Education (Tertiary Reforms) Amendment Bill — In Committee 
Education (Tertiary Reforms) Amendment Bill — In Committee 
[Volume:643;Page:13169] 
Education (Tertiary Reforms) Amendment Bill 
In Committee 
Part 1 Amendments to Education Act 1989 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 This bill is very important because undoubtedly tertiary education is vital for the country in every way. It is important in terms of the economy in terms of future productivity—something that has been lacking under the Labour Government over the last 7 or 8 years—and in terms of citizenship. 
Part 1 is the machinery of the bill and the Minister described it as bringing in a new era of high trust and of low compliance. He said it is about quality relevance and value for money. Sadly the very opposite seems to have occurred. In fact he talks about streamlining yet we have already heard from right around the country as the 13 investment managers and the 13 stakeholder engagement managers spread themselves out that more and more hurdles are occurring. In fact I heard from one of the tertiary education institutes just recently that an investment manager said to it: “Look if you don’t play ball we won’t sign off the plan with you.” Is that is an indication of the high trust? No it is centrally controlled threats and that is totally the opposite of the ethos that Dr Cullen started with when he began to plan for this bill. 
I do want to say that the select committee members worked extremely well together. This bill was so bad when it was first introduced that it needed a whole lot of work. I also want to commend the officials for their wonderful report. It was beautifully set out. The bill is a very complex bill but they set out their report magnificently and clearly and described the various contentious areas that are encompassed particularly in Part 1. These areas relate to charters procedural fairness treatment of sensitive information and the adult community education amendments. Of course the most controversial area—where we will go back to the purpose clause—is the issue of academic freedom and institutional autonomy which the Labour Government has tried so hard to trample over. 
Nevertheless we are talking about Part 1 today and I hope that the Government is appreciative that I have tried to help it all I can. Even though National is opposing this bill we have brought in a very well-thought-out Supplementary Order Paper to try to see whether the Government can see some sense as to the error of its ways. Undoubtedly it is important to have high trust in the tertiary education system and it is extremely important to diminish the bureaucracy that has built up so logarithmically over the last 7 years under Labour. From a department within the education department of 16 or 17 people there is now a steaming group of 340 in the Tertiary Education Commission— 
Anne Tolley 
: How many? 
Dr PAUL HUTCHISON 
: There are 340 staff and just recently appointed as fast as the commission can get them are those extra 13 investment managers and 13 stakeholder engagement managers I was talking about earlier on who appear to be very variable in their ability to engage or invest. I have heard from some institutions that many of those managers are not very comfortable in dealing with financial investment and when organisations are as complex as the tertiary education institutes it is hugely important to have highly competent people. In fact the OECD in its report this year said that one of the things about the tertiary education system in New Zealand is its complexity and this bill adds even more to its complexity. 
Dr ASHRAF CHOUDHARY (Labour) 
: 
 I rise to speak briefly to the Education (Tertiary Reforms) Amendment Bill because it is a fantastic bill that is designed to reform the system for planning funding and monitoring the provision of the tertiary education system. 
Clearly this Government is committed to quality education. Under this bill the Government is clearly moving from the “bums on seats” system to a quality education system and we are committed to quality tertiary education that is relevant for today’s New Zealand economy and social well-being. This bill will provide a tertiary system that will better fulfil New Zealand’s needs yet at the same time give better value for money for taxpayers and students. Clearly this bill allows us to move away from the annually funded demand-led system to a system funded 3-yearly which will be a much better way of giving stability to our education system so that teachers lecturers and students can be surer of the courses they are following. The bill will also streamline the processes supporting the operation of the tertiary education system in New Zealand thus strengthening the stakeholders involved. 
I totally support this bill. We had a good discussion at the select committee where we had a lot of input from the tertiary education sector and stakeholders and the committee made quite a few changes to the bill that clearly made it much better. With those few words I commend the bill to the Committee. 
COLIN KING (National—Kaikoura) 
: 
 The bill we have in front of us was certainly a challenge to the Education and Science Committee and we must acknowledge during this Committee stage the wisdom and advice we had from submitters. When we stop to think about tertiary education we realise that it covers an enormous range of provision right through from our Gateway programmes to university courses at the other end of course like PhDs and suchlike. 
But in the middle we have such things as the Tertiary Advisory Monitoring Unit and the New Zealand Qualifications Authority and it is on that basis that when we look at this Education (Tertiary Reforms) Amendment Bill we start to understand that a bill of this particular nature will not change an awful lot. In actual fact when we put it up and measure it against the performance of what we have had to endure in tertiary education over the last 8 years we start to realise that it will take a lot of work to get the tertiary education programme back on track. 
Part 1 of the bill deals with a whole range of situations. As the previous speaker Ashraf Choudhary alluded to it is meant to change the efficiency and productivity of tertiary education and increase the return to the Government and taxpayers of the money invested in it which is some $3 billion. However to put it bluntly the Labour Government has completely butchered this sector time and time again. In actual fact when we come to look at the productivity gains inside New Zealand against those of OECD countries we find that our productivity gains have been very very poor. 
