Hon Steve Maharey
10 October 2000 Speech Notes

Access and Accountability:
Dual Goals for Tertiary Education Policy

Speech to Victoria University of Wellington Students' Association student forum. Meeting Room 1, Victoria University of Wellington.

INTRODUCTION

I would like to thank the Victoria University of Wellington Students' Association for inviting me to speak to you here today. I would also thank the Victoria branch of Young Labour for helping to organise and promote this student forum.

I think Ministers with responsibility for tertiary education need to front up to tertiary students as often as possible. It is important that we listen to your concerns. It is also important to get a dialogue going with you on key issues facing the sector.

Those are not just student 'pocketbook' issues.

I am not a Minister who believes that the only thing that students care about in tertiary education is how much they have to pay. That is critically important of course, and I will return to it in a moment. But you also care deeply, I know, about the environment you study in – the quality of your courses and health of your institutions.

Participation in tertiary education means being part of a 'learning community'. It's not about being a shopper pulling some pre-packaged product off a supermarket shelf. Labour and the Alliance recognise this, whereas the parties of the Right do not. That's why we've been very clear about retaining a representative role of Councils, while also being concerned to equip them to meet modern demands.

You as students are full members of that learning community. That's why we support student representation on Councils. It is why we repealed the 'voluntary student membership' legislation and strengthened the student associations that underpin that representation. Representation on Councils is fair to the student, and it is also good for the health of the institution itself. It makes institutions more responsive and accountable to the student body. That in turn allows them to evolve more effectively to meet changing needs.

It is an example of the advantages of accountability.
I'll return to that later. First I want to tell you what this still relatively young – 10 months old – Government has done to improve access to tertiary education. Then I want to say a few words about how we are answering the question, "access to what?"

Our four major access initiatives have been:
 Fee Stabilisation;
 No Interest While Studying;
 Restoration of the Training Incentive Allowance; and
 Industry Training

FEE FREEZE 2001

This Government has done something that National was never able (or willing) to do: we have brought a halt to the tuition fee spiral. Next year there will be a sector wide fee freeze.

Any of you who are coming back to Victoria next year will pay no more than you did this year. Those of you who recall the sometimes bitter fee-setting rows and registry occupations of previous occupations will breathe a sigh of relief to hear that.

But it's not just Victoria. Every university has announced publicly that they will take the Government's 'fee stabilisation' offer and keep fees at 2000 levels. In addition, we have received an acceptance from every single polytechnic, college of education, and wananga. Most private training establishments have also accepted the offer, though not all, but they're not so pivotal.

I really appreciate the sector's willingness to support the fee freeze. It wasn't the most generous offer in the world, though it is costing us $30 million in 2000. Their acceptance really shows a commitment to stemming the tide of rising fees.

NO INTEREST WHILE STUDYING

We also promised a 'fairer loan scheme' and we made a start on this within days of taking office. We announced the end of interest while studying for full-time students and part-time students earning less than $24,596 a year.

If you fit into either of those categories then, starting this year, what you borrow is what you owe. No more worrying about how much your loan balance has crept up while you've been completing your qualification!

However, I do ask you all to make sure that you receive your interest write-off. Starting this week every borrower should be getting a letter from the IRD. It will ask you to confirm if you are an enrolled student in 2000. When you get the letter, be sure to reply either by filling in the form or by phoning or using the internet. If you don't receive a letter, perhaps because you've moved flats, just ring IRD on 0800 377 778 and 'wipe out' your interest. In future years, we'll make the whole process automatic, but that hasn't been possible this time.

Alongside this, we have made other changes to the Loan Scheme:
 Reversing the previous Government's plans to raise the loan repayment rate on income over $50,000 to 15 cents;
 Allowing students to borrow for their student association fees once again;
 Freezing the maximum interest rate for ex-students at 7.0% for 2000/01; and
 Implementing the interest write-off to ensure 50% of ex-students' repayments (in excess of the inflation adjustment) go to repay their loan principal.

In addition, the Education & Science Select Committee is currently conducting, at the Government's request, a comprehensive review of the Scheme. Connected to this was the Youth Affairs Student Loan Summit, held in August.

