Education (Tertiary Reforms) Amendment Bill — Second Reading 
Education (Tertiary Reforms) Amendment Bill — Second Reading 
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Education (Tertiary Reforms) Amendment Bill 
Second Reading 
Hon MARYAN STREET (Associate Minister for Tertiary Education) 
 on behalf of the  
Minister for Tertiary Education 
: I move  
That the Education (Tertiary Reforms) Amendment Bill be now read a second time 
. The bill as reported back now includes a number of important changes and I commend the Education and Science Committee for the thoroughness and efficiency with which it has considered this bill. I agree with and support the changes it has suggested and I believe that these will improve the bill. 
A high-performing tertiary education sector is critical to the future of our country. This bill implements the Government’s reforms of the system for planning funding and monitoring the provision of tertiary education. It puts mechanisms in place to ensure that the Government can have confidence that the tertiary education system is making a valuable contribution to the social economic and environmental interests of New Zealand. 
One of the main components of the bill is the establishment of a streamlined set of steering instruments. This will significantly reduce compliance costs for tertiary education organisations and will also reduce the administrative workload on the Minister and the Tertiary Education Commission. The Minister will publish a single tertiary education strategy that sets out the long-term strategy and the current to medium term priorities for tertiary education. This will replace the current strategy and statement of tertiary education priorities. The Minister will also determine the design of funding mechanisms and will specify the total amount of funding available to organisations. 
The Tertiary Education Commission will publish guidance on how organisations in different parts of the sector can give effect to Government priorities in a single plan that will replace the current system of charters and profiles. Tertiary education organisations will be required to prepare their plans in consultation with their stakeholders. The commission will approve those parts of the plan for which Government funding is sought with a focus on investing in priority areas identified at both national and local levels. These arrangements simplify the lines of accountability between organisations and central government. 
It is important to note first that in general submitters supported the aims of the bill and of the reforms. In particular they supported the move to a more streamlined system a more strategic focus and the stronger emphasis on stakeholder involvement. 
The Education and Science Committee has recommended several changes in response to concerns that were raised. The committee has recommended that academic freedom now be made explicit in the purpose statement of the bill. 
Dr Paul Hutchison 
: It took a lot; it had to be dragged into the bill. 
Hon MARYAN STREET 
: Although of course it was never the intention of the bill to compromise academic freedom as a former academic I understand the importance of restating this principle. 
Hon Maurice Williamson 
: Yeah right! 
Hon MARYAN STREET 
: The amendments set out in the bill are all subject to sections 160 and 161 of the Education Act 1989. However this was worth clarifying and I support the change. Some of the members opposite are querying my interest in and knowledge of this sector and I just remind them that I spent 9 years as an academic in the tertiary sector and have followed these reforms with great interest. 
All along the bill has given the Tertiary Education Commission power of approval only over those programmes and activities for which organisations are seeking Government funding. Programmes or activities funded entirely by philanthropy and/or private sources will not be subject to approval by the commission. The select committee has recommended changes to the bill to make this explicit and clear in response to concerns expressed by submitters. Tertiary education organisations will identify what “stakeholder” means in their particular contexts. They will consult relevant stakeholders and show how they intend to meet stakeholder needs in their plans. The Tertiary Education Commission will take into account whether the needs of stakeholders have been adequately considered and addressed in an organisation’s plan when determining funding. 
The bill as reported back by the select committee now gives public tertiary institution councils the functional role of undertaking long-term planning. This addresses the concerns of some submitters that in streamlining charters and profiles into plans the ability of organisations to plan for the long term could be compromised. So let us be clear about what these changes mean for the tertiary education system and for the country. These reforms aim to make this key national asset deliver real benefits for New Zealand and New Zealanders. They aim to encourage excellence by rewarding quality and this is quite a shift from a funding system based on quantity. The funding system needs to change so that tertiary education organisations can shift their focus from participation and funding to achievement and the long-term needs of stakeholders. 
Government expenditure will no longer be driven by demand but will be set as a 3-year funding path that takes account of inflation pressures expected demographic change student demand and competing priorities within and outside the education sector. The new investment-based approach will expect and reward high performance. Along with greater funding and planning certainty there will be greater responsibility on organisations to deliver the outcomes the Government is seeking. The new system will be based on high accountability high trust and low compliance. 
The reforms set out with greater clarity what the Government expects of tertiary education organisations. The Government will define national priorities and organisations themselves will determine regional and local needs in consultation with stakeholders which may include businesses local bodies communities and iwi among others. The system will recognise the key strengths of and the differences between tertiary education organisations. This is to ensure a diversity of education provision develop a critical mass and expertise assist decision making and minimise undesirable duplication. This will allow organisations to work together in ways that complement each other’s contributions. 
I commend the select committee again for contributing to the smooth passage of the bill. This has helped to ensure that the necessary legal framework is in place to allow these changes to take place from 1 January 2008. The Tertiary Education Commission has been working closely with the sector to ensure that it is ready for the change. The Government has made new funding available to ensure that tertiary education organisations are able to make the necessary shifts. I am sure that organisations will be relieved to move away from competing with each other in order to attract students and Government funding. That is a very significant difference from the past. In my time as an academic in the 1990s teaching industrial relations labour history organisation and management and things of that sort the competition the university was forced into because of the funding regime at that time did nothing to enhance the education outcomes and these changes will now allow commitment to excellence which has always existed in our tertiary institutions to be the primary driver. 
The bill is good for the tertiary sector. It clarifies the powers of the Tertiary Education Commission and it provides for collaborative long-term planning. It is good for taxpayers in ensuring value for money on our investment in education and it is good for New Zealand by cementing the reforms that create a quality tertiary education system relevant to New Zealand and to the current and future needs of our society. I commend the bill to the House. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I rise to speak on the so-called Education (Tertiary Reforms) Amendment Bill. This really would be an important bill but sadly because of its huge myriad of defects we are not going to support it. Tertiary education is pivotal to New Zealand’s future economic growth and productivity which is something that has been sadly lacking under the last 7 years of the Labour Government. I must say that the select committee process did work well and it was just as well that it did because the initial draft of this bill demonstrated just how out of touch this tired old Labour Government had become. The vice-chancellors of New Zealand said in their submission that “none of the world’s leading universities are subject to the degree of control proposed in this bill.” [ 
Interruption 
] Would the member like me to say it again? 
Hon Maurice Williamson 
: Does this include “Vice-Chancellor” Steve Maharey? 
Dr PAUL HUTCHISON 
: No no—he was not there at the time. He was opposing it. 
The vice-chancellors went on: “In no other Western democracy has a state sought the degree of control over a university’s teaching and research.” When I asked Dr Cullen in this House about this loss of academic freedom and autonomy he said: “No I’ve been an academic for 40 years.” and he indicated that the vice-chancellors were being overdramatic and that in fact he and his academic colleagues on the Labour front bench knew better. I bet that the vice-chancellors of New Zealand have been getting at Dr Cullen in the last few months and not only the vice-chancellors but also the New Zealand Law Society the National Council of Women of New Zealand and the Auckland City Council to name just a few of the submitters who were deeply concerned by Labour’s trampling—trampling—over academic freedom and autonomy. 
