Steven Joyce

21 March, 2013

Higher Education Summit 2013

Good morning. It’s a pleasure to speak to you today.

I think we are as a team making great progress in lifting achievement, improving quality, and improving value for money in the tertiary education sector.

Despite difficult financial times and virtually no new money we are training and qualifying more people across the tertiary sector. More people than ever have tertiary qualifications, so we are making good progress. We are continuing to build on this to get even better results.

The world economy remains challenging. The old world continues to struggle to get out from under its mountain of debt. There is a massive economic power shift underway from the West to the East. New Zealand straddles both worlds and has both opportunities and challenges

We are a nation born of our size, our location and history. We are located at the bottom of the world and have to work harder and smarter than anyone else to get ahead. The reality is no one owes us a living – our skills and knowledge therefore are a big part of our competitive advantage

Government policy for higher education

Last year the Prime Minister set 10 challenging and specific results for the public service to achieve over the next three to five years.

One of these is achieving the target of seeing 85 per cent of 18-year-olds with NCEA Level 2 or equivalent qualification, and there’s a role for the tertiary sector to play in that through initiatives like the Youth Guarantee.

More squarely our responsibility is the target to increase the proportion of 25 to 34 year-olds with qualifications at level 4 or above from 52 per cent to 55 per cent in 2017.

We want more young people to have qualifications at this level because of the impact on future incomes of those with higher qualifications, and the related increase in skill levels in the workforce and productivity improvements.

Achieving the target will require 11,250 additional people with level 4 qualifications at by 2017. This will involve lifting performance levels even higher, particularly by bringing students with partially completed qualifications back into study, but we are on the right track.

While this target will be a key focus over the next few years, it is not our only priority in tertiary education. We continue to focus on:

o ensuring that Christchurch tertiary institutions are rebuilt, and the post-compulsory network in the Canterbury region is strengthened to meet the skill needs for rebuilding the city and of the broader economy

o supporting innovation and research

o improving the performance and value for money of industry training

o helping students to transition from school to further education

o supporting the New Zealand education industry to succeed in key international markets.

Funding policy and strategies

In tertiary education, the challenge is to get better results from what we are already spending – it’s about getting the most out of every dollar spent. This means investing in the areas that offer the best return for students and New Zealand as a whole.

I asked the Tertiary Education Commission to reflect our growth and innovation goals in its funding decisions, and I expect providers to continue their focus on responding to demand signals at the local and national level.

At the same time, this Government has responded to immediate gaps in current provision:

o We have reprioritised $42 million over four years to increase the funding for quality engineering training, and to increase the number of engineering graduates by an additional 500 per annum from 2017.

o We have increased science tuition subsidies reflecting the Government’s focus on research and science as a basis for economic innovation.

o We have refocused entry-level tertiary education on providing people who do not already have essential foundation skills with a low-cost way to gain those skills and progress to higher-level study and skilled employment.

Better Skills Matching

The Government has committed to provide better information that will assist students in making informed choices about their study options and careers.

In January the Ministry of Education published Moving on up - What young people earn after their tertiary education. This compares what students earn after studying different subjects and at different levels in New Zealand.

Careers New Zealand has also released a new online tool that uses data from the report to allow students to compare earnings by qualification and field of study.

This report on post-study earnings complements a new report from the Ministry of Business, Innovation and Employment on the demand outlook for major occupations in New Zealand’s labour force.

The Occupational Outlook report provides a demand-side view of the current state of 40 common occupations in New Zealand, their likely employment prospects, and the qualifications required to enter those occupations.

Over the course of 2013, I will be asking government agencies to look at how to provide more information that will help young people make more informed choices about their careers.

Improving the interface between schools and higher education institutions

The interface between the secondary and tertiary education sectors continues to be a priority for this Government, particularly through the Youth Guarantee.

16-18 year olds can now choose to study at school, in a school-based service academy, a secondary-tertiary programme such as a trades academy, or fees-free at levels 1-3 in the tertiary education system.

The secondary and tertiary sectors are more strongly linked, and work has also been undertaken to better link the social development and education systems.

We have developed new vocational pathways to give students who are interested in vocational learning clear linkages between what they are studying and their post-study options.

Our changes to secondary and tertiary transitions have mostly focused on vocational education, as the ‘traditional’ pathway from school to higher education has been well signposted.

We are currently reviewing careers information, advice, guidance and education. I expect this to improve the information and advice available to students, to better inform their decision-making, in relation to higher education as well as vocational education.

You will be aware that the Tertiary Education Commission is strengthening its expectation that tertiary providers improve support for learners to make decisions about their programme of study. I expect this, alongside other initiatives such as the publication of the employment outcomes from tertiary education, to strengthen the links between schools and higher education.

• Strengthening quality and ensuring accountability

You do not need me to tell you of the importance of high-quality education. I am heartened to see that this summit includes sessions on “raising the standard of higher education to meet the needs of all stakeholders”, and on quality assurance.

I think considering educational quality in the context of meeting the needs of all stakeholders is crucial. Education of the highest quality is important for students themselves.

We have put in place robust quality assurance frameworks to ensure providers are delivering first-rate courses to students. This includes transferring the quality assurance of institutes of technology and polytechnics back to NZQA, to ensure consistency across the tertiary sector.

Performance-linked funding, and the publication of performance information, are also important drivers of continued improvements in educational performance.

• Strategies for encouraging innovation in higher education

Innovation is an important factor in driving productivity growth, increasing output and improving competitiveness. It is a vital part of building a better, more prosperous future for all New Zealanders.

