Education Amendment Bill (No 4) — Second Reading 
Text is incorporated into the Bound Volume 
Education Amendment Bill (No 4) — Second Reading 
[Sitting date: 11 August 2011. Volume:674;Page:20578. Text is incorporated into the Bound Volume.] 
Education Amendment Bill (No 4) 
Second Reading 
Hon STEVEN JOYCE (Minister for Tertiary Education) 
: 
 I move  
That the Education Amendment Bill (No 4) be now read a second time 
. I would like to thank the members of the Education and Science Committee for their prompt consideration of this complex and technical bill. I also wish to thank those individuals who and organisations that made submissions. The select committee carefully considered the submissions and made some changes to improve the bill. The Education Amendment Bill (No 4) has three objectives: firstly to increase transparency and accountability in the tertiary education system by enabling the regulation of compulsory student services fees; secondly to facilitate the expansion of international education by establishing the new Crown agency Education New Zealand; and thirdly to improve regulation of the tertiary education system by updating and reinforcing the New Zealand Qualifications Authority’s legal arrangements. 
The committee has made amendments to clarify the accountability arrangements for the use of compulsory student services fees. These clarifications make it clear that the Minister for Tertiary Education can give a direction listing the categories of student services an institution may use the compulsory fee for and that the fee fixed by tertiary institutions is limited to covering services from within those categories only. I have considered the minority view that does not support the proposed changes to compulsory student services fees. We know that changes are needed given that compulsory fees across universities increased 102 percent between 2009 and 2010. Therefore I consider that the provisions in the bill are necessary to improve the accountability and transparency of student services fees by ensuring that students are consulted on the categories and levels of compulsory fees and that institutions adequately report on how those fees are used. 
The bill establishes a new Crown agency for international education to drive growth and innovation in this important sector. The committee has made some minor changes to those provisions. First the committee has clarified that the Minister can give only terms of reference on the topics that the stakeholder advisory committee may advise the board on rather than specifying the content of that advice. The original specificity was unintended. Second the committee removed the general exemption for Education New Zealand from the Commerce Act 1986. It has provided for Education New Zealand to seek exemptions on a case-by-case basis instead. 
The bill strengthens the regulation of private training establishments. These changes include raising the threshold for private training establishment registration and giving the New Zealand Qualifications Authority greater powers to deal with non-compliance. The committee made a number of technical changes that will improve the practical application of the new regulatory regime. The bill also modernises the legal arrangements of the authority. The committee made a number of technical changes as well as requiring that an officer inspecting a private training establishment must provide a list of all documents removed and return the originals unless this would prejudice any investigation. 
The committee supported changing the legal name of Career Services to Careers New Zealand. Careers New Zealand will provide leadership co-ordination and resources to the groups involved in influencing career decisions. The name change reflects the organisation having a wider focus as a national leader in the careers sphere. The Government intends to support the amendments recommended by the majority of the committee including the Career Services amendments. 
At the appropriate time I will be moving a Supplementary Order Paper addressing two aspects of the New Zealand Qualifications Authority’s new legal arrangements. First the scope of the authority’s rule-making powers regarding the use of standards in degrees and postgraduate qualifications needs to be clarified. Second under the bill as currently drafted the authority has duplicate powers to impose conditions on consents to assess against standards. That was unintended and should be corrected. 
In conclusion this bill will improve the transparency of and accountability for tertiary education in New Zealand. It will also support the growth of our international education sector and ensure that our reputation as a provider of high-quality education continues. I now commend the Education Amendment Bill (No 4) to the House. 
SUE MORONEY (Labour) 
: 
 I rise to support the Education Amendment Bill (No 4) and to say at the outset that Labour supports this bill because what it does is in the main sensible. Certainly the 102 percent increase in student levies from universities and polytechnics over the course of 2009 and 2010 is of great concern to Labour. It also shows the Government that there is a squeeze on tertiary education funding. I hope the Minister does understand that this has been the reaction of tertiary institutions to the underfunding that has happened right across the education system but which in this instance is clearly visible in what is happening to the tertiary education system. 
The attempt by the institutions to significantly increase student levies has been their response to the squeeze on funding that has come from the Government in the area of tertiary education. So although this is one aspect of what needs to occur in order to safeguard dramatic increases for students in the levies being imposed on them by tertiary institutions I hope the Government is under no illusion that this will solve the problem. The problem of course is that institutions were starting to use and to increase the student levy to pay for things that previously have been paid for by Government funding. That is the fundamental problem here and I hope the Government is under no illusion that by passing this bill it has fixed the problem; it has not. 