The purpose of this bill to unravel the complexities but unfortunately the opposite is the case. When we look at what the  
Education Review 
—which is quite a laudable publication that keeps us all up to date—says about the growth of tertiary education we see as my colleague Paul Hutchison has told us here in the debating chamber that the Tertiary Education Commission has grown to comprise some 340 members. The  
Education Review 
 gives reasons for this being the case and states: “The Tertiary Education Commission Communications Manager Andrew Bristol said that the number of the staff paid more than $100000”—which incidentally has increased from some 20 to over 50—“increased because the commission had a far different role to play compared to when it was first set up. The new method of investing in tertiary education requires the appointment of more senior people with specific skill levels.” Unfortunately we have seen a proliferation in the number of those members. That has had another effect on the other side when we look at the structure of it all because the institutions themselves have become bogged down in it. 
Inside all of this we have the New Zealand Qualifications Authority. That is dealt with in Part 1. The authority is to set up a quality assurance programme yet we find it working at a snail’s pace. In actual fact I was disappointed to learn today that after the debacle and fiasco around the Plumbers Gasfitters and Drainlayers Board and the industry training organisation stand-off in the Hazel Armstrong inquiry the new qualifications have not been approved. It is hoped they will be approved in January 2008. That is an indication of what we are working with here and I do not think that a bill of this nature which came to us with very draconian wording in it will address this issue whatsoever. 
One of the major issues we really are confronted with in legislation of this nature as laid out in Part 1 is that it will stifle quality. What we saw down in Christchurch with the Southern Institute of Technology—a very very successful model of what a polytech should be doing and accomplishing—was that that institute lost $8 million worth of equivalent full-time student funding because of being more competitive more efficient and in fact having more people coming to it for quality education than the Christchurch Polytechnic Institute of Technology. What we are actually seeing unfortunately is that this bill is stifling initiative. It is stifling quality of education and that is not good for the tertiary education sector. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I am pleased to have the opportunity to speak to Part 1 of the Education (Tertiary Reforms) Amendment Bill. Right at the very outset I want to make the point that the Education and Science Committee really faced a massive challenge in working its way through this proposed legislation. I think the select committee was very very fortunate on two counts one being the quality of the advice and the guidance—and I have to say the forbearance and the patience—that the officials brought to the task. It could not have been easy for them either. But finally we got through it. 
The second acknowledgment I want to give in addressing Part 1 is to the leadership provided by National’s own tertiary education spokesperson Dr Paul Hutchison. He brought a detached thoughtful and reflective approach to the debate—not helped I have to say by some of the members opposite—and this brought a bit more common sense and structure to what were when the bill was first presented to the committee some pretty loose untidy assertions on the part of the Minister. 
Life is interesting. It has a way of going round in circles and I think that Part 1 clearly demonstrates that. The bill is trying to clean up a mess that was initially created by the Minister responsible for the Tertiary Education Commission at the time a Mr Maharey. He left tertiary education more unsettled and more confused than he found it and that is what tends to happen with the left in New Zealand politics. So they put in Dr Cullen the man who had already lost control of financial policy and the man who—it is increasingly obvious—does not know what to do about for example taxation and they told him to get in there and fix tertiary education. This bill is the result. 
If we look through Part 1 we realise just how bereft of sound original thinking this Government is. What is in the minds of the members opposite that makes them think that the best way to get quality is to create massive bureaucracies? What was wrong with the New Zealand university system when a couple of people sat around a table in the old Department of Education? Now we are talking about—is it 380 people? 
Colin King 
: 340. 
ALLAN PEACHEY 
: I must get it right. I would not want to be accused of exaggeration. That is a hugely increased number of people. Why is this bill making it so expensive to administer the tertiary education system? 
One of the other problems we get is that left-wing Governments bring with them a sort of massive crashing club in their approach to issues they are trying to deal with and nothing illustrates that better than the tertiary education issue. When I look at Part 1 I have two thoughts. Firstly where is the trust? Why does this Government not understand that one gets the best results from high-trust models? 
Jill Pettis 
: Is this the National Party’s policy on tertiary education? 
ALLAN PEACHEY 
: Goodness gracious me is that the defeated member for Whanganui? I think it might be. Well the people of Wanganui decided they had no interest in her views and I certainly have no interest in her views on tertiary education reform. As I was saying this is not a high-trust model. I looked at the vice-chancellors and the chancellors who came and presented very well before the committee and I could not help but reflect that when they were asked the question: “Is this legislation so seriously flawed that it should be dumped and we should start again?” their body language was interesting. 
Hon BRIAN DONNELLY (NZ First) 
: 
 National members cannot have it both ways. Prior to the last election they had a field day over the excesses of 5.1 funding the singalong courses and the twilight golf courses which actually came about as a result of the uncapping of the equivalent full-time student numbers in 1998. Who was it that uncapped the number of equivalent full-time students in 1998? The consequences of that were first the blowout in the number of equivalent full-time students used by the private training establishments which Labour then put a totally artificial moratorium on. Then there was the blowout in the polytechs and institutes of technology. Then National members had the gall to say: “What we want to do is get rid of any bureaucracy. Let’s go back to ‘bums on seats’ and the uncapped EFTs.” I am sorry but those members cannot have it both ways. 
In this particular case it is the second tranche I guess of the reforms that Labour has attempted to put in. The first one failed somewhat because some of the funding mechanisms were left in place by the former Minister. When Maurice Williamson travelled to Finland and Ireland and studied their tertiary education systems he said that he met up with people who said: “If you plan you are almost certainly not going to get it right. But if you don’t plan you absolutely are not going to get it right.” That is what occurred with the “bums on seats” situation. There was a misalignment. This bill the Education (Tertiary Reforms) Amendment Bill is attempting to achieve some alignment. 