Tertiary education plays an important role in enabling successful innovation. It provides the skilled graduates we need to create and deliver high-value products and services, cultivate new markets and sell to the world.

In the past few years, this Government has been focusing its efforts on enabling and stimulating more innovation.

Over the last year I have outlined a comprehensive plan to build innovation in New Zealand through investing in research that offers opportunities for commercialisation, strengthening our research institutions, improving intellectual property settings, developing an innovation infrastructure and building international linkages.

Last year, the Government launched the Building Innovation driver of our Business Growth Agenda, which outlines 56 government initiatives to increase New Zealand’s economic growth through greater innovation.

In last year’s Budget, I announced an increase in the size of the Performance-Based Research Fund (PBRF) to $300 million by 2016 to strengthen tertiary education research through maintaining the quality of research-led teaching and growing research.

This year, we are reviewing the two main tertiary research funding streams - the PBRF and the Centres of Research Excellence (CoREs) - to assess their effectiveness in delivering skills and innovation, producing excellent research, and encouraging the utilisation and commercialisation of research.

The review of the CoREs fund is focused on practical ways to optimise CoRE performance, to ensure that CoREs policy is aligned to overall science and research policy.

I am generally impressed with the quality of what the CoREs do. I want to support further high performance. I want to be sure we have a performance framework in place that supports continued excellence in CoRE research.

Universities and CoREs will have the opportunity to provide input on how this is best achieved when a discussion document is released shortly.

In the case of the PBRF review, we want to see if there are practical improvements that can be made to reduce the cost of the PBRF process for researchers, TEOs and the government.

We also want to look at how the PBRF recognises applied research that is relevant to business, whether it could do more to encourage research with impacts that go beyond the tertiary system, and how the fund may be improved to better support mātauranga Māori research.

There will be an opportunity for you to provide input into the review when some possible options for change are circulated, probably in May.

Student Support

Student support policy continues to be important. Policy changes made by the previous government in relation to both student loans and student allowances blew out both budgets – lifting costs dramatically and squeezing monies for tuition and provision; and also squeezing taxpayers more widely

We have made a number of changes to improve both systems. The most value-for-money impact has been on the student loan system, which has reduced the cost about 10c in every dollar lent.

We will continue to focus the student loan system on people who are achieving qualifications that will allow them to lift their post-study incomes and pay their loans off; and we will also chase those overseas to meet their obligations – something which we have started but by no means yet got on top of.

And we will continue to focus out student allowance system to young people in their early years of study; particularly those with low family incomes who might not otherwise participate in tertiary study.

• Making education accessible for all

This Government is also committed to ensuring more New Zealanders have better access to further education and skills-based learning.

The number of students participating in Youth Guarantee continues to grow. There are 8,428 fees-free places in tertiary education for 16-17 year olds in 2013, up from 7,342 in 2012.

And as part of our changes to entry-level tertiary education, to attract learners who have not already achieved a level 2 qualification, around 5,500 EFTS will be fees-free, at no extra cost to the Government.

In vocational education, we have introduced the Pacific Trades Training initiative for 2012 and 2013, which are a part of the Skills for Canterbury additional trades training places. The Pacific Trades Training Initiative is designed to target Pasifika trainees and increase participation rates at higher levels of study.

We also launched the He Toki ki te Rika trades training initiative in 2011, to raise Māori participation in the trades, and to contribute to the Christchurch rebuild.

We are lifting the profile of, and participation in, apprenticeships. The first 10,000 new apprentices who enrol after 6 March this year will be given $1,000 towards their tools and off-job course costs, or $2,000 if they are in priority construction trades. The same amount will also be paid to their employers.

Following the review of industry training, from next year all apprenticeship-type training will be combined under an expanded and improved scheme called New Zealand Apprenticeships. These new apprenticeships will provide the same level of support, and the same level of subsidy, for all apprentices, regardless of their age.

International Education

International Education very important for New Zealand. Not just because it is a source of income to providers and to the country – although that is important to help us compete on a world stage for top-class academic resources

Also because of the people-to-people links it builds that are crucial for our country’s future. Malaysia last week – met captains of industry and government for whom New Zealand is highly relevant – having studied here in the 60s and 70s under the Colombo Plan

Opportunity that we have to seize – for our own sake and our country’s sake

Today I am releasing latest Export Education Levy data – confirms a 2% rise in international tuition revenues last year – to $745.7 million.

That’s the good news. Numbers of students however was lower. 6% down last year. Much of that is because of the impact of the ChCh earthquakes – ChCh numbers down 31% last year on top of a 37% decline the year before. Without ChCh our numbers of students would have been down only 3% versus a decline of 7% in Australia.

Within sectors (and again discounting ChCh), Polytech numbers were up 4%, schools up 1%, Universities were flat, and PTEs declined.

Looking ahead is also challenging with the number of first-time student visa applications declining.

Challenge is the same for international educators as for every exported dealing with a high dollar. Innovation and an emphasis on quality. Its worth pointing out that often overseas I strike people who have a greater appreciation of the quality and value-for money of New Zealand education than we have here.

The new Education NZ is steadily increasing its ability to assist and I am pushing them hard to move quickly to help the sector to grow.

Concluding Remarks

This Government has high aspirations for higher education in New Zealand. I think we can achieve a high-performing system that maximises the potential of all learners and supports our economy at all levels.

I look forward to working with you to achieve this.

Thank you for your time today – and enjoy the rest of the summit.

ENDS

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