Estimates Debate — Education and Workforce Sector (relating to education)

Members, I understand that the Minister of Education is available to speak to the relevant Votes in the education and workforce sector volume (B.5, Volume 2). The question is that Vote Education, Vote Education Review Office, Vote Labour Market, Vote Pike River Re-entry, and Vote Tertiary Education stand part of the Schedules.

I raise a point of order, Madam Chairperson. Thank you, Madam Chair. Just seeking clarity there: obviously, we’re in a different environment now with the committee stage not being set five-minute calls, and so in terms of the allocation of time, I understand we’ve got some support to measure that, but are the questions and responses from the Minister part of our allocated time? For example, if I made a two-minute contribution and the Minister responded, and then I took another two minutes, is his response to my contributions part of my time allocation?

The question is part of your time as a member of the National Party. The Minister’s answer is also part of his time as a member of the New Zealand Labour Party. So everyone is on a time, and that’s why I say it behoves people to—but the whips can apply for that on a daily basis.

Sorry, I will give the call. I’ve got another one little bit to read: in accordance with the leave of the House, other responsible Ministers will be available to speak to the remaining Votes in this sector later in the debate.

Thank you, Madam Chair. As the chair of the Education and Workforce Committee, it’s a pleasure to take this call and summarise the Estimates hearing—the 2020-21 Estimates for Vote Education, Vote Education Review Office, and Vote Tertiary Education.

As we have just one Minister for the whole education portfolio, the Hon Chris Hipkins, he appeared for all these Votes within Vote Education before the select committee, and we went through several topics. The select committee noted that in Vote Education, the appropriation sought in 2020-21 for Vote Education totalled approximately $13.941 billion. In that, the allocations breakdown is nearly $9.977 billion for educational services from schools; just over $2.617 billion for services from the Ministry of Education; nearly $1.172 billion for capital expenditure by the Ministry of Education, which related mainly to school sector property; nearly $52 million for allowances, scholarships, and awards for students, teachers, and trainees; just over $89 million for other educational services; nearly $55 million for capital expenditure for Crown entities and schools; and there was a capital injection to the Ministry of Education that was of nearly $593 million.

In the Vote Education Review Office, the appropriation for 2020-21 is $34.7 million; for Vote Tertiary Education, the appropriation totals $3.54 billion, which covers tuition subsidies and reserves for tertiary education organisations, first year fees-free study, Tertiary Education Commission funding and funding for services from Education New Zealand, funding for tertiary scholarships and other awards, services from the Ministry of Education, and establishing a single national vocational institute.

During the select committee process, the select committee focused mainly on primary and secondary schooling and tertiary education, in that there were several topics that were discussed. In primary and secondary schooling, a wide range of topics were discussed and the main focus was on COVID-19—how primary and secondary schools responded to COVID-19, and especially during that time when we went from level 4 to level 3 and the kind of confusion that was caused because of that. So the Minister responded to those questions which were asked by the select committee. We also dealt with the communication with schools from the Ministry of Education during COVID-19, and, according to the Minister, the communication was quite good and it was quite frequent.

The other thing which we really focused on was our preparedness for future events. This was in relation to a college in Auckland where a cluster was identified. The committee wanted to understand how the Minister saw that the ministry would be prepared for such incidents happening in the future. There was a focus on personal protective equipment (PPE) as well, because PPE is something that is talked about a lot. So it was noted during the select committee process that if there was any decision made around use of PPE in schools, that will be based on apolitical or psychosocial kind of decisions, not actually a public health response—that was the response given by the Minister.

Then, digital delivery during COVID-19 was a very important topic that was discussed during the select committee process in the Estimates hearing. This was in regard to the survey that was done in 2018 which identified that 52 percent of schools had 25 percent or more of their students without home internet access. So we discussed the dispatch of modems and laptops that was done during that lockdown time, and we also discussed missed delivery of these modems. The Minister’s response to that was that it was important that the equipment is available as soon as possible rather than sitting and making sure that the data is accurate. We also asked about how many of those modems had been returned; we were told 404 modems until that point were returned, but the latest data wasn’t available.