I would be the first to agree that the bill is more heavy-handed in terms of bureaucracy than what existed in the past but we have to look at what occurred as a result of the light-handed bureaucracy in the past. Mr Peachey asked what was wrong with two people sitting in the department running our universities. Well there was only one university in New Zealand then. Members may recall that it was called the University of New Zealand and it was set up in 1876 at the request of Canterbury much to the chagrin of Dunedin. Of course there were a lot fewer students and it was a lot less complex sort of a world. If that is what National wants to take us back to then it really does have a dinosaur policy on tertiary education. I continue to ask this question which I cannot get an answer to: if National gains the Treasury benches will it repeal this legislation? Would it reverse these reforms? National members cannot seem to tell me that. There has been speaker after speaker but no one will address that simple yes or no question. 
I would be the first to admit that the members of the Education and Science Committee worked constructively although from time to time we did have to point out one or two of the basics to Dr Paul Hutchison. For example even when this bill has gone through academic freedom and institutional autonomy will still be protected because it was in the Act anyhow in a different part. In fact we went so far as to say “Let’s just confirm that this is in the other part of the Act as it has got to be considered in this part.” 
What I mean when I say that National cannot have a bob each way is that Dr Hutchison has put up some amendments one of which I would like to talk to because I think it has some merit but the other amendments actually create more bureaucracy. They require even greater levels of consultation and they try to prescribe to the Minister all of the different groups he should be consulting with when at the same time Dr Hutchison says that this measure is too bureaucratic. The North American native indigenous people used to call it talking with a forked tongue. 
The area in which there is some merit—and I think it is a 50:50 call from New Zealand First’s point of view as to whether we will support it—is the amendment about commercially sensitive information. I would like to take a call later if I could to go through this in a bit more detail because I believe it needs explanation. I think that in this particular case there is some merit in the amendment on that particular issue set out on Supplementary Order Paper 161 which is in Dr Hutchison’s name. I am not saying at this point in time that we are going to support it but I can say that I think there is an issue around this one. 
MOANA MACKEY (Labour) 
: 
 I move  
That the question be now put 
. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 I appreciate the opportunity to take this call and I hope that we will have time to spend on Part 1 because it is very very important. One of the basic aims of the Education (Tertiary Reforms) Amendment Bill was to make the planning of tertiary education institutions more streamlined by cutting down on charters and profiles and replacing them with a 3-year investment plan. 
That sounds great in theory but there are a few ironies about this aim one of them being that the universities were anxious to hold on to their ability to retain a charter. They felt that a long-term plan that was signed off and given the tick of the Minister would be very useful to them in terms of having a link with the Minister. They felt that that association would give them an extra bit of security in terms of their direction. 
I guess the other irony is what has turned out. The very good summary that the department has provided points out that plans are developed by the tertiary education organisations. Although the plans must satisfy the requirements set out in clause 17 of this bill tertiary education organisations are not prohibited from including in their plans information to satisfy their own purpose—for example long-term planning. However the summary then goes on to state that in some instances tertiary education organisations may be required to provide the Tertiary Education Commission with evidence of long-term planning. 
Under clause 17 of the bill new section 159R states that the Tertiary Education Commission can require types classes individuals or tertiary education organisations to provide supplementary information. In actual fact that supplementary information may be short-term planning medium-term planning or long-term planning. So in effect the Tertiary Education Commission may require almost anything in the way of planning. 
I am very sceptical about whether the basic idea of a simple 3-year plan replacing the charters and profile will work out under this Labour Government in actuality. I think there is a very very slim chance. Because as I have said I have heard what is happening right around the country—about the threats by the investment managers to the tertiary education institutions that they will not sign off plans unless the institutions are prepared to reduce the number of equivalent full-time students or whatever. 
Let us look at the polytechs. “The polytech cuts start to bite” is one of the headlines in the  
Education Review  
of 14 September. We have heard for instance that the Southern Institute of Technology has been cruelly cut down on the number of equivalent full-time students for next year—something like 2500. I say “cruelly” because the Southern Institute of Technology is one of the best-performing institutions in this country. Quality relevance and value for money is what it has aimed for yet the centrally controlled Tertiary Education Commission under the Labour Government says that it will penalise the successful institutions and that the institutions cannot provide education in Christchurch because they are actually making it too hard for the incumbent to be able to survive so they have to move away from there. 
This is grossly unfair particularly when it is inconsistent with what the universities are doing. I would defy Dr Cullen or the Tertiary Education Commission to start doing the same sort of thing to the universities. Can members imagine if the Massey University campus up in Auckland was told that it was out of region and to go down to Palmerston North or likewise if the Otago University campus up here in Wellington was told that it was out of region and to go down to Dunedin. 
The commission has started with the weakest institutions. What it should be doing is concentrating on who can provide quality provision at the best price. It is doing the very opposite. 
JILL PETTIS (Labour) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Ann Hartley) 
: No we have a couple more speakers. 
KATHERINE RICH (National) 
: 
 It is an honour to speak to Part 1 of the Education (Tertiary Reforms) Amendment Bill. 
