Reti ShaneDr SHANE RETI (National—Whangarei): Thank you It's a pleasure to lead the National Party response to the reform of vocational education. The second reading is an opportunity to report back on select committee deliberations and construct a line of argument going forward and for us that line of argument will be why we will not be supporting this bill. This bill is quite clearly the next fees-free flop. It will damage the regions it will damage polytechnics and it will damage vocational education. Mark my words: this bill will bankrupt tertiary education.The Minister of Education spent the first five minutes of his time talking about the ideology. It's almost as if he needed a testimony to himself. He needed to reaffirm that the ideology is still there because the delivery won't. We know that's not going to happen and the detail behind it isn't there as well. So why don't we just spend half the time talking about the ideology behind it all and then we'll worry about the delivery later.I'm going to talk to the submissions we saw in the Education and Workforce Committee. There were 236: 148 individuals 19 unions nine of the industry training organisations (ITOs) nine Institutes of Technology and Polytechnics of New Zealand (ITPs) 41 representative peak bodies and nine others. I thank them all for their submissions. I would also note that 75—that is roughly only a third—were in support of the bill of those who expressed an opinion. There were also 65 changes that were made by officials in consultation with the select committee. I'm going to address eight of those. I'll discuss the change the advantages—because some of them I think actually did improve the bill—and then the disadvantages as we see it as well.To the first point changes one and three clearly this is hurried legislation because even in the definitions of the bill we can see there are substantial issues arising. In paragraph 37 the wording is a training contract" and the point was made that that sort of verbiage that wording had caused problems in the past particularly for volunteers and those who are self-employed and so a reference back to "training agreements" was used. You'd think that would've been self-evident in the first draft.It also talked about work-based training. It was added as an amendment to the definition that work-based training also needed to include assessment. So again the very first part of the bill—amendments made pointing out how hurried this is. Now this is also consistent with the submission from the Office of the Auditor-General (OAG) who said "We have some concerns about the timetable of the reforms. A longer transition programme might reduce some of the risk." So here we have an independent body saying "Too rushed too hurried—stretch it out if you're going to do this at all."I want to move to the second of the eight points. I think there is some improvement in the requirement for workforce development councils to collaborate with industry. I think that it makes a lot of sense and I'm pleased; it's a good addition. However to us the functions of the workplace development councils are still not clear and there's deep unhappiness in the sector with the clustering of ITOs together into these workforce development councils. How do we account for information technology being put with quarries and being put with manufacturing? What is their commonality as a group? How will their voices be represented? So a lot of unhappiness in industry around the clustering of workforce development councils.The third point I wanted to talk to is the training levy. The training levy was raised as a concern by a number of submitters. Federated Farmers and the Master Electricians had concerns that the training levy would replace Government funding. I think that is a valid concern. The Crane Association of New Zealand said that levies would be a significant burden for not-for-profits. Now on the other side of that—and I said I'd be balanced in my approach to this—we need to remember that a levy requires 60 percent of the weighted headcount ballot by members. So hopefully there is an opportunity for each sector to offer what they think a levy should be whether it should be in place or not but we do need to take on board some of the submissions we heard and make sure that it doesn't replace Government funding and that we do take some cognisance of not-for-profits.The fourth part I want to talk to the fourth change is ITO assets. I think this is one part that was strengthened. What happened here was there's no compulsion—or what the amendment is is that there'll be no compulsion for ITOs to hand over their assets to workforce development councils. This also makes a lot of sense because a number of the ITOs—their founding documents and their charters are based on trusts all sorts of other things. It'd be very difficult for them to undo their assets and pass them across. Furthermore the cash balance that they were required to hold to show they were representative of an industry—surely that wasn't going to be handed across to a workforce development council. So I think that addition change number 29 is actually quite useful.The fifth I want to talk to is academic freedom and this received a lot of submissions from people who were very concerned that their academic freedom was going to be compromised. The solution that the committee came to was to effectively put in a removal-of-doubt clause and I think that goes some way towards resolving that issue. However net-net I would submit that academic freedom is less in this bill than before. The reason for that is the academic boards from the regional ITPs the regional polytechnics are disestablished and aggregated back to the one mega polytechnic the New Zealand Institute of Skills and Technology (NZIST). How can that be improving academic freedom? The bill is taking it away from the regions. That is a net-net loss of academic freedom. So we still have grave concerns that that's not addressed and we do not believe that a mega polytechnic will satisfactorily respond to that.I want to then talk to administrative regions change number 54. This is a very strange thing and I've WPQed this and I'm really no wiser I have to say. But administrative regions what are they exactly? Do they cross iwi boundaries? Are they geographic boundaries? Furthermore when the assets are sucked up into the NZIST and we're told "Oh don't worry they'll be applied back in your regions." is it the regions as we understand it now the territorial land authority regions or are they these strange administrative regions? What is this nebulous administrative region? That needs a lot more explanation than has been put into this bill.The seventh of the eight changes I want to talk to is the conversion of polytechnics to Crown entities. Now one part of the bill I think is better: the reporting of the subsidiaries is picked up a little bit by including them in section 45L of the Public Finance Act which then allows them to have more formal reporting than was in the bill beforehand. That's a good thing particularly over this transition period particularly I think if we look at the January to March—so ITPs are disestablished on 1 April and what the proposal is from January to March there'll be a revaluation at the end of March and that's the end of the financial year and then from April through to December. I think quite sensibly what the recommendations were were that by including ITP subsidiaries in the Public Finance Act we actually will be able to report year-long. We won't have two reporting periods—one three months and one nine months—and that's very important for comparative analysis.The problem here is—and it was pointed out by the OAG and I'd ask the Minister of Education and his team to look at it as another Supplementary Order Paper (SOP). The problem is the Public Finance Act allows a transfer of functions to allow that reporting across a year not a conversion of functions and yet the wording in the bill still talks about the conversion of polytechnics. This is the advice we're getting from the OAG: why would we want to not make that simple change make it easy for ourselves? It's going to be hard anyway revaluating at the end of March hideously hard. Make it easy—why would we not take that advice? I'd put it to Government that they think about an SOP that just changes that wording from "conversion" to "transfer".The last point I want to talk to is around employment protections and very very wisely this Government saw the danger coming towards them. What on earth was in your head removing employer protections? That transition from the subsidiary ITPs through to the big mega NZIST the mega polytechnic in the bill in its first place—Part 6A of the Employment Relations Act was removed and all employment protection provisions. How on earth did that get through in the first draft? My goodness! Thankfully you've seen the danger to it. I'd submit it's because we pointed it out in the first reading that it absolutely needed to be reworded although it concerns me the intent underlying it. It concerns me the intent for workers' rights. It concerns me the intent for job losses because the first statement we made when this bill was announced around about 6 February last year was that there'd be a thousand job losses in that and I think that number's increasing. I'll absolutely stand by that number and submit that it's increasing.So this is a failed process. It's an ideology that will fail. It will bankrupt the tertiary system. If I reflect on the Tertiary Education Commission who were in front of us at the select committee yesterday we asked the chief executive "At any point have you said to the Minister 'We don't support these reforms.'?" He quite honestly—and I appreciate his honesty—said "Yes initially we said we do not support these reforms. They will not work." Well clearly they then got along to a position where they think they can deploy it. I don't think they can and we have grave reservations on this side of the House for this bill. Thank you Madam."