Association Of Polytechnics Of NZ Annual ConferenceEducation
Thank you for the invitation to be with you this year. In the light of my experience last year, I am pleased to actually be with you here at Waipuna Lodge. For the sake of reminding those who may have forgotten, last year I intended to address the Association of Polytechnics of New Zealand. But due to bad weather, especially flooding, I was unable to get from my home in Martinborough in the South Wairarapa to Wellington to catch the plane down to Nelson. So at the last moment I had to invite my colleague and then Associate Minister, Nick Smith to fill in for me. I am glad to be here this year.
In fact I had hoped that I would be here just after the release of the White Paper and therefore be able to use this opportunity to expand and explain the policy decisions that have been made as part of the Tertiary Review. Unfortunately that is not to be, the White Paper is still a couple of weeks away from publication.
We are dealing in the White Paper with very significant policy issues. Decisions made will influence the shape of the tertiary sector for the next twenty to thirty years, and maybe more. Any decisions made as part of the review that can affect 1999 have already been announced. I refer here in the main to the resourcing package announced in the Budget. I agree with the comment in your Conference brochure - "Students are people not EFTS". We are developing policy that must work for people for years ahead - it is not a mechanical bureaucratic exercise. We need to take great care to get it right.
There has therefore been no need for us to be driven by artificial deadlines. Rather given the importance of the subject we need to take our time to make sure that we have got the White Paper right. There are some White Paper issues I can discuss however, the most obvious one being the resourcing decisions that have already been announced. But before I do so, I would like to take advantage of this opportunity to move outside the more narrow focus of education policy and talk for a moment on the broader economic situation facing New Zealand. It is a subject that should be close to the heart of every Kiwi, because at the end of the day, what we can do, whether it is in tertiary education, health, welfare or any other area of government or personal activity, will depend on the wealth creating ability of our economy.
I am sure that many New Zealanders are yet to grasp the extent to which the international economy has turned against us over the last year. The problems began in Asia and after initially being contained within that part of the world, spread to Russia, and South America. Japan, one of our most important trading partners and a key economic player in the world has been very seriously affected and it still has some distance to go to achieve an economic recovery. And while at the moment stockmarkets seem to be coming back again, they have displayed real volatility. It is hard to believe that a company carrying on as a going concern can vary in value by as much as 2 or 3% per day, and yet those are the kinds of swings we are seeing in our sharemarket.
Commodity prices including those key commodities that earn so much overseas for New Zealand, like the meat and wool industries have shown significant falls. This is the economic context that we a small nation of 3.6 million, remotely located in the South Pacific have to make our way within.
The Coalition Agreement in 1996 included proposals for increases in Government expenditure of $5 billion. This included considerable increases for education and health. Both are areas of very significant political sensitivity. The $5 billion increase would have been okay had the economy kept growing as forecast, but it has not, and we have had to amend the plan so as to match that large fall in revenues that comes from weaker economic performance. Our best economic advice suggests that the current position with Government expenditure is about right. The difficulty is in the medium term.
Again our best economic advice has been that unless we made the changes to bring back medium term expenditure along the lines of those in the June and September packages our fiscal position was not sustainable in the medium term. Sure when we did it we got screamed at. But it is much more important in Government to do what is right, than do what is instantly popular. All of us no matter where in society we come from, have a duty to be certain that we leave our country in the best possible condition we can for the next generation of New Zealanders. And loading them up with debt is not doing that.
That focus on the next generations of New Zealanders, the one whose interest we should all be doing our best to serve, naturally moves me over into the education debate.
The first Tertiary Review announcements made were the resourcing decisions included in the 1998 Budget. The removal of the cap on student numbers so that from hence forward with the Universal Tertiary Tuition Allowance, all students, no matter where they study in New Zealand, as long as they are studying for an approved qualification with a quality provider, will receive taxpayers' support towards the cost of their course. We initially budgeted on that tuition subsidy level being 75%. The need to trim Government expenditure in the light of the economic circumstances I have just explained, unfortunately it meant having to pull that figure back to 72.5%, although there is still $155 million more going into the sector than there was under the 75% formula. We are now covering all students rather than the capped number. Institutions can now be confident that if they go out and attract additional students, they will be funded for them. The era of the unfunded student is over and we are better off for it.
The Tertiary Review is comprehensive. The White Paper will cover issues that have been around for a long time. Governance, monitoring and accountability are addressed. So too is research, quality assurance, Study Right, base grants and a rational tertiary structure - all issues around which there has been considerable consultation and discussion in policy development. Most of our conclusions will I believe be well accepted across the sector. The options chosen from the menu put forward in the Green Paper are sensible and moderate - the sort of "they are going to privatise everything" reaction from some more extreme elements will be proved wrong. It always was. although the media got some sensational copy publicising those over the top claims.
