TEU Tertiary Update Vol 13 No 3

PM DIAGNOSES TERTIARY EDUCATION WITH ECONOMIC WOES

The prime minister John Key told TV3's Sunrise this week that he has
given Steven Joyce the tertiary education portfolio to sort out the sector's
economic issues.

"If you look at the tertiary sector a lot of the challenges that lie before
that sector are quite economic in nature", stated the prime minister.

"There are some polytechnics which are struggling financially. There are
issues around basically how the student loan policy works. There could be
improvements in that policy, for instance. There're a lot of economic issues
in there and from our perspective Steven Joyce is well placed to take on
those issues."

When later challenged by NZUSA co-president David Do on what 'improvements'
to the student loan scheme might mean, the Prime Minister confirmed that the
government is not going to change interest-free student loans, telling the
New Zealand Herald:

"At the margins, at the boundaries, there are specific issues where, as I
understand it, the universities and the student associations have been
having some discussions," Mr Key said. "But zero percent loans remain."

Mr Joyce has not made any public statement yet on his views regarding the
economic situation of New Zealand's tertiary education system generally, or
how best to address the problem of financially struggling polytechnics.

ALSO IN TERTIARY UPDATE THIS WEEK:

1. University of Otago to merge schools to save money
2. Tax reforms unlikely to address funding or inequality
3. Tertiary education won't make you rich – in New Zealand
4. Ministry unlikely to reach Pasifika tertiary education target

UNIVERSITY OF OTAGO TO MERGE SCHOOLS TO SAVE MONEY

A University of Otago is proposing to merge the departments of Design
Studies and Clothing and Textile Sciences.

The university told staff in the departments last week of a proposal to
establish a department of Applied Sciences, which would incorporate Clothing
and Textile Sciences and elements of the department of Design Studies.

"The process of considering the proposal is at an early stage, and people
who work in these departments are currently being consulted," pro
vice-chancellor, sciences, Professor Vernon Squire told the Otago Daily
Times.

Prof Squire told the Otago Daily Times the university was facing a
difficult financial environment and the proposal was partly the result of
this situation.

"It is too early to determine how this might affect jobs and a specific
time-frame is not established."

TEU national president Dr Tom Ryan says that announcements like these are
challenging for staff who are concerned not only about their employment, but
with the interests of their students, as well as maintaining their
subject’s presence in the university.

"TEU staff and members are considering the proposals, and will provide the
university with a response to them. However it is too early to guess at
outcomes, as this is just the beginning of the consultation phase."

"This is part of ongoing restructuring in the tertiary education sector and
highlights financial pressure in the sector. I hope the new minister of
tertiary education recognises the need to invest in tertiary education in a
way that protects jobs and professional skills, while also enhancing
educational outcomes for students," said Dr Ryan.

TAX REFORMS UNLIKELY TO ADDRESS FUNDING OR INEQUALITY

Prime minister John Key is preparing to announce at the opening of
parliament next week his government's view on reforms to the tax system.
At this stage he has ruled out increasing the government's revenue base so
that it can better afford to fund tertiary education and other sectors that
must drive any economic recovery.

However, CTU economist Bill Rosenberg has warned that the Tax Working Group,
which the prime minister established and recently has reported back to him,
may not have considered the issues broadly enough.

"It limited its view of the taxation system largely to its revenue gathering
purpose. Yet there are other purposes for the taxation system, notably to
redistribute income in an unequal society. Given the substantial rise in
inequality and poverty in New Zealand, particularly over the 1980’s and
90’s, this review was an ideal opportunity to look for ways to use the
taxation system for this important social purpose."

Dr Rosenberg says that officials did a good job of testing different
proposals for their effect on income inequality and poverty, but the results
were used to maintain the inequality status quo rather than improve things.

TEU national president Dr Tom Ryan says it is unfortunate that the
government still fails to see that investment in higher education is an
important way of beating recession, creating employment opportunities for
young people, and improving the economy.

"United States president Obama recently said 'the best anti-poverty
programme around is a world-class education’. Like the United States,
France, Germany, Australia and so many other countries, New Zealand could
make the same wise choice. But first of all we need to see that choice as an
investment rather than a cost," said Dr Ryan.

TERTIARY EDUCATION WON'T MAKE YOU RICH - IN NEW ZEALAND

A series of indicators released by the Ministry of Education last month
shows that New Zealanders who gain a tertiary education qualification can
expect a substantially smaller return on their investment, in terms of
earning potential, than students in other countries.

Average earnings in 2007 for New Zealanders with a tertiary education are 21
percent higher, compared to those with only upper secondary and
post-secondary non-tertiary education. This is lower than equivalent figures
for Australia (31 percent) and considerably lower than the OECD average
across 25 countries of 52 percent. In 2007, both the United States (72
percent) and the United Kingdom (57 percent) had very high premiums for
tertiary education over these lower levels education.

The ministry states that this is important because the success of an
education system is manifested in, amongst other things, the success of
individuals in finding sustainable employment as well as the level of wages
that employers are willing to pay for the skills and knowledge that the
individual brings to a job.

"These labour market advantages are an important outcome of education. They
may even be the primary economic and social outcome, because earned income
enables people to achieve a higher standard of living and many of the other
individual and national outcomes associated with education may accrue either
directly or indirectly from higher incomes."

MINISTRY UNLIKELY TO REACH PASIFIKA TERTIARY EDUCATION TARGET

The Pasifika Education Plan: Monitoring Report 2008 published by the
Ministry of Education at the end of last year, sets a target to increase the
completion rates for young Pasifika people in tertiary education. However,
its target is still significantly lower than the existing completion rates
for young non-Pasifika people.

The ministry is aiming to raise the five-year completion rates for Pasifika
people aged 18 to 24 in qualifications at levels four and above from 37
percent of those first enrolled in 2004 to 43 percent of those first
enrolled in 2008. The five year completion rate for non-Pasifika people of
the same age first enrolled in 2004 is significantly over 50 percent.

The ministry notes in its report that it needs to change its approach if it
is to reach this target:

"While the New Zealand recession is likely to increase the retention rate
for young Pasifika students in the foreseeable future as younger people find
it harder to gain employment when the labour market weakens, it is unlikely
that the target will be met without some form of intervention."

In fact, the ministry estimates that without intervention the completion
rate is likely to be just 39 percent.

The report also notes that the participation rate by Pasifika students in
postgraduate-level study continued to increase. The Pasifika participation
rate in postgraduate study has risen from 0.40 percent in 2001 to 0.58
percent in 2008. It now is forecast to reach 0.72 percent by 2012, lower
than the previous target of one percent by 2012.

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TEU Tertiary Update is published weekly on Thursdays and distributed
freely to members of the Tertiary Education Union and others. You can
subscribe to Tertiary Update by Email or feed reader. Back issues
are available on the TEU website. Direct inquiries should be made to
Stephen Day, email: stephen.day@teu.ac.nz

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