New Zealanders should know that their left-leaning finance Minister and their Government have been pushed into amending clause 3 the purpose clause to “make it explicit that the new functions conferred on the responsible Minister and the Tertiary Education Commission are to be exercised in accordance with the principal Act which makes provision for the preservation of academic freedom and institutional autonomy.” But it is very poignant and telling on this Government that we have Michael Cullen Steve Maharey—who is gone now of course—and Helen Clark all on the Labour front bench and all so self-righteous that they lack the insight to think they would get away with trampling over academic freedom. So this amendment to clause 3 is an absolute victory for freedom. It is an absolute victory for the select committee process it is an absolute victory for National and it is a damning indictment on this left-leaning Labour Government. 
It is important to understand the circumstances that led to this so-called Education (Tertiary Reforms) Amendment Bill because this bill is the result of years of poor management and wastage under this Labour Government. As the OECD report of this year said there have been reforms on average every 2 years under Labour. National has calculated that the bureaucratic costs of these reforms that Labour has undertaken over the last 4 years is about $490 million and that does not include all the other things that have occurred—the soft courses like homeopathy for pets etc.—which probably come to $1 billion. That is money that could have gone directly into tertiary education. 
But members should listen to what Steve Maharey said back in 2002. He said: “These reforms”—this was back in 2002 when he thought he had sorted it all out—“represent the culmination of the government’s promise to overhaul our tertiary education and training systems.” But by 2005 the vice-chancellor of Victoria University had written to Minister Maharey to proclaim: “The system is haemorrhaging dollars right before your very eyes.” So Steve Maharey’s reforms were so bad that Dr Cullen was called in to bring this latest round of reforms. This is why we have yet another round of tertiary education reforms before us. 
But Labour’s mismanagement does not stop there. The Prime Minister as we know has just rearranged the deck chairs. She has replaced Dr Cullen with someone else to solve her Government’s tertiary education woes. 
Hon Maurice Williamson 
: Who? 
Dr PAUL HUTCHISON 
: Well it just happens to be none other than the man who could not figure out why $5 billion extra a year would not bring about any more operations—none other than the Hon Pete Hodgson. This is the man who has been brought in to solve the country’s tertiary education reforms. Dr Cullen says that the new era will be characterised by high trust and low compliance by relevance by quality and by value for money. But our analysis is that the very opposite is happening. 
Hon Maurice Williamson 
: Just stop telling jokes! 
Dr PAUL HUTCHISON 
: Ha ha! To add to the complexity of the Tertiary Education Commission—which now has 340 personnel; when Maurice Williamson was there it had only 17 but now it has 340—Dr Cullen brought in 13 stakeholder managers and 13 investment managers. The reports that we are getting back from right around the country is that these people are getting in the way and we have heard reports of those managers threatening institutions that if they do not “play ball” the managers will not sign off the investment plans. 
In the first draft of this bill Dr Cullen did not even require the Tertiary Education Commission to act reasonably. I repeat: he did not even require the commission to act reasonably. The irony is that now the word “reasonable” has been placed back into the bill under pressure from Her Majesty’s most loyal Opposition but even before the bill has become an Act the managers are acting unreasonably. So much for “high trust”! This is the track record of the Labour Government in tertiary education. 
One of the other great ironies of this bill is that in the name of simplification profiles and charters were to be replaced by a single 3-year plan. Dr Cullen himself said in this House that “institutions are now saying they need ministerial approval for a long-term vision statement. If institutions want a long-term vision statement they are welcome to have one but they do not require my little tick …”. But now under huge pressure Dr Cullen has reneged. Instead of simplification we are going to have not only an investment plan but a requirement for a short-term a medium-term and a long-term plan. Each organisation will be required to have those plans. 
So there is no question that the tertiary education system needs stabilising and simplifying. Labour has provided the opposite. As well its recent history of personnel changes is appalling and unprecedented. What are they? Mr Maharey is off to Massey University the chairman of the Tertiary Education Commission—none other than Russell Marshall—has gone and just the other day was replaced by David Shand and the chief executive of the Tertiary Education Commission Janice Shiner is off next year. So there will not be anyone left with the institutional knowledge to actually be held to account. Dr Cullen has gone and who has he left? It is none other than Pete Hodgson. He too will be gone in 11 months. Thank goodness there will be a National Government to take over and sort out the mess that this Labour Government is leaving. 
Hon MARIAN HOBBS (Labour—Wellington Central) 
: 
 I rise to support— 
Katherine Rich 
: I raise a point of order Madam Speaker. I went for the call a number of times quite audibly. You looked around and you looked around and there was no movement on the other side. I had thought that under the Standing Orders the first person to stand and seek the call would get the nod. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is completely wrong. That is not what the Standing Orders say. The call was Labour’s. 
Hon MARIAN HOBBS 
: I rise to support the— 
John Carter 
: I raise a point of order Madam Speaker. What you have ruled is absolutely true but it is nevertheless important if those members on the Labour side have the right to take a call that they take it. In this case the member was very very slow in rising to her feet and Katherine Rich had called a number of times before Marian Hobbs actually stood and took the call. Madam Assistant Speaker it could well have been that you may have decided to give Katherine Rich the call. So it is important if members are seeking the call that they do so quickly. 
The ASSISTANT SPEAKER (Ann Hartley) 
: The member is completely wrong. 
Hon MARIAN HOBBS 
: Speaking to the point of order Madam Assistant Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I have ruled on it. 
Hon MARIAN HOBBS 
: Speaking to the point of order Madam Assistant Speaker I say that it may not have missed your attention but the chairperson of the Education and Science Committee is in the Chamber and I was waiting out of courtesy to see whether he was going to take a call. 
The CHAIRPERSON (Ann Hartley) 
: That is not a point of order. 
Ron Mark 
: Speaking to the point of order Madam Assistant Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I have ruled on it. 
Ron Mark 
: Just in case members of the Opposition had forgotten I say that your ruling is absolutely correct. Those members might like to recall that last week a member from the Opposition side of the House was given the call even though that member was sitting in a seat and had made no attempt to stand and take it. 
The ASSISTANT SPEAKER (Ann Hartley) 
: That is not relevant Mr Mark. We deal with the situation as it happens. 
Hon MARIAN HOBBS 
: I rise to support the second reading of the Education (Tertiary Reforms) Amendment Bill. I respond in the first place to some of the arguments we have just heard. We were told by Dr Hutchison that there was a huge myriad of defects in the bill. The only one that I heard as valid has been rectified and I still cannot understand why National is opposing the bill. 
Let me take members through that defect. Dr Hutchison quoted from the vice-chancellors when they talked about how the State had a degree of control. The interesting thing was that in the debate that we heard and from the submissions that we heard—and I am sure that the member was in the same select committee that I was in—the vice-chancellors slipped from talk of academic freedom to that of financial autonomy. To talk about financial autonomy of universities when they get 60 percent of their funding from the State is a bit rich. That was the distinction that was being made and the game that was being played. 
So what we did in clause 3 was reiterate for those who are a little slow—and that remark counts for some of the vice-chancellors as well—that the new functions and powers must be exercised in accordance with the existing provisions. This bill is an amendment to an Act so it goes back to the existing provisions in section 161 of that Act which are to enhance academic freedom. That was said over and over again. We have clarified that there is no effect on academic freedom and that there is a rightful responsibility of the State in terms of financial responsibility given that taxpayers’ money is invested heavily in tertiary education. 
The second comment that was made left me smiling very wryly having lived through 5.1. It was not the Labour Government that lifted the lid on 5.1—and if members do not know what I am talking about I tell them that these are the soft courses. When National was so interested in bums on seats and on tertiary success being counted in terms of numbers of bums on seats it was not interested in the calibre of the courses that were being offered to attract those bums on seats. National lifted the cap so that any amount of money could be spent. So the spending went from $13 million to $78 million to over $120 million and Labour has put that cap back on. It was the National Government with its interest in bums on seats that did not worry about the calibre or the quality of the courses. The quality of the courses is what this is all about. 
