TEU Tertiary Update, Vol 13 No 12

Joyce wants incentives for pastoral care

Tertiary education minister Steven Joyce wants to create incentives for tertiary institutions to provide better pastoral care for students.  The minister met with TEU national president Dr Tom Ryan and national secretary Sharn Riggs yesterday, for the first time.  At the meeting the minister said the new performance-based funding system for tertiary institutions that he will introduce will be focused on student completions and that he will be looking to see that institutions have "a success rate commensurate with the sector". The minister stated he was looking for a reasonably straightforward system.  He  does not want anything as complex as the PBRF funding system but is willing to consider different completion levels for different types of programme, such as foundation courses, vocational courses and so on.

Dr Ryan agreed that there needed to be a strong focus on pastoral care to support student completion rates, and hoped that the government would be looking to support pastoral care rather than just pressuring tertiary institutions to find funding for it out of their existing budgets or to add to the already significant workloads of current staff.

Mr Joyce also used the meeting to discuss the EFTS cap, saying that while this year there were more student places than ever before, it would be a challenge maintaining those levels in 2011; previous predictions that student numbers would start to fall again have not been borne out, with numbers likely to stay close to 2010 figures. The government and institutions will then need to find a way to maintain these numbers within current funding allocations. He also agreed that there were some short term issues with the current EFTS cap system but said that the focus after the budget would be on long term student enrolment trends and workforce requirements.

Also in Tertiary Update this week:

1. Tairāwhiti and EIT to merge?


2. Students are bearing burden of underfunding


3. GST, the cost of living and wages


4. Commission to audit industry training funding


5. Other news

Tairāwhiti and EIT to merge?

The Gisborne Herald reported over Easter that Tairāwhiti Polytechnic has announced a "collaboration" with Eastern Institute of Technology and it was possible that the two institutions could merge. The Herald said that the collaboration was being driven by funding cuts to the sector.

Tairāwhiti Polytechnic council chairman Geoff Milner told the Herald that funding cuts "in the millions" were expected next year.

"Given such substantial reduction in funding, the view of our future viability is not good. The council has, therefore, taken the proactive step of looking for a preferred partner organisation... to save money and actually improve service."

The two institutions would spend the next three-to-four months discussing the various options available, he said. Final decisions would be announced in the next year or two, which could be anything from "status quo to a potential merger and everything in between".

It was 50 percent likely the institutions would fully merge, Mr Milner said. The council explored UCOL, Wintec and Te Wānanga o Aotearoa as options, but settled on EIT.

EIT chief executive Chris Collins said discussions were still in the earlier stages.

“We really just need to establish what the options are. EIT is a very strong and stable institution. We are rated as very low risk.”

This did not mean EIT was bailing Tairāwhiti out of a troubled financial situation, he said. “There are some things we bring, but likewise there are things Tairāwhiti can bring to the table.”

Neither institution would confirm nor deny the likelihood of job losses if a merger was chosen. "We don’t know what the outcome will be," said Mr Collins.

Students are bearing burden of underfunding

TEU national president Dr Tom Ryan says that systematic underfunding is pressuring tertiary institutions into passing costs onto students.

Last week the Manawatu Standard reported that UCOL planned to increase its student services levy by a hundred dollars a year to offset government funding cuts. UCOL, like other tertiary institutions, was unable to pass the cost of government funding cuts directly on to students through student fees, because of the government's five percent fee rise cap on institutions.  Instead it has raised its separate student services levy, replicating a strategy adopted at other institutions looking to sidestep the fee rise maxima.

Dr Ryan says that where students are not covering the cost of underfunding from their own wallets they are instead subsidising through a compromised the quality of the education.  

"Anecdotally I'm talking to staff around the country who are all describing bigger tutorial classes, more crowded venues, and less time to do the basics of running a successful tertiary education course. We won't know until final rolls are confirmed how much workloads are growing by. But it all makes it harder to provide quality teaching. Staff in student support services are probably feeling the combined pressure of growing rolls and dwindling budgets the most."

GST, the cost of living and wages

CTU policy director Bill Rosenberg says that it is still not clear how workers will be compensated for an increase in GST.

"We don’t know how changes to Working for Families, income tax cuts, or other measures will offset the increase. This will only become clear in the Budget on 20 May."