I guess in supporting this bill I want to point out that Labour has a concern about another bill that is proceeding through this Parliament at the same time which we think causes great concern. If we combine the two we can see that students will be the people who miss out. The bill I am referring to is the Education (Freedom of Association) Amendment Bill although— 
Mr DEPUTY SPEAKER 
: That is not part of this debate. Remember this is a second reading speech and the member can concentrate only on the purpose and contents of the bill. The member must come back to this debate. 
SUE MORONEY 
: Speaking to the point of order— 
Mr DEPUTY SPEAKER 
: There is no point of order. I have ruled. This debate is on the bill’s second reading. It is not a first reading debate. The member must concentrate on the second reading of the bill as reported back. 
SUE MORONEY 
: What I want to raise— 
Todd McClay 
: The problem is the member hasn’t read the bill. 
SUE MORONEY 
: The member over there who seems to be the brightest spark that National can come up with may be a bit confused. When bills work in tandem they have an impact on students in that regard. Here is what the Government is doing. On the one hand the Government is saying to tertiary institutions that they cannot increase the levy for students. But on the other hand it is trying to diminish the role of student unions in their institutions so that they can no longer provide the services on those same campuses—if that is the plural of campus. 
What is happening is that the Government is putting itself in a position with this legislation and another piece of legislation whereby the combined effect will be that student services will suffer. If those services are no longer being provided by student unions because they are collapsing under the weight of other legislation put through by this Government and the university chooses to pick up those services this legislation gives the Minister the right to come along and stop the institution from asking for a contribution from students towards providing those services. The net result will be that those services will not continue to be provided for students. 
So I think it is important that the Government understands the impact of not only this bill but also its combined effect with another bill it is supporting at the moment. Yet Labour is prepared to support this bill because by itself it makes sense—by itself it makes sense. In combination with another bill that Labour will not support and does not support it puts student services at risk and that will put student education at risk academic achievement at risk the future productivity of this country at risk and all of the things that go with that. 
I will not take up too much more time on this bill because as I said Labour supports it. The bill supports greater transparency and accountability in the setting of student levies. They did increase hugely in 2010 under this Government. Please understand that it was not just by pure accident that that happened; it happened because of the funding squeeze that came on to the tertiary sector. The bill also establishes a new Crown agency in charge of export education and it introduces stricter requirements for the registration of private training establishments in order to stamp out growing qualification fraud in this sector and we wish to support that. 
I look forward to seeing the Supplementary Order Papers that the Minister for Tertiary Education referred to in his speech when we come to the Committee stage because as a member of the select committee the issues he raised with regard to the New Zealand Qualifications Authority were not issues that were put before the select committee for our deliberation. So I look forward to seeing the content of those Supplementary Order Papers when we reach the Committee stage so that we may make a decision on whether to support those as well. Labour supports this bill. 
ALLAN PEACHEY (National—Tamaki) 
: 
 The Minister for Tertiary Education clearly outlined the provisions and the intentions of the Education Amendment Bill (No 4). I do not feel any need to reiterate those. I want to make two comments if I may. The first is that as chair of the Education and Science Committee that held the hearings and reported back to the House I want to endorse the Minister’s comments about the work of the select committee and express my appreciation to all members for their contribution. The second thing I want to do is welcome Labour’s support for this legislation. It is good legislation it will improve tertiary education it will improve international education and I commend the bill to the House. 
KELVIN DAVIS (Labour) 
: 
 Being a recent member of the Education and Science Committee I would like to acknowledge the chair Allan Peachey for the great job he does. I find him to be a very fair and reasoned chairperson who gives us the opportunity to express our views. I appreciate that from the chairperson. 
Labour supports the Education Amendment Bill (No 4). It will do a lot of good. It will improve things in education. I would particularly like to focus on careers. I do not think there is enough emphasis on careers in New Zealand education in particular the transition between secondary schools and tertiary education and from tertiary education into employment itself. I do not think we can overemphasise the need for career advice and guidance in schools. 
I was surprised to see that despite inflation running at about 5 percent student levies increased over 2010 by 102 percent. That is outrageous so any moves to cap that are very welcome. 
The export education provisions in this bill are interesting. It is basically about representing New Zealand as an educational destination to students overseas. I think there need to be measures on that and it will benefit New Zealand and New Zealand education. I did say in the first reading that we need to be careful that we do not forget our own home-grown students by overemphasising the fact that we want to attract foreign students to New Zealand. 
In respect of the part of the bill concerning private training establishments I think that making sure we protect the integrity of those institutions is very important. There have been instances of qualifications basically being sold and the falsification of results which is unacceptable at any level of the education system be it at primary school at secondary school or in the tertiary sector and private training establishments. We have to move to protect the integrity of those institutions as I have said. 