The question I have to ask the National Party when it gets to reply is that if we have answered its concerns if the whole myriad of defects is only one defect that has been rectified and if the other defect was National’s and that has been rectified too then why is National not voting for this bill? What is so wrong with it that National is not voting for it? I have heard about only two defects—one caused by National and one that was not a defect at all. It seems to me that National will say it will spend a lot of money repealing this legislation. If that is so I would love to understand why. 
The third thing that was said by the previous speaker from the National Party was that tertiary institutions are required by this bill to have long-term plans. That is not so. There are 3-year plans. If institutions want to have a charter as well with 10-year plans they are offered that opportunity but it is not a legal requirement. The simple reason for it not being a legal requirement is that one could have a real difficulty between a 3-year plan and a 10-year plan that was approved by the Minister—one could set up really nice opportunities for lawyers. 
New Zealand’s national development in all areas requires a tertiary education system that performs at the highest level. We have a strong tradition of providing a broad range of educational opportunities for adults be that in the Rural Education Activities Programme be that in schools—the old night schools and community education centres—or be that in the workplace. This is reflected in the fact that we do not differentiate as many other countries do between higher education and universities and other forms of tertiary education. 
Our industry training system for instance is a unique partnership between education and industry which delivers recognised qualifications for learning on the job. New Zealand does not experience the gap that other countries do between the industrial wing if you like and what industry requires and the training organisations. They are meshed together and they work together. The National Party understands that it has members within its own group who have as members of the shearing industry been very much involved in the provision of industry training in that area. 
The tertiary reforms are designed to build on those strengths and extend high quality across the system. In our diverse tertiary education system however one size does not fit all. So Government investment will take account of the distinctive roles that various types of tertiary education organisations play in the sector. A small rural polytech functions very differently from a large urban university or even from a large urban polytech. 
Hon Maurice Williamson 
: How does the member know that? 
Hon MARIAN HOBBS 
: Very well and I will not go into that. 
Hon Maurice Williamson 
: Tell us how you know that. 
Hon MARIAN HOBBS 
: Because I have served on the select committee and I have served as a Minister in that particular ministry—OK? 
The current funding system does not always recognise the diversity of tertiary education organisations. This bill allows a Minister to earmark funding for the different types of organisations which is a flexibility that will help to give New Zealanders access to excellent tertiary education throughout the different organisations in the tertiary sector. 
Many New Zealanders access adult and community education and this plays a vital role in our society. For many it is a first step back into formal learning after leaving school without qualifications—and members know that we have had too many of those people. Every year we celebrate on Adult and Community Education Day the stories—and they often bring tears to the eyes—of people who have come back into learning in New Zealand because of our particular provision of adult and community education. The bill clarifies the current arrangements so that the New Zealand Qualifications Authority can ensure that providers of adult and community education meet the high standards that our communities require. That was not there before. We put money into those adult and community education providers so that they could actually design and build those quality assurance things. This was not done by the New Zealand Qualifications Authority coming over the top of them; it was a case of working with them with funding provided by the Government. 
Overall the bill aims to provide greater certainty for all players in tertiary education. It clarifies the roles of the Minister the Tertiary Education Commission and the tertiary education organisations. It allows for a 3-year planning and funding cycle. It was quite extraordinary to listen to National speakers and not hear them repeat the joy that that was received with by the vice-chancellors. It is much much better than the 1-year funding cycle that they had. This may sound like a minor detail but its implications affect all players in tertiary education. Students will have greater confidence that the course they are studying will be available for the time they need to complete their qualification. Many tutors in tertiary organisations are currently employed part-time and on casual contracts as changes in student numbers from year to year cannot be predicted and student numbers entirely determine funding levels. 
As a result of agreed funding over years in the new system organisations will be able to build up their capability which is something that is desperately needed in order to deliver a certain type of course or qualification be it in information technology or whatever. For example a regional tertiary organisation may decide to deliver a world-class winemaking course. Under the old system the organisation would not have the certainty it would need to have in order to make the necessary investment decisions. In the new system that organisation will have that certainty. 
The bill provides the backbone of a high-quality system. Making these changes requires participation from a range of stakeholders and the bill reinforces the vital role that stakeholders will play in that system. There was a real problem about this in terms of commercially sensitive information. It was made quite clear by the Tertiary Education Commission that although an institution has to declare things to the commission in order to get the funding it does not have to declare that which is privately funded. The institution mentions that it is getting funded but it does not have to give over those commercial secrets or that commercial knowledge. We said that when applying that the commission had to comply with the Official Information Act but the Act provides the commission with options to withhold information provided by those institutions. If the commission received an information request it would likely seek the view of the institution when considering whether to withhold such information or transfer the information request to the institution. 
If New Zealand is to become a high-income knowledge-based economy we need our tertiary education system to respond quickly and effectively. Together with existing legislation which provides for academic freedom this bill provides a framework for an innovative and creative system that can meet the needs of society and the needs of business students Government taxpayers and tertiary organisations themselves. I commend this bill to the House. 
KATHERINE RICH (National) 
: 
 I think it is very nice for the member who has just resumed her seat Marian Hobbs to believe that. I think she wholeheartedly believes everything she has just said. But I can say that there are hundreds and hundreds of academics up and down the country who are totally at odds with her view. I think one of the most telling statements in that whole speech was the comment about academic freedom which I think will send shivers down the spines of many people who work in academia up and down the country: “When 60 percent of funding comes from the State it is a bit rich to expect full academic freedom.” 
Hon Marian Hobbs 
: I raise a point of order Madam Speaker. 
The ASSISTANT SPEAKER (Ann Hartley) 
: I just warn the member that this is a debate. 
Hon Marian Hobbs 
: It is a debate but I want to lay it on the cards. I was talking about financial autonomy not academic freedom. 
John Hayes 
: Come on Booboo you can do better! 
The ASSISTANT SPEAKER (Ann Hartley) 
: Mr Hayes I am on my feet ruling on a point of order. The member can stand withdraw and apologise. 
John Hayes 
: I stand withdraw and apologise. 
The ASSISTANT SPEAKER (Ann Hartley) 
: As I was in the middle of ruling that was not a point of order; it was a point of debate. 
KATHERINE RICH 
: The member can stand and attempt to clarify the issue but I think the impression that those of us on this side of the House were left with was that academic freedom was to be something that academics could not take for granted if they received their money from the State. In fact this was one of the main issues that came up time and time again in many of the submissions. A number of people came along to the select committee and said that one of their major concerns is that this bill could have an impact on their ability to write what they want to write and to offer courses that they want to offer in the event that their courses may be at odds with the Government of the day. To give some evidence of the fact that the National Party has always been a defender of academic freedom I found out today that the Centre for Labour and Trade Union Studies was opened by none other than Maurice Williamson during his tenure in Cabinet. He opened that centre obviously disagreeing with much of the content of the course but he was there as a defender of academic freedom and he opened it. 
The next thing that Marian Hobbs brought up was this debate about the “bums on seats” mentality in tertiary education funding. Well I think it is ironic that that member would raise this as an issue. Which Government was it that put all those bums on seats to do homeopathy for pets? Which Government put all those bums on seats to do radio singalong courses? Thousands and thousands of people signed up for that course and did not complete—[ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: We just do not want interjections across the floor like that. The member can do it once within reason but not constant like that. 