And then, in this limited time, if I quickly jump on to tertiary education, one topic that was discussed was Massey University’s science degrees issue, because we also have a petition on this issue before the select committee. The Minister’s response was that it doesn’t reach the Minister’s threshold to intervene. Wide-ranging topics were discussed in tertiary education, as well. Fees-free was another focus, and student hardship and international students were also discussed during the Estimates hearing in the Education and Workforce Committee. Thank you, Madam Chair.

Thank you for the opportunity to ask some questions about these Estimates. An issue that our select committee did examine, but which I would appreciate some more input from the Minister in the chair, the Hon Chris Hipkins, on, was predictions around what early childhood education participation may look like over the next months and, indeed, years. The reason this is important, of course, is that the Estimates estimate how much expenditure the Crown will make on early childhood education (ECE) on a demand-driven basis, i.e., how many hours we expect children of each age to enrol in services by type of service and, therefore, how much Crown expenditure will be incurred. What we have seen during COVID-19 is reductions in participation by children, both in terms of the hours that they’re attending and the number of children who are enrolled in early childhood education.

I think it is of concern to me and to National, and I think to many of us, that in an economic environment where we can expect to see increasing unemployment, where, in some households, parents will no longer have work or will have reduced incomes and therefore will make choices not to enrol their children in early childhood education or may, on the margin, decide to reduce their participation—this may have a significant impact, because it has been agreed by Governments of both stripes in recent times that increasing participation in ECE, particularly for three- and four-year-olds, sets a good foundation for future learning.

So my question to the Minister is around what the latest view is on what we can expect to see in early childhood education enrolment patterns. But, secondly to that, if there is any view that there may be a reduction in that attendance, has there been any thought given to whether any underspend in this area would be reallocated within early childhood education? In previous Budget years, we’ve seen that when there has been an underspend in early childhood education, it hasn’t been reallocated within that sector. I would be interested to see what the Minister’s view is there, and whether he has engaged at all with the Minister for Social Development, who, in a separate Vote, has funds that are associated with subsidising early childhood education for lower-income families in particular. And in relation to both of these questions, I’m interested in what steps have been considered to monitor, respond to, and evaluate any changes in early childhood participation across the country, and particularly across at-risk demographic groups. So I’d invite some commentary on that.

I think the questions the member asks are incredibly reasonable ones. Early childhood education participation, as she’s noted, has declined both during the COVID-19 lockdown period, as we would have all expected, but also it has yet to rebound to the level that it was pre - COVID-19. At the moment, the data that we have on that is survey data. It is not the most reliable data, as the member will appreciate. Survey data is a rapid response, so it gives us some information to work from, but the most reliable data takes a wee while to come through in the data return exercises that centres go through, and then that will need to be rigorously crunched in order to give us the best picture possible.

I guess what I could give her is a high-level response and say the bit that I would be concerned about is if we were losing children out of the system altogether, because I think a lot of work has gone into getting particularly under-represented groups into early childhood education. If the data shows us that we’re seeing shifting participation patterns, depending on what those patterns are, it may or may not be something that we’d be worried about. So if we were seeing, for example, a reduction for some children from, say, 40 hours a week down to 30 or 20 hours a week based on their parents working less and therefore having them at home more, we might be concerned about the overall employment outcome for the parents. But for the children, that wouldn’t be such an issue, because, you know, 20 hours is still a very credible amount of early childhood education participation. So we don’t yet have that data to be able to do that detailed number crunching around that, but, of course, I want to see that data as soon as I can, the same as everybody else in the House does.

In terms of the childcare subsidy that the member mentioned, we did have an issue with the childcare subsidy during the lockdown. We provided the subsidies for early childhood education participation during the lockdown as if a lockdown hadn’t happened. So it was if the participation was at the pre-COVID levels, because during level 4 there was next to no participation, and during level 3 the participation was very, very low, and even at level 2 we still weren’t back to normal levels; level 1, we’re getting closer, but we’re still not there completely. So we have kept the Ministry of Education - provided funding at the level that it would have been.