One particularly thorny issue - this one will I expect illicit some controversy - answers the question of how we balance up the different levels of capital provided from public sources to different institutions. It can hardly be fair when one institution loaded up with assets built with public money prior to the introduction of the new system in 1990, gets paid exactly the same for tuition as another institution usually set up much more recently with comparatively few capital assets. My fear is this debate might descend into nothing more than people defending the side of the fence they are on. If they are an institution with considerable assets they will say all should be paid the same price. If they are an institution with comparatively few assets they will say they should receive additional payments to recognise the fact they had far fewer assets to work with when the new system started.
At the end of the day the most powerful criteria for judging any policy is to ask oneself whether it is fair. Rather than seek to protect one's own vested interest in this matter, I hope all institutions will look at the broad picture and address their comments as to whether we have selected the right approach, rather than what suits their pockets.
We have also posed the question of what is the rational structure for tertiary education services in New Zealand. I said earlier on that we are a nation of 3.6 million people, smaller than a medium sized city in many countries overseas, and yet we have seven universities, 25 polytechnics, five colleges of education and three wananga as public tertiary education institutions. The Government is determined to retain widespread regional delivery of tertiary education services, but I am sure there are ways that alliances of all sorts can be developed that will strengthen the structure or our service delivery system. Alliances are already appearing, mergers are being discussed. We will support new arrangements that strengthen the sector although we want to retain our capability for widespread regional delivery of vocational applied education and training.
Our tertiary policy like education policy generally is driven by four clear goals. These goals are at the heart of the policies proposed in the White Paper. The first clear goal is to continually raise standards and quality. The reason for that is self-evident. We want in New Zealand an international quality tertiary education system. The new quality assurance system will see every taxpayer funded New Zealand qualification quality assured - although with an approach that recognises the widely varying needs of different providers.
Our second clear goal is to make sure that what is taught is relevant to the needs of the 21st Century. We all know the old story that goes along the lines that if you can't work your video, the quickest way to figure it out is to ask a kid. The world they live in will be technology driven. Our approach must reflect their needs in the future. As has been observed by many here new technologies will impact significantly on course delivery in future. There is an emphasis on policies which allow for quick adaptability - the system will not hold back change.
Our third clear goal is to continue with a devolved structure developed in the reforms of the late eighties, but as with quality assurance, in a way that allows for the different needs of different institutions to be recognised and accommodated. One of the mistakes of the late eighties reforms was to assume that one size fits all solutions were the answer. Currently no matter whether you are the largest university in New Zealand or the smallest polytechnic, the same prescriptive statutory rules about councils and their operations apply. I would have thought it self-evident that smaller institutions can operate with smaller councils. This alternative horses for courses approach gives flight to common sense and contrast positively with that one size fits all approach so fashionable in of the late eighties. It also facilitates the need to allow institutions to adapt to changing circumstances.
Our final goal is to better deal with the needs of at risk students. We are moving to a future where skills and qualifications, human capital is the backbone for future achievement. Tertiary education has a key part to play in securing the future for everyone. We must no longer accept or tolerate the too high proportion of student cohorts coming out of our educational system without the skills and knowledge they need to make it in the 21st Century. For balance, I should make this point, the media focus in the education policy debate as it is in other debates, spotlights the negative. We hear when things go wrong. We seldom hear when things are going well, and yet for most students in New Zealand our education system works very well indeed. Teachers at all levels do a good job.
I congratulate and thank those who put in the effort to make it possible for the younger generation of New Zealanders to succeed. But we must make sure that for those who in the past, success has been elusive - and regretfully their numbers included a disproportionate number of people from Maori and Pacific Island backgrounds - we must make sure that they too have the educational where-with-all to make it in the modern world. In the past there were plenty of manual, low skilled jobs to sustain income streams for people in that group, but those types of jobs are rapidly disappearing as we move from the industrial to the information age. They too now must acquire the skills and knowledge required to actively participate in productive economic activity in the 21st Century.
I end with the future focus. There is a gag line that reads something like this, when you are up to your neck in alligators, it is hard to remember that the original intention was to drain the swamp. Every now and again we have to stop being consumed by fighting off alligators, stand back and see that bigger picture. For me the bigger picture is simple, we all have a duty to do what we can to address the problems of today in a way that creates the best possible future we can for the generations of New Zealanders that follow us. Their interests must be at the centre of our long term focus. This ties in perfectly with the theme of your Conference - - "Students - Our Future".
While I am sure there will be debate about aspects of the Tertiary White Paper, I can say without fear of contradiction that it is driven by a motivation to create the best possible future for New Zealand by providing a framework that will allow the development in our country of a modern, efficient, effective high quality, forward looking international quality tertiary education system.
Thank you for the opportunity to speak to you today.