Mallard Trevor: Education Amendment Bill — In Committee 
Mallard Trevor: Education Amendment Bill — In Committee 
[Volume:662;Page:10304] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I will focus particularly on Supplementary Order Paper 99 today. It is in my name and it inserts new clause 78A in the Education Amendment Bill to validate borrowing by King’s High School in Dunedin. 
This matter has a long history and it is one that I think neither the ministry nor two three or even four Ministers of Education have very much to be proud about. The short story is that a number of years ago King’s High School entered into an agreement to build a joint facility with Queen’s High School. It received some additional Government money in order to build a performing arts centre. Unfortunately the school’s board—we think probably through the former principal—was under the impression that it could effectively draw down on its 5-year property plan money: that it could get a bank loan in that year and a year or two later when it became eligible for more 5-year property money it could use that to repay the loan. The advice to the board was wrong and as a result the school has been paying about $4800 a month since that time to service the loan. At the same time that the school has this loan which it would like to get rid of it has a large amount in credit in terms of the 5-year property plan money that it would have been able to draw on from 2008 onwards. 
I make it very clear that the board was not correctly advised. It took out a bank loan for a building and it has a large credit with the Ministry of Education for building purposes. It wants to use that credit—about $400000 of it—in order to repay the loan so that it stops paying the $4800 a month to service the loan from the school’s operations grant funding. That money would otherwise be used for the direct educational benefit of kids and the school has indicated to me that its top priority if it could for spending the money in credit would be to apply it to the repayment of the loan. 
I will put all the cards on the table. At least one former Labour Minister of Education received a letter from the school and turned it down. It might have been two Ministers but I know that one Minister did. That Minister was wrong to do so. 
I have now had two meetings with the current Minister of Education about this issue. It is fair to say that at the earlier meeting she understood the problem and asked the ministry for advice on a solution to it. I make it clear that this is not the only solution to the problem. There could be a policy change in relation to 5-year property funding to sort it out; there are a number of routes that the Minister could take in order to solve it. But the trouble is that if the Minister makes a policy change she probably opens up the door for other schools which I think is probably not a wise thing to do without going through a longer process. 
But in relation to this particular school the facts are well known. We have a school that has now been committed to using its resources and it is not a rich school. Despite the names “King’s” and “Queen’s”—and when we hear “King’s” a lot of people think of Auckland and of a school that is in a much better financial position than this school—Dunedin South is a medium to low decile area and King’s High School is not a wealthy school. It is not in an area of growth and it is not in an area where there are major benefactors. It is fair to say the school is in quite good condition. One of the interesting things that we learn while serving as the Minister of Education is that boys wreck their schools but that girls do not. The sad thing that occurred there in relation to the two schools—which are of the same vintage—is that the boys received their new school buildings before the time provided for under the 5-year property plan but the girls did not get their new school. So the boys’ school King’s High School is in a much better position than Queen’s High School. I actually like the style of the buildings at the girls’ school a bit more than those at King’s High School but there is no doubt that King’s High School has more up-to-date modern facilities and more room than the girls’ school has. 
My question is really about whether it is appropriate or right for the interest on that loan to keep on flowing to Westpac ad infinitum instead of that money being used by the school. It could be used for the special-needs pupils at the school for extension work at the school for the maintenance of the school—and it does not need a lot of maintenance—or to buy computers. Over $50000 a year could be used to employ another teacher. I think that the Minister although she and I might have debates about the adequacy of schools’ operations grants—I think that schools need more of that funding—would agree that the grants are not particularly generous. Nor are they set up in order for a mid-sized medium-decile secondary school to use that money in that way. 
I want at this stage—and it is interesting to note that I am doing this in two debates in a row—to acknowledge the work that Sir Roger Douglas has done on this issue. He has taken the time to investigate the issue and look at the fairness of the situation. Notwithstanding the fact that the suggested amendment has come from the Labour Party he has agreed to support it. I say to my colleagues from the Maori Party that I think it is sad that to date they have not made any contact with the school. There is an issue there and there is an offer for them to be briefed on that issue. There is an offer for the Maori Party to understand the priorities of the school but that offer has not been taken up either by its education spokesperson or by its local member of Parliament. I think that is sad. 
At this stage it is important to acknowledge Clare Curran the Dunedin South member of Parliament who took me to the school where I was briefed on the situation. I think it is fair to say both of us are a little embarrassed that we are in this situation. It is something that could have been fixed by a former Labour Minister of Education. There is no glory in this situation and it is something that I think could have and should have been sorted out. 
The Minister says the approach set out on Supplementary Order Paper 99 is inappropriate under the Public Finance Act. I have invited her to look at legislation of a very similar nature that has been passed in the last year. Every year Parliament passes dozens of validating clauses to sort out wee mistakes that have been made. That is what Parliament is for. Parliament is there to make sure that when mistakes that are against the law—that breach the law—are made that are technical not deliberate people should not suffer because of it. We are here as parliamentarians to try to sort out these things for the sake of the kids and there is a solution here. It will make no difference to anyone who is not at the school. It does not involve any extra money. Nothing extra has to be voted as a result of this exercise; the money is sitting there for that school to use as it wants. All that this amendment does is to say to King’s High School that it has the ability to use its money from its 5-year property plan which it thought it could use to pay off the debt to pay off the debt. I think that it is not an unreasonable request. We have thought a lot about this and I cannot think of a better way of doing it without opening the gate to other schools.