Keynote address: New Zealand Association of Private Education Providers (NZAPEP) Conference 2013

Introduction

Tēnā koutou katoa.

Thank you for having me at the NZAPEP Conference. It’s good to be here again.

I’d like to acknowledge the NZAPEP Board, the Chair Christine Clark, and the Deputy Chair Margie Sorenson.

Tertiary Education – government vision

Tertiary education offers a passport to success in modern life.

It helps people improve their lives and the lives of those around them. It provides the specific tools for a career, and is the engine of knowledge creation.

For most young people, as you’ll all know, achieving a tertiary qualification is a crucial milestone towards a successful working career. 

Whether they study at a university, polytechnic, wānanga, private training establishment, or through an apprenticeship, a qualification gives them a concrete record of knowledge learned and skills gained that they can use to move up the employment ladder.

Government changes since 2008

I’m proud of what we’ve achieved in tertiary education since 2008.

We’ve improved the value for money of tertiary education, by reducing spending in low-value areas, and improved the way the system targets need.

We’ve set performance incentives on providers and students, and improved information for students about the performance of providers and the employment outcomes of their study.

It’s great to see that after four years of publishing annual performance information, the PTE sector is achieving improved performance year on year against most indicators. I am advised that PTEs have been actively identifying how they can improve student achievement and changing their practices accordingly.

We’ve also made a significant investment in tertiary education. Student Achievement Component funding went from $1.7 billion in 2008 to $2.1 billion in 2012.

We’ve encouraged competition in foundation education by opening it up to private as well as public providers, and transparently tendering level one and two provision.

From the beginning of next year we will have fully closed the gap in funding between public and private sector providers, created by the previous Labour government in a deliberate attempt to screw the scrum away from private providers.

That changed is based on a simple formula – that providers should be paid the same amount for producing the same results regardless of their ownership.  It’s their performance that counts – not who owns them.

Results

Our changes are producing results.

Completion rates are rising - qualification completion rates improved across all sub-sectors between 2011 and 2012.

More young people are moving from school to degree level study - from 13,600 students in 2007 to 16,500 in 2012, including more Māori and Pasifika.

More people are completing level 4 qualifications by age 25 – from 40% of 25-year olds in 2007 to 46% in 2012.

And the share of 15-19 year olds not in employment, education or training has fallen from 11.3% in March 2011 to 8.8% in March 2013.

Tertiary education institutions providing the Youth Guarantee since it began in 2010 have shown increases in course completions from 63 per cent in 2010 to 70 per cent in 2012. Qualification completion rates have also increased from 48 per cent in 2010 to 64 per cent in 2012.

Youth Guarantee was amalgamated with the former Youth Training programme in 2011 so that more young people would achieve a full qualification and improve their job prospects. Latest data shows that students of former Youth Training providers are producing significantly better results under the Youth Guarantee programme. Credit achievement has risen from an average of 24.86 in 2011 to 37.31 in 2012 – a 50 per cent increase.

New Tertiary Education Strategy

Soon I’ll launch a revised Tertiary Education Strategy for the years 2014 to 2019.

While the tertiary system is performing well, it needs to become more outward-facing and engaged, by having strong links to strong links to industry, community and the global economy.

There will be six priorities for the new Strategy.

The new strategy and its priorities are a key part of the government’s Business Growth Agenda.

Delivering skills for industry

As we move out of the GFC, employers are once again finding it difficult to find people with the right skills.

The challenge for the tertiary education system is to retain the recent increased focus on student achievement, while doing more to help students and their families making informed choices so that their training provides them with good career opportunities.

We’ve done a lot in this space already – through things like “Moving On Up”, the “Occupation Outlook Report”, and the Vocational Pathways.

We’re allocating $27.2 million over four years to increase tertiary tuition subsidies for engineering and science.

This funding increase will continue to bring tuition subsidy relativities for science and engineering closer in line with international practice and Australia in particular.

This funding will help deliver 500 extra engineering grads per year.

And in terms of IT specialist degree graduates, from 1200 in 2011 we’re on track for 1600/1900 a year by 2014.

Apprenticeships

We’ve also made a number of changes to industry training, which are all about increasing the opportunities for in-work training for all Kiwis.

From 1 January next year, all apprenticeships will be combined into a new single nationwide scheme called New Zealand Apprenticeships.

These new apprenticeships will provide a premier vocational pathway into an industry-based career for New Zealanders.

We’re boosting the overall funding for apprenticeships, and increased the educational content.

In January the Prime Minister announced an “Apprenticeship re-boot subsidy”, which would give the first 10,000 new apprentices $1,000 towards their tools and off-job course costs, or $2,000 if they are in priority construction trades. The same amount would also be paid to their employers.

As a result of the changes the government is making, and stimulated by the boom in construction and other trades that is already underway in Christchurch, we estimate that around 14,000 new apprentices will start training over the next five years, over and above the 7,000 who normally enrol.