The cost of our student loan changes has been substantial. At $420 million over four years it is surpassed only by the restoration of superannuation rates. There have been those in the sector who have castigated us for this largesse. They say some or all of the money should have gone to the universities and other tertiary institutions rather than to students.

But we stand by the policy. The burden of student debt is a major social problem that the previous National Government has left as a legacy to this nation. Even they no longer defend it in Opposition – though I wouldn't rely on that if they ever get back into Government!

RESTORING THE TRAINING INCENTIVE ALLOWANCE

Fees and loans (along with allowances) are what probably most of you think of when they talk about student access issues. But there are other measures, which for many students are probably more important.

Over 20,000 sole parents, widows and invalids beneficiaries access the Training Incentive Allowance to help pay for their fees and course costs. Without the TIA many of these people would never be able to get the education they need to get back into the workforce.

We see the Training Incentive Allowance as an investment in people's futures. National saw it as a cost.

That's why they barred access to the TIA for postgraduate study.

That's why they introduced a requirement that TIA recipients should have to provide at least a co-payment of 40% of their tuition fees themselves.

From the beginning of this year, we have abolished that co-payment and we have restored eligibility for many graduates. We have also reinstated an annual inflation adjustment on the TIA rate structure. In total, we are investing $32 million over four years into extending educational opportunities to beneficiaries.

INDUSTRY TRAINING

Access to education doesn't just mean degrees, either. We have entered a period in which we need to make lifelong learning a reality. Our tertiary education system will have to adapt to meet the needs of all learners, instead of trying to make everybody fit our existing methods of provision.

We need to meet different needs in different ways. That is why we've committed $75 million over four years on additional industry training placements including our new Modern Apprenticeships programme, and expanded funding to Career Services.

The Modern Apprenticeships initiative clearly resonates with the needs of employers, trainees, providers and the community at large. Modern Apprenticeships and the new Gateway programme are about providing a range of initiatives as part of an Education and Training Leaving Age strategy that will see no young person 'unemployed'. They will all be either in education, training, and/or employment.

OTHER MEASURES

One of the problems with being a Government of constant improvement is that it quickly becomes impossible to discuss fully all the improvements we have made. I would just briefly mention:
 Halving fees for studying dentistry;
 Additional money for Student Job Search;
 Developing a strategy to promote export education; and
 Our prompt response to the problem with Student Loan processing.

A focus of our efforts has been to address disadvantage and broaden access. An example of that has been the Training Incentive Allowance changes I mentioned before. Another is our determination to 'Close the Gaps' between the tertiary participation of Maori and Pacific people and those of other New Zealanders.

Do you know that you are twice as likely to go directly on to a tertiary institution when you leave school if you're not a Maori, than if you are? That gap hasn't closed at all over the decade. In fact, it's got marginally worse.

Your student president Chris Hipkins – and congratulations on your re-election, Chris – commented in April this year on falling Maori enrolments here at Victoria. He raised concerns that,
"New Zealand Universities will return to being the domain of the white, middle class unless urgent attention is given to boosting participation among Maori, other ethnic groups and students from low socio-economic backgrounds'.

I agree, and this Government wants to encourage tertiary institutions to be responsive to the needs of under-represented groups.

I'm not in a position to make a policy announcement on this today, but -- watch this space.

'ACCESS TO WHAT?'

Actually, what I would like to do before taking your questions is to spend a bit of time talking about another area where the Government intends to take action. It is an area that students are not "supposed" to be interested in, but I know you are.

It is about governance and management. In short, the way that your university is run.

I say "your university" advisedly. It is your university as members of Victoria's "academic community". It is also your university as citizens of New Zealand.

Universities, like other tertiary institutions, are Crown Entities. If a university were disestablished, the Crown would assume any residual liabilities that it had.

A number of universities dispute, however, that the Crown 'owns' them in the usual sense of the word. Nonetheless, I think that everyone would agree that universities and other tertiary education institutions are public assets.

The Government has the responsibility and the obligation to ensure that these assets are preserved and that they are used in the public interest.

Over the 1990s we had a Government that was careless with that responsibility. The competitive framework it set up seemed almost calculated to cause the failure of some institutions.