KATHERINE RICH 
: Thousands and thousands of New Zealanders signed up to that course and did not even complete it. Which Government was it that put bums on seats to play golf? Well actually one would not be on a seat; one would be standing on a golf course! What about the pendulum swinging for beginners? What about COOL IT where the tertiary organisation in question handed out loads and loads of discs and vouchers and enrolled thousands of people who never completed the course? I suppose in effect that it was not a “bums on seat” mentality but it was certainly a “get the numbers up and grab as much funding as we can” mentality. Not to mention the crochet jackets for small pets—I might have made that up but given the types of courses this Government was funding—[ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: That is just too much. 
KATHERINE RICH 
: I suppose the quality of courses that this Government was funding at the time gave evidence of the fact that some tertiary reforms were needed. But I think it is important to put this bill into context. Here we are after nearly 8 years of a Labour Government which campaigned in 1998 and 1999 on reforming tertiary education only now bringing in a bill. What we saw from Labour’s tenure was not just a number of glossy documents and brochures which are currently stopping doors as we speak but not a lot of progress. We saw the growth of the Tertiary Education Commission from a handful of staff to over 300 people. We saw the commission open offices up and down the country. We had an office in Dunedin that was designed to interact with stakeholders whatever that means; it can mean everything or nothing depending on who uses the word. Then the Tertiary Education Commission decided that those offices and that structure was not “fit for purpose” which is what it said when we asked about this. It went and closed them all down. So after spending well over $420 million if one looks just at that cost alone we were no further ahead. 
A lot of tertiary providers bought into this new regime and went through a rather expensive process of writing charters and writing profiles. I remember talking to one university that said it would have spent $35000 to $40000 on writing its charter only to get in a position where the Government said: “We don’t want you to do that any more we want you to write another document and we want you to do a plan.” Michael Cullen said in his first speech that this bill was aimed at reducing bureaucracy and at introducing a high-trust model with low compliance designed to protect academic freedom which I have already covered and that it would lead to better allocation of funding. The funny thing is that rather than reduce bureaucracy some tertiary providers will have to do more planning than they did before this plan will eventually be brought in. They will have to do not just their charter but a long-term plan and some will have to do a short-term plan and a medium-term plan as well which brings in more compliance and more writing. Frankly why do we expect universities to plan 10 years out when a lot of Governments cannot do that? A lot of Governments cannot predict what will happen in 10 years. So it just adds to a lot more compliance and a lot more navel gazing. It is all money that is not spent on students and not spent on the provision of courses. 
Hon Marian Hobbs 
: Point me to the clause in the bill that says that. 
KATHERINE RICH 
: I will not do that but I will point to the report that the member signed off. A little addition in the commentary to the bill under the heading of “Charters” says that the committee members had considered the arguments for charters and that they believed “long-term planning is integral to the governance of an institution”. So one has to do not only these charters but additional planning documents—[ 
Interruption 
] 
The ASSISTANT SPEAKER (Ann Hartley) 
: No look that really is the final warning to members. 
John Hayes 
: Yes! 
The ASSISTANT SPEAKER (Ann Hartley) 
: Well that member is lucky too. 
KATHERINE RICH 
: We really do appear to have hit a nerve tonight. I think that Marian Hobbs may not be as au fait with the bill as she thinks she might be. 
The aim of this bill was to reduce compliance and reduce the amount of reporting. The upshot is that it will require the production of more plans in terms of the process and more accountability. I do not think we are any further ahead—let alone before we have the debate about the types of courses. The Tertiary Education Commission can dress things up as much as it likes but really what it is bringing in is a blunt mechanism of determining the number of seats it will provide for limited funding. There is no fancy way of doing this. Although the member over there says that it is not a “bums on seats” mentality someone still has to determine how many seats will be provided. We have some concerns about some of the decisions that have been made and that will be made in certain areas that we have been tracking in the education sector particularly when there are long-term shortages for certain types of staff. 
Tonight we have heard some interesting comments about competition. The previous speaker also said that this will get rid of competition and that competition is a bad thing. Well I can report to that member that students are not thick. Students will still decide to go to certain universities because they have an interest in a certain subject and they know of a professor or a course that is held in high regard. They will determine to go to one university as opposed to another because there is an expectation that they will get an audience with people who are of a higher calibre depending on what the perception might be. We will never get rid of competition between universities or other tertiary providers because students will continue to make decisions based on the information they have and so they should. That brings higher quality into the sector. It ensures that people are honest with their funding and are accountable to their communities. 
I have already made a comment about “stakeholders” which is the most overused word in this bill. What does it mean? It can mean everything; it can mean nothing. The stakeholder-negotiation investment people I think are basically a waste of money and probably designed to have cups of tea with people rather than to make some decisions regarding the tertiary education sector. 
Hon BRIAN DONNELLY (NZ First) 
: 
 The select committee process that has seen this legislation the Education (Tertiary Reforms) Amendment Bill returned to the House—significantly amended I might add—has provided me as chair with a great deal of satisfaction. I thank the officials who advised the committee. They came from the Tertiary Education Commission the Ministry of Education and the New Zealand Qualifications Authority. They worked collaboratively. I believe and I think the rest of the Education and Science Committee would agree that they provided the committee with very clear advice. 
Also I thank members of the committee. They had to get their heads around some complex issues and they certainly took their task with responsibility and acted in a way that befits responsible members of Parliament. I have to say that that includes the National members of that committee even though at the end they wrote a minority report expressing concern about the excessive complexity and increased bureaucracy that they suggest lies behind this bill. In terms of the actual treatment of the bill they acted extremely responsibly asked all the right questions and made the right suggestions to make sure that it was as good as possible. 
There is one question I would really like to ask and I hope that one of the National members who is yet to take a call will answer it. I ask whether National members if by any chance they should gain the Treasury benches next year would repeal this bill and overturn these reforms. I would love to hear one of the National members tell the House one way or the other what the case would be in those circumstances. 
There are a couple of parties in this House who constantly bemoan the good old days of tertiary education when students were required to make very little financial contribution to their tertiary qualifications. Not only was that the case but also on reaching the age of 21 anyone in New Zealand could access university education on those favourable terms. The only trouble with those so-called good old days was that New Zealand had the lowest tertiary participation rate of any country in the OECD with the exception of Turkey. That was in the late 1980s. 
When the National administration came to power in 1990 it put in place policies aimed at addressing that situation which was a dead weight around the neck of the New Zealand economy—the “bums on seats” policies. Participation rates increased dramatically over the 1990s so that by the end of the 1990s New Zealand was in fact fifth on the OECD list. Unfortunately there was not a good alignment between many of the courses offered by institutions and undertaken by students and the economic and social needs of the nation. 
This legislation marks the second attempt by the Labour administration to create a better alignment. The first was made by the former Minister for Tertiary Education Steve Maharey but he left the old funding mechanisms in place and inevitably the institutions made full use of those. As a result we had situations such as the 5.1 funding debacle and the uncontrolled growth of wananga and Te Wananga o Aotearoa. 
This legislation certainly provides for more heavy-handed control by the Tertiary Education Commission as to what it will and will not fund. At the same time it seeks to simplify the processes by replacing the 3-year profile with a plan. It also gets rid of the requirement for institutions to have 10-year charters signed off by the Minister which gives us a good place to start a discussion on the specific issues the select committee had to address. 
