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Shaping the Tertiary Education System - Speech

Hon Steve Maharey

2 October 2001

Speech Notes

Shaping the Tertiary Education System to Shape our Future

Speech at Shaping Our Future, the 2001 annual conference of the Association of Staff in Tertiary Education. Brentwood Hotel, Wellington.

I am pleased to be here today to speak at your conference. As a professional association covering approximately 4000 staff in both the private and public sectors, you are a vital part of the tertiary education system.

You are gathering this week at a time when work on where we are going in the tertiary education system is beginning to take shape. This work will take us out of the situation we’ve been left in as a result of the last ten years

We need to change, firstly, to correct the imbalances of the competitive era. Secondly, we need to enable the tertiary education system to make a strong contribution to New Zealand’s social and economic needs, and propel us forward in our development as a knowledge society.


The intent of Labour’s Learning for Life reforms of 1989-1990 was to create a balance. Institutions got the autonomy they had been seeking, and that autonomy was to be constrained by carefully drawn up Charters setting out complementary institutional missions.

In implementing those reforms, however, instead of the proposed co-operative model, the National government developed a market-place model requiring institutions to focus - to an unhealthy degree - on competitive activities.

This has placed some institutions at risk and resulted in a fragmented system lacking in clear direction and leadership. Of course, such an environment impacts on all concerned, students as well as staff. You will be able to vouch for the financial pressure institutions were put under, and the time and energy that was diverted away from the core task of providing quality tertiary education.

I know that some of your members will also have faced redundancies, and others the resulting challenges of larger classes and more responsibilities. Of course, this all has an impact on the quality of the education provided.

Our challenge as a government is to provide future-focussed leadership to the tertiary education system. New Zealand now faces new and demanding challenges in a period of rapid global change - in technology, in communications, and in labour market dynamics. These changes will continue to have a profound effect on the sector you represent.

The tertiary sector has an important role to play in equipping New Zealand to meet these challenges and to take advantage of the opportunities they create. The tertiary education sector also has a fundamental role to play in promoting a vibrant cultural identity, which places value on diversity, achievement and innovation.

Tertiary education will be key to “Shaping our Future” (the theme of this conference) as a knowledge society.


A key requirement for this is that it be properly resourced to carry out its functions. We have already made a start on this.

We have been active in working with institutions that have been, to varying extents, casualties of the competitive model. We have provided advice and governance training. We have provided Crown Observers where necessary.

We have also provided a considerable amount of money. A recent estimate was that between capital injections, loans and loan forgiveness, we have contributed about $50 million in capital expenditure to assisting “at risk’ institutions.

This has not been money “down the drain’. It has focussed on moving these institutions towards sustainable solutions. This has sometimes involved tough decisions. But our focus has always been on preserving an adequate range of high-quality tertiary education programmes in each region.

Labour and the Alliance have also halted the “death of a thousand funding cuts’ that National imposed on tertiary education over the 1990s. We have continued to fund growth without reducing the funding rates. We have also extended the number of places funded through Youth Training and in particular Industry Training (where we have committed an extra $24 million a year). And we are developing new tertiary education pathways such as Modern Apprenticeships, Gateway and learning and assessment centres.

We have committed an additional $100 million in 2001 and 2002 to raise the EFTS funding rates. This has been part of the “fee stabilisation’ offer and so it has been portrayed that this money has all gone to the benefit of students. In fact only $32 million (just under a third) was for the purpose of compensating providers for the effects of inflation on tuition fees.

The remaining $68 million adjusted the rates for 3.4% inflation on government tuition subsidies over 2001 and 2002. This is the first time since the initial development of the EFTS tuition subsidies that they have been adjusted for inflation.

This distinction might not be too important to an institution with a strong “market position’. They would have been able raise fees by enough to pass on a failure by Government to adjust for inflation. But for many regional institutions struggling to retain enrolments, this $68 million inflation adjustment has been absolutely vital.

We have made a start. Nobody is under any illusions that if we are to retain a strong network of public tertiary education institutions, more is needed.


But new money also needs to be spent strategically.Tertiary education is one of this country’s major public investments in building the skills and capability needed for the future. To maximise the benefits of this important investment, a paradigm shift is required.

The tertiary education system will no longer be solely driven by the choices of consumers as it was during the 1990s, when it was too narrowly focussed on student demand as the primary determinant of resource allocation. Rather, the focus of the tertiary education system will now be to produce the skills, knowledge and innovation that New Zealand needs to:

- transform our economy;

- promote social and cultural development; and

- meet the rapidly changing requirements of national and international labour markets.

This Labour/Alliance Government is leading a shift to a co-operative and collaborative sector, unified by a clear vision for the future, which contributes effectively to New Zealand’s development as a knowledge nation. While maintaining strong levels of participation, the tertiary education system needs to be more explicitly aligned with wider government goals for economic and social development.

The key message is that the tertiary education system can no longer be seen in isolation from the Government’s wider social and economic development initiatives and strategies.


As you may know, the Tertiary Education Advisory Commission (TEAC) was established by the Labour/Alliance Government in April 2000. It was tasked to provide advice on the future strategic direction of the New Zealand tertiary education system.