The childcare subsidy, however—under the rules of the childcare subsidy, centres were not able to access that because it was attached to children attending, and if they weren’t attending, then they couldn’t get the money. So we worked very quickly to put an alternative in place, which is basically a fund that centres could apply to if they’d been financially disadvantaged by not having the childcare subsidy, recognising that, actually, many of those centres that are heavily reliant on the childcare subsidy are also in the lowest socio-economic communities, which is where we can least afford to lose early childhood education provision. So we have taken steps to make sure that we’ve kept those services going.

With regard to underspend, of course, all of those things are subject to further Budget consideration. At this point, we don’t have an accurate estimate of what any underspend might be and what it might look like. But, of course, you know, I’ll go into those Budget negotiations attempting to get as much money for early childhood education as I can.

Just before I take the next speaker, can I just clarify: the chairman’s speech counts in the time—the chairman of the select committee—and that doesn’t stop the chairman from asking questions.

It’s a pleasure to rise and take a call in this Estimates debate, and the first time I’ve had this type of format in the Estimates for the committee of the whole House, so, really good, and I want to thank the Minister in the chair, the Hon Chris Hipkins, for appearing before us.

Look, as was noted in the select committee process for this Estimates, the Minister talked about the response from the ministry to the COVID response and how schools coped with that. I’ve gone out there and spoken to a number of schools in my electorate, and what is quite clear from the schools that I’ve spoken to and the principals I’ve spoken to is that the way schools have handled COVID and the ability for them to handle it depends, by and large, around the uptake of technology and the level of maturity that these schools are at with respect to, say, bring your own devices.

So the first question I had for the Minister, and in relation to kind of the Estimates stuff that we talked about in select committee, is what are the ministry’s plans to help reduce the inequalities in some of our schools around the digital divide? Even though I’m on the North Shore, and a proud Northcote electorate MP, there is a lot of inequality in some of our schools, and I want to just get a sense from the Minister around how he’s looking to bridge those digital divides so that if we, touch wood, have to go back into lockdown or anything of such a degree, that these schools can cope more adequately. So that’s the first question I have for the Minister.

The second question I have is around roll growth. I know that the Minister answered a couple of questions that I had around the roll growth, and in response to his response, really, which was around how the ministry calibrates their models in order to make sure that the projected roll growth that the ministry uses is, in fact, accurate. Now, I really appreciate the Minister’s answer in the Education and Workforce Committee; however, I want to just clarify with him how the ministry calibrates those models. So just giving an example: if the ministry produces estimates for roll growth to 2025, they present them to the school, the school flat out rejects them and says, “Hey, we’re already actually at 2025 figures.”, what is the process by which the school directly—dare I say—vetoes those projections? Ultimately, it’s the schools who know their communities. And we’ve talked about this and the role of schools and the authority and autonomy that they should have because they know their communities better than the ministry.

So I want to get a sense of how the ministry calibrates their models and what level of, I guess, would I say, “weight” that the schools and the principals and the boards have in helping the ministry calibrate their models, because the feedback that I’m hearing loud and clear from my community is that the ministry’s protections are not accurate, and I feel like I’m talking to a brick wall because I can’t get the ministry to update their models. So I really would just appreciate some clarification based on the Minister’s discussion in select committee on the digital divide and the roll growth and how that’s calibrated in our schools.

Thank you, Madam Chair. With regard to the digital divide, we’re still doing work to analyse the success of our initiatives during the lockdown period. So the member will be familiar with the fact that we did send out modems, laptops, and other digital devices to get people connected during that lockdown period. We did not get them to everybody that needed them. What became very clear during that time as well is that while we had good macro-data, our micro-data wasn’t quite so good, if I could put it that way. So we had a rough idea of how many people weren’t connected, but actually pinpointing where they lived proved to be a little bit more challenging then we might have thought. In some cases, we may have missed some young people who needed to be connected; in other cases, we’d identified them as needing to be connected when they didn’t need to be connected. Overall, we still got pretty good numbers: 45,000-odd modems, I think, got sent out. We’re talking now about a couple of thousand of them, potentially, that have either been redistributed or would be in the process of being redistributed. That work will continue, and, of course, the Government has plans to continue to close the digital divide, and that’ll be, no doubt, the subject of future budget debates as well.