A number of submitters—most noticeably representatives of the university sector—argued that ministerially approved charters were an essential tool for long-term planning and investment. The argument however seemed to contradict another strongly held position of the university sector that the bill did not adequately protect academic freedom and institutional autonomy. It is hard to understand how the requirement of ministerial approval for long-term planning documents sits comfortably with the joint concepts of academic freedom and institutional autonomy. The select committee agreed that long-term planning is an essential tool of institutional governance and therefore that it includes the requirement that tertiary institutions carry out such planning but not in any prescribed fashion. In doing so I believe that the committee upheld the concept of institutional autonomy. 
A concern was also expressed not just by the university sector but also by others in the submitter group that the bill did not directly mention the requirements for academic freedom and institutional autonomy. However the bill amends the Education Act which most assuredly states these requirements. In order to allay any unnecessary fears over this issue the committee made an amendment to make it explicit that the functions conferred on the Minister and the Tertiary Education Commission by this legislation are to be exercised in accordance with the principal Act. So it has to take into consideration those twin concepts. 
One of the committee’s challenges was to ensure the consistency of language. To this extent it was affirmed that a plan drawn up by an institution in order to initiate discussion with the Tertiary Education Commission will be consistently referred to as a “proposed plan”. Only when a plan has been ticked off for funding will it be referred to as a “plan”. 
Considerable concern was expressed that the Tertiary Education Commission would be able to control the non-Government resources of an institution. The legislation was amended to make it clear that the commission’s power of approval applies only to those aspects of a plan for which Government funding is being sought. We believe that this amendment will allay fears that the Tertiary Education Commission will be able to control non - Government-funded programmes and activities. 
However the Tertiary Education Commission will have the power to seek information in order to access whether an organisation may be at risk. Clause 14 requires the chief executive to monitor and report to the Minister on institutional risk. When we think about it we see that if there is to be prudence around the investment of taxpayers’ money in tertiary education then there has to be a level of monitoring. Why would a responsible Government invest tens of millions of dollars into programmes in an institution that was about to go belly up? In the bill that was initially prepared and sent to the select committee section 159KBA in clause 14 required the chief executive of the Tertiary Education Commission to assess whether the operation of any institution represented a risk to “the financial or proprietary interests of the Crown;”. Anyone with any understanding of tertiary education would know that the use of the term “proprietary rights’’ would be a red rag to the bulls of the university sector. It was agreed that the wording went further than was necessary and the section was rewritten. 
There was an issue as to which stakeholders the institutions should be required to consult. A number of submitters recommended certain groups of stakeholders that they believe should be written into the legislation and they recommended that institutions should be required to consult them. The problem with that approach was about how long we should make the list and whom we should leave off. A more fundamental difficulty was the question of whether select committees or Parliament itself should prescribe such a list. In the end the committee believed that it should be left up to the institutions themselves to decide which groups are their significant stakeholders. However as a check against possibly irresponsible behaviour the Tertiary Education Commission will have the power to recommend any further groups to an institution if it believes that the institution has been remiss in the identification of its key stakeholder groups. 
John Hayes 
: 6 weeks to go and all’s well? 
Hon BRIAN DONNELLY 
: The member did not hear me start this speech with “kia orana” did he? 
 A number of concerns about the bill were expressed such as that it provides the Tertiary Education Commission with unbridled powers. Certainly the way the bill was originally written up left the Tertiary Education Commission with the ability to have almost arbitrary powers. Amendments were made by the select committee which have certainly reduced the possibly of the perception of arbitrary usage of powers conferred by this legislation. No longer will the Tertiary Education Commission just purely and simply be able to come along and do it; it will have to pass over to the institution the reason why it is doing it. However we did not go as far as to provide equal powers between the institutions and the Tertiary Education Commission for one simple reason: the Tertiary Education Commission will be operating in an environment of capped funding. Therefore it must have the final say if the system is not to be logjammed. 
I just note a minor change that was made at the suggestion of the engineering industry training organisation Competenz. Its submission pointed out that students of industry training organisations do not attend the industry training organisations themselves and the legislation refers to students attending the institutions and industry training organisations. However those students are enrolled at the industry training organisations. The select committee recommended that the legislation be amended in such a way as to reflect that accurate and common-sense suggestion. 
I reiterate once again that all of those involved during this particular select committee process acted commendably. They got the bill back in a form that I think is much much better shaped and they have removed some of the rough edges from the bill that came to us originally. That is what a select committee should be about. With that I commend the bill to the House. 
METIRIA TUREI (Green) 
: 
 I want to take just a short call on the second reading of the Education (Tertiary Reforms) Amendment Bill. We are very pleased to support this bill at its second reading and in the remaining stages. I was able to participate in the Education and Science Committee for some of the submissions and for the consideration. As always Brian Donnelly’s chairmanship of the committee was very skilful and well done. It is always a pleasure to be on that committee. 
We have always been concerned about the tertiary sector being so focused on the market demands and on what is known as the “bums on seats” funding model. That model has tended in the past to disenfranchise those who have the greatest investment in seeing the tertiary sector be successful—the students who are enrolled the staff who are employed and the country as a whole which is in need of the skills and the critical analysis that universities enable these students to have. We are very pleased that under the bill the funding model has been altered to some degree—not entirely but to some degree—to be focused more on the longer term with a greater emphasis on longer-term planning. It is good to hear Mr Donnelly make it clear that 10-year charters are no longer required under the bill which some members of the House were unfortunately misinformed about. But there is still the process for long-term planning which is crucial. 
Under the previous model before this bill the demand-driven nature of tertiary education and tertiary funding led to the closure of a number of very well-established humanities courses at the universities in Waikato and Christchurch—Canterbury University. The courses were closed not because they were not successful or because they were not making their contribution to the academic priorities of the institutions and not because they were losing money either—people were going to those courses and enjoying them and were successful at them—but simply because they were not producing enough profit as required by the university at the time. It still remains a little unclear to me whether under this new regime those kinds of cuts in courses that are successful but not considered to be highly in demand or major money-spinners will be entirely prevented by the reforms. That is still a very serious concern particularly when we are looking at cuts to courses like Islamic studies in Canterbury in particular but also women’s studies courses and other humanities courses across the board. 
This is where the free-market ideology from the past has had a huge impact on the tertiary sector. We see that reflected in the profit-driven approach of the universities—and the example of course is the cutting of these kinds of courses—and in the fierce competition between universities. Universities are spending millions and millions of dollars on advertising in competition with each other wasting money on television advertisements when students and staff are desperately in need of resources and good-quality courses to make sure that they are successful in their studies. Of course the massive increase in fees and the student loans system which although said to increase participation because people can go into debt to get their education now in fact drive up the whole concept of a market-driven model for tertiary education. It is a model that has failed those students and the community as a whole. 
Students are coming out of the tertiary sector with massive debts and unable to have an ordinary life that is expected in the New Zealand way—to buy a home start a family and all of those things—because they come out of university with $30000 or $50000 worth of debt. They then leave town and leave the country to go overseas so that they can pay off those debts. Do they return? Some do; many do not. The disadvantage to the country as a whole from that kind of funding model—the kind of market-driven model and that free-market ideology—has been very clear. It is about time something was done about it. I am not convinced that these reforms will completely fix it. Real issues relating to student support and allowances and student loans still exist. This bill does not fix all of the funding issues that need to be sorted but it does go some way towards resolving some of them. 