First of all I think it is worthwhile asking the Minister in the chair Maryan Street why after 8 years and over half a billion dollars of expenditure we are looking at tertiary reform only now. If one looks at Labour’s history back in the 1998-99 campaign one sees that it said it was going to make changes to the tertiary sector. Up until this point there has just been talk expenditure and change and many people do not agree that this measure is going to make a skerrick of difference to students up and down the country. 
My colleague Paul Hutchison and I went to a presentation put on by the Tertiary Education Commission. We said that our Education and Science Committee was looking at the tertiary reforms and we asked for a blow-by-blow account of exactly what this piece of law would do in terms of its impact on universities. We heard the presentation which tended to go along the lines of blah-blah stakeholder engagement blah-blah charters and profiles blah-blah investment reducing duplication. We have all heard the discussions that occur when we talk about tertiary reform. But in the end we said: “Well if you can give us an example what exactly will be the difference for Auckland University?”. There was a long pause before someone said: “Oh actually there’ll be very little change as a result of this reform. It’ll be business as usual.” So we thought that it was probably not a bad thing for universities because nobody has had much of an issue with them. 
But when we started to look at the nuts and bolts of this bill and the proposed changes we started to have deep concerns about some of the changes. The Minister for Tertiary Education at the time said that this bill was designed to reduce bureaucracy increase transparency and look at better investment in tertiary funding. A lot of the universities and a lot of other tertiary providers said it was good to reduce red tape reduce the amount of reporting and reduce the thousands of dollars they spend on useless red tape and bureaucracy. When we looked at this bill we found that the bill gets rid of charters and profiles but then it suddenly brings in a whole new layer of accountability and a whole new section on planning. The tertiary provider not only has to put in place planning in the short term which of course we all expect but also is asked to do a medium plan and perhaps a long-term plan as well. So rather than just preparing a charter and profile—which cost some universities hundreds of thousands of dollars to produce and will now be parked—the tertiary providers are going to have to start again and put out a long-term plan for up to 10 years. Well I challenge the Government—any Government—to have a plan for 10 years because things change so dramatically. We cannot expect our tertiary providers to have a crystal ball so that they can plan exactly what they will do vis-à-vis courses etc. in 10 years’ time. So the National Party has some concerns that this bill seeks to take away some bureaucracy only to bring back a whole new set of changes that will be equally burdensome if not more so. 
The other issue that I think is addressed in relation to Part 1 is academic freedom. Most of us were shocked at the second reading the other night to hear a member from Labour say that when universities receive 60 percent of their funding from the State it is a bit rich to expect full academic freedom. Well I think that will be a huge shock to many in academia and I think the Minister should explain some of the changes that have been made in relation to that. I would also like to hear how the changes make it easier for universities. How do they make universities and other tertiary providers’ jobs easier or are they just introducing another layer of bureaucracy which will be equally costly? 
I think there is a lot of discussion about plans. In fact “plan” is the most overused word in this bill. In an attempt to reduce the amount of resources attached to planning and strategising it actually introduces far more planning and strategising than anybody ever envisaged when the tertiary reforms began. 
Hon MARYAN STREET (Associate Minister for Tertiary Education) 
: 
 I rise to take a short call on Part 1 in response to some of the points raised by the National Opposition in respect of the Education (Tertiary Reforms) Amendment Bill. 
The bill does use the word “plan” a lot as the member who has just resumed her seat said and we make absolutely no apology for that. Tertiary education ought to be planned it ought to be considered carefully and it ought to be engaged with by stakeholders. That is the framework and the upshot of this bill. As a result of this bill we will have a new system for planning funding and monitoring the provision of tertiary education. 
There are some significant changes. It will be a system that is no longer demand-led it will be a system that is no longer based on inputs and it will no longer be a system with a 1-year planning and funding cycle. Spreading the plan the funding and the organisation across 3 years provides a level of security and continuity and that allows tertiary education organisations to proceed with their business. So the new system is built on a plan and it lasts for up to 3 years. The plans are developed owned and maintained by each of the tertiary education organisations. The people who have an interest in the offerings of those tertiary education organisations will be encouraged. In fact there will be a requirement that they are consulted and talked to in the course of the development of programmes and in the implementation of the plan. 
A key feature of this process is its flexibility. The contributions we have had from the Opposition have implied that a layer of stultifying bureaucracy will be applied across the top of these organisations. In fact the opposite is true. The bill does establish plans but it contains a number of provisions for those plans to be reviewed amended and replaced as needed through a collaborative process. There is some flexibility built in. 
I would like to make a couple of comments especially about clause 3 which has been amended to make clear that the principle of academic freedom is completely unfettered by the amendment bill. I welcome the reassurance that this will provide to academics in tertiary institutions. Although that provision was already present in the legislation this provides additional reassurance and demonstrates that academic freedom is in no way jeopardised by these reforms. 
The part currently under consideration does the bulk of the work in this reform bill. It sets out the legal mechanisms that allow for the plans which I have already referred to to be developed and approved then changed if need be. It sets out the mechanisms that the Tertiary Education Commission might use to monitor the performance of tertiary education organisations. That is right and proper. It is also important to note that there is no prohibition or control. The repeated notion that the Government represents some sort of commissariat that dictates what is taught completely misrepresents and distorts the function of the Government. Of course if a programme offered in a tertiary education organisation is funded by the Government the Government through the Tertiary Education Commission is responsible for ensuring that the courses are delivered as they are meant to be. The commission has no reach over programmes that are not funded by the Government. 