I return to student levies. I endorse what my colleague Sue Moroney said about them. Student levies are used in institutions to provide services for students and those services are being jeopardised by another bill that is going through the House. We have to make sure that students have the support that they need—emotional social and health—to get through their studies. 
The funding squeeze in tertiary education has forced institutions to look elsewhere for funding and that is why student levies have risen at such an extraordinary rate—for example there have been increases of up to 600 percent at Canterbury University. That is just not on especially given that the rising cost of living as we know is putting pressure on students’ budgets everywhere as is the cost of gas the cost of food—the cost of everything. The price of tertiary education has risen 18 percent since National took office and out-of-control student levies are just one of the causes. 
Labour is supporting this bill. We look forward to the Committee stage. Again I acknowledge the members of the Education and Science Committee. I have been a member of that committee for a very brief time and much of that time was interrupted by unsuccessfully contesting a by-election. However it has been a pleasure to work with all committee members. Kia ora. 
GARETH HUGHES (Green) 
: 
 Kia ora Mr Deputy Speaker. Nga mihi nui ki a koutou. Kia ora. It is great to be discussing education issues in this Chamber but I have been struck by the lacklustre debate we have been hearing. There is no passion from any of the members. It seems as if they are not interested in the Education Amendment Bill (No 4). Education is vital to our future as a country as a people and as an economy. My vision is for an education system that sets up our young Kiwis be they in primary school at university or at a polytechnic so that we can deliver a smart economy. I was just looking out of my office window today at all those logs on the Wellington waterfront. Why are we still exporting raw logs in 2011? Why are we not using our smarts to turn them into high-value wood products? Why are we not leveraging that clean green brand and building a smart economy? Although it is good to be discussing education in this Chamber this bill is about tinkering. This bill is not visionary and it will not bring about the big changes we need to really deliver a smart economy and smart people. But here we are; we have this bill to debate today. 
I first acknowledge the submitters to the Education and Science Committee. There were not a huge number of them but I acknowledge them. I acknowledge the officials the chairman of the committee and other members who heard the submissions on the select committee. I also acknowledge them. 
This bill does a number of things—for example it strengthens the regulation of private training establishments. It gives the Minister of Education more power to issue directives to tertiary providers about how they charge the student services levy. It establishes the new Crown agent Education New Zealand to replace three former agencies and lastly it makes it easier for the Ministry of Social Development to administer student allowances by giving the ministry the power to request enrolment information. Much of that is not controversial at all. The Green Party could support these mostly common-sense or beneficial clauses and parts to the bill. 
But the fact is that the Green Party will not be supporting this legislation because of what we see in clauses 25 to 29 which are the student service levy clauses. I will outline why the Green Party is opposed to these clauses why we would have liked these clauses to be removed and why there are good reasons they should have been removed. Then we could have had the whole Parliament voting for what would have been a pretty good common-sense and non-controversial bill. 
The reasons why the Green Party is opposed to these clauses is that no evidence was presented that there is a significant problem of rising fees or that this situation will continue into the future but we acknowledge there have been recent rises that have been significant. But of course both parties are avoiding the real issue. Why are we seeing student service fees rising so high? The reason is that Governments whether red or blue have both failed to properly fund tertiary education and have put in place policies like the fee maxima that have been good on one side but that have meant that institutions have had to go out and get revenue sources in other ways like having student fees. 
The bill gives Steven Joyce Minister for Tertiary Education far too much power to issue directives on what institutions can do. The Green Party supports greater autonomy for our tertiary institutions. Through this legislation we will see a worse outcome for our students. Clauses 25 to 29 give the Minister power to direct via regulation the categories of student services that the institution may make available. The council of the institution must ensure that any fees fixed under the schedule relate only to the types of student services that fall within those categories. In a nutshell the Minister will be deciding what categories of services independent institutions can charge their students for and fund. 
The Green Party is concerned about rising fees. We do not think that rises of up to 600 percent at Canterbury University are on. Some rises have been significant. But we heard from the officials on the regulatory impact statement. They said quite clearly that there is no indication that recent rises will be the norm. I looked at the Auckland University submission which states: “The Bill as presented seeks to address a number of ‘problems’ that do not exist and even if they were to exist would be capable of efficient and inexpensive resolution without the need for the approaches suggested in this Bill.” If we look at the submission from Victoria University we see that it says this bill is about “second guessing” the university’s roles and responsibilities to its students and it questions the independent ministerial powers. There is no evidence that we need legislation to deal with the problem. 