We were very pleased to be able to hear submissions during the select committee process from a number of the stakeholder groups and very pleased with the decision of the committee to include an expressed comment about the retention of or support for academic freedom and institutional autonomy. That was a very serious concern raised by a number of submitters. It is important that they are able to retain that function as the critique of society in general and as a whole. So it is good that that was done. 
We are pleased that the Government is choosing to take a strong overall view of the sector and of the strategic directions the sector is going in and that this bill is making some of those changes. In effect it is kind of fiddling around the edges to some extent because of the major issues around things like student loans. Some options around the competition have been sorted but not all of them. The sector still needs major reform in order to deliver to the community and New Zealanders what it is supposed to. Thank you. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 Kia ora Madam Assistant Speaker. Kia ora tatou i tenei po. A policy backflip a reversal of position or a change of heart in this House is usually some sort of occasion that we make great political capital of. Tonight I was eagerly looking forward to such an announcement and was fully intending to give my support for yet another flip-flop. The flip-flop I am talking about and that I was looking forward to hearing about tonight concerns Te Tiriti o Waitangi. I found out that remit 45 on the Labour Party conference floor about a fortnight ago was going to challenge the party hierarchy to put the Treaty into policy into legislation and to ensure its enshrinement in a written and supreme constitution of Aotearoa. 
I was told that the party faithful were going to be heard and that today would be the day on which Te Tiriti o Waitangi was truly honoured as our founding document. But I am sorry to say that unless the announcement is being saved up for the grand finale to the debate tonight it appears that the Treaty being omitted from the Education (Tertiary Reforms) Amendment Bill is being continued regardless—regardless of the Association of University Staff’s submission that the goals and aspirations of Maori should be included as a Government responsibility to Maori under the Treaty; regardless of 400 or more submissions received relating to the omission of the Treaty from the latest tertiary education strategy and the statement of tertiary education priorities; regardless of the submission from the Council of Trade Unions that the bill gives scant recognition to Te Tiriti o Waitangi; regardless of the disappointment of the Association of Staff in Tertiary Education Te Hau Takitini o Aotearoa about the lack of reference to Te Tiriti o Waitangi; and regardless of the specific recommendation from Te Tauihu o nga Wananga that the bill should be deferred until such time as there is specific reference to the principles of the Treaty for the Tertiary Education Commission and the Minister as there is for tertiary education institutions. 
It would have been awesome if the Labour Government had listened to its own party membership and to key education agencies and stakeholder groups. I would ask whose interests are being served by failing to protect the unique relationship between the Crown and Maori as authorised by the Treaty. Who will be answerable for the fact that although section 181 of the Education Act requires recognition of the principles of the Treaty by institutional councils there is no reciprocal requirement on the Tertiary Education Commission or on the Minister in this bill? As Te Tauihu o nga Wananga concluded: “The bill erodes genuine partnerships a damning indictment on the status and functioning of tertiary education.” 
Although I did ask questions about this particular matter in the select committee I have now had time to reflect on the response and I still have a few concerns. According to some of the policy spin around this bill the idea is that the previous Maori strategy chapter in the tertiary education strategy and the long and visible Maori tertiary education framework is improved upon by the sharper focus in Ka Hikitia by encompassing a few specific measurable things. Let us test the waters. 
The tertiary education strategy 2002-07 in its Maori strategy chapter Te Rautaki Matauranga Maori established six broad objectives for Maori tertiary education with the first one being that tertiary education leadership is effectively accountable to Maori communities. Well consultation with Maori is about as visible as the Treaty of Waitangi in this second reading—not! There is no requirement in this bill for the Minister the Tertiary Education Commission or tertiary education organisations to consult Maori in the plan of the tertiary education strategy. The Association of Staff in Tertiary Education Te Hau Takitini o Aotearoa recommended that this bill along with the accompanying strategic documents needs to confirm explicitly that both the Tertiary Education Commission and the tertiary education organisations must fulfil their commitments to Maori as tangata whenua under Te Tiriti. The Council of Trade Unions went even further and expressed its concern about how real consultation and engagement with tertiary education stakeholders in tertiary education could take place without there being formalised provision for it in this bill. 
One of the issues around this is the poor institutional performances that characterise most tertiary education sector consultation processes. Under the charters and profiles process there was a requirement to consult stakeholders on the development of them but unfortunately this was not adequately monitored by the Tertiary Education Commission and sometimes it did not occur or it was very flawed. Why is this such an issue? At its heart the Treaty is about a relationship with Maori—a commitment to a constructive and mutually respectful relationship. 
We have been given guidance from the courts as to how a constructive and mutually respectful relationship develops—namely the relationship should be built on mutual cooperation and trust there are basic principles of reasonableness and good faith and the Crown has to make informed decisions. All aspects of the Treaty relationship therefore point to consultation. 
In the process of preparing for this bill tonight I came across a statement from the Vice-president Maori of the Council of Trade Unions Te Kauae Kaimahi. Sharon Clair had this to say: “The Treaty or more specifically Te Tiriti of Waitangi is a living covenant to be proud of. What we did with it and what we want to do with it is where the shame or pride lies not in the document.” That is the crunch issue in this bill. For although councils of tertiary education organisations are required to “acknowledge the principles of the Treaty” as specified in section 181 of the Education Act the challenge will lie in taking this out of the goodwill category and making it mean something—meaning something so that the Treaty relationship is given life in the work programme and the organisational structures of the organisation so that the development aspirations of Maori are known and are identified and so that targets are developed. 
The disappointing feature of all the Treaty talk without action is seen in the fact that the goals and aspirations of Maori specified in section 159 should be included as a Government responsibility under the Treaty but in this bill Maori goals and aspirations are not connected to the Treaty. So when we come down to the vital issue of system compliance it will be anyone’s guess as to how well the Tertiary Education Commission will act to ensure that tertiary education organisations do actually consult Maori in developing the plans. 
What we have seen occur through the select committee process is that amendments to clauses 10 and 17 were introduced in order to provide that tertiary education organisations need to consult only such stakeholders as they deem appropriate. “Appropriate” is another one of those great buzzwords for doing nothing—in effect enabling tertiary education organisations to determine who their stakeholders are. There is a risk involved that key groups such as iwi hapu and tangata whenua will be taken off the list to keep the numbers down. 
What we know through the evidence reported from Te Mana Akonga the national Maori tertiary students association is that in many instances tertiary education organisations are failing to adequately consult whanau hapu iwi tangata whenua staff and students. In some instances consultation has consisted of a letter to Maori students telling them what has already been decided. In other instances the concerns from submissions and hui have been inadequately reflected in charters and profiles if at all. The Association of University Staff in its submission was clearly of the view that the requirements to consult do not go far enough. It describes the term “stakeholders” as indefinite stating that it is problematic to not give it specific clarity in the bill and leaving it to the Minister and tertiary education organisations to decide. 
Finally we come to the view that there could be a way around what was otherwise appearing to be an impasse. The Association of Staff in Tertiary Education Te Hau Takitini o Aotearoa recommended that this bill as well as the tertiary education strategy and the statement of tertiary education priorities could include a statement that the Government through the Tertiary Education Commission and the tertiary education organisations could fulfil its commitments to tangata whenua under the Treaty. We would expect the Crown to be explicit in its capacity to express kawanatanga while at the same time making it possible for wananga to express rangatiratanga and for Treaty principles to be given specific reference in respect of the Tertiary Education Commission and the Minister as it does for institutional councils. The Maori Party will therefore support this bill at its second reading in the hope that during the Committee stage of proceedings the appropriate adjustments can be made to ensure that the Treaty actually means something. 