The prime minister John Key has stated "I expect that the vast bulk of New Zealanders will be better off under a tax switch that comprises an increase in the rate of GST to 15 percent, together with a reduction in personal income taxes across the board and upfront increases in benefits, New Zealand superannuation, and Working for Families payments."

Dr Rosenberg says GST is likely to rise from 12.5 percent to 15.0 percent.  Taking into account some items that do not have GST, some GST costs that will not be passed on to consumers, and some consumer money that will be saved rather than spent, Statistics New Zealand estimates the net effect on average of a 2.5 percent increase in GST will be an increase of "about" 2 percent in the Consumer Price Index (CPI).

However, as Dr Rosenberg notes, even the estimated increase of 2 percent is only an average.

"We know that people on low incomes face a higher rate of GST increase on their incomes than people on high incomes because they can save less (and may in fact be spending more than they earn), they spend more on necessities, which almost always have a GST component, and spend less on items that don’t attract GST. So an argument can be mounted that low income workers require more than 2.0 percent compensation."

"Very little attention has been given to the effect a rise in GST has on wage increases via CPI increases. Employers may argue that they do not need to compensate for GST increases in wages because the tax changes include compensation. Some unions may argue that income tax is not a wages issue, and some collective agreements have a built-in CPI adjustment, so workers covered by those agreements will automatically get compensation for GST in their wages at some point. But workers are bound to argue that if wages do not match CPI increases, then real wages are decreasing.

Commission to audit industry training funding

The Dominion Post reports that twelve industry training organisations are being audited after accusations that some are receiving funding for students they do not have.

A paper by the Tertiary Education Commission says that, in the past year, questions have been raised about some industry training organisations getting funding for a "significant number" of trainees not in training.

Some were making funding claims for more training than they were doing or were keeping failing trainees on their books. Some were operating a system in which employers, who are meant to pay a portion of training costs, avoided that cost.

Tertiary education minister Steven Joyce told the Post that, between now and June, twelve of the organisations would face extra funding audits resulting from the concerns.

If the audits found the organisations were intentionally rorting taxpayers, he would back the Tertiary Education Commission in referring the matter to police.

Commission tertiary investment and monitoring director David Nicholson said there was no evidence of fraudulent behaviour. "However, because the current audit and quality assurance settings don't specifically investigate all these types of possible issues, we need to discuss whether or not they should."

Industry Training Federation executive director Jeremy Baker said he believed many of the concerns probably related to confusion about reporting requirements set by the commission.

Other news

To help bankroll tertiary education, Steven Joyce plans to increase international student numbers and encourage commercial university research. Tertiary institutes will not feel pressure to deny places to students with poor school grades, he said - Manawatu Standard

Tertiary education minister Steven Joyce is defending a government move to cut spending on workplace health and safety training, saying the Tertiary Education Commission should not fund courses designed to meet the legal obligations of employers. However Business New Zealand chief executive Phil O'Reilly says the Government has to be careful about its spending, but it does have responsibility for workplace health and safety training - Radio New Zealand

Otago Polytechnic has passed a statute abolishing its staff and student representation on council but establishing staff and student subcommittees to advise the reduced board. An election will be held to decide the staff subcommittee, of up to fourteen members - Otago Daily Times

The Guardian asks what led to a rise of academic bureaucracy in Britain. Statistics show that while in the UK higher education sector in 2003-04 there were 10,740 managers, by 2008-09, this had grown to 14,250, an increase of 33%. During that time the number of academics increased by just 10 percent while the total number of students rose by 9 percent. - The Guardian

American colleges and universities are outsourcing marking to a company that uses markers in India, Singapore and Malaysia. The benefit for the colleges is that they believe they can get more consistency and timeliness than from graduate teaching assistants. The company turns around essays in 3-4 days for US$12 per essay - Education Directions

The Australian government's higher education spending is slanted to universities, colleges and research institutes in Labor electorates.  $1.5 billion in allocations from the Education Investment Fund show Labor seats have received 84 per cent of spending from the first two funding rounds of the "nation-building" program controlled by Education Minister Julia Gillard - The Australian

A pay survey in Times Higher Education reveals that universities spent 10 percent more on vice-chancellors' pay and benefits in 2008/09 than they did in the previous year, despite saying a year ago that bumper pay deals were unlikely to continue. Embarrassingly, the news of the huge rises for vice-chancellors comes just days after universities offered the higher education unions a pay freeze for this year - The University and College Union (UCU)

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