Donnelly Brian: Urgent Debates — Te Wananga o Aotearoa—Dissolution of Council 
Donnelly Brian: Urgent Debates — Te Wananga o Aotearoa—Dissolution of Council 
[Volume:625;Page:20378] 
Hon BRIAN DONNELLY (NZ First) 
: 
 I start by saying that there is a really delicious irony in this whole issue over Te Wananga o Aotearoa in that the wananga actually represents everything that the ACT party believes is good in tertiary education. It is a model of ACT’s philosophy of education. It is a model of the market model. It is a most successful institution based upon ACT’s philosophy of education. All we have to do is ask about ACT’s philosophy of education; it is about the market model meeting clients’ needs getting enrolments and getting bums on seats. It was the model that was established through the 1990s and now here in 2005 a successful institution which started off in a garage next to a dump in Te Awamutu is the largest tertiary institution. By the way there is no minority report from ACT in there at all which points out that everything was hunky-dory. 
We have to recognise the fact that this institution has grown rapidly and it has grown rapidly as far as we know at this point in time within the rules that have been established under the market model—as far as we know at this particular point in time. No one has come along from the Audit Office or anywhere else and said that it has not been working within the rules and the rules have been established for all institutions. We will have to wait—and the Minister was correct to say so—and see just exactly what comes out of the audit report. There may be some shortcomings in the terms of reference. But as far as we know this is the most audited tertiary institution in New Zealand and we have not got one hanging offence so let us wait and see whether the accusations made by Ken Shirley are well-founded. 
What we do have to recognise is that that institution grew within the rules as far as we know. It started off in a shed in Te Awamutu and grew all the way to being the largest tertiary institution in New Zealand under as I said those particular things—under the elements of entrepreneurialism innovation penetrating market research and the efficient delivery of systems. We know well that one of the reasons why it was able to cream so much money was that it was able to have very very high levels of student-teacher ratios—much higher obviously than the funding architects had ever considered because they packaged up all those programmes. So it is very efficient in terms of efficiency as measured by the ACT party and its economists and the people who believe that our whole society can be organised upon the Adam Smith model. Nevertheless we still think that it moved too fast. 
Ken Shirley has fingered one of the key issues and it is not the rubbish he has been talking about; it is the issue around the Treaty of Waitangi money. That is one of the keys to the financial problem the institution has got into and I want to give a little bit of background to that. During our time in coalition Government an application was made to us—for $10 million I might add—along those particular lines. We had all the Maori members and we were fairly keen on looking at that. But when we actually analysed it this is what we came to a conclusion about: in 1993 when the private training establishment became the wananga under Locksmith Smith under National and became a State institution it agreed to accept equivalent full-time student funding like other tertiary institutions and the policy was that the capital funding would be in equivalent full-time student funding. So if we were to give it a Treaty of Waitangi claim because it claimed a capital shortfall—it was not about operations it was about capital funding—in fact it was already getting the capital funding and all that funding it was getting from the time it was a wananga. 
New Zealand First said that that was double-dipping and that it was not fair. Why should other institutions not get the same sort of double-dipping? Northland Polytechnic started off with terrible buildings so why should it not get the same sort of capital injection that a Treaty of Waitangi claim was able to give to this particular institution? So we did not allow it. But the moment the coalition broke down the National Party immediately started working on giving that money to the wananga. When Labour came into Government it just could not wait to throw the money at it and say: “Here’s a gift from the Labour Party. Go and close the gaps.” So an agreement was made for $15 million. The wananga then started to purchase buildings on the expectation that this money would flow through to it. That was quite a reasonable expectation—a deed of settlement had been signed. 
Then the Government reneged on that settlement deed and therein lies the problem. Suddenly the wananga did not have the money to be able to continue along with other things that were going on for example the capping of the funding that went through—the 5.1 funding—and the other funding there. That cap was put on and that put pressure on the wananga. Other factors—and I think the Minister is right; some of the unemployment factors etc. meant that its enrolments reduced at the very time that the Government was reneging on the issue over the Treaty of Waitangi money which it should not have been given in the first place. Then of course it said: “Look we can trade ourselves out of this.” but the way to trade out of it would have been to sell off those properties and they would have been at fire-sale cost. Quite rightly the Government has said: “Hang on a second. We don’t want this. We don’t want that pub on the road just out of Hamilton sold at fire-sale cost. If it has to be sold it should be sold at a decent level so that the money can be returned to the State institution.” which the wananga is and as I say for that both National and Labour have to take some blame. 
The member from ACT Ken Shirley mentioned that the Education and Science Committee did a financial review. I have to tell Mr Ken Shirley that unfortunately that review was of the year prior to the year we are looking at now when the wananga got itself into financial problems. I also have to mention—and this is an excuse for the member—that ACT did not put in any minority report to suggest that there was any financial mismanagement or financial problem in the wananga up to that particular point in time. 
Hon Ken Shirley 
: And you were the chairperson. 
Hon BRIAN DONNELLY 
: I was the chairperson and that is why I will stand by the fact that we did not get any evidence of financial mismanagement during that financial review. I want to make that public and people can read it in the report we made to the Parliament itself. But I have to make mention of one particular interaction during that review. I refer to the occasion when we went up to the wananga and interviewed and all the programmes that were going on were explained to us. Let us face it—there has been real innovation in the delivery of programmes there. There has been very real penetration of a part of the educational market that has been very very resistant to penetration by any of our other institutions. Those things have to be recognised and whatever is occurring here in the decisions the Government is making those things cannot be lost. As a Parliament we have to ensure that they are maintained. 
Rongo Wetere made this particular comment to a question asked of him when they were putting out some of the problems that were occurring with the funding flow etc. Someone asked him: “What could be done to help you out?” and his comment was: “Get rid of this Labour Government.” Am I correct! Maybe that piece of information went back to the Minister of Education and maybe that has created some of the turn of events since then. There has been a lot of talk about the $239 million but that $239 million has come from the funding streams from the policies that were set in place during the National Government. If National—[ 
Interruption 
] Oh yes certainly. But the funding policies were put in place at that particular time and endorsed by ACT I might add. If Labour can be criticised it would be because it has done nothing about it. In fact the Associate Minister Steve Maharey whilst recognising that there was a problem with the “bums on seats” policy did not do anything about it. He put in place the levers but never pulled any of them. Therefore this Labour Government does have to take responsibility for the financial problems that occurred. 
In the last Parliament we put through a tertiary education reform bill. The reason we put it through and changed the way in which things were done was so that there would be early signals when there were financial problems. So much for the early signals! This is not the first institution that has had to be bailed out by National or Labour. There is one in New Plymouth that is still in that particular process so it is not unique in itself. But the tertiary education reform legislation was supposed to give more timely information to be able to act. This particular situation has not been acted on in a timely fashion. In fact it has been frustrated by some of the deliberate measures made by the Government itself around Treaty of Waitangi money and about capping funding.