The fact is that the bill avoids the real issue: why institutions feel they have to keep raising student fees. It is the lack of funding by this Government and the last Government it is the fee maxima policies and it is the fact that the budget for tertiary education has not grown by a cent under the National Government yet we know that inflation is rising by 20 percent—the highest increase in 21 years. We are seeing a country that spends $3000 less than the OECD average on our students yet Australia which we are apparently trying to catch in terms of economy and performance has poured $5.7 billion extra into its tertiary sector. We have put no extra money into ours which has required institutions to raise their fees. There is no need for this law as it fails to address the real problem and the legislation gives the Minister for Tertiary Education Steven Joyce far too much power. 
I believe that clauses 25-29 are in contradiction of Part 14 of the Education Act which gives institutions institutional independence. National when in Opposition railed on about the nanny State and the perils of regulation and red tape coming from the last Government but here it is now in Government and deciding to put regulatory powers on the shoulders of one man for him to decide who should levy fees on students what fees should be levied and how they should be levied. At the same time that we are debating another bill that we cannot name in this Chamber—ostensibly in the name of student choice and student freedom—here is the National Government supported by Labour telling students how their student fees will be raised and what fees can and cannot be used for. If that is not nanny State then I do not know what is—the Government telling institutions what they can spend their own money on. 
In the environment of the legislation that cannot be named in this Chamber we are seeing that students associations are going to collapse and we are seeing the need for agreements to be signed between institutions and students associations as is the case now at Auckland University. That puts a serious constraint on their funding ability and the fact is that the vast majority of these services are critical to a good university environment critical to good pastoral care of our students and ultimately critical to good educational and economic outcomes. 
The Greens support greater openness and transparency and greater student involvement in setting student levies but again that is being left up to regulations and there is no detail in this bill. We think that that should have been enshrined in this legislation to make sure the principles of openness and transparency will be delivered by the Minister. Again so many parts of this bill have been left up to regulation. We are writing the Minister a blank cheque to decide what he sees fit to do with students’ money. 
What we have is a problem that both the regulatory impact statement and most institutions in their submissions say does not exist. The bill goes against the institutional independence that we hold dear in our institutions. It will see worse outcomes for students. It avoids the real issue and I say once again that it puts too much power on the shoulders of one man the Minister for Tertiary Education. At a time when we desperately need education in order to provide a boost to our economy and our society we are seeing the underfunding of tertiary education fewer places being provided more expensive services and reduced access for students aged over 55. The Government has made shocking retrospective punitive decisions that will rule out literally thousands of students because it has made changes that will apply from 2 years ago and has raised entry requirements. In a sense we are seeing a whole bunch of barriers to better tertiary education outcomes. We are seeing tertiary education in New Zealand becoming less accessible less affordable and in some cases downright impossible as the Government closes the door. That is why the Green Party opposes this bill. We would have preferred to see clauses 25-29 removed; then we could have seen all of Parliament voting for the bill. As it stands this bill is not needed is avoidable and ignores the real issues facing our sector. Kia ora. 
COLIN KING (National—Kaikoura) 
: 
 It is a pleasure to rise and speak in the second reading of the Education Amendment Bill (No 4). I too congratulate the chairman Allan Peachey and other members of the Education and Science Committee on the diligent way they worked on this very important legislation. This legislation really will improve our tertiary education system. Let us consider the aspects of it. 
Export education contributes $2 billion to the New Zealand economy. On that basis one can begin to understand how important this legislation is to improve and enhance the reputation of New Zealand. The New Zealand Qualifications Authority is long overdue to be modernised and improved. The evidence that has been mentioned in the House today about student fees shows that they need to be brought under control. 
I draw the attention of the Green Party member to the work that was done at the select committee to adjust the powers of the Minister for Tertiary Education. In actual fact new section 227A(1)(b) inserted by clause 26 contains a lot of work that was rewritten. The select committee took on board the comments and views of the members of that select committee and adjusted the bill. All the Minister can do now is advise and direct; he cannot tell those institutions what to do. So I think the Green member was well out of order in talking the way he did. I will leave that issue there. 
The other point that is quite interesting inside the legislation is that with changing modernising and improving there are always transitional arrangements. In Part 2 a lot of work was done to improve the transitional arrangements. There are organisations that are delivering training at the moment that will be affected by the bill. Provided they react appropriately within the legislation within a 12-month time frame they will be able to continue to do what they do. So it is very good legislation. I commend it to the House. 