I refer to Supplementary Order Paper 161 in the name of Dr Paul Hutchison and respond to some of the points he made earlier. As much as I admire Dr Hutchison and take no exception to him as a person in any way the Supplementary Order Paper is completely redundant. It is a second bite of the cherry it seems. The very points that the member raises have already been disposed of by the Education and Science Committee. The National Party is having another go at what did not make it through the process of the select committee. The issues around the shape of consultation requirements on tertiary education organisation plans the publication of the tertiary education strategy the reasonableness of Tertiary Education Commission decision-making and the potential exposure of commercially sensitive information have all already been addressed. Dr Hutchison’s amendments are considered to be unnecessary repetitious and altogether unhelpful which is why the Supplementary Order Paper should fail despite the niceness of the member who puts it forward. 
COLIN KING (National—Kaikoura) 
: 
 It was good to hear the Associate Minister for Tertiary Education explain some of the details that the Education and Science Committee spent months and months working our way through. It is good to know that the Minister has some understanding of the challenges that the committee had to face. 
But for just a moment or two I would like to talk about Dr Paul Hutchison’s Supplementary Order Paper 161. I point out to the Minister that the reinforcement of academic freedom was put in clause 3 only at the very last moment. It is a bit like the requirement that information be supplied to the Tertiary Education Commission before funding is granted. Listening earlier to the chairman of the select committee gave me some confidence that he too is aware that under closer examination there are some problems with that ability of the Tertiary Education Commission to demand information before funding is given. I see the risk emanating from the point of view of how it appears to a person on the outside—a partner or a joint-venture client who may be entering into a research programme. Such people will look at the requirement and decide on balance to go with a university that can guarantee them categorically that there is no spectre of confidential information being disclosed. It is on that basis that the National Party is particularly concerned about that requirement. 
As I mentioned in the second reading debate our eminent member Dr Paul Hutchison is ever ever aware of—and is probably the most well-informed person in this Committee about—the alignment that is necessary between universities and the science fraternity. It is something that we really have not done very well. That probably highlights the attitude of the Tertiary Education Commission and the angle at which it is approaching this whole thing. It is approaching effectively to put it in simple terms an issue around delivering skills and trade training at institutes of technology and polytechnics—low-level diplomas certificates and some degree-level qualifications—that is about managing quality yet we have actually roped in the universities and have done it under the view that they will do as we say. They will not be able to be heard around any sensitivities. With this particular provision in Part 1 I believe we are putting at risk a lot of the commercial science arms of universities. I want to make that particular point. 
I now want to move on to a point about quality. Clause 14 includes section 159KBA “Monitoring and reporting function of chief executive in relation to institutions”. I draw the Committee’s attention to a review that was done recently and resulted in  
Review of the Operation of the Tertiary Education Institutions at Risk Legislation 
. It deals with sections 195A to 195F of the Education Act. I think it is necessary for the Committee to be aware that from my working through this bill it will go nowhere near tidying up this problem. The report talks about the Tertiary Advisory Monitoring Unit and its responsibility but in terms of the auditing process that happens every 5 years it states: “… TEIs should also be measured in terms of the quality of education provision. … In the longer term it may be appropriate to review the current criteria …”. Then we go to section 46 of the report which states: “It is likely for example that as part of the Investing in a Plan process the TEC will have more tools to support TEIs to respond to the difficulties they are facing by providing the right kinds of incentives to encourage good performance.” 
That is quite an indicting statement. It is an indictment that after 8 years of Labour Government we have a comment from the auditing body of standards of education inside the tertiary education sector about providing “the right kinds of incentives to encourage good performance.” The right kinds of incentives are not in the bill. I think that is a point that is well worth being made. 
Hon BRIAN DONNELLY (NZ First) 
: 
 I take a call just to stress three points. The first is the point about academic freedom. I have to say that the Opposition has this totally wrong. There is no change to the Act in terms of the protection of academic freedom and institutional autonomy. 
Dr Paul Hutchison 
: I raise a point of order Mr Chairperson. We are actually debating Part 1. The academic freedom part is dealt with in the purpose clause and is actually not relevant to Part 1. 
Hon BRIAN DONNELLY 
: Speaking to the point of order Mr Chairperson I note that the Opposition speakers have been referring to academic freedom and institutional autonomy all the way through their speeches. I am responding to their speeches. 
The CHAIRPERSON (Hon Clem Simich) 
: Thank you. 
Hon BRIAN DONNELLY 
: I wish to make the point which is quite simple that references to those two concepts are still in the Act. This bill makes no change to them except to strengthen their protection. That was explained to the members of the Education and Science Committee time and time again. 
I also want to make a point about charters. There was a sector that wanted charters but it flowed over into the polytech sector as well. Universities can still have their charters. There is nothing in this legislation that prevents them from having charters. The problem is that they came along and said they have to have institutional autonomy but that they also want to have those 10-year charters signed off by the Minister. The whole thing contradicts itself. 
What the committee said was that long-term planning is good governance practice and we would expect that all tertiary institutions would have in place some form of long-term planning vision statements etc. But we said we would leave it up to the institutions themselves to devise what works for them. So small private training establishments might have a totally different need from say a large institution like Auckland University which may decide that it will stick with the charter that it has spent money on. I want to make clear that the select committee said that we will put in place something requiring long-term planning but we did not prescribe what form it was to be in and it certainly was not to be signed off by the Minister. 
