Media release 25 July 2001

Funding decision will hinder knowledge economy

Business New Zealand Chief Executive Simon Carlaw says the Government's decision to cut funding to new private training enterprises (PTEs) and programmes will make the education market less competitive, less innovative and of less value to business.

"In a situation of apparent funding constraints, the Government seems to have given in, at least temporarily, to the demands by public education institutions to cut funding to their private counterparts.

"This is unfortunate, because state and private education providers complement each other by catering to differing needs. State education providers are good at long-run education programmes (e.g. post graduate degrees), while private training enterprises have shown their value in responding rapidly to the changing needs of business.

"Discriminating against private training enterprises will undermine the strength of our education and training market which until now has been funded on the basis of quality and need, regardless of who delivered it. To restrict funds for PTEs is a step back to the days when there was little to spur state education providers towards increased innovation and quality.

"The way the funding is being restricted is also retrograde - by cutting funds to new operators and new programmes only. This will harm the ability of the sector to innovate. If it was necessary to cut funds for private training enterprises, a better way would have been to offer less funding in a contestable pool.

"This step also seems to be contrary to the key TEAC message that education and training markets should operate on an integrated basis if New Zealanders are to prosper in the knowledge economy," Mr Carlaw said.

Contact Simon Carlaw 04 4966555 (work) or Kathryn Asare

© Scoop Media