Hon STEVE CHADWICK (Labour) 
: 
 I rise to say that we support the Education Amendment Bill (No 4) but we have some concerns about the powers that the bill gives to the Minister for Tertiary Education. For all that Government members say this bill is just a tidy-up and that it looks at strengthening the New Zealand Qualifications Authority and the regulations around private training establishments there are aspects of the way that the Minister has put some squeezes on the tertiary education sector that we are really worried about. There is a certain irony that we are debating this bill a week after we debated at length the impact of voluntary student membership on universities and students and the effect that will have on student participation and student input into the tertiary sector. 
When we are considering a bill that looks at fee-setting mechanisms and transparency it is absolutely critical that first students have the capacity to be consulted and then second have a voice back to the ruling council about a fee-setting mechanism. That will be taken away because there will be no students associations around the country and that really worries me. 
Along with the funding cuts that have happened we have also seen funding cuts in Adult and Community Education and all those other portals that allow access into learning and lifelong learning that are so critical. I come from an area where second-chance education means such a lot so why the cuts there? It is the union that helps those adult learners to know the range of services they can access and what is a fair fee-setting mechanism and those opportunities will be taken from the polytech sector which I am more familiar with. 
I am worried that Mr Joyce has already cut $145 million from industry training. We have seen the number of people in industry training drop by 30000 and that worries me and there is a 10 percent drop in Modern Apprenticeships. I have had meetings with our polytech in Rotorua and the staff there said they could have taken many more students but for the funding cuts and the cap that has been put on student numbers. I find that irresponsible from a Minister who then comes to the House and says he believes in transparency and in tidying up the loose ends of a sector. Tidy up the loose ends of a sector and do it in a transparent way. That is why we are supporting this bill to select committee—so that we can hear back from various sectors that will be impacted on and they can give us their views in a proper select committee process. 
Labour will be supporting this bill but I do not think this is just a pro forma bill tidying up aspects of the tertiary education sector at all. One aspect I am happy to see—but again there is a delicious irony in the fact that some Crown entities are being forced together today—is the establishment I understand of a new industry group to look at export education. For all that is needed I wonder about the timeliness of that when such constraints are being put on public sector service delivery. I think there are some rather odd messages coming from the Minister’s tabling of this bill in the House but because we believe in democracy and community participation in this so-called non-controversial bill we will support it to select committee to allow the select committee process and submissions. Thank you. 
LOUISE UPSTON (National—Taupo) 
: 
 I am pleased to be able to speak in this second reading of the Education Amendment Bill (No 4). It is fairly obvious that the speaker before me Steve Chadwick has no knowledge of this bill because it has actually been to the Education and Science Committee and come out. So it was a bit of a bother to realise the ignorance of some of the members on the other side who do not even understand where this legislation is in the process. We have had a full select committee process. We have had a great level of scrutiny on the legislation. 
I will focus on one of the parts of the legislation that has not been touched on a lot today and that is the unleashing of the export potential of our international education. That is one of the key differences between the Opposition and this side of the House: this side of the House is focused on where we can gain more export dollars. This bill is about taking the handbrake off a section of our education that is doing extraordinarily well overseas and getting rid of some of the braking that is currently stopping its ability to grow and therefore bring in much-needed export money to this country. That is why this bill is so fantastic. 
On the one hand the legislation is providing opportunities for us as a country to earn more but on the flip side it is also saying that we have to make sure that the spending that goes into tertiary education is as effective as possible. So the bill is tightening up provisions to make sure that the tertiary institutions that get significant funding from the Government are using that money wisely. In particular with the student services fees the bill is giving students more opportunity to provide some views about how those fees should be spent and the level at which they should be set. Common feedback that has come back particularly from Canterbury University says that those fees have been increased without the ability for students to have an input in terms of how that money is being spent. 
To again correct the member who spoke previously I tell the House that in terms of what is happening with export education three organisations currently do the work in relation to international education. We are simplifying that by making sure that one agency is responsible for that work rather than having three agencies tripping over themselves and still getting it wrong. That is what the international education industry wants. That is what will allow New Zealand to grow our international education and to grow our export income. 
I am very pleased to support this bill. It is one that has two focuses: first of bringing money into the country and second of making sure that the money being spent in tertiary education is spent as effectively as possible. As well the bill is lifting the number of places to be available in tertiary institutions—11600 more core places—without more money being spent. So there will be better more effective use of money in tertiary education while students will also be given the opportunity to have input and be consulted by their institutions about how their student services fees are set. Thank you. 
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 104 
New Zealand National 57; New Zealand Labour 38; ACT New Zealand 5; Maori Party 2; Progressive 1; United Future 1. 
Noes 7 
Green Party 6; Independent: Carter C. 
Question agreed to. 
Bill read a second time.