Rt Hon Helen Clark
Prime Minister

ADDRESS TO

AUCKLAND UNIVERSITY OF TECHNOLOGY
GRADUATION CEREMONY

Auckland

4.00 pm
13 October 2000

Thanks for invitation to speak today.

Graduation ceremony is a time for celebration and for congratulations.

Graduating with a tertiary qualification is a major achievement.

It comes after several years of effort - and often after a lot of sacrifice – because achieving these qualifications comes at a cost to leisure time and in financial terms.

You can't expect to graduate with good grades if every night is party night and the holidays are taken at face value!

Good results are only achieved if the effort is put in.

Tertiary education is not a soft option. And, the cost of it means if you are not going to put the effort in to pass, there's not much point in spending the money.

Many of you graduating today will have made substantial financial sacrifices to achieve what you have. In many cases, your partner and/or your family will have too.

Many of you will have held down part time jobs while you've been studying - and that puts even more pressure on your time. Sometimes grades suffer as a result.

Now many of you face paying back student loans as well.

So I do want today to acknowledge your achievements and the hard work you have put in to graduate.

The 1990's were the toughest time in New Zealand's history to be a student.

It was the decade when the costs soared. The government of the day paid less and less to tertiary institutions for each student place. The institutions had no choice but to pass the cost on to the student and they did.

The result was a rise in fees from the $1,200 set in 1990 to an average of around $3,000 in polytechnics today.

At the same time, the universal student allowance system disappeared – to be replaced by a heavily targeted one, which saw only a small minority of students get the full allowance.

In it's place came the loan system – which had very unfair aspects – both in the charging of interest, when students had no means of servicing the loan – and in the

repayment terms, which saw many unable to make headway in reducing the amount they owed.

One of the key pledges my government was elected on, was to make tertiary education more affordable to students, beginning with a fairer loans scheme.

Acting on that was a priority for us – and before Christmas last year, we were at work on cleaning up the scheme. The result is that no interest is now applied to loans at all while full time students, or part time students on low incomes, are studying.

We estimate that, based on average borrowing over three to four years of study, this change is worth about $5,000 to students who are borrowing for their tertiary education.

There have also been changes to the repayment scheme for loans – with the effect that at least fifty per cent of the repayment goes to reducing the principal amount owed. That ensures that progress in paying off the loan can be made.

For this year, the Department of Work and Income took over the administration of student loans. That was not a happy experience. The Department seriously underestimated the workload involved, leaving students confused and without money for too long.

A full review of the saga was commissioned and the government is now acting on its recommendations to improve administration for next year.

As well as dealing with the student loan scheme, we have also taken an important step to stabilise the cost of tertiary education.

For years government payments, per student, have been falling. Now for next year, there is a 2.3 per cent across the board increase in the government subsidy in return for an agreement by the tertiary institutions that they will hold fees.

That agreement has been reached with all state tertiary institutions, meaning that fees will be stablised at this year's levels, next year.

In an ideal world there are many more initiatives one would like to take to reduce the cost of tertiary education to students. In the 1990's there was a deliberate policy of pushing more and more of the cost on to students and their families.

Huge amounts of money are involved in even beginning to address the problem. But we have begun that process, because we believe that all New Zealanders should be able to be educated to their full potential and because our country needs more skilled and educated people.

Last week, there was an orchestrated political campaign claiming that a brain drain from New Zealand to overseas was worsening. Obviously it would be of concern if New Zealand was to lose more skilled and educated people than it gains through migration in the medium to long term.

New Zealand has experienced net migration loss since 1998. The good news is that the trend is slowing. There is a smaller net loss in the year to August than in the year before.

There are plenty of reasons, however, behind that net migration loss.

Firstly, fewer migrants came into New Zealand from the mid nineties.

In 1995, the immigration criteria were restricted, affecting the inflow.

In 1996, there was an unhealthy public debate about migration, which made new migrants feel unwelcome.

In 1998/99 New Zealand had three quarters out of five in recession – that affects migrant inflows too, as people are obviously less likely to come to a country in recession.

On top of that, there were the factors affecting the outflow of New Zealanders.

Number one was the student loan scheme – which began to bite by the mid-nineties.

With little hope of paying off the loan at home, more graduates headed overseas. I do believe most eventually return, but they may stay away longer because of the need to earn more to reduce their loans at home.

Then the recession in New Zealand in 1998/99 also affected New Zealand's chances of employment – so that increased the number of departures.

On top of all that is the reality that we live in a global labour market where people with skills are in high demand. There are worldwide shortages in a number of occupations – particularly those in the new technologies – but also in traditional professions, like nursing and medicine.

Just as other countries are poaching New Zealand's skilled people, so an active immigration policy has to see us poaching others. We do not offer the world's highest salaries – but I believe we do offer the world's best lifestyle.

For recreation and leisure outdoors, New Zealand offers so much. Our cities offer entertainment and services as good as anywhere in the world. Our suburbs and regional towns and cities offer the opportunity for people to live in strong communities.

It's time we built up the great advantage New Zealand has as a place to live in – rather than put up with the knockers who want to drag us down.

This is a good country and I am proud to be a citizen and Prime Minister of it.

That's not to say we don't have our problems. We do – and we are facing them. Over years of economic restructuring from the mid eighties and then with the social spending obstacles of the nineties, inequality in New Zealand increased at a faster rate than almost anywhere else in the western world.

It is falling to our government to do something about it, and to improve the circumstances of those who were left to fall through the cracks.

That's why we've raised the minimum wage and New Zealand Superannuation.

That's why we are bringing back income-related rentals for state tenants.

That's why we are funding for more treatment in public hospitals and for more spending in schools in low income areas.

And that's why we are active in economic development to give the country a chance to grow sustainably again.

What will drive the economy of the future is the number of educated and skilled people we have.

Wealth and prosperity in the 21st century will flow from knowledge, technology, skill and innovation.

ENDS

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