Debate on Crown Entities, Public Organisations, and State Enterprises — Tertiary Education Commission

It is my pleasure to rise again to speak on an area that, like that of my previous contribution, is of critical importance to the New Zealand economy and to the way we develop and grow our economy. The Tertiary Education Commission is a complex being in terms of its funding and whom it funds. I want to touch tonight on just one aspect of what it does.

The Tertiary Education Commission establishes and promotes the opportunity for lifelong learning throughout New Zealand. This is an extraordinarily important area for New Zealand, for the simple reason that the economy is changing extremely fast and extremely quickly. As our economy changes, we want people to be able to engage and move with those changes. We also want to be able to cater for those who step out of the workforce for various reasons and step back into it again and need to upskill once more in order to join and become profitable members of society. I think it is a great worry for New Zealand that this Government, rather than promoting the opportunity for lifelong learning, has gone out of its way to erode the opportunities for those people. An amount of $2.3 billion goes into the tertiary education area through the Tertiary Education Commission. One of the areas that was targeted under the previous Minister for Tertiary Education was adult education. For a mere $13 million of that vast amount of money we stripped out what had become an institution in New Zealand and had helped countless numbers of New Zealanders to re-enter the workforce. For more than about 100 years thousands and thousands of New Zealanders, me included, re-entered the workforce as a result of second-chance education, re-skilling, and upskilling—a different way of getting back into the workforce, through having their skills renewed by joining the education system. We once had 212 schools involved in night classes, and now we have 24. That is disgraceful. It is absolutely disgraceful for $13 million out of a budget of $2.3 billion. PricewaterhouseCoopers said that the benefit cost was 70 to one, yet we still stripped it out.

I thought this Minister for Tertiary Education might have had a different approach from his predecessor. Yet in this Budget the over-55s are thrown on to the scrap heap. We could say that maybe the over-55s should be thrown on to the scrap heap. Maybe those people do not have to upskill and be re-skilled. But actually 55 now and in the future is, and will be, a very young age. Those people will go on to be working members of society perhaps well into their 70s. Yet those people cannot get student loans. We have discriminated against older people being able to get student loans, yet they are the very people who have paid their taxes for about 40-odd years and they are not able to have access to student loans any more. To compound the problem, we have also added to that the people who are part-time students. Those part-time students now cannot get their course-related costs paid. Those people tend to be women who have gone out of the workforce, perhaps for child rearing, and now want to move back into it. What we are seeing, and I would like to see the analysis on this—it would be very interesting, not only for this House but for New Zealanders in general—is that women are being targeted more unfairly under these policies than men are. I think women are being disadvantaged more than anybody else. I think that is a disgrace—it is an absolute disgrace. We should be encouraging people to get back into the workforce. We should be encouraging people to upskill. We should be encouraging our economy to move forward as a result of those people joining our workforce, with the right and appropriate skills, but instead we are penalising those people. We are penalising their initiative. We are penalising their self-sacrifice.

The member David Shearer should not let the facts get in the way of a good story, and he obviously does not do that. Firstly, people can still borrow on a student loan if they are over 55 years old. They can borrow fees for courses if they are over 55. They cannot borrow for living costs, and there is a reason for that: once people are past 55, taxpayers end up writing off over 70 percent of their student loans. We thought about how we could strike a balance there, because, yes, we want to have people of that age upskilling, but we also have to acknowledge that they do not have as much time at that age to repay their student loans, which is the contract, of course, with the taxpayer. So we thought we would have a bit of balance, and we would have borrowing for fees but not for living costs. That is actually what we are doing, so the member made his first mistake there.

His second mistake was in talking about compulsory course costs for part-time students. Of course part-year students have never been able to get compulsory course costs from the fees component—we have changed the rule for full-year students to ensure consistency—but of course they can still borrow for fees. Once again, the facts got in the way of a good story.

