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Widespread consultation promised on TEAC report

7 November 2001 Media Statement

Widespread consultation promised on tertiary funding report

The Government will consult widely before making decisions on a new tertiary education funding system, Associate Education (Tertiary Education) Minister Steve Maharey said today.

The fourth and final report of the Tertiary Education Advisory Commission (TEAC), Shaping the Funding Framework, proposes a new funding framework to complement other changes being made to refocus New Zealand’s entire post-school education and training system (comprising adult and community education, industry training, foundation education, tertiary education institutions and private training establishments).

“The Government will be listening to feedback and we hope the report will be considered carefully and widely because it contains a large number of recommendations which will allow us to take a strategic approach to tertiary education and training. This is vital if New Zealand is going to succeed as a knowledge nation.

“There are however a small number of recommendations that the Government has decided to make its opinion clear on now to avoid confusion. These are:

- Discontinuing the current student loan interest write-off policy. Making tertiary education more affordable was a key pre-election policy of both Labour and the Alliance responding to widespread public concern that cost was becoming a significant barrier preventing potential students enrolling and we remain committed to the policy;

- Reallocating existing funding to public tertiary education institutions for support services for Maori and Pacific students. Funding currently allocated to improve responsiveness to Maori and Pacific peoples will continue to be used for this purpose but the Government wants to discuss if it can be allocated more effectively;

- Discontinuing current base grants for all tertiary institutions. The Government needs to investigate the best means to secure tertiary education’s contribution to regional development and remains committed to the retention of base grants for regional institutions in the absense of more effective mechanisms; and,

- Automatically adjusting funding rates by a Tertiary Education Price Index. The Government is more interested in TEAC’s suggestion of providing greater certainty by signalling funding rates in advance than in doing so by means of an index.

Steve Maharey said the Government wanted feedback on the TEAC proposals and was reserving its position at this time.

. . / 2

“Shaping the Funding Framework advances some concrete proposals for the design of the new funding framework we intend to implement for the 2003 academic year. The new framework will be phased in, which will keep compliance costs down and help the tertiary sector manage the transition.

“In receiving the report, Cabinet has agreed that:

- public submissions be invited, closing on 31 January 2002, and that final decisions will be made following an analysis of those submissions; and,

- that recommendations about youth training and the training opportunities programme will be referred to the Training Opportunities/Youth Training Ministerial Review Group, due to report in March 2002.

“In relation to proposals for a relatively extensive rationing by merit of all under-graduate degree places, we are encouraging a broad-ranging discussion on the best ways to ensure the effective use of national resources and to encourage learners to choose the educational pathways that most suit their needs.

“The Government is not persuaded that the affordability of tertiary education can be ensured without active measures to keep fee levels down. We will be consulting with students, staff and institutions to develop a sustainable approach to fee setting for 2003 and beyond.

“Other recommendations about student support will be considered as part of the Government’s response to the Report of the Education and Science Select Committee Inquiry into Student Fees, Loans, Allowances and the Overall Resourcing of Tertiary Education.

Steve Maharey said those making submissions need to know that the government will not be proceeding with all recommendations, and will considering carefully the response of the sector and wider stakeholders. TEAC will be meeting with stakeholders and the Government is now inviting public submissions, closing on 31 January 2002.

“The current funding system is inadequate because it focuses solely on student enrolments. Other vital elements such as lifting achievement levels, responsiveness to economic and social needs, and the quality of teaching and research must also be taken into account in the future.

“In a little over a year the Tertiary Education Advisory Commission has made an outstanding contribution to the reform of New Zealand’s tertiary education system. I want to thank them for their hard work and commitment to rebuilding a strong, quality, focused tertiary education system. In particular I want to note the considerable contribution made by Russell Marshall and his predecessor as Chair, Norman Kingsbury.

“TEAC has consulted widely in the preparation of its four reports. This will help ensure that the system we implement has widespread support,” Steve Maharey said.

Contact: Michael Gibbs, Press Secretary, (04) 471 9154 or (021) 270 9115,

e-mail: michael.gibbs@parliament.govt.nz. Attached is a backgrounder on the Government’s tertiary reform programme.

. . / 3

The Government came to office committed to developing an agreed strategic direction for the tertiary sector to:

- ensure institutions and providers to work together across the whole system to meet New Zealand’s changing educational and research needs, and

- guide investment in teaching, scholarship and research.

The Tertiary Education Advisory Commission (TEAC) was established in April 2000, in line with a Labour manifesto commitment, to provide advice on how the system should be reshaped. The Commissioned has produced four reports and gave independent advice on priorities for the 2001/02 budget.

Shaping a Shared Vision (July 2000)

The Commission proposed a vision for New Zealand and how tertiary education should respond to changing economic and social needs. The Government accepted the overarching conclusion that it needed to engage as an active partner with insitutions to give clear strategic leadership. The report also outlined TEAC’s work programme (reports 2-4).

Shaping the System (February 2001)

The Commission recommended the establishment of a new Tertiary Education Commission (TEC), responsible for administration of funding, building capability, and negotiating expanded charters and profiles in all areas of the publicly-funded tertiary education system. It also recommended the establishment of centres of research excellence. In the Budget in May the Government announced it was establishing a new permanent Commission in 2002 to improve quality, relevance and cost effectiveness of the tertiary education sector. Funding was also allocated to establish Centres of Research Excellence in 2002. A transition Commission was established in August, and several working parties comprising sector and stakeholder representatives are working through implementation issues.

Shaping the Strategy (July 2001)

The Commission recommended the development of a Tertiary Education Strategy to advance the country’s strategic goals. This would be used by the new permanent Tertiary Education Commission to guide its decision-making. A draft Tertiary Education Strategy is being prepared with stakeholder input and will be released for public consultation in December and finalised in April 2002.

Shaping the Funding Framework (November 2001)

The final report proposes a new funding framework to implement the reshaped tertiary education system to be progressively introduced from 2003. Public consultation is now open, closing on 31 January 2002.

Other related reviews:

- Moving Forward, Skills for the Knowledge Economy (August 2001)

Following a comprehensive review, the Government announced a series of measures to improve access to and responsiveness in industry training and initiatives to support the development of multi-industry generic skills and raise the level of foundation skills such as literacy and numeracy.

- Review of Youth Training and Training Opportunities (on-going)

The Government is undertaking a 'first principles' review to establish future objectives for these programmes and ensure that they meet the educational and employment needs of those people with significant histories of unemployment and/or no or low qualifications.

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