With regard to roll growth: nothing new in this particular debate. As long as I’ve been around education, it’s been a case where schools have hotly contested the Ministry of Education’s roll projections for their area. Of course, in some cases where it’s more immediate, their grounds for doing so are very good. It is a bit of crystal-ball gazing the further out that you get though, and the ministry use a variety of different sources to make those projects. They’ll use census data, obviously, and data from Statistics New Zealand, but they also do use data from local government and that around where extra houses are being built in order to try and forecast where the growth is going to take place. Of course, it’s going to be very interesting to see how that shakes down in the next 18 months or so, given that all of those projections will have been affected by COVID-19, because, with the closure of the borders, then obviously our population demographics and the projection around our demographics will have changed as a result of that.

Thank you, Madam Speaker, for the opportunity to take a call in this debate, and I’d like to focus my remarks at first around tertiary education, in particular around fees free for first-year students. It seems very interesting, this Government came into power and promised fees free and their intention at the time was that the purpose of their fees-free policy was to increase participation amongst—

💬 Hon Member: That’s what they said.

That’s what they said: increased participation, more students going to university, more students in tertiary education, and that this policy of paying for their first year, or giving them a free first year, was going to do that. Of course, the evidence that we’ve seen has been to the contrary. In fact, there’s been a drop in the number of students participating in tertiary education over its first year. The data for the second year is, I don’t believe, fully complete, but if the Minister of Education, the Hon Chris Hipkins, would like to take a call and enlighten the committee around what the 2019 figures were, that would be greatly appreciated.

But the interesting thing is that this target has then shifted. So it was, firstly, “We’re going to increase participation.” Then came the second line, which was, “Well, increased participation is just one of the goals of this fees-free policy. We’re just wanting to do a few things. Increased participation is great, but, you know, it’s not kind of working. So we also just want to—just really it’s just about paying for the first year, making sure students don’t have to borrow their first year, despite the fact it would have been interest free.” And now, of course, we come to Budget 2020, and we look at the new Budget measure, and the new Budget measure’s got nothing to do with participation. It’s simply: what is the average payment per learner? So we’ve got this policy which the Government has in place, and its measurement is by how much they can pay people. In this Budget, it’s how much they can pay each student an average of $5,787—and that is the new Budget measure.

I just find it absolutely ironic that the Government has gone from a policy position of wanting to increase participation. It’s realised it’s a fail and now it’s simply come down to how much they can pay each—or how much per student they can give in fees free. I’d like to ask the Minister if he could explain that transition in the language and the policy intent and how come the Budget measure simply is now about “How much?” And going forward, is that about, you know, a target? Can we get to $5,787? Is that the aim? Is it that the goal—we want to get it close to $5,787? What if we want to get a bit higher? Is this Budget measure going to be increased in future years? Is it simply going to be around how much money the taxpayers have to fork out for this failed policy, which has not—which has not—achieved its intended aim, the aim that was sold to New Zealanders about increased participation for New Zealanders to get into tertiary education?

A couple of very sad statistics is we’ve actually seen a 2 percent drop in Māori participation and a 0.5 percent drop in Pasifika participation—greater drops than on average. So this policy is particularly not working for those demographics. So I ask the Minister to take a call and explain to the committee: why are we now measuring a policy simply based upon how much money per student is being paid out, and why has he dropped the target, dropped the measure, on actually increased participation? Is it because he’s failed or is it because of something else?

Of course, if the member goes back and looks at the statements I made when we launched the fees-free policy for the first year free, he will see that—the things the Government was talking about: breaking down barriers to participation to ensure that those who might not otherwise participate in tertiary education were able to do so; making sure that those who complete their tertiary studies have less debt at the end of their tertiary study, something that I know a lot of New Zealanders are anxious about—the level of indebtedness that our young people have when they complete their tertiary studies.

In terms of that second one, the policy’s been very successful. It has, of course, resulted in hundreds of millions of dollars less borrowing by young New Zealanders, which will mean that they’ll have smaller student loans when they finish their study and they’ll be able to pay them back more quickly.