But the really good story here is the work that the Tertiary Education Commission has done. I salute the Tertiary Education Commission for the work it has done in improving the outcomes from our very large tertiary education spend, which, across student support, fees, and tuition subsidies, is over $4 billion. The commission has had a real focus on value for money, and the evidence in terms of outcomes is very impressive indeed. This year we will have the highest number of fulltime-equivalent students ever in New Zealand universities. It is a tremendous outcome. We also have the highest number of full-time core places at universities, polytechnics, and wānanga, right across the public tertiary sector—16,500-odd more places than 3 years ago, when the previous crowd left Government. But overall our expenditure has not gone up, because we have had better value for money. This year we also have more private training establishment places—750 more. The previous Government froze those in about 2002. We have lifted the freeze this year. We have more opportunities for New Zealanders, right across the board, including more places at higher levels on the spectrum of qualifications.

We have also managed to achieve better results out of industry training. That area was actually a horror story inherited from the previous Government—an absolute horror story. That Government had trebled the industry training budget over 10 years, but it had not ensured accountability for the funding. It had not ensured that there was any accountability, at all. As a result, when the Tertiary Education Commission audited industry training in 2008 and 2009, we discovered that 44 percent of trainees had not earned credits over that 2-year period. Labour’s phantom industry trainees had disappeared from the scene. Some had not had training agreements signed, some were not actually employed by the companies they were supposed to have been employed by and to be getting industry training from, and a dozen, even, were deceased. They were deceased, and the previous Government had not noticed.

We have put in a much more reasonable industry training budget, and we have cut it back a bit. Do members know what? We will get better results out of industry training with a lower-cost budget than Labour members managed to achieve with theirs, because they are the crowd, as I think Dr Mapp said, who just like to get the bucket of money and keep tipping it in at the front, and not think for a moment about what the accountabilities are at the back end. That approach was right across the public sector when we arrived, and we are sorting it out.

We are also sorting out a number of other areas. I think that adult and community education is very important, but, like Mrs Tolley, I am not at all sure that the Government and taxpayer should be paying for people to do their hobbies. So we have refocused on literacy, numeracy, English for speakers of other languages, and Māori language, and I am very, very proud of that. There is no doubt that people can take up their opportunities with adult and community education.

Finally, in the limited time I have available, I refer again to the excellent job the Tertiary Education Commission is doing. It has managed to come up with additional funding over the next 4 years for English for speakers of other languages—$17.5 million. That has not been talked about a lot but it will be good for migrants, and it will make a real difference for refugees in this country. This Government cares; this Government is focused on getting real value for money out of tertiary education, and we are doing that. The previous crowd just could not get off their backsides for long enough to check what was going on.

How timely it is that I get to respond to some of the comments that the Minister of Transport has just made about industry training. I concur with the comments that my colleague David Shearer made about this Government’s lack of commitment to lifelong learning. One particular aspect where the Government is a complete disgrace concerns the role of the Tertiary Education Commission in funding industry training. Just for the record, let us note that industry training has been slashed in this year’s Budget. After $55 million of cuts last year, a further $90 million has been taken out over 4 years. That means that tens of thousands of trainee places have gone.

There may be issues in relation to needing to improve quality, but there are two ways we can go here. We can either just cut money from the system and have fewer trainees, or focus on what is working. That is where the Minister failed to address the issues. Many industry training organisations are doing a good job, delivering good outcomes for trainees, and lifting skill levels in New Zealand. We should be not cutting money from that sector but actually finding out what works and investing money there. I think it is a complete disgrace that $55 million went from industry training and into the university sector, instead of that money being put into funding more apprenticeships, and more industry training where we need it and where it is working.

The Tertiary Education Commission is meant to be responsible for implementing the tertiary education strategy. That strategy states: “The Government sees the tertiary education system as a key national asset, which enriches New Zealanders’ lives, increases their employment opportunities and helps to build a productive skills base to drive economic growth.” Well, frankly, the record in the skills area is a completely disgrace. Participation rates in industry training are down; participation rates in apprenticeships are down. It seems that National thinks these are “nice-to-have” things, rather than essential for meeting the skills shortages that we all know exist. Business groups, unions, and community groups understand that there is a problem here, but this Government does not understand that. I would just like to quote Phil O’Reilly, who says: “As we get out of this current slump—and let’s hope we do some time—we’re going to have skill gaps appearing all over the place. We know that business people are looking increasingly at that issue, asking what the story is there, and asking what we are going to do about it.” That is a good question. What are we going to do about the skill gaps that exist in New Zealand?