JUDY TURNER (Deputy Leader—United Future) 
: 
 I rise on behalf of United Future to take a brief call in support of the second reading of the Education (Tertiary Reforms) Amendment Bill. United Future does not enjoy representation on the Education and Science Committee. However we have tried to keep up with what has been happening and we have been appreciative of some materials supplied by the select committee staff regarding summaries of some of the submissions that have been made on the bill. Certainly the thing that occurred to me as I was perusing those this afternoon was the fact that generally most submitters seemed to support the reforms that this bill introduces although they did take the opportunity to signal some issues of concern. They were important issues and I think that the select committee needs to be commended for the way it has been very responsive to those concerns and for the amendments that it has sent back to the House. 
The concern that I picked up on in particular was the fear that this legislation would result in some loss of academic freedom for universities and that the amount of control that the Tertiary Education Commission would impose on them would be too restrictive. I note that one of the recommendations of the committee is an amendment to clause 3 to make it explicit that the new functions conferred on the responsible Minister and the Tertiary Education Commission are to be exercised in accordance with the principal Act which makes provision for the preservation of academic freedom and institutional autonomy. I think it is a very wise move on the committee’s part to clarify that matter in particular. 
I think it is good that we have a single tertiary education strategy document now that sets out the Government’s long-term strategy and also shorter-term priorities. The thing that most interested me when I met with some key stakeholders during the passage of this bill through the select committee process was that they talked about the fact that they were thrilled that they could now develop much longer-term plans thereby developing courses and a future for their institution. 
 I am glad to see that the Government has insisted that the plans include clear evidence that institutions have consulted with key stakeholders. I note that the member from the Maori Party has just mentioned its concerns about the lack of specific reference to who those key stakeholders are. I think we will need to monitor that issue over time. I heard the Hon Brian Donnelly talk about the fact that there were reasons why the committee did not want to get too specific about that and I think we will need to see how that plays itself out over time. We could come to a place where we recognise that people who should be considered to be key stakeholders are not being consulted enough and that courses are not being aligned enough with the needs of those sectors. That is something United Future would see as an issue for ongoing monitoring beyond the implementation of this legislation. 
We are very happy to see there is also a greater requirement for organisations to collaborate more closely with the Tertiary Education Commission itself in the development of their plans. I have advocated to the Minister on a number of occasions on behalf of private tertiary providers when there was a bit of a logjam with the commission. They were waiting to get their documents approved for the new round of funding and there were some timing issues that were sensitive for them in terms of their business plans and that was unhelpful to them. I think the fact that the commission will now be more proactively involved at the beginning as those organisations develop their plans means that that logjam should be stopped and at the end of the day that consideration of and approval for courses and funding should be more streamlined. 
United Future is very pleased to see this bill come before the House and is happy to support the second reading. 
DIANNE YATES (Labour) 
: 
 I rise to speak at the report back of the Education (Tertiary Reforms) Amendment Bill. It was very interesting to hear some of the comments made tonight that I did not actually hear at the select committee. It was good to hear people offering opinions that I did not actually hear at the select committee hearing. I note that the member from the Maori Party was talking about the Treaty and recognise that the Treaty is referred to in the substantive Act. I also note that new section 159AA(2) substituted in clause 6 states: “The part of the tertiary education strategy that sets out the Government’s long-term strategic direction for tertiary education must address the following: (a) economic goals: (b) social goals: (c) environmental goals: (d) the development aspirations of Maori and other population groups.” 
The other thing mentioned was the whole area around who a stakeholder is. I myself questioned that at the select committee and suggested that we might like to list the stakeholders. The difficulty is that once we start listing who they are then we leave people out. It was decided amongst the committee members after much discussion that it was better for the institutions themselves to decide on the stakeholders rather than to put a list of stakeholders in the bill and then leave some out in practice. So that was something that was discussed at the select committee by its members. 
I also want to refer to some of the opinions expressed by Dr Paul Hutchison in this debate. I ask him: what does he want? Some months ago we had a series of questions in the House from Bill English and a number of other people who were slamming wananga slamming adult education and slamming courses already running. I would have thought that the National Party members would support this bill and give it unqualified support and would be happy to see the measures that are in this bill. I am actually surprised to see that they seem to be lions to the media and lambs in the House and that they are not supporting this bill. 
Then we come to the question of academic freedom. Academic freedom I think has no definition in this bill but it has been spelt out that there should be due recognition of academic freedom. Should I decide to study Portuguese at my local university and it does not offer Portuguese academic freedom does not mean I can go along and demand that the university teach Portuguese. It does not mean I can go along and ask that it teaches Kiswahili because I want to learn Kiswahili. Academic freedom is not about the courses; it is about people expressing their opinions when they are in courses. It is about teachers and students expressing opinions in courses and being able to speak their minds in institutions; it is not about the courses that are offered. There seems to be some misunderstanding about what academic freedom really means but for the sake of those who are rather pedantic I can tell them that it was spelt out that this bill would not interfere with academic freedom as it has been traditionally known. 
I ask Dr Paul Hutchison a spokesperson for National who has been critical of this bill and has not supported it where his policy is. All we can see on the National Party website is old stuff that seems to be yellowing with age—it has probably been there for about 20 years since Lockwood Smith jumped out the window. Where is the alternative policy and where are there any other ideas? There is complete academic freedom in this House to present ideas. Where are National’s alternatives where are its ideas and where is its policy? I ask National to please get in behind the Government and support this bill because it is a very very good bill. 
When I worked at a university years and years ago there was such a thing as a quinquennium; that tells members my age. Universities used to get 5-year grants once upon a time. Then the grants were reduced to 1-year grants and everything was run on a very commercial basis under a National Government. So I am really really pleased—as are the universities themselves—that we are now going to a 3-year grant and that universities can have strategic plans. They can plan ahead. Students can plan their courses ahead and universities can plan their recruitment of staff ahead so that they will have a much better basis for recruiting especially of staff from overseas. There will be a much firmer foundation for universities and other educational institutions to go ahead. 
I say too that I am really pleased with these reforms because we have had a proliferation of educational institutions in this country which has I might say led to a suspicion that there has been a reduction in standards and we have had to work very hard to make sure there is no reduction in standards. There have been 35 teacher training institutions in New Zealand—in a country of 4 million people there have been 35 teacher training institutions. They were set up under National but I know that people involved in standards have been monitoring very carefully to see that all those institutions have maintained standards because some of the institutions have found that it has been very difficult for their graduates to find jobs in the New Zealand system. So I can see that all the reforms in this bill are very very welcome. Reform means there will not be wasteful competition. It means there will not be unnecessary duplication as I have just mentioned and it will reduce the pressure on tertiary education organisations to maximise enrolments—bums on seats. There will also be a reduction in compliance costs. 
We have talked about the whole idea of stakeholders being involved and that is really important. When we talk to people in business we hear them say they are crying out for engineers for qualified people and for qualified apprentices. We know what happened to the apprenticeship training scheme under National and that is why there is a dearth of people today. I admit that it is very very difficult to predict the labour needs of the future. It is very very difficult; it is not an exact science. I see Mr Hayes doing some peculiar dance over on the other side of the Chamber but we are not talking about dance classes; we are talking about people who are being trained for the future and who are being trained for jobs. It is extremely difficult to predict labour needs but we have to to some extent. Institutions have to to some extent. They have to plan ahead and this bill gives greater capacity to consult with stakeholders to understand and anticipate the needs in the industrial in the business and in the working communities of New Zealand and to plan and to provide for that. 
