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Tertiary Education Reform Bill second reading

Steve Maharey
30 May 2002 Speech Notes

Tertiary Education Reform Bill second reading

Mr Speaker, I move that the Tertiary Education Reform Bill be read a second time.

I want to express my thanks to all those members who participated in the excellent work of the Education and Science Committee, in reviewing this complex piece of legislation and the large number of public submissions.


The Bill forms the architecture for the government’s reform of the whole tertiary education system. It underpins the most significant programme of reform of tertiary education and training the country has seen in many years, and seeks to build on the strengths of the current system.

When completed, these reforms will give us a system that is far more connected to its stakeholders, with Government taking a leadership and facilitation role.

Our tertiary education and training system already delivers major benefits to New Zealand’s economy and society through the development of new ideas and skilled people. In the future, the system will have a vital role in raising the skill levels of all New Zealanders to contribute to our economic and social development. Such a challenge will not be met by individual organisations alone. It is only through working towards a shared vision, that the kinds of change required to support our goals will be achieved.

What we need is a system with a greater sense of connection to economic and social development and stronger links to industry and communities. We need a system actively working to provide lifelong learning opportunities and meeting the learning needs of an increasingly diverse range of people and communities.

The combination of policy instruments established by the Bill will help us reshape the new tertiary landscape. These include:

- the introduction of a Tertiary Education Strategy to guide the whole tertiary education system;
- a Statement of Tertiary Education Priorities that flows from the Strategy;
- the introduction of charters and profiles for all publicly-funded tertiary education providers and ITOs;
- the assessment of the alignment of these with the Strategy by the new Tertiary Education Commission (TEC); and
- shifts in the focus of funding to a more integrated funding framework.


The recently released Tertiary Education Strategy sets out a five-year blueprint for a more collaborative and co-operative tertiary system, that contributes to national goals and is more closely connected to enterprise and local communities.

All forms of post-school education and training come under the Strategy umbrella. These range from full-time academic study, on-job and work-related training, right through to foundation education, distance education and part-time study. All learning activities, from post-school transitions to post-doctoral research, are encompassed.

This landmark document contains six strategies to lift the performance of the sector and help New Zealand meet economic and social challenges in the years ahead.

A Statement of Tertiary Education Priorities will then spell out specific goals, actions and performance measures for the next one to three years.


This Bill establishes a Tertiary Education Commission to oversee the implementation of the new Strategy and the associated priorities. The Commission will play a key role in reshaping the tertiary education system to meet the challenges of developing New Zealand’s knowledge society.

It will be responsible for allocating funding of approximately $1.6 billion per year to public and private providers of tertiary education and training, and building the capability and capacity of tertiary education and training to contribute to national economic and social goals.

The Bill equips the Commission with a fresh set of tools. These are designed to foster a more focused and strategically relevant sector. This will happen by encouraging tertiary education providers to seek better connections with external stakeholders, and more co-operation and collaboration between providers.


Charters and profiles will demonstrate the alignment of providers’ and ITOs’ activities and education provision with the Strategy and statement of tertiary education priorities.

A Charter will be a high-level governance document that provides a broad description of an education provider or ITO’s mission and role in the tertiary system.

A Profile will describe in much greater detail how the high level goals in an organisation’s Charter will be implemented. Profiles will determine which providers and ITOs gain approval for access to public funding or to pursue particular initiatives.

The system of funding has also been reformed to reinforce these other changes. As announced in the Budget last week, we will now have an integrated funding framework for all tertiary education. This will encompass:

- funding for teaching and learning;
- funding for research; and
- funding for strategic development.

The market-oriented EFTS system will be replaced by a more strategic Student Component. The Student Component will include a performance element, the ability of manage enrolments and fee maxima provisions. I will be moving an amendment to this Bill during committee of the whole House stage to provide the basis for setting fee maxima.

These steering instruments have been designed, and will be implemented, in close consultation with the sector. The objective, in implementing these changes, is to ensure that we achieve the excellence, relevance, and access that the Government is looking for, while ensuring that compliance costs are held to a minimum. This is a significant change, but it will not be a bureaucratic one – this is about smart action by government, not heavy-handed intervention.


This Bill better integrates Industry Training Organisations (ITOs) into the wider tertiary education system by requiring the same planning and reporting for ITOs as for tertiary education providers. It also directly strengthens the industry training part of the tertiary education system in response to the Industry Training Review.

The changes to the Industry Training Act, arising from the Industry Training Review, are designed to improve the effectiveness and responsiveness of the industry training system so that it better serves the current and future skill needs of employees and employers. This is an area where there is a very high level of agreement between employers, unions, and the Government.

The Bill adds new criteria for the recognition and re-recognition of ITOs. It requires ITOs to provide greater leadership in skill and training matters for their industries, along with evidence of satisfactory performance. The Bill will ensure that the contributions of unions and employees to the work of ITOs, and in support of training strategy, is maximised. The Bill also enables an ITO to impose a levy on firms within its industry area if a voluntary ballot reveals that a majority of employers in an industry support such a levy.


This Bill strengthens the quality assurance system. New Zealand Qualifications Authority (NZQA) will now have a wider range of mechanisms to address problems with quality. This includes greater flexibility at the time of initial recognition of a provider, as well as the ability to respond better when problems become apparent as a result of an audit, data return or other evidence-based investigation.

The Bill enables NZQA to set conditions, as needed, on registration, course approval and accreditation and to issue notices for immediate compliance where serious problems arise. These new processes will allow for a more flexible, responsive system, with better risk-management.


I’m now going to explain some of the select committee’s changes to the Bill that will help streamline the effective operation of the reformed tertiary system

All tertiary education Crown entities will be required to have regard to the Strategy. This includes NZQA and Career Services, along with the new TEC, so all agencies will be working together towards shared tertiary education priorities.

Encouraging providers to consider greater collaboration, concentration of resources and specialisation in order to lift system effectiveness is a central aim of these reforms. A change to the Bill makes mergers more attractive for both parties. The change means if one institution merges with another, it can keep on using its pre-merger title in association with the title of the encompassing institution.

A number of changes clarify the relationship between the Minister and TEC. The Commission must be able to carry out its day-to-day operations. A change to the Bill means that TEC now has more room to carry out functions that support its role.

The Bill also clarifies some of the functions of the Commission. The TEC needs to be able to feed its considerable knowledge of the sector into policy development and overall system monitoring. The Bill therefore includes a function for the Commission to advise the Minister on the activities of the sector, along with advice on the Statement of Tertiary Education Priorities and the Strategy.

Applied research on the tertiary education system is now specified as a function of TEC. A new subclause will allow the Commission to carry out applied policy and programme research, monitoring and evaluation. It will advise the Minister on the policy implications arising from research.

It is vital that a highly capable and skilled Board leads TEC. With this in mind, it is pleasing that the Bill now includes a requirement for the Minister, in appointing the Board, to have regard to the Commission’s need for breadth of experience and expertise, and depth of knowledge of areas of tertiary education.

The Bill also introduces a mechanism for a levy to fund a wide range of activities relating to Export Education industry development, promotion and quality assurance.


As well as the input of the Select Committee that has strengthened the Bill, an enormous amount of other work has been undertaken since this Bill was introduced in December. Over the summer months we consulted widely on the draft Strategy. Right now, the Transition TEC is preparing for the Commission to open its doors on 1 July.

This is a Bill that will help us put in place the building blocks of a more connected tertiary education system, one that is dynamic, outward looking, and strongly linked to economic and social development and the communities, enterprises, iwi and businesses it serves.

I am happy to commend this Bill to the House.


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