The third issue is around the notion of commercially sensitive information. Clearly the Tertiary Education Commission has a responsibility—and it is spelt out in the Act—to continually monitor the financial risk of the institutions themselves. That is prudent. Why would we be putting literally tens of millions of dollars into an institution that was going to go belly up in the next week? We need to have some sort of guarantee that the institution is not engaged in some foolhardy scheme that will turn the whole thing to custard. So the Tertiary Education Commission requires information beyond just purely and simply the information around those programmes for which the institution is seeking money. But the question is whether the Tertiary Education Commission requires information that burrows down deep enough to be commercially sensitive information. 
The problem brought to our attention—and I think it was a genuine problem—was that if universities for example had to reveal all their contracts then they could not give that information because they would have already signed contracts not to reveal it to anyone. Commercially they would be breaking their deals right from day one. But secondly their concern was that the Tertiary Education Commission also comes under the Official Information Act as do universities. The Tertiary Education Commission told us that it could refuse information that was commercially sensitive. The universities responded by saying: “But they might not know what is commercially sensitive. We do.” and that was a very very good point and a valid point. 
We asked the officials to go away and look at this matter seriously and it was confirmed to us that the level of detail of information that would be required by the commission in order to be able to do its monitoring function was at nowhere near the level that would require commercially sensitive information on research contracts etc. and even if it was required—and the officials said it would not be—and the commission got an Official Information Act request on it the commission would first go back to the institution and ask it what its opinion was under the protected disclosures provisions under the Official Information Act. 
Therefore I have to say to the Committee that I am not too certain about the tidiness of the language that is used in the bill because it is really about that commercially sensitive information that is protected under the Official Information Act. That part is what really is relevant in terms of the amendment that Dr Paul Hutchison has put forward. I think it is a genuine attempt and I will not lambaste him for it. It is still an issue that we are not 100 percent comfortable about and it is a line call for us at this point in time. 
Hon DARREN HUGHES (Deputy Leader of the House) 
: 
 I move  
That the question be now put 
. 
NATHAN GUY (Junior Whip—National) 
: 
 I raise a point of order Mr Chairperson. Under Standing Order 137(3)— 
Hon Member 
: What does that say? 
NATHAN GUY 
: It talks about closure motions. If there is a lot of interest as there is in this debate on Part 1 it is over to you to decline it Mr Chairperson. I urge you to consider that there is a lot of interest in the debate and many members are seeking calls. 
Hon DARREN HUGHES (Deputy Leader of the House) 
: 
 The member’s knowledge of the Standing Orders is impressive and delightful but the most important arbiter on this is you alone Mr Chairperson. The motion that I have put is not a debatable one but that is what the member has now sought to do by—[ 
Interruption 
] A member is now interjecting on my point of order as well. So maybe Mr Chairperson you could also tell Mr Bennett some of the rules of Parliament. But this is not a debatable motion. The motion is put and you either accept it or do not accept it and your decision should not be challenged by any member in Government or in Opposition. 
The CHAIRPERSON (Hon Clem Simich) 
: I thank Mr Hughes for his assistance. I do not need any more assistance on this one but I think that the Committee would like to hear from Te Ururoa Flavell. 
TE URUROA FLAVELL (Maori Party—Waiariki) 
: 
 I appreciate very much being given the opportunity to speak to Part 1 of the Education (Tertiary Reforms) Amendment Bill particularly because the Maori Party has some proposed amendments. I thank you very much Mr Chairperson and I appreciate the opportunity to be able to speak to them—and I am sorry for being a little late to do it. 
During the last big reshuffle of the tertiary education sector which saw the establishment of the Tertiary Education Commission and the introduction of charters and profiles the Ministry of Education released a document entitled the 
 Report of the Working Party on Charters and Profiles 
. Arising out of that report institutional charters were expected to outline and describe institutions’ approaches to fulfilling Treaty of Waitangi obligations towards Maori by identifying how they would give effect to relationships with Maori. That directive was reiterated in the Tertiary Education Commission’s document  
Charter Guidelines 
. With regard to profiles the situation was similar. The 
 Report of the Working Party on Charters and Profiles 
 stated that one of two fundamental expectations of profiles was that they would identify how an organisation planned to work with Maori. That report was significant in that it underscored the need for a Treaty-based relationship between tertiary education providers and Maori and in relation to the issue at hand it highlighted the need for the institutions to develop their charter profile system in consultation with Maori. 
But with this bill before us the requirement to consult Maori and the acknowledgment of consultation as central to the Treaty relationship has for some reason been written out. So what has happened since that report was released in 2001? Just to take us back a little I say Maori scholarships and references to the Treaty in policy documents have been scrapped in the face of accusations of race-based privilege made by the previous leader of the National Party Don Brash— 
Hon Darren Hughes 
: That’s right. 