Māori/Pasifika Trades Training

We’re also bumping up the investment in the Māori and Pasifika trades training programmes by more than $35 million. By 2015, the programmes will expand from 600 fees-free places to 3,000, which include end-to-end support, foundation skills, and a pathway from foundation education through to employment and the completion of a New Zealand Apprenticeship. This increase also recognises the economic importance of engineering in New Zealand, including the rebuilding of Christchurch, and that scientific skills and research are integral to lifting innovation and boosting growth.

Looking ahead, we need more explicit co-operation between industry and TEOs on skills demands.

FFTO Changes - Announcements

The priority I’d like to focus on today is getting young people into a career.

The GFC has had a strong impact on young people’s career prospects. While the rate of people aged 15-24 not in employment, education or training has decreased from 67,000 in 2010 to 60,000 so far in 2013, this still leaves a substantial number of young people at risk, particularly in the 20 – 24 age group.

One of the areas that hasn’t been working well enough is the interface between tertiary education and the social welfare system.

The Foundation Focused Training Opportunities programme was put in to replace the old TOPS programme – but it too has not produced the desired outcomes for learners. While the intention of the programmes are good, the courses are neither full-on foundation education programmes, and nor are they focused enough on getting people into employment.

Participants in FFTO are actually less likely to become independent of welfare assistance, compared to those who don’t participate in the programme.

So the government has decided to wind down this programme, and it will cease from the end of this year.

We are going to replace FFTO with an expanded range of programmes, which we know are effective at helping people

up-skill or move into employment.

All the existing FFTO funding will be reprioritised.

FFTO  is being replaced by….

A significant sum of money will stay with MSD and be spent on courses focused on getting beneficiaries into work, such as shorter duration training providing industry skills or other employment or training programmes.

The number of places at these types of programmes will rise by around 2,000 to 4,000 per year.

ESOL / ILN

Funding will also increase for English for Speakers of Other Languages (ESOL) programmes.

In 2014/15 there’ll be an additional 1,420 places in these programmes.

We’re also increasing funding for intensive literacy and numeracy courses.

In 2014/15 there’ll be an additional 1,350 places.

Fees free Levels 1-2 Student Achievement Component provision for 20-24 year olds

Some of the FFTO money is being transferred into fees-free level 1 and 2 SAC funding for 20-24 year olds.

I’m pleased to announce today that all foundation education courses will be fees-free for 20-24 year-olds from 1 January next year.

Level 1 and 2 courses deliver core foundational skills required for success in life.

They provide students with the skills required for higher level vocational study, training and employment.

Most students gain these skills and qualifications (such as NCEA Level 2) in a school setting, but too many New Zealanders don’t have these skills at age 18 or 20.

As part of the FFTO changes, beneficiaries will be prioritised for level 1 and 2 courses, and MSD will refer beneficiaries to the most effective level 1 and 2 education programmes for their needs.

The government will also focus funding on those who have previously not achieved a level 1 or 2 qualification. It’s vital that those who don’t have a qualification at this level go and get one.

Youth Guarantee Extension

I’m also announcing an extension of the Youth Guarantee scheme today.

The government established the Youth Guarantee scheme in 2008 for students who find the traditional classroom environment challenging and are at risk of dropping out of school.

It provides fees-free Level 1 and 2 qualifications at tertiary institutions and at trades and services academies, encouraging students to gain practical qualifications that will set them up for a range of career options including in priority trade areas such as carpentry, engineering, horticulture, plumbing, gas-fitting, and brick-and block-laying.

The Youth Guarantee is currently available to 16 and 17 year olds, 15 year-old students with early leaving exemptions, and 18 year-old teen parent beneficiaries.

8900 students enrolled in Youth Guarantee programmes in 2012, with only seven per cent of students in 2012 having achieving NCEA Level 2 by the time they entered the programme.

The Youth Guarantee has been very successful at encouraging 16 and 17 year olds to stay engaged in education, completing Level 1 and 2 qualifications instead of dropping out and going on the dole.

However there are older teenagers who have already dropped out of school, who need a chance to get that vital first level 2 qualification.

I’m therefore announcing today that the Youth Guarantee will be expanded to 18 and 19 year olds from 1 January next year.

With Youth Guarantee, Trades Academies, and the new Vocational Pathways, the government is confident that every single teenager has a fees-free path to a level 3 qualification, and a clear pathway to guide them to a vocational career.

Foundation level education from 1 January

In fact, the changes I’ve announced today mean that anyone under the age of 25 will be able to obtain a level 2 qualification fees-free, whether that is at a secondary school, in a Youth Guarantee programme, or at a tertiary provider such as a private training establishment.

This is a significant commitment to New Zealand’s future.

I’m conscious that the changes I’ve announced today will affect some providers. However, as I’ve outlined, much of the FFTO funding is being redirected into other programmes that providers will be eligible for. Furthermore, Youth Guarantee funding is budgeted to increase in both 2014 and 2015.

TEC is here today and I encourage you to engage with them.

Conclusion

Thanks for inviting me to address you again this year.

Finally, I’m told that you’ve had a rebrand – and that NZAPEP is now to be known as Independent Tertiary Education New Zealand (ITENZ).

As this is considerably easier to say than NZAPEP – I welcome this change and wish you all the best for the conference and the future.

Happy to take questions.