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Tertiary reform – implications: medicine & health

Steve Maharey Speech: Tertiary reform – implications for medicine and health sciences

Address as part of Christchurch School of Medicine’s Mid Winter Dialogue series. Rolleston Lecture Theatre.


Thank you for inviting me to take part in your Mid Winter dialogue series.

I’m grateful for the opportunity to bring you an update on the tertiary education reforms and what these mean for the tertiary sector in general and for medicine and health sciences in particular.

First, some essential background for the detail I plan to share with you.

The Growth and Innovation Framework

The Growth and Innovation Framework, Growing an Innovative New Zealand, which the Prime Minister launched in February last year, articulates this government's vision for a vibrant New Zealand.

We want New Zealanders to: be optimistic and confident about our country’s future; celebrate our successes in all walks of life; create globally competitive companies; commit to sustainable development; ensure that a social dividend flows from economic success; and gain strength from the Treaty of Waitangi as our nation’s founding document.

The Tertiary Education Strategy

Tertiary education has a pivotal role in enabling us to realise this vision.

A complex modern economy sees, amongst other things, the increasing importance of knowledge, skills, life-long learning. It requires greater connectedness and collaboration within the tertiary education system.

The reforms are rewarding and encouraging tertiary education organisations to go out and create co-operative links with their stakeholders.

A more connected tertiary education system means: stronger linkages within the system as well as with business and other external stakeholders, effective partnership arrangements with communities, and increased responsiveness to the needs of, and wider access for, learners.

We’ve undertaken reform of the tertiary education system to ensure that every part of it achieves excellence, emanates relevance, and provides access. With those characteristics, the tertiary system will contribute, more than they have to date, to the achievement of our national goals.

Our focus so far has been on putting the architecture and resourcing systems in place to bring about this reformed tertiary education environment.

The Education (Tertiary Reform) Amendment Act 2002 introduced the key features such as the Tertiary Education Strategy, the Statement of Tertiary Education Priorities (or STEP), the integrated funding framework, and of course the Tertiary Education Commission.

Our Tertiary Education Strategy 2002/07 is at the heart of all this. As you know, the TES establishes six strategic priority areas. These strategies are designed to encourage you and every other tertiary provider and organisation, to enhance the performance of the sector and help New Zealand meet future economic, social and environmental challenges.

They are: Strengthen system capability and quality. Contribute to the achievement of Mäori development aspirations. Raise foundation skills so that all people can participate in our Knowledge Society. Develop the skills New Zealanders need for our Knowledge Society. Educate for Pacific peoples’ development and success. Strengthen research, knowledge creation and uptake for our Knowledge Society.

The Interim STEP for 2002-2003 takes the Tertiary Education Strategy and looks at the short-to-medium term priorities for tertiary education organisations and government departments and agencies over this period.

A number of specific objectives have been highlighted. These include: improved strategic capacity of Tertiary Education Organisations at both governance and management levels; tertiary education leadership that is effectively accountable to Mäori communities; significantly improved adult foundation skill levels, achieved through increased access to foundation education in a range of learning contexts; support for industries in meeting their self-identified skills needs; encouragement and assistance for Pacific learners to develop skills that are important for the development of both the Pacific and New Zealand; and more focussed tertiary research investment through world-class clusters and networks of specialisation.

The STEP for 2003/04 is soon to be gazetted. In the interests of continuity, the 2003/04 STEP will effectively update the objectives of the interim STEP.

The Tertiary Education Commission (TEC) supports and implements all these government strategies and will give effect to them through the allocation of funding and building of capability and relationships in the tertiary sector.

Charters and profiles are being introduced so that all tertiary education organisations can articulate their strategic direction, relative to the goals of the TES and STEP, and show how they will contribute to the system as a whole.

There will also be an assessment of strategic relevance to provide criteria for determining charter and profile alignment with the Tertiary Education Strategy.

Throughout 2003 and beyond, the government expects that all stakeholders will be engaged in developing the new tertiary education system outlined in the Tertiary Education Strategy.

This will necessarily involve all stakeholders reflecting the new ways of thinking and working. The Tertiary Education Strategy must become an integral part of tertiary education organisations’ strategic and business planning.