The Commission’s first report, Shaping a Shared Vision, set out a broad vision that has guided its work ever since. TEAC’s second report, Shaping the System, gave us the steering mechanisms we will need in order to use our tertiary education capability strategically. These are:

- Charters for publicly-funded providers that are meaningful and set out their special mission and contribution to the system as a whole;

- Provider profiles to avoid duplication and focus each provider on their specialities and the needs of their stakeholders;

- A Centres of Research Excellence Fund to foster excellence in areas of strategic importance; and

- A Tertiary Education Commission (TEC) to bring the administration of the whole system together under one agency, with strong involvement from business and other stakeholders in its governance.

Over the next few months, further decisions regarding the structure of the TEC, the nature and form of Charters and Profiles, and the funding system will be taken. I would like to discuss briefly each of these topics in the context of the Tertiary Education Strategy that is currently being developed.


The Tertiary Education Strategy will cover the whole tertiary education system, and will have linkages with the compulsory education system and the labour market. All elements of the system need to be performing to the highest standards to ensure we develop the skills, capabilities and knowledge that New Zealand requires for the future. To develop an inclusive knowledge society in this country we need a tertiary education system that provides diversity with excellence.

The Tertiary Education Strategy will outline how the tertiary education system will achieve the paradigm shift from looking inwards at consumers, to looking outwards at how it can:

- contribute to New Zealand’s goals for economic and social development;

- produce the knowledge that New Zealand needs to be a world leader in innovation;

- produce the skills and competencies that New Zealanders need in order to fuel our economic growth; and

- develop the capabilities within the sector to meet the needs and expectations of enterprise and communities.

The Strategy will outline priorities and milestones for the next three to five years and inform policy direction, purchasing decisions and capability building by the TEC, as well as provide a framework within which the tertiary education system can develop.

The development of any tertiary education strategy is not a task that should be undertaken behind closed doors. We want to hear your views and suggestions about the content of the Tertiary Education Strategy, and have established a website for this purpose: Submissions and comments on both the Strategy and TEAC’s Shaping the Strategy report are welcomed until 31 October 2001.

This forum for discussion is being complemented by a series of workshops around New Zealand over the next couple of months to seek further engagement from you, communities, industries and others in the tertiary sector. We expect to publicly release a draft Tertiary Education Strategy in December 2001 for feedback.


The TEC will positively impact on you, as tertiary staff, by providing a more strategic and systematic approach to the way that tertiary education is funded and regulated. The TEC will include the functions currently carried out by Skill New Zealand and the Tertiary Resourcing division of the Ministry of Education. Just to put these units’ functions into perspective, the Tertiary Resourcing Division of the Ministry is responsible for the administration of $1.5 billion of tertiary funding to tertiary education providers! The TEC will also have responsibility for implementing the Tertiary Education Strategy.

Progress has been made in this area with the creation of Transition TEC, which will act as an “establishment board’ for the TEC during its set-up phase. I am pleased that Dr Andrew West, Chief Executive of the New Zealand Qualifications Authority, has been appointed as Chair of Transition TEC, and Kaye Turner, currently Deputy Vice-Chancellor (Academic) at the University of Waikato, has been appointed as Deputy Chair. Transition TEC will also act as an “advisory board’ during both the further development of the Tertiary Education Strategy and the work on Charters and Profiles.


We have set up a working party to make recommendations on the operational details of a new system of charters and profiles that would set out strategic directions and activities for all government funded tertiary education providers and Industry Training Organisations.

As you will be aware, at present only public tertiary education institutions are required to have charters. This new policy would see this requirement extended to government funded private providers as well. The idea is that Profiles will replace the annual statement of objectives, which providers currently prepare.

The working party of sector representatives is making good progress working through the details of this proposal. This process gives us the opportunity to hear and respond to staff concerns.

For instance, one of the matters that Charters will need to cover is the approach to ensuring that the organisation develops and supports a staff profile that reflects its mission and special character. The working party is still working through the text which explains what this should mean, and ASTE are part of this process.

We recognise that in order to achieve a more co-ordinated and coherent tertiary sector, change will be required at many levels. We are supporting you and your institutions to effect this change by making available both capital and operational funding through the Strategic Change Fund.

The Fund of $35 million will provide both capital ($16.615 million) and operational funding ($18.142 million) to public tertiary institutions in 2002/03 to help them adjust to the new environment of the tertiary sector. It will largely fund activities aimed at improving sector performance - strategic, business and risk management planning and a host of other activities such as joint ventures, infra-structural and human resource development and governance and management.

The reason this Fund is only available for public institutions reflects the distinct differences between public and private providers in terms of the Crown’s ownership interest in them. The ownership relationship, between the Crown and public providers, means that the Government has a long term strategic interest in the continuing viability of these providers that differs from its interest in having a viable private sector.


ASTE, as a professional body representing staff throughout the tertiary sector, will play an important part in the development of a tertiary system which will drive this country’s social and economic development as a knowledge society. It is critical that we work together to achieve this. The Government is committed to effectively resourcing the sector to enable positive change towards a more co-operative, outwards looking sector.

Let me in closing just mention one further symbol of this commitment. We have provided funding for the establishment of annual teaching awards for outstanding tertiary education teachers. Apart from national recognition, the awards will provide some financial support for the tertiary education teacher to further his or her interests in teaching.

We don’t just intend to identify individuals but also practices that can be disseminated. The best examples of tertiary education teaching will also be shared nationally through an annual publication of best practice.

Thank you for the opportunity to speak at your conference. I look forward to continuing to work with you through the range of initiatives that are underway, and encourage your continued input.


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