Estimates Debate — Vote Tertiary Education

I look forward to pointing out the main points in the tertiary education portfolio, and also speaking very briefly on student loans, which are something that a number of my constituents have given me their views on.

It is really important that in tertiary education, including student loans, our plan for the future is a sustainable one, but we also recognise that now is the time when we need to have more students in tertiary education places. We have put in more than 3,000 extra university places over 2 years. There are now 186,000 core places at universities and polytechnics in 2011, despite the rhetoric from the left. There are now 11,600 more core places at those institutions—universities and polytechnics—than in 2000. But it is also very, very important that the Government gets value for money, that it looks hard at the tertiary education spend and makes sure that it is outcomes-focused, and that we do not have institutions or organisations claiming funding for educating people who are in fact dead, which I understand has been happening. So my constituents are relieved to hear that we are not willy-nilly handing out their taxpayer funding without asking for the details of exactly how it is being used.

When it comes to student loans, there is a belief amongst many New Zealanders that it is a privilege. I certainly believe that, too. It is a privilege for students to receive taxpayers’ money to help them through their education. Students will be the better for it, and I believe they understand that. Right now we are spending $1.58 billion on student loans in 2010-11. We have had to borrow that money. We need students to understand that their responsibility is to use it wisely, study their course, qualify, get a job, and then repay that money to the people who loaned it to them—that is, the taxpayers.

Some of my constituents have been telling me that they believe that students should not be able to go overseas, at all, until their loan is all paid back. I have said I think that is a bit tough, but nevertheless I think it is really important that we have shortened the repayment holiday for overseas borrowers to 1 year. We have also restricted borrowing for those who have had a repayment of $500-plus overdue for more than a year. We are, however, keeping interest-free student loans, and we intend to make sure that we write off a whole lot less than the 47c in the dollar - plus that it was in 2009. It is now down to 45c in the dollar; it is improving, but we still have a long way to go. It is largely the overseas borrowers—55 percent of the overdue debt is owed by 15 percent of the borrowers, and they are overseas. It is a really generous scheme, but it is a scheme whereby there is an obligation on students to pay back the money that will ultimately have made their lives better by improving their educational standard.

We also require that students pass their courses; this seems like a bit of a no-brainer, really, does it not? Over a period of 2 years students must have passed half of their courses. We have also said that there must be a limit on how many years they can continue to receive student loans. I heard a story last night from a constituent about someone who went back for a third degree, and then said they were intending to do a fourth. I think that person might be in for a bit of a shock, because simply being a perpetual student and having the taxpayers funding that particular lifestyle is not what the scheme was intended for.

The student loan scheme is a really important scheme. We have made changes that will make the student loan scheme much more sustainable, thereby reducing the need for more Government borrowing to fund it. Those students who are overseas will find that we are entering into arrangements with countries to help us track them down so that they can repay their loans. There should not be arrogance amongst students who have borrowed that money, or a belief that they can keep the money and not repay the loan. The taxpayers in New Zealand have loaned it.

I would like to have the opportunity to take this call to follow on from my colleague Jo Goodhew, who spoke very well, and to talk a little about some of the other initiatives that the Government is taking to improve the skills in the economy and improve the outcomes of tertiary education. A lot of them involved moving from an inputs focus, if you like, or a “how much money can we spend” focus, to a “what can we get for the money that we spend, and what sorts of results can we achieve” focus. We have increased the numbers of places, as Jo mentioned. We now have, for example, at universities and polytechnics 11,600 more full-time funded places than in 2008, which I think is a pretty impressive result.

We can look around the rest of the world to see some of the challenges that the higher education sector is facing. I met the vice-chancellor of Oxford University last week, and he updated me on what is going on in the UK. It is certainly a very different situation from the one in this country, as we have sought to maintain and indeed grow our investment in the number of places in institutions. This year in the Budget we have funded up to 750 additional places in high performing private training establishments as well, and that is the first significant increase in the number of funded places in that part of the tertiary sector for some time. But we are also making requirements in terms of performance-linked funding, to make sure that it is not just about enrolments but also about achieving results. We are also getting the publication of performance information across the tertiary sector to encourage that focus, as well. I record for this Committee’s information that the tertiary sector is responding very, very well to the incentives that we are setting.

There was quite a bit of discussion at the Education and Science Committee about the area of industry training. I think it is very important, because we are doing a lot of work there at the moment. We had an issue of very significant numbers of trainees being listed as being involved in industry training but not achieving any credits. In fact, something like 53 percent of trainees who were enrolled to train in 2008 did not achieve any credits in that year, and there was a very similar percentage in 2009. In fact, 44,000 people were enrolled in both years. Money was paid in terms of a subsidy in both years for their training, but they achieved no credits, at all. So in the industry training space we have also moved to a model in which we are looking to see better outcomes, and actually get credits awarded appropriately to trainees who are operating in that space. Again, I have to say the industry training sector has responded well. This year, despite the fact that quite naturally we would see a decline in the number of trainees in training, we have actually had an increase in the number of credits earned, and an increase in the number of qualifications earned. Ultimately, that is the important thing: how many people are being upskilled in industry training.

Right across the vocational sector a number of changes will have a very positive impact, and I would like to refer briefly to them for the Committee’s information. The first one is the whole tidying-up and simplifying of the qualifications system, particularly in the vocational educational training area. From the 4,500-odd qualifications that we currently have listed at levels 1 to 6, we will be down by about a third of that at the end of this year. That process is ongoing. We are working hard with the New Zealand Qualifications Authority to achieve a further reduction, because it will have the effect of simplifying the whole vocational pathway system.

On top of that, we are putting a lot of effort into getting more and better literacy and numeracy, in levels 1 and 2 particularly. I think that is hugely important. If we are to have second-chance learning at levels 1 and 2—and that is very important—I think making sure that we have literacy and numeracy embedded in it is crucial. We know we have a challenge with some older New Zealanders who do not have the required literacy and numeracy skills to be successful in the modern world. With the approach that we have taken, we have seen in a couple of years a quadrupling in the number of embedded literacy and numeracy courses available. Again, I take my hat off to that sector for responding very well to the challenges that the Government has placed in front of it. There is some very good early success, but it is only early success; there is a lot more to do in this space, and we are very determined to do it.

The other thing I just mention in passing is international education. We are doing a major reorganisation in this area and will have legislation back before the House shortly. This is important too for New Zealand’s educational future—to take advantage of the great skills we have in our education sector. Thank you.

Vote agreed to.

Vote Transport