So with regard to participation, of course, there are other factors that come into play around participation, including the fact that up until COVID-19, we had one of the strongest labour markets in the developed world. We had very, very low unemployment and the lure of paid employment for young people was particularly strong. And you can see that in the declining participation, particularly in the polytech system and that participation now—as the labour market loosens up and we see an increase in unemployment—is starting to rise exponentially. And so what we’re doing with the extension of the fees-free approach and moving to targeted areas of vocational education and training is helping to ensure that that additional growth is targeted into areas where we know the employment prospects are best.

In relation to the statement the Minister of Education made around the extension of the fees-free policy, can the Minister then confirm to the committee that it is his intention to extend fees free to the second year of tertiary education if his Government is, unfortunately, re-elected?

Of course I have no ministerial responsibility for what a future Government may do.

Thank you, Madam Chair. I would like to focus on digital delivery during COVID-19, which was discussed during the Estimates hearing, and I appreciate that 80,000 houses were identified where students didn’t have access to the internet, and then modems, 50,000 modems, and 23 laptops were dispatched. We also heard that 404 were returned because of mis-delivery. At that date, we were told that we didn’t have the total number—the Minister didn’t have the total number—of how many were mis-delivered and how many were returned. So I would like to actually know from the Minister of Education how many have been returned; how many mis-deliveries happened; and once these modems or laptops are collected, what is going to happen to these modems and laptops—where are they going to be utilised; and what has been done? So there are several questions here.

The next question is: originally, 80,000 households were identified where students didn’t had access to the internet, so, obviously, these many modems were mis-delivered, so what is being done to identify it so that we have this data for where houses don’t have the internet for any future requirements? And then we were also told that the Ministry of Education is contacting schools as well to see if there were any surplus units which they had received that they didn’t need. So what’s happening there? It would be good to have an update to see what progress has been made to collect that information or to collect those modems or units back which were dispatched since that time, since the Minister appeared before the Education and Workforce Committee. Thank you, Madam Chair.

I think, as I indicated in my previous answer, we’re now talking about several thousand; it’s in the low thousands, but there are a number of modems where work is being done to redistribute them. It’s useful, though, to clarify for the member the process here. The Ministry of Education are contracting with ISPs—internet service providers—for successful connections. So only once a household has been connected does the Ministry of Education end up paying for that. So if there are modems floating around out there that need to be redistributed, only when they have been successfully connected would the Ministry of Education then pay for that connection.

Thank you, Madam Chair. I wanted to have a chat with the Minister in the Chair, the Hon Chris Hipkins, today about the effect of COVID-19 on the revenue that schools get from international students. It’s of a particular interest to me and my electorate of East Coast Bays, but it will be very relevant to many schools across New Zealand—and certainly in the Auckland region—because of the amount of revenue that they get from those international students. Now, I understand that we didn’t actually get a chance in the Education and Workforce Committee to grill the Minister on this, because there were so many other topics to talk about, but I wanted to bring it to his attention and we ran out of time, so I’ll take that opportunity now.

Just for example, one of the secondary schools in my electorate, a third of their revenue is international students. So you can only imagine their concern at the loss of revenue from this year, but also looking forward to next year, given that there really isn’t any certainty. Not that that’s the Government’s fault, but there is no certainty around when they will be able to get these students back. So there is a great deal of frustration and anxiety, certainly from schools in my electorate—and, I know, across Auckland—who are worried about this.

Now, I know that there was an announcement made yesterday, and I want to talk to the Minister about that particular announcement, because, as far as I understand, from that announcement, there is a $20 million fund that’s been ring-fenced. So I want to—just for the Minister to enlighten us a little bit more on how far he thinks that will go, what percentage of the loss and revenue that he thinks that that will cover, because I’m just looking at my electorate, and I reckon you could almost sink $20 million into—take the North Shore. You could probably sink $20 million into the North Shore, and that would maybe just cover the revenue that we get from international students.

💬 Dan Bidois: Easily.

Easily, yeah. I mean, I know one of my one of my big schools is $3 million alone. So when we’re looking at $20 million, it doesn’t—from my perspective—seem to be that much, so I’m keen to get an idea from the Minister on what percentage of the total revenue gained from international students that will cover.