Implication of tertiary reforms for medicine and health sciences

So what will the tertiary reforms mean for medicine and health science education and training?

The Tertiary Education Strategy has close linkages with the New Zealand Health and Disability Strategies. At the centre of the relationship is their shared role of helping the government achieve its economic and social goals.

The New Zealand Health and Disability Strategies provide a platform for setting the policy direction for health care in New Zealand. An important element of these strategies is the availability of a suitably trained workforce to deliver services.

A close working relationship between the Ministry of Health and the TEC will be essential to ensure that the education and training of health practitioners delivers the competencies required to implement the New Zealand Health and Disability Strategies.

The TEC has a role in working with tertiary education institutions and health bodies to support a co-operative and collaborative approach to achieving the government’s tertiary education strategies.

One of the key strategies for the tertiary education system is an improved response to the needs of business, social services and health care providers.

Tertiary Education Organisations, including health education providers, are in the process of preparing their charters and profiles and will need to take into consideration the expectations of the health sector.

They will be expected to consult with local providers of health services, such as District Health Boards, and those with a national focus such as the Ministry of Health. All charters must be approved by 1 January 2004.

I understand that the health sector currently lacks well-developed processes that enable employers, professional groups and educators to get together and discuss, in a meaningful way, strategic workforce issues.

These tertiary reforms will therefore provide a much needed framework for the health sector to have more input into the provision of health workforce education to meet areas of national or local need, and bring about more areas of excellence.

The government is also eager to see more collaboration between tertiary education providers, including health education providers, to reduce unnecessary duplication of resources. If New Zealand is to make the best of its limited resources, the mix of courses offered will need to shift to better reflect our future needs.

I’m referring to where providers are developing similar qualifications and course materials and delivering similar programmes. We need to see a much greater mutual recognition of other providers’ areas of expertise in teaching, research and management.

All providers must find their own ways to take up their responsibility to contribute to achieving the Tertiary Education Strategy. The reforms can be effective only if they are not driven from the centre alone.

If we are to achieve the national visions and goals outlined in the reforms, and respond to the challenges of globalisation and accelerating technological change, sector support and action is vital.

I’m aware that there are particular concerns amongst tertiary education organisations who provide health courses about the impact of the Performance-Based Research Fund on the funding of their courses.

I can tell you that Cabinet has made a decision to review the impact of the PBRF on clinical education courses required to produce practitioners for the health sector in 2004.

I also understand from my discussions with medical school staff that institutions are increasingly facing difficulties in retaining teachers and researchers in medicine. This is a result of a number of factors, including the shortfall in trained medical staff generally, and the difficulties faced by institutions in meeting salary expectations. Increases in funding for tertiary education in the last two budgets, including increases in PBRF funding and funding to accompany the introduction of the fee/course costs maxima policy should ease this pressure. Similarly, an increase in the cap on student enrolments in medical schools will help this situation in time.

On top of this, there has been concern that the PBRF will drive up expectations for part-time medical teaching staff to undertake research. This may be an unrealistic expectation, given that part-time medical teaching staff will only be available for a small amount of time and have other commitments in the health sector.

Budget 2003….Building the Capability of the Sector

Funding reforms remain a focus of 2003. The government is committed to seeing a well- resourced, quality tertiary sector.

As part of Budget 2003, we are committing $432 million over the next four years to continue progress on the implementation of the integrated funding framework.

This includes: introducing the Fees/Course costs Maxima policy, putting in place the rolling funding triennium; funding, and implementing the results of, the funding category review and providing for the development of performance measures to be included in the Student Component.

The Fees/Course costs Maxima policy is an integral element of the government’s objective of ensuring that tertiary education remains affordable for students. It will provide students with some certainty as to their future costs, while also providing some flexibility to providers in terms of their fee-setting behaviour.

I know you’ll agree that what was effectively a fee freeze in the last three years could not carry on.

The Fees/Course costs Maxima policy is designed to be less rigid than a centralised fee-setting policy, while providing government and students with some certainty about future fee levels.

The rolling funding triennium will mean that funding rates will be indicated three years in advance to assist providers’ certainty as to future funding rates. This will be achieved by funding rates for one further year being rolled out every year.

