Response to the Productivity Commission report on tertiary education

  • Paul Goldsmith
Tertiary Education, Skills and Employment

Good afternoon everyone and welcome. It is great to be here with all of you who have a major stake in tertiary education and the future workforce of New Zealand.  I am here today to announce the Government response to the Productivity Commission report on new models of tertiary education.

I want to start by acknowledging Kirk Hope, Chief Executive of Business NZ for hosting us today.

I would also like to acknowledge Murray Sherwin, the Board, Judy Kavanagh and the team at the Productivity Commission for producing a very insightful – and very thorough – report.

I would also like to thank the stakeholder groups, peak bodies and employer groups who put in an enormous amount of effort to organise feedback from their members and provide submissions on the report.

You will be able to find the response published in full online, but I want to take you through a number of parts which are relevant to those here this afternoon.

The Productivity Commission’s task was to look at how our tertiary education system responds to emerging trends in technology, the internationalisation of education, flexibility in the system and importantly the skills needed in our economy: no small feat.

Over recent decades New Zealanders have invested ever-greater funds to ensure that more and more Kiwis can extend their learning further, to gain skills for their careers and to gather knowledge about themselves, our society and the world in which we live.

The tertiary sector is now a big part of the economy, not just preparing workers and citizens, but also providing research and intellectual leadership in so many fields.  Academics, researchers and the administrative staff that support them help our companies innovate, they help solve national and international challenges and they deepen our understanding of the human condition.  The sector is also a major export earner, sustaining the livelihoods of thousands of New Zealand families.

My priority as Minister is to ensure that the sector remains responsive to the needs of all its stakeholders, is innovative and effective, and that it builds on its high international reputation.

Skills for a growing economy

The consistent message we’ve all been receiving around the country is that at a time of rapid job creation, demand for skills is at fever pitch. And there’s a sense that demand will continue to grow in the years ahead.

The demand extends from highly-skilled areas, such as writers of code for the digital economy, to the skilled tradespeople needed to build our houses and infrastructure, the technologists who will drive our growing food industry, through to the many skills required in the booming hospitality industries.

This demand is driven by a strong economy, by shifting technology, and by population growth.

The education system, naturally, is critical to delivering the skills required. It’s not just a one-off task, immediately following school. In many cases it will be ongoing, throughout multiple, shifting careers.

Our tertiary system is high performing and in many aspects, equal to this task. But there is always room for improvement. As part of our response to the inquiry we have developed four key areas of focus.

Students at the heart – creating a more student-centred system

Students are at the heart of any strong and effective tertiary education system. It is their commitment, their choices, and their outcomes that will drive any benefits we, as a country, gain from our investment in tertiary education.

We will work to make it easier for students to move between work, study, and different types of learning. We will continue to improve the information available to students, right from careers advice at school, through to study options and employment outcomes of graduates. We will also look into options to provide students with more flexible and relevant qualifications.

You’ll begin to see some movement on this area very soon, as NZQA are progressing three pilots in the area of micro credentials. These pilots are a stepping stone to NZQA developing a full micro credential system so that employers and learners can access the skills they need as the nature of work continues to change. 

Ultimately our system will recognise informal and formal learning and reduce duplication through greater use of recognition of prior learning, cross credit and micro credentials.

Meeting the needs of industry

We want to ensure that providers are offering a relevant and responsive education for their students. And one that meets the needs of industry through relevant, responsive, and supportive teaching.

One element of this is ensuring that we have the balance right between teaching and research, so we will be reviewing research-led teaching rules. It will also mean supporting the sector to improve teaching quality, and increasing the opportunities for providers to collaborate with industry to offer programmes that integrate with the working world.

Inertia in the system

Through its inquiry, the Commission – and many submitters – identified inertia as a key problem with the operation of the tertiary education system. Many providers are unwilling to trial new approaches to delivering education because of perceived funding or other implications.

The third area of focus will be on improving performance across the system. We want to support a more responsive system that better rewards high performance, provides the right incentives for TEOs, and reduces the barriers to delivering an improved system for everyone who is involved. Part of this will mean looking at how we fund providers, including performance funding, how EFTS are calculated, and how fee regulation can restrict innovation and providers’ ability to differentiate their courses. This is complex work that will take time to complete.

Innovating in the tertiary sector

One of the Government’s core aims for the inquiry was to see how enabling and encouraging innovative new models and providers could be achieved. The first three areas all contribute to encouraging innovation, but there are some specific opportunities available to directly support innovation.

Over the next year we will make it easier for providers to enter the TEC-funded system, and for the TEC to prioritise applications offering course provision that isn’t already available with TEC funding. And in line with the Commission’s recommendation, provide a “safe harbour” for providers to run experimental SAC-funded courses with an exemption from EPIs.

To summarise, some of what we’re proposing in response to the Productivity Commission is a continuation of work already underway, some however, is more substantial reform. We know it is a complex system, so we would go about change in a careful and consultative manner.

Wrap up

In wrapping up, I just want to say something about the prize we seek. It’s not just about better delivering the skills we need for a growing economy, it’s also about creating opportunities. An important part of the work lies at the foundation level – where tertiary providers are working with at-risk young people who have struggled during their schooling. They are looking to find that spark of inspiration that each young person needs to get back into education and into a job.

With the current strong demand for labour and skills, we have a once-in-a-generation opportunity to make a real difference to the lives of those young men and women, and some older people as well. We have a chance to get people into work, in families where that hasn’t occurred consistently for generations, and thereby to make real progress on a long-standing social problem. That’s why it’s so important that the tertiary system is responsive and innovative.

The other thing I wanted to mention was the challenge of matching the skills we produce with the skills we need as a country. A stark example is the continuous struggle we have to get talented young people into the trades.

We can put better information in the hands of students about the options out there for work, the careers they can have, and the employment outcomes from specific courses. But in the trades space particularly we’re still fighting against entrenched attitudes, amongst parents, educators and the community at large that steer bright and enterprising young people away from a career in the trades and technical areas.

This has to change. There are huge opportunities for great careers in the trades in this country. The Government is willing to put the money in, but we need buy-in from parents, careers advisors, educators, and the wider community. We need them to support our young people into trade professions, because they’re not just the courses for the students struggling at school, they’re essential for building the houses we need, the roads we need, and all of the other infrastructure that we are investing so heavily in.

Because it is so topical at the moment, I have focused on the skills side of the equation, but I do want to make the obvious point in closing that the tertiary sector contributes more than skills alone. It’s about the development of knowledge at the individual level and at the broader national and international level. It’s about deepening our understanding of ourselves, our history, the world in which we live, and finding solutions to our many challenges.

We have inherited as a country, a world class university system that is consistently high-quality. The Commission didn’t directly focus on this area, but it is certainly one of my overarching concerns, to ensure that we preserve and enhance that global reputation.

That’s why we continue to invest in high-quality research, which underpins the strength of our universities. We are committed to that.

So thank you to the Productivity Commission for your report. The documentation released today gives a high-level response to the recommendations, and as we work our way through many of the proposals over the next few years we will ensure our tertiary system remains responsive, innovative, and effective.

Thank you all.