Also, if he could just explain to us—because I’m not sure how each school will be worked out on how much income they will get, or revenue they’ll get, from this $20 million—what the calculation will be. Has that already been set? Do the schools already know what amount of money they will get from that $20 million, what sort of certainty they will get, when they will get that information? Because I know that they’re looking ahead to next year and they’re very, very concerned.

I also want to know, what does that cover? What period does that $20 million cover? Is that for this year, or is that to cover next year’s loss of income as well? If the Minister could provide some information around that. I just want to reiterate the anxiety and the concern that schools—certainly in my electorate—have relayed to me about the lack of certainty and lack of revenue streams, certainly for next year around these international students. Thank you.

If I could just say, to reiterate one of the key messages of this Government, and, actually, of the previous Government, because I had this discussion with the previous Minister when I was sitting about where the member is now, actually. The Government’s position is that we fund our schools sufficiently to deliver the curriculum to New Zealand students. Some schools do raise additional revenue as a form of fund-raising through having international students. It is not the position of the Government that we should have to replace the revenue that they have lost as a result of having fewer international students.

But we do recognise, though, that some schools have got fixed costs around international students. I mean, there’s a transition required there. If you suddenly turn the tap off in terms of international students coming in, schools will still have costs that they need to incur as they manage a transition to having fewer international students. So the $20 million fund that I announced yesterday is a small percentage of the overall revenue that schools would generate from international students. It’s not designed to replace the revenue that’s been lost as a result of COVID-19. It is designed to help the sector adjust to the new reality that they live within. For how long? We don’t know at this point.

In terms of the formula that that funding will be allocated on, it will be allocated based on a formula around the real revenue reduction that schools have experienced as a result of fewer international students being in school, or as a result of international students leaving the country and going back to their home countries as a result of COVID-19. That exact formula is currently being worked through with representatives of schools to make sure that the formula is right. So the exact formula has not been finalised, but the broad approach to it has been finalised, and that’s currently being consulted on with the sector.

I’ve got a number of more detailed questions for the Minister in the chair, the Hon Chris Hipkins, but before I run through those, I do think it’s important that we take a slight step back. I put to the Minister, when he’s looking at the overall appropriations in this Budget in education, it’s my hope—it’s my expectation—that what he is expecting of his department and of the schools that are operating in New Zealand is that every year they will do a better job than the last in terms of ensuring that New Zealand students are achieving more and are progressing better than they have in the past. So my question that I put to him at the outset is: what is it in this Budget that will actually ensure that more children are achieving at better rates than they have done in previous years? Because surely that is the major measure by which we assess how effective a Budget is. Are children actually going to achieve more in our early learning services and in our schools and our tertiary services in the next year, and what is it about this Budget that means that will be the case?

I want to start with that high-level picture before I then move to some more specific questions, specifically around why there has been a reduction in the “Supporting Parenting” appropriation, down from $26 million in 2019-2020 to $9 million in 2020-2021. Certainly, the parents I speak to tell me that it is their view that the foundation for all future learning is particularly what happens in those first thousand days of life, but is about the strong family settings and the parenting support that is available for young people. That’s also what I get reflected by teachers, which is that, actually, what turns up to the classroom does impact on the achievement they’re then able to progress.

I’m also very interested in the Minister’s predictions about teacher supply in the COVID environment. There are a number of appropriations and initiatives in this Budget which relate to teacher shortages that have been apparent in some geographies—particularly in the early childhood sector. Does the Minister expect these shortages to be better, to be exacerbated, or to be unchanged by the COVID environment, and how might that affect appropriations and the way in which the Government continues its spending?

I’m interested in the area of school infrastructure, because members across this House, like me, will be hearing from schools and communities frequently about the delays they see in new classrooms being built and in new schools being built. We often hear that the Ministry of Education is being slow to move. We do see in this Budget additional appropriation for capital spending on school infrastructure, but it’s one thing to have the appropriation; it’s another thing to have the actual delivery of that building. I want to be very specific with the Minister: does he think that the COVID-related challenges in our construction sector, in which significant proportions of the construction sector are saying that they are expecting to have to cancel projects, to lay people off, will affect the school building programme, and if those effects are predicted in any way, what are they? What can schools expect to see, and are there any initiatives under way to address that?

