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17th Annual Education NZ International Conference

Hon Pete Hodgson
Minister for Tertiary Education

7 August 2008
Embargoed until 10.15am Speech

17th Annual Education NZ International Conference

Thank you for the opportunity to address the 17th annual Education New Zealand international conference.

Your organisation is 17 years old, more or less, but I have been in the tertiary education portfolio only 9 months.

Accordingly, you might anticipate my remarks to be hesitant. Here I am, after all, a newcomer amongst veterans. Hesitancy might be expected.

The truth is I don’t feel hesitant at all. Instead I find this export industry, or this opportunity, or this area of international activity, exciting.

Part of the reason that it excites me is that one can approach it through many different lenses. An export industry, an opportunity, an area of international activity or any number of other labels or descriptions one might imagine.

I do approach it through different lenses. I wear three hats. One is tertiary education, one is research science and technology and one is economic development. All of them are at play.

If I put on an economic development hat, I see a $1.8 billion dollar export earner and I ask what is wrong with $2.8 billion dollars. I see an opportunity for both the public and the private sector to flourish in New Zealand, and for New Zealand based consultancy firms to flourish off-shore as well. I see spill-overs into tourism or investment. If I think a little down the track I see future international business partnerships forged by people who spent time at school or university together. The Minister of Economic Development is attentive to New Zealand’s international education industry. It is hard not to be.

If I put on a science hat the picture changes. I see the formation of lifetime research collaborations. I see our research institutions enriched by smart doctoral students who may hang around to do some post-doctoral study. I see a highly successful policy of domestic fees for international doctoral students, resulting in a lift from 700 students in 2005 to 1500 in 2007. I know some of those will want to stay and will be able to stay. Which might be just as well because Fast Forward New Zealand and the recent changes to taxation policy will see a step change in the amount of R&D undertaken in New Zealand and we don’t want human capacity constraints.

Or I could be who you thought I was supposed to be and speak as the tertiary education spokesperson. I acknowledge of course the importance of international education to the compulsory sector.

So perhaps I should pause here and say that Chris Carter has an abiding interest in international education for several reasons. At a personal level I think Chris would be happy enough if I described him as an internationalist, as are our respective predecessors and as am I. As well, Chris seeks to respond to the small or large issues that the compulsory sector brings to his attention. And, of course he is motivated to see the additional stimulus and revenue that flows into many of his beloved 2700 schools continue, and increase. As you would expect of us, he and I work closely on issues as they arise.

For my part as Tertiary Education Minister I need to look no further than out the door of my electorate office in Dunedin, one door up from the Captain Cook Hotel, to see the benefits of international education. Dunedin’s population is ethnically very European as one might expect of a South Island city, but it is instantly transformed into a United Nations by the University and Polytech. International students are in and out of my electorate office every day, usually because my two electorate staff are both justices of the peace. I might add that these students very rarely come via the Captain Cook Hotel. They influence all corners of the city. That’s why so many Dunedin homes have personal links with this or that nationality – my own home seems to specialise in Sub-Saharan Africans – and that’s why we have such brilliant restaurants.

So there, deliberately, I touch on the social benefits of this remarkable sector.

Indeed, if one picks up more or less any document from the Ministry of Education, it is the educational and social benefits which are listed first.

Take the International Education Agenda that was released by Michael Cullen at your conference in Christchurch last year.

It lists four goals.

The first is that New Zealand students are equipped to thrive in an interconnected world.

The second is that international students are enriched by their education and living experiences.

Only by the time we reach goal three, though education officials might protest that the ordering of the goals is not to be taken that seriously, do we read about immediate benefits – domestic education providers are strengthened academically and financially through international linkages.

Having mentioned that agenda, I should update you on its progress.

The review of the code of practice is nearing completion and I expect Cabinet will take a look at the outcome in the next few weeks.

The State School International Levy issue is also not too far from being crystallised. The Ministry consulted with Education New Zealand in the design of the review and PriceWaterhouseCooper has just completed their report.

Most schools have little or no understanding of the services and costs the levy covers. This is no surprise given that it was struck in 1992, predominately as a capital charge.

Many schools however said that they supported ISL funding activities such as ESOL services and ERO reviews.

The code of practice and the ISL involve my colleague Chris Carter, but I’m sure he will make these various reports available sooner than later, in the case of the PWC report, I suspect after discussion with the board of Education New Zealand.

Other items on the agenda that Michael released this time last year are also being progressed. The second national survey of international students has been completed and released. The results are generally rather favourable. Inevitably, there are useful pointers as to how to do better.

NZQA has been active on the international front, seeking to make our qualifications more internationally recognised. By mapping our framework against Ireland we make our qualifications more transparent for European institutions, and European students, and there is similar activity elsewhere, such as in Malaysia, Thailand and China.