TE URUROA FLAVELL 
: —the Foreshore and Seabed Act which denies Maori both land rights and legal rights has been passed—that is right—Treaty settlement legislation has continued to be passed amidst criticism of poor process including inadequate consultation; the Treaty of Waitangi Act 1975 has been amended by specifying a closing date for submitting historical claims to the Waitangi Tribunal without prior discussion with or agreement from hapu and iwi Maori; a member’s bill to delete the principles of the Treaty of Waitangi from all legislation has been supported to go to a select committee; the Treaty of Waitangi was removed from the school curriculum by deleting references to it in the Ministry of Education’s 2006 draft curriculum document; direct references to the Treaty of Waitangi and its principles have been deleted from the new health policy action plans and contracts; land subject to Treaty claims has continued to be put up for sale without any prior communication with claimant iwi; and the list could go on and on. 
But to come back full circle to the field of tertiary education we are now considering a bill that allows tertiary education providers to prepare a proposed plan in consultation with those who they consider ought to be consulted. The key words are “ought to be consulted”. We know from experience that unless a requirement to consult is spelt out in black and white it does not happen despite the planning and despite the good will. We also know from experience that those who do consult who take the time to build the relationships from which robust consultation and productive decisions can emerge come to value it a great deal. And that is not to mention the economic benefits that often follow as a result of consultation. 
The Maori Party’s amendment to clause 10 of the bill is to rectify that omission by adding subsection 10(3)(e)(iii) to new section 159ABA which would require tertiary organisations to consult with Maori—with hapu iwi and Maori staff and students—in preparing their proposed plans. It is important that the gains developed out of the tertiary reform process of the late 1990s and early 2000s are not cast aside. 
In yesterday’s speech at the second reading of this bill I talked of the Treaty being about relationships: a commitment to a constructive and mutually reached respectful relationship by both Maori and the Crown. I reiterate also from yesterday’s speech that the lack of commitment this bill makes to the Treaty by failing to match up the ministerial requirements to set a long-term strategic direction for Maori development aspirations to a Treaty-based context makes the Treaty meaningless invisible and invalid. 
Although the issue of consultation with Maori has been the focus of the recent period of tertiary education reform one issue that was not resolved was that the same care for the Treaty in terms of constructive mutually respectful relationships be asked of the Tertiary Education Commission in the performance of its functions as is asked of institutional councils in the performance of theirs. The idea shared in the select committee by Te Tauihu o Nga Wananga which is basically the collective of the three whare wananga is that for a Treaty relationship to be meaningful it needs to exist at all levels of the tertiary education system whether at Government level or at the level of the tertiary institutions. 
The amendments to the Education Act 1989 that established the Tertiary Education Commission failed to include an acknowledgment of the Treaty and its principles and that was despite the presence of a tailor-made section for doing so—namely section 159G “Principles guiding how Commission operates”. The amendment that we are talking about today from the Maori Party to add a new clause 11A to the bill proposes that the statutory requirement of tertiary institutional councils to acknowledge the principles of the Treaty of Waitangi in their governance role be reciprocated and reflected also by the Tertiary Education Commission in its planning and monitoring role on behalf of the Government. That would mean that the Tertiary Education Commission would have a statutory requirement to make good on the Treaty and get past the frustrating ad hoc and absent processes that have been reported to us over the last couple of years. 
In closing I say the purpose of the amendments is to make the Treaty meaningful real and visible. We hope that members of the Committee will be able to give serious consideration to our proposed amendments and will vote accordingly. Kia ora tatou. 
LESLEY SOPER (Labour) 
: 
 I move  
That the question be now put 
. 
The CHAIRPERSON (Hon Clem Simich) 
: We have had 13 speakers including three doubles. But you have nine amendments and you opened the debate so I think you should close it Dr Paul Hutchison. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you very much Mr Chair for your generosity in allowing me to speak again on the Education (Tertiary Reforms) Amendment Bill. I must say that I was appalled that Labour right from the beginning of Part 1 has tried to close the debate—firstly Moana Mackey then Jill Pettis then Sue Moroney and then Maryan Street more or less in that order—and that is of huge concern. 
Sue Moroney 
: I raise a point of order Mr Chairperson. The member said that I tried to move a closure motion and I have not done that. It is wrong. The information is false. 
The CHAIRPERSON (Hon Clem Simich) 
: That is not a point of order although it did relate to a procedural matter. 
Dr PAUL HUTCHISON 
: Thank you Mr Chair. 
I would like to concentrate on this area of commercial sensitivity which has been of great concern to the universities and to the polytechs because in this last 15 years there has been a different era in terms of most of our academic institutions developing commercial arms. Prior to that what they tended to do was altruistic selfless and for the good of mankind. But what has happened over these last 15 years—I think starting with UniServices in Auckland University in about 1992—is that those institutions have all formed commercial arms. This may or may not be a good thing but it is certainly the reality of today’s world and it is very important for New Zealand that we make sure that the commercialisation of research is enabled to the greatest extent possible. 
The universities have said that being required in the summary plans to insert commercial information may ruin some of the deals that they could be planning. That is of great concern when members think for instance of the Pfizer deal with Auckland University. That was cancelled for other reasons but it was a $65 million agreement with the university and it was profoundly unfortunate that the company decided to withdraw the funding. 
In Supplementary Order Paper 161 I have tried just to diminish or protect to a small extent the amount of information that an organisation is required to put in its summary plan. It states: “an organisation is not required to include details in any plan summary of information that is confidential or commercially sensitive or that may otherwise be withheld from disclosure under the Official Information Act” etc. I think that brings us just another edge closer to giving institutions a degree of comfort and that is the reason why I have inserted it. I believe it was constructive and I think it is realistic. 
