10. Question No. 10—Tertiary Education and SkillsHon Dr DEBORAH RUSSELL (Labour) to the Minister for Tertiary Education and SkillsQuestion No. 10—Tertiary Education and Skills10. Hon Dr DEBORAH RUSSELL (Labour) to the Minister for Tertiary Education and Skills: [Interruption][Member waits for silence]SPEAKER: There's actually a lot coming from the left as well so by all means wait but not for too long.Hon Dr DEBORAH RUSSELL: Does she stand by her statement that she will cut the very expensive bloated head office of Te Pūkenga" to fund the expected deficits that polytechnics are facing?Hon PENNY SIMMONDS (Minister for Tertiary Education and Skills): Thank you Mr Speaker. Yes I stand by that statement in the context that it was given back in December 2023.Hon Dr Deborah Russell: Why then has Te Pūkenga been instructed to employ highly paid consultants to find ways to cut costs?Hon PENNY SIMMONDS: The Tertiary Education Commission (TEC) has recently exercised its statutory intervention power to require Te Pūkenga to obtain specialist external help to conduct the necessary cost-out work to develop clear pathways to re-establishing an Institutes of Technology and Polytechnics of New Zealand (ITP) network and to implement this work. The ITP sector faces significant financial sustainability issues that were not addressed by Te Pūkenga. This work should have gone ahead four years ago. Sadly in the four years millions of dollars have been wasted. Hon Dr Deborah Russell: How can she expect Te Pūkenga to turn their financial situation around when she has not yet set out her plan for the future structure of Te Pūkenga and vocational education?Hon PENNY SIMMONDS: The previous Government reduced funding rates for front-line education delivery by polytechnics and other providers diverting funding into central projects. This has also driven the increase in their deficits. In March 2024 Te Pūkenga's chief executive initiated a review of head office with a view to reducing central roles to only what is essential to meet current legislative-compliance requirements and undertake disestablishment work. That work is also under way as well as the cost-out that should have occurred four years ago.Hon Dr Deborah Russell: Point of order Mr Speaker. I believe I asked about the Minister's plan for the future of Te Pūkenga not what was happening previously.SPEAKER: Well I'm pleased you believe it because you did. The first thought I had was that this is not the way to answer the question except it was qualifying the body of the answer which was the action that was taken on 24 March this year.Hon Dr Deborah Russell: Did Te Pūkenga advise her that her directive to cease restructuring ahead of her promised plan would result in additional costs of $53 million in 2024?Hon PENNY SIMMONDS: I don't recall being given that advice from Te Pūkenga—they may have given advice to the TEC who they report to. However there is considerable work that has to carry on in terms of cost-out that should have occurred four years ago. That work is occurring now as is the reduction in head office and as I previously said the funding rates that were reduced by the previous Government for front-line education delivery by polytechnics and other providers also contribute to those deficits.Hon Dr Deborah Russell: Is the Minister saying that she has not received any advice or correspondence stating that the decisions she has made will cost Te Pūkenga $53 million?Hon PENNY SIMMONDS: If the member would like to put that in writing to me I'll go back and check but that is not information that I've immediately got to hand.Hon Dr Deborah Russell: Is the Minister saying that she has no recollection of any correspondence that clearly sets out addressed to her of her decisions costing Te Pūkenga $53 million; and how could she possibly forget a sum of $53 million?Hon PENNY SIMMONDS: This Government is undertaking considerable work to take cost out of Te Pūkenga: we have asked for the head office to be reduced; we are looking at the funding decreases that were brought in by the previous Government; we are considering what costs at individual institutions can be taken out. There is a range of work going on to take out the millions of dollars that have been wasted by Te Pūkenga which was set up by the previous Government."