I witnessed that activity in China myself a few months ago. I was there mostly in a science capacity but met officials from their quality assurance organisation and saw their straight forward enthusiasm regarding their relationship and progress with New Zealand.

I also met the Chinese Education Minister. I prepared very carefully for that meeting, so that I could address any of the very many concerns he might just raise. I need not have bothered. Minister Zhou Ji was very forthcoming in his strong praise for the way New Zealand and China were progressing their relationship. He said that he thought it was a model relationship which he wished to promote with other countries.

Which occasions me to make a point. Please don’t underestimate the role of diplomacy and of good government-to-government relationships in this sector. Whether its China or Viet Nam or, as was the case last week with Chile, the diplomatic role of governments in general and of education counsellors in particular can often be very important indeed.

It is now time to turn to your document which is designed to brief the incoming government, and to respond to it.

Before I do here are a couple of scene setters, one of which is I hope is obvious, and the other a little cheeky.

The obvious one is that export education is an important, powerful and integral part of this government’s economic development agenda.

We seek a high skilled, high value and innovative economy, strongly connected globally. We seek an economy and a society that moves us further and further towards sustainability. Our vision relies on innovation and quality because that is the path to more productive work places. Our citizens must increasingly be able to operate comfortably in different countries and cultures, and be skilled to operate in a world that continues to change rapidly.

With that vision in mind, export education’s role becomes very important and very obvious.

My second remark, the cheeky one given that I’m the newcomer and you are the veterans, is that export education is a still maturing sector.

Perhaps that ought not be surprising given that the level of offshore demand is itself rapidly changing. But aside from still maturing markets, domestically we have not yet resolved the detail of each of the roles of the many agencies involved, that we have not developed a shared view of the size of the sector, or its likely mix and so on.

I suspect many will agree with that viewpoint and indeed I think there is considerable evidence of strong desire to make progress in some of the seven requests you make of an incoming government.

These range from levy issues to immigration issues to various aspects of the NZ Trade and Enterprise relationship to elimination of trade barriers to funding for generic marketing and the last which is interesting advocacy in favour of more empowered self determination.

Some of these have a history and some are new – or new to me in any case. There isn’t any particular item that you have listed to which I have any negative allergic reaction. I see no reason to why they cannot all go on the agenda of the incoming government for consideration and, in some cases at least, for resolution.

Some are budgeting and inevitably get weighed against other government priorities and some are to do with striking a balance between different interests, including differences within the sector.

But it is the last request, more empowerment for self determination, that I found really interesting.

This is the one that speaks of a future where funding is gathered by a mechanism not unlike a commodity levy in the primary sector.

It is of interest because such a mechanism places high levels of accountability on both Education New Zealand and providers. It is based on the thesis that the sector knows best what an appropriate levy should be and how to best deploy it.

So I would be on for that, when you think the time is right. Which probably isn’t now, but which may be sooner than later. I hope so.

Whether this is the future or not, it is clear to me that this sector, has a strong case, based on good economic theory, for an ongoing levy. I think the case for that has been more than adequately made.

For example three years ago, almost to the day, you received a report you had commissioned called the economic review of the export education levy. It took me until the week before last to read it. It explains the economic rationale for a levy and the rationale is very clear, and quite simple to understand. Whether that levy is struck by government as is the case now, or self imposed by the sector, which is the possible future, the industry will operate more efficiently with a levy than without one.

But there is, in addition to a levy, an economic case for ongoing taxpayer support for generic promotion. It is the same case that exists in tourism. And it is a similar case to that which exists for oil exploration and for filmmaking. These are all export earners that work because people or businesses choose to come here, when they could go somewhere else. And while, in all of those industries it is not the taxpayer’s dollar that makes the difference, the taxpayer’s dollar makes a difference.

Up to point. An incoming government needs to decide what that point is. A modest budget increase last month takes us towards that point but Education New Zealand asserts that it doesn’t take us to it. An incoming government needs to discern that point, then seek to fund it. At least in theory there is an optimal taxpayer investment. So, at least in theory we’d better find out what it is.

None of which is to detract from the Government’s efforts to date. At your last conference Michael Cullen announced $10m over four years for a variety of purposes. We continue to support the sector willingly. What I am adding this year is my commitment to try and find an optimal level of support.

Let me close by recognising those who have been involved in this remarkable sector for some time, who have contributed to its development, who have watched the sector peak, then decline, then begin a slow steady rebuild.

What we have now is a more mature sector than five or ten years ago and a sector that seeks still more maturation and self determination.

The quality assurance is better than before, the policy settings continue to improve, the market development is deepening and the sector has a growing resilience and a determination to expand.

The importance of this sector as an export earner, an agent for the betterment of institutions, as an employer, as a provider of education to students from many countries and cultures and as a facilitator for social and attitudinal change in New Zealand is significant indeed.

I wish your conference and each of you well.


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