If that was the plan, they nearly succeeded. Shortly after taking office, I was briefed by my officials on the parlous financial state of the sector. A great deal of our energy this year has gone into working closely with a number of institutions to bring them back from the brink.

Last month, one of the most difficult situations was brought to a successful conclusion. I approved the merger of Wairarapa Polytechnic with UCOL, to take effect early next year. I am very pleased with this result, which preserves and extends the range of education offered to the people of the Wairarapa.

We have Crown Observers working with a number of other polytechnics to address barriers to their ongoing viability. You will be well aware that universities have not been immune to serious difficulties and hard choices, either.

MEETING NEW CHALLENGES

I am determined that I will not leave my eventual successor the same sort of legacy that greeted me, in terms of sector viability.

Part of the solution to that is funding. We have to be clear about what it is we are asking from each institution and fund them in a way that realistically supports those expectations. The Tertiary Education Advisory Commission will look at how to set up institutional profiles, and how to fund them. I do not think this approach will be able to rely solely on an enrolment-driven formula like the EFTS system.

I would also note that an important aspect of a profile-based system, particularly for universities, will be the identification and funding of centres and networks of international research excellence. I know it's frustrating to have to wait for these ideas to be developed and implemented. Nevertheless, I would urge institutions against short-termism. In particular, it would be unwise to shed capacity in centres of excellence to meet short-term financial pressures.

However, we also have to be honest. It is not only underfunding which has caused institutions' financial problems. Funding alone will not resolve all the problems of the tertiary sector.

Institutions need to be:
 Well-managed;
 Efficient and effective; and
 Connected to the communities they serve.

They need to be able to retain the confidence of students, or else they will lose enrolments. They must also maintain the confidence of their community that they are well-managed and that their courses are of high quality.

They must be clear about their mission and what they stand for.

Let me be frank. The quality of the governance and management of some tertiary institutions over the last decade has not always been adequate to meet the demands upon it. Some of those demands have been because of underfunding and the competitive model. Those demands will change, but others will not. These include the increasingly sophisticated demands of learners like you, and the needs of an emerging knowledge society.

We want to end the competitive model. We want to address underfunding. But we do want to ensure that the running of institutions is totally professional.

If anything the demands on tertiary governance and management will be even greater in an integrated and responsive national tertiary education system.

TAKING ACTION

My points are not intended to be personal. A lot of tertiary managers have found themselves in increasingly challenging circumstances and have struggled to adapt. Some have succeeded, and some haven't.

Similarly, with governance. Institutional Council members are lucky to get any sort of training for their role and ministerial appointees have had very little guidance on what is expected of them.

That is starting to change. For the first time, this Government is putting Ministerial appointments through the official Cabinet Committee appointments process. This will expose selections to much greater Governmental scrutiny. I have also written to all Councils with a draft set of expectations for the role of Ministerial appointees for consultation. We will also look to ensure that Council members, including student representatives, get the training they need.

The Government cannot continue to act only as the ambulance at the bottom of the cliff. We also have to build fences at the top.

We are going to legislate to do that. A Bill will be introduced, probably this year.

The principle that we will be using is that intervention will be inversely proportional to success. If institutions are coping well, we will leave them to succeed. If not, we will be there to help. But we want to ensure that institutions accept our help.

We will also make clear the duty of Councils not only to appoint the vice-chancellor (or chief executive), but also to hold them accountable.

CONCLUSION

I want to finish by making it clear that nothing that I am suggesting will be allowed to interfere with academic freedom or institutional autonomy. I believe strongly in both of these principles.

Nor am I advocating a 'managerialist' model of tertiary education.

In the past much of the management and administration of institutions was carried out by academics trying to be managers. Now it sometimes seems that institutions are being driven solely be the needs of Registry, and the least powerful person in the place is the professor.

But the solution is not simply to turn the running of the place back over to the academics. I remember those days, as an academic myself. And I know that we don't have the competence to do everything that is demanded of institutions these days ourselves.

How many academics have the expertise to negotiate a research contract with a multi-national corporation that might take advantage of any hint of inexperience?

We have to go beyond managerialism to a new partnership between managers and academics -- a focus on the needs of the stakeholders of education, including learners, industry, and communities including whanau, hapu and iwi.

ENDS

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