The Funding Category Review will show us areas where the funding relativities within the Student Component funding rates are causing significant distortions in either provider or student behaviour.

The setting of Fees/Course costs Maxima and the decision to undertake the Funding Category Review are based on the broad directions proposed by the sector working groups that met in late 2002. Consultation was also undertaken with peak sector bodies regarding scope and direction of the Funding Category Review, prior to making any decisions.

We’re also increasing our investment in research activity and in high quality research staff in our tertiary education sector. Over the next 4 years we’ve made a commitment to increase spending on the Performance Based Research Fund by $28.46 million, higher than that required to keep up with inflation.

This commitment will ensure that from 2006 a real funding increase of $20 million has been achieved in the Fund.

Budget 2003 also put aside funding for the first phase of a strategic review and plan for the tertiary education workforce. Strategically reviewing the tertiary education workforce and developing a plan to ensure that the workforce meets the future needs of the reformed tertiary education system will contribute to ensuring that New Zealand's tertiary education system meets the requirements of New Zealand's knowledge society, and the requirements of stakeholders such as the health sector.

Phase one of the review will begin in 2004 and will identify the issues the review might explore and propose possible methods to undertake the review. I expect the review to have a strong element of consultation.

In addition we’re: making an investment of $30 million over four years in a Capability Development Fund; spending over $14 million to expand the number of Modern Apprenticeships to 7000 annually; spending $85 million to increase the number of people in Industry Training to 150,000 in 2005; investing nearly $4 million dollars over 4 years beginning in 2003 to provide high quality foundation skills learning opportunities.

Supporting Students in Tertiary Education

One of this government’s key objectives is to ensure that everyone can enter tertiary education, and that they can acquire the skills and knowledge that the nation needs to grow and prosper.

To be able to do this we need to ensure that tertiary education is affordable and accessible to all. While we have made good steps forwards, further work needs to be done.

In addition to the Fees/Course costs Maxima policy that I have already outlined, the government has introduced a number of initiatives as part of Budget 2003 that focus on improving the equity of the student support system and ensuring tertiary education is affordable Growth and Innovation scholarships

Some key areas of work in this country are not attracting enough student interest, and in other fields too many of the relevant graduates are choosing to work overseas very early in their careers.

Funding of $23 million has been set aside in this year's Budget for a package of bonded scholarships and research fellowships to attract students into study and professions critical to New Zealand's future success.

These scholarships will reward graduates who stay and work in areas critical to the country. This will give us more ability to address people and skill shortages.

Details of policy design and implementation will be announced in the near future so that the scholarships can begin to be made available from 1 January 2004.

Raising the Medical Enrolment Cap

As you know, the government announced in Budget 2003 our decision to raise the enrolment cap on funded medical students by 40 equivalent full-time students per year. 20 of the extra places will be at the University of Otago and 20 will be at the University of Auckland. This will increase funded medical student numbers from 285 full-time students to 325 per year.

The additional funding for extra medical places will be conditional on the universities implementing a preferential entry system for rural students, and specific career initiatives in secondary schools.

The increased cap will come into effect next year and will cost Government about $4.8m per annum when it is fully implemented.

The problem at the moment is that there is an uneven distribution of GPs, with low numbers of GPs in rural and in some poorer urban areas.

New Zealand will need more doctors in the future and the increase is also designed to help address pressures on the health system, such as greater demands on health services from an ageing population, increased public expectations, and a greater emphasis on population health and preventative health.

The cap is a medium-term strategy, which is consistent with steps taken in Canada, the UK and Australia. It is hoped that raising the cap will result in greater numbers of graduates, and that it will complement other strategies including better access to GP locum services, improved rosters, and rural workforce retention funding.


In conclusion, you can see by now that there is much happening in the tertiary education system that will have an impact on tertiary education funding and provision, including health workforce education and training.

At the heart of what the government is trying to achieve is the Tertiary Education Strategy. We are working hard to ensure that we create a responsive and dynamic tertiary education system which will be the envy of other nations and which will help us to secure our social, economic and environmental goals in becoming a knowledge society, in promoting strong economic growth and in further developing our vibrant and distinctive culture.

I thank you once again for the invitation to attend your mid-winter dialogue series.

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