The reality is that investing in industry training and apprenticeships lifts productivity, which is something that Government members say they are concerned about. There is no doubt—all of the evidence is there—that lifting skills and better utilising skills will lift workplace productivity, giving us economic growth, better and more satisfying jobs, and better-paid jobs. Why does the Government not support that? I think the failure to invest in our people is actually a form of economic vandalism. It is short-sighted. We are going backwards in relation to many other countries, including Australia, which has provided an additional $3.6 billion in funding to skills and training over 6 years in its recent federal Budget. That was on top of a higher base than ours.

What are we doing? Not only are we cutting investment in skills, and therefore the ability to lift our workplace performance, but now the Prime Minister says that as well as that we will cut workers’ rights. We will have workplaces that are low quality, low skill, and low wage. That is the prescription of this National Government. Anybody who thinks that that will deliver the kind of income we need as a country, and the kind of economic growth we need as a country, is wrong. If the Minister thinks that is funny, then he needs only to look at our comparative performance in relation to countries like Australia and the Scandinavian countries, where there is a significant investment in skills. He needs to ask himself what the difference is. Why do Australian workers get 30 percent higher wages than New Zealanders? Part of the answer—not all of it, but part of the answer—is because there is more investment in people. It is recognised that paying people properly means that employers will want to ensure that they are well skilled, and that their skills are well utilised.

So I say to the Minister that the work of the Tertiary Education Commission in implementing the tertiary education strategy has gone wrong. The reason it has gone wrong relates to the direction given to it by that Minister. I urge him to relook at the cutting of industry training. It is the most short-sighted cut that I can imagine, and it sits on top of 2 years of no new initiatives in skills. We saw cuts of $55 million last year, and now we see a further $90 million of cuts in skills training. That is an absolute disgrace.

I start by saying that I thought the Minister for Tertiary Education gave an excellent retort to the first speaker from the Labour benches and debunked everything he said. I wanted to focus on the positive in my contribution to this debate, but after listening to the tirade from Carol Beaumont, and the passionless rhetoric, which, no doubt, was produced by Labour’s research group, I would say that the Labour Party’s research group is lacking in skills. It is about time it got some skilled staff in there to produce decent material for Labour members to speak on.

I remind the previous speaker, Carol Beaumont, that the responsibility of the Government is to make sure it gets value for money. That is why the Tertiary Education Commission has had to recover $4.3 million from 18 industry training organisations that have been claiming funding for students who are not eligible and, in fact, in most cases do not exist. I say to that member that the Government’s first priority should be to get value for money. I want to speak positively about this subject, because it is very serious. I myself am a product of a tertiary education—

💬 Dr Rajen Prasad: Not a good one.

—and was challenged that I might not be able to succeed. Just to prove my challengers wrong, I say to Dr Prasad, I decided to get one A. I ended up getting an A in the hardest of subjects, which was econometrics. For those who do not know what econometrics is I tell them it is mathematical economics. I got a couple of Bs in economics, and then I wanted to prove that I could get passing down to an art form by getting Cs for the rest of my subjects.

Tertiary education is a very critical matter that this Government takes very seriously, which is why we have a Minister of Steven Joyce’s capabilities overseeing it to make sure that this country gets value for money in terms of the limited resources that are available. Because of that we are giving significant funding increases, and there has been a huge increase in student places at university, for instance, as the Minister explained.

I will also talk about why I think tertiary education is critical. The one thing I could agree with in terms of Mr Shearer’s contribution to the debate is that tertiary education is an extraordinarily important area. It contributes to economic growth and enables the country to move forward as the requirements change within the economic environment and we provide people who can bring the skills to bear in those areas that are required.

One of the things I found fascinating in terms of this matter—having people who are qualified and can lead the economic growth that this country, so sadly, needs; and this Government is addressing that issue—is the fact that, as I think a previous member alluded to, Professor Sir Paul Callaghan addressed the Labour Party conference a few weeks ago. In addressing the conference, the four critical words he uttered were: “We require entrepreneurial genius.” This was in response to a Labour Government that had gone through all the catchcries and clichés about having a knowledge wave, economic transformation, and growth in innovation but never produced a thing. Sir Paul Callaghan says we must have entrepreneurial genius. Thank you.

Report noted.

Children’s Commissioner

Families Commission