Tertiary sector vital to nation's economic future

"Labour recognises that the tertiary education sector is vital to the development of a knowledge economy and will back this commitment with an extra $750 million funding in our first term," Labour finance spokesperson Michael Cullen said today.

"We will increase spending by $200 million in Year One; $250 million in Year Two and $300 million in Year Three.

"That represents a significant investment given the tight fiscal position we expect to inherit. But we don't have a choice if we want to secure the nation's economic future.

"New Zealand's prosperity in the twentieth century was built largely on a temperate climate and an ability to grow grass year-round. But the returns from these assets are declining as commodity prices continue to trend relentlessly downward," Dr Cullen said.

"The only way New Zealand can regain the affluence of the 1950s and 1960s is by breaking our over-reliance on commodities and re-centreing the economy on the knowledge industries.

"Clearly a well-functioning tertiary sector is essential to this. To be successful in the next millennium, we need to be producing graduates in the right numbers and in the right disciplines. Now we are churning out too many lawyers and accountants. We need more engineers and software designers.

"Our chances of getting the mix right will be improved if our tertiary institutions are encouraged to complement rather than compete with each other and if the Government sits down with them to develop a broad strategic plan.

"Labour will also increase government funding of university-based research by $60 million in the first three years and will develop initiatives to encourage more business investment in research.

"But the obvious role for government is to ensure as far as possible that cost does not become a barrier to educational participation. We will put around $100 million in the first year alone into easing the debt burden on students from the student loans scheme.

"However this is an expensive area in which to move where a lot of money goes only a little way so our other objectives of reducing student fees and increasing access to student allowances will have to wait until we have a stronger economy.

"That said, they will remain firmly on my agenda as Minister of Finance because Labour sees them as integral to the knowledge economy project," Dr Cullen said.

This policy is available on Labour's website at www.labour.org.nz

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