Tolley Anne: Education (Polytechnics) Amendment Bill — Third Reading 
Tolley Anne: Education (Polytechnics) Amendment Bill — Third Reading 
[Volume:659;Page:8599] 
Hon ANNE TOLLEY (Minister for Tertiary Education) 
: 
 I move  
That the Education (Polytechnics) Amendment Bill be now read a third time 
. This bill introduces new legal arrangements that will enable polytechnic councils and the Crown to respond decisively and appropriately to the educational and financial challenges facing the sector. The new arrangements need to be in place as soon as possible to give the reconstituted councils time to start addressing the financial pressures on their polytechnics. I therefore thank the members of the Education and Science Committee for their consideration of this bill within a shortened time frame. I also acknowledge the hard work of officials select committee staff and parliamentary counsel in progressing this bill. 
This National-led Government is committed to establishing a world-leading education system—one that equips New Zealanders with the knowledge skills and values to be successful citizens in the 21st century. A key priority is the development of high-quality relevant and efficient tertiary education provision that meets the needs of students employers and the economy. The polytechnic sector has an important role to play within the tertiary education system as the primary provider of vocational education and training opportunities for New Zealanders. It is critical therefore that New Zealand has well-governed polytechnics that are educationally sound and financially viable. 
At present educational performance across the polytechnic sector varies from good to poor. 
Hon Members 
: Oops she’s lost her place already. 
Hon ANNE TOLLEY 
: Of concern to this Government are the six polytechnics— 
Hon Trevor Mallard 
: Read the book. 
Sue Moroney 
: She’s looking for the pictures. 
Hon ANNE TOLLEY 
: There are no pictures. Of concern to this Government are the six polytechnics whose educational performance has been identified as poor. Indications are that without major changes these polytechnics will be unable to achieve significant improvements over the medium to long term in the quality of education provided to students. 
Historically financial performance has also varied across the polytechnic sector for a number of reasons. Some polytechnics have not managed costs within revenue. Others have faced increased competition from private providers. Regional polytechnics have been unable to take advantage of economies of scale because of the decline in their local population base. Since 2005-06 the sector has received $416 million in extraordinary funding to address issues of poor financial performance. Despite such assistance six polytechnics will not be financially viable in 2011. A further six can become financially viable but only through compromising educational quality. Across the board polytechnics are not living within their means. In 2008 polytechnics spent on average $1131 for every $1000 of core income earned. Given the tight financial environment within which this Government has to operate the polytechnic sector can no longer rely on additional funding being made available to address financial viability issues. Rapid innovative and decisive action will need to be taken by polytechnic councils and the Crown to address the educational and financial challenges facing the sector. 
The bill establishes new legal arrangements that provide polytechnic councils and the Crown with greater decision-making flexibility. For the benefit of the House I will reiterate the bill’s objectives. This bill’s first objective is to improve the governance capability and effectiveness of polytechnic councils. The second objective is to allow the Crown to more effectively respond to the risks posed by polytechnics with educational or financial performance issues. This bill introduces new governance arrangements for polytechnics with the aim of building the capability of councils for decisive and responsive decision-making. 
As a number of submitters commented a reduction in the size of polytechnic councils from the current 12 to 20 members would be of considerable benefit. From 1 May 2010—or earlier if circumstances require—polytechnic councils will consist of eight members only. Each polytechnic council will comprise four ministerial appointees and four council appointees. Again I thank the Education and Science Committee for its recommendation that councils be given the discretion to appoint four members. This pragmatic approach recognises the advantages of giving a polytech council greater flexibility to tailor its composition to reflect the particular needs and interests of its community. It will also enable the responsible Minister to appoint the chairperson and deputy chairperson from amongst all eight members instead of only five. 
Under the bill there will be a new emphasis on achieving and maintaining good governance practices. Appointments to polytech councils are to be made on the basis of relevant skills and experience especially governance experience. Council members will be expected to comply with new individual duties which will reflect the primary obligation of members to act in the interests of the polytech as a whole. The introduction of such duties was welcomed by submitters. This Government regards the need for adherence to good governance practices as a serious matter. It is important as is demonstrated through members being made accountable to both the responsible Minister and the polytech council itself for breaches of the new individual duties. 
A feature of this bill is the collaborative governance arrangements which include the formation of a combined council governing two or more polytechs. The decision to enter into such an arrangement is a voluntary one to be made by each participating council. The inclusion of collaborative governance arrangements within the bill enables councils to consider innovative solutions to future governance issues and ensures that the legislation will not pose a barrier to their implementation. The bill also addresses the Crown’s ability to respond appropriately and in a timely manner when individual polytechnics are at risk educationally or financially. On the passage of the bill an extended interventions framework will come into effect for the polytech sector; one intervention will provide for a gradually escalating series of responses to situations of risk. 
A number of miscellaneous amendments are included in this bill. The most significant are those enabling the Manukau Institute of Technology to establish a tertiary high school from the beginning of 2010. I am delighted at the endorsement of the proposal for a trial project received from submitters and members of the select committee. This Government is committed to reducing the number of 15 to 19-year-olds who are leaving school early and without adequate qualifications. The operation of a tertiary high school is a significant step and I thank members of the House for their support. I am pleased to commend the bill to the House.