I can say that there are very very welcome changes in this Education (Tertiary Reforms) Amendment Bill not only for students but also for teachers and for the institutions themselves and it is with great pleasure that I support the further progress of the bill. I thank fellow members of the committee. I thank those of the Opposition. I see Colin King over there. He has had a good deal of experience in adult education and I know that he asked many questions and welcomed the amendments in the bill around adult education and the informal sector. I thank particularly my colleague Marian Hobbs because I think she was perhaps the most active person on the select committee in working through some of the issues with the officials and in working through some of the changes. I think that she did a good deal of homework and a great deal of work on this bill. The work that has been done is a credit to the Minister and to Marian Hobbs. 
COLIN KING (National—Kaikoura) 
: 
 I think it would be fair to say that of the things that the Labour Government has failed in and failed to deliver the tertiary education sector would be one. It has made an absolute shambles of it. In fact using a word that is associated with “shambles” the Labour Government has totally butchered the sector. Effectively since 2000 we have had a process of restructuring which has worn out and fatigued the whole industry somewhat. Maharey was the Minister at that time and he was introducing things that were more to do with trying to connect with Labour’s policy intentions and its prospectus inside its stated policies of growing those numbers involved in tertiary education. So effectively over time from about the year 2000 we have seen a massive growth inside the tertiary education sector. 
I am talking about this because it is what concerns me about the bill we have in front of us tonight. We have seen the Tertiary Education Commission grow to having some 400 employees. That on the other side means that every institution that has done business with the commission has had to grow likewise. So we have seen a tremendous growth in the bureaucracy. In my own situation when we were delivering shearer training we actually had to employ twice as many people to deliver the same amount of training. We did not get another trainee out of it at the other end but we had to employ people to tick boxes to interface with this massive bureaucracy and try to interpret what was coming at us. 
The intention I am led to believe is that the Education (Tertiary Reforms) Amendment Bill is meant to unravel all of that. I do not think so. On that basis that is one of the reasons National will not be supporting this bill. We had in 2004 the charters and profiles. The interesting thing about the charters and profiles is that if they are not sorted out before this bill becomes law we can actually carry on with our charters and profiles and treat them as if they were plans. When I heard that it conjured up in my mind the image that the charters and profiles are just a plan combined. 
The message I am hearing from a number of institutions is that they are just trying to get a steer on what managers are looking for and that they are weaving those two things together. It is in that context and after the last 8 years that we have some strong reservations about the ability of the Labour Government to come anywhere near meeting the expectations of the taxpayer around tertiary education. 
When we consider that all this restructuring and reviewing has cost some $400 million we find it hugely concerning because that is massive wastage. When we consider those other courses that were being funded by the Labour Government wasting another $500 million - odd we find that $1 billion has gone up in smoke. However this is only one particular area—tertiary education. The Labour Government has also done it in health and in law and order. The public of New Zealand generally expect a Government to be able to deliver in a meaningful fashion. 
One thing I would really like to talk about as basically a good policy butchered by Labour is the Modern Apprenticeship scheme. It was something I was involved in. I was a Modern Apprenticeship coordinator. When we looked at it we saw that there was $2000 up for grabs. The Tertiary Education Commission was prepared to give that to the coordinators so we just took it and carried on training. Unfortunately after poor management and 7 years we found some shocking results of wastage. For instance we have the situation where Masterlink Ltd has had one Modern Apprentice complete training and it has been paid $165000. That is $165000 for one Modern Apprentice completion. 
Now that is only half the equation because there is the student standard training measurement funding that also goes on top of that which is some $3200 a year. We are talking about one completion and it has cost the taxpayer over $200000. That is a good policy butchered by Labour. Labour picked up on the Modern Apprenticeship scheme in 1998 off the British. A scheme was started in Britain and Labour picked up on it and ran with it. It has not been anywhere near as effective in New Zealand as it was in the UK. We are particularly suspicious of any of the rhetoric around Labour getting the tertiary education sector up and being productive. 
On that basis it really worries us. We look at the way the private training establishments have been treated under Labour—they have been really booted around. Then we look at the institutes of technology which have had money poured into them to keep them afloat and we see that excellence in education has been punished. We have seen cases like the Southern Institute of Technology—a high-performing polytech—losing $8 million of equivalent full-time students funding because it is actually too competitive against the Christchurch Polytechnic Institute of Technology. Now you cannot tell me that in that particular environment some legislation—be it the Education (Tertiary Reforms) Amendment Bill—will change all that. 
Let us have a look at the bill. In the commentary there is the subheading “Minor amendments”. It was good to see the chairman of the committee Brian Donnelly allude to the fact that there were actually some major amendments. There was a lot of work. We had to draw heavily on the submissions. The submitters made some very very fine points. On that basis when it states in the commentary to the bill that the majority of us recommended a number of minor amendments to clarify the intent of the bill I think that is a total understatement. 
At the end of it all it was up to National to put in a minority report. The reason we did so was that we were not comfortable with the purpose set out in clause 3 which states that the purpose is to “simplify and streamline the processes supporting the operation of the tertiary education system in New Zealand” because we do not believe that this bill achieves that. In actual fact we believe that the bill creates a further complexity. So it was very important that we pointed that out. I am quite sure this bill will come in front of this House again for further tweaking and modification. 
The bill in itself gives the Minister enormous power and that is what pre-empted this concern by the universities and the polytechnics that there had to be a restatement without affecting the academic freedom and autonomy of institutions. That was necessary because inside the body of this bill an enormous amount of power and authority is given to the Minister. Dianne Yates mentioned what the bill meant to academic freedom as defined in section 161 of the Education Act. We know that it is about the freedom for people to express themselves inside an institution and inside their qualifications. 
However when we look at the bill from the point of view of new section 159AC entitled “Revocation and replacement or amendment of tertiary education strategy” we see that it says that the Minister needs to consult only with whomever he or she “considers” is appropriate or “ought to be consulted”. That scares the horses somewhat in the sense that we give the Minister that sort of authority. It challenges the ability for that Minister to be able to rewrite the tertiary education strategy. 
When we look at the bill in balance we see that it is not hard for National to vote against it. We find that the complexities costs and the increases in bureaucracy are over the top. It is a huge threat to academic freedom and we know that academic freedom is something valuable. As stated by the vice-chancellors it is over the top in the sense that no other Western democracy has this level of control. 
 Commercial sensitivities are something that have not really been dealt with by other speakers. My colleague Paul Hutchison touched on it. He is very interested in science and aware that there is a lot of risk around anything to do with breach of confidentiality. Yet inside this bill that spectre is raised. From the perspective of somebody looking in that person could be completely turned off by the fact that the bill mentions that he or she has to declare this information. That is another reason. Something else that is not in this bill—and that is the reason it really does concern me; it is all rhetoric—is that it does not deal with such things as the overlapping provision it does not talk about repatriation of equivalent full-time students and it does not guarantee quality of education. Section 195 of the Education Act points out that we must work hard at delivering quality if we want to improve our productivity. Thank you Madam Assistant Speaker. 
A party vote was called for on the question  
That the amendments recommended by the Education and Science Committee by majority be agreed to. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Question agreed to. 
A party vote was called for on the question  
That the Education (Tertiary Reforms) Amendment Bill be now read a second time. 
Ayes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Noes 51 
New Zealand National 48; ACT New Zealand 2; Independent: Copeland. 
Bill read a second time.