I’m very interested in the Playcentre and kōhanga reo funding models. These are left very vague in the Estimates. We know on this side of the House that there have been ongoing challenges with the sustainability of the funding models for those two parts of our early childhood sector, and I know from my engagements with Playcentre that they still feel that they haven’t actually progressed a funding model that they can see will work for them for the long term. So I want to know what the Minister’s time line is on landing those funding models and what they might look like.

Then, I’m also interested in the issue of institutes of technology and polytechnic viability, because yesterday when the Minister was asked about the special appropriation for export education, in which additional funds have been appropriated in order to support schools and private training establishments affected by a loss of international students, he was quick to say that universities have good reserves and can take the blow. Well, is it the Minister’s view that institutes of technology and polytechnics also have sufficient reserves to take what may be a significant blow in some regions of our country, where the loss of international students will be affecting bottom lines? Centralisation or no centralisation, we are told that these individual balance sheets still were being maintained. So I’m interested in an answer to that question.

Finally, just to allow the Minister to respond to this quick list of questions, I do have some questions relating to early childhood education, teacher pay, and the way he will be monitoring how that appropriation comes into effect, but I’ll leave him to address those initial questions first.

There’s certainly a lot in there to address, and I’ll do my best to work my way through that. With regard to student progress, yes, of course we do expect the education system at all levels to be doing a better job and to be striving to do a better job year on year in terms of student progress and student achievement. The single biggest determinant in school of a child’s progress will be the quality of their teacher, and all of the international evidence and all of the evidence here in New Zealand will tell us that, too—doesn’t mean we can ignore the out-of-school factors, but it means in school the biggest impact is the quality of the teacher that they have in front of them.

Of course, the member will be aware that one of the biggest increases in expenditure in this year’s Budget is the increased expenditure to meet the collective agreement negotiations that were finally settled last year. Every Minister of Education will tell you that where there’s a heated negotiation round, it ends up being a very big price tag, because even a modest pay increase for each teacher adds up to a very large amount of money for all teachers. So the increased investment in teachers is one of the things that will have a big impact on student achievement.

With regard to teacher supply, the Government’s been working to increase participation in initial teacher education. Of course, there are long time frames involved here between when someone signs up for an initial teacher education programme to when they actually make it into the classroom. We also know that, again, in an economic downturn when there are fewer employment opportunities, we see participation in those sorts of programmes going up. So I’m feeling optimistic about that. We know that in terms of existing teacher supply, we do have enough teachers in the system now to meet the formulaic entitlement for schools up and down the country. What we don’t have enough teachers necessarily to meet are the additional teachers that schools employ over entitlement, and, of course, the COVID-19 situation does have an impact on that, because in some cases they’ll be paying for those teachers from external revenue sources like international students, and so we may see some reallocation of the existing teaching workforce as a result of those changes. Of course, I do want to acknowledge that for those teachers, there’ll be some bumpy times ahead.

In terms of the education infrastructure, the last Government I think made some good steps in the right direction of providing more capability in the Ministry of Education to help oversee educational infrastructure projects. Up until that time, each school managed their own infrastructure projects, and, if I could say so—and I don’t mean this as a criticism of the individual schools—not very well. You know, that’s because they just don’t have the capability in-house to be able to do that well. Sometimes, they had a great board of trustees by accident who may have managed a good project, but, actually, by and large, the school system is not equipped to manage big infrastructure projects. So having a dedicated team in the ministry is giving us more certainty. We did put more money in during the COVID lockdown to support those businesses who are currently engaged in education infrastructure projects during that lockdown period so that they didn’t go broke while they weren’t able to be on site, so that the works could start again as soon as the lockdown was over—and that has happened—and, of course, we’re continuing to stimulate the economy by bringing forward school infrastructure projects in order to help supply that pipeline of activity for that sector.

Playcentre and kōhanga reo funding—been a vexed issue for a long time. I think we made really good progress on kōhanga reo; I think we’ve got a bit more work to do around playcentres. In terms of polytech viability, polytechs have fewer international students than, say, the universities or private training establishments, other parts of the sector, relative to their overall size, but they won’t be immune from an impact from that. The New Zealand Institute of Skills and Technology (NZIST) is managing the financial situation of each of its subsidiaries very carefully to help them through, and we have put capital injections into the NZIST to help them manage their way through that.

Finally, there, early childhood education teacher pay and how that’s going to be monitored: of course we will be looking to make sure that the pay flows through to increased teacher pay. We can guarantee that in one way, by increasing the minimum attestation rates, which we have done. One of the things that I have asked for further advice on—and more work is happening with the sector on this—is whether it should be just one attestation rate or whether there should be tiers of attestation so that we can monitor and ensure that additional funding for teacher pay goes into paying additional teacher salaries. We haven’t made decisions on that yet, but it is something that we’re exploring with the sector.

So just to advise you, we’ve got about four minutes left, so to get through before we move on to health, keep your questions short.

Madam Chair, thank you very much for yielding to me. I wanted to continue to go down the lines of my colleague Erica Stanford to the Minister of Education, the Hon Chris Hipkins, around international students and the role that has, and the significance of this, because, talking to schools, talking to my community, this is a serious issue for many New Zealanders. It’s a $5 billion industry for us and going out there, talking to people in the community, you realise just how significant it is, whether you’re a person that takes homestays, whether you’re a school, whether you’re a food and beverage provider that takes a lot of international students on, it has a significant impact for us as a country.

So the first question I have for the Minister is around the formula that the Minister has outlined that will be used to calculate which schools get what. I understand that, of course, it’s going to be based on the real revenue reduction. The issue that I have with that, Minister, is that there’ll be some schools that have a significant real revenue reduction but have good balance sheets, and yet there’ll be other schools that perhaps have a smaller real revenue reduction, but weaker balance sheet. So I want to know, from the Ministry of Education’s perspective, whether the balance sheet of these schools will be taken into consideration, because, just looking and listening to some of my principals in Northcote, there are some schools where they don’t actually take a lot of international students, but they just don’t have the balance sheet strength to actually absorb some of that downturn, whereas there are other schools that actually have a larger international education impact, but they’ve put a lot away for a rainy day. So I want to get a sense from the Minister on that.

But, I think, just the second part of that is around the clarity for the sector, around what the Government is thinking around when international students will be allowed in to New Zealand. I think that’s the biggest thing that I’m hearing from the sector—the sector needs clarity. I know the Prime Minister may have made some clarifications, “Don’t expect to see something in the next year”, but what I want from the Minister, and what my schools want from the Minister, is to go a step further, to say, under what scenarios will we see international students back in New Zealand, and what will that look like? Will it be international students from particular countries? What are the things that the ministry is considering? So that it gives schools some comfort and some clarity to plan. Whether it’s another year, or another year or two, we want to get a sense from the Minister around that. So there are two areas: the first is the formula and the inequities that may happen because of that; the second is around the sense of clarity that the sector needs and deserves in order to plan for the future.

Look, very briefly with regard to the first part, I don’t really have a lot to add on the formula yet for how the money will be allocated to schools, other than to say that it is being consulted on with schools at the moment. I do want to just make an observation, though. As Minister of Education, of course, I get a breakdown of schools’ finances each year. Members of Parliament will all get their school’s annual reports. There aren’t many schools in the country that you would describe as having healthy balance sheets. By and large, schools do live a pretty hand-to-mouth existence, year upon year. They don’t have a lot of money sitting in the bank, and so that’s one of the things we’ve been very conscious of.

When will international students be allowed back into the country was the second part of the member’s question. At this point, again, I don’t have a specific time frame for that—for the member, for the schools, or for anybody. I know we’ll get them a specific timetable as soon as we’re able to. There are a variety of scenarios when safe travel zones might emerge between New Zealand and other countries, where it may be that international students can come back from those countries—under those circumstances when we have the capacity in quarantine and managed isolation to be able to support them, when we can expand those arrangements to be able to support them. Of course, we’re actively involved in conversations with the sector about how we might be able to do that. Bearing in mind, though, that the schools sector is a little bit unique, in the sense that other parts of the sector can put people into managed isolation by themselves; the school sector can’t do that, because those young people need to be with a caregiver, if they were to be put into managed isolation. That adds a layer of complexity for the school sector that the rest of the international education sector doesn’t really have.

Health Sector