It is correct that at the end of the day one does have an Official Information Act process. However as we all know when an institution has something that is very sensitive it is very easy to have that document leaked in this day and age of emails—and we know it around Parliament around New Zealand and around the world. So I think every possible mechanism that we can bring in to ensure that commercial sensitivity is protected within the bounds of reason is appropriate. 
Clearly organisations like Business New Zealand have said in their submissions “that the bill should reflect the principle that information regarding the use of public funds must be as freely available as possible”—I totally agree with that—“apart from the fact that exceptions to this principle should be made only when there are compelling reasons; for example national security privacy—natural persons—or commercial sensitivities.” As we know New Zealand universities are very cash-strapped; there is a cap put on their funding 
Hon Steve Maharey 
: Promise more money. 
Dr PAUL HUTCHISON 
: Well I say to Mr Maharey that he may need it in a few months’ time down there at Massey. I think it is after some funding. But the very important thing is that this is potentially a crucial source of funds for universities. Hence we want to make every protection possible. Thank you for indulging me Mr Chairman. 
Hon MITA RIRINUI (Minister of State) 
: 
 I move  
That the question be now put 
. 
Motion agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section159AA in clause 6 to omit subsection (3)(a) and substitute new subsection (3)(a) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159AA in clause 6 to omit subsection (4) and substitute new subsection (4) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159AC in clause 8 to omit subsection (2)(a) and substitute new subsection (2)(a) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159AC in clause 8 to omit subsection (3) and substitute new subsection (3) be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Te Ururoa Flavell to clause 10 be agreed to: 
to add after section (3)(e)(ii) of section 159ABA: 
(iii)in consultation with local hapu and iwi Maori staff and students: 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 10 
Green Party 6; Maori Party 4. 
Noes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to clause 11 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the following amendment in the name of Te Ururoa Flavell be agreed to: 
to insert the following new clause: 
11ANew subsection added to section 159G 
Section 159G is amended by adding the following paragraph: “(d) acknowledge the principles of the Treaty of Waitangi.” 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 10 
Green Party 6; Maori Party 4. 
Noes 109 
New Zealand Labour 49; New Zealand National 48; New Zealand First 7; United Future 2; Progressive 1; Independents: Copeland Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159V in clause 17 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159YA in clause 17 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159YC in clause 17 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
The question was put that the amendment set out on Supplementary Order Paper 161 in the name of Dr Paul Hutchison to section 159YO in clause 17 be agreed to. 
A party vote was called for on the question  
That the amendment be agreed to. 
Ayes 49 
New Zealand National 48; Independent: Copeland. 
Noes 70 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; United Future 2; Progressive 1; Independent: Field. 
Amendment not agreed to. 
A party vote was called for on the question  
That Part 1 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 49 
New Zealand National 48; Independent: Copeland. 
Part 1 agreed to. 
Part 2 Related amendments to other enactments 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Part 2 deals with related amendments to other enactments of the very important Education (Tertiary Reforms) Amendment Bill. When speaking on Part 1 I stated its importance. Part 2 is equally very important as is the whole bill because it is so pivotal to New Zealand’s future economic growth and productivity—the productivity that has been so sadly lacking under the Labour Government over the last 7 years. 
It is good to see the Hon Steve Maharey here in the Chamber this afternoon because in many respects this bill has been brought about by the failure of the continuous reform that has gone on over the last 7 years. In fact the OECD in its report this year said that on average reforms have occurred in tertiary education in New Zealand every 2 years. It has been calculated that just the bureaucratic costs of the reforms has been in the order of $419 million— 
Colin King 
: How much? 
Dr PAUL HUTCHISON 
: From the budgetary estimates it is $419 million. And here we are again with more reforms. Mr Maharey is off to Massey and he has left Dr Cullen and now the Hon Peter Hodgson to take over. But in the meantime that $419 million has gone to waste when it should have gone into education. 
It is quite interesting that clause 44(1) repeals the definition of profiles. After all profiles and charters were brought in by the Hon Steve Maharey during those turbulent years that resulted in soft courses and a huge extra wastage of money—over and above the bureaucratic wastage—which has amounted to about a billion dollars over the last 7 years. But it is interesting to recall just what the Hon Steve Maharey said about the reforms back in 2002. He said that “These reforms represent the culmination of the government’s promise to overhaul our tertiary education and training systems.” 
So there we were back in 2002 when those reforms were the “culmination of the government’s promise”. But here we are again: one more reform; another reform—what has happened to them? What did he say in 2003? He said: “The TEC will bring clear strategic direction to the system as a whole.” But we all know that the whole system has been mired down in a fog worse than those at Wellington Airport. 
Extraordinarily in 2005 the vice-chancellor of Victoria University wrote to Minister Maharey to proclaim that “The system is haemorrhaging dollars right before your very eyes.” That is how bad the legacy has been and that is why Dr Cullen was called in to bring in the latest reforms which we have here in Part 2. 
As I said the charters and profiles have been taken away. They were instituted by the grand architect over there Steve Maharey but have been dispensed with by the new investment plan the grand new investment plan that is supposed to be introduced every 3 years. But in actual fact if we look at the wording of this bill more closely we see that it looks as if the Tertiary Education Commission has the Draconian power not only to insist on a 3-year investment plan but to require institutions to have a short-term plan a medium-term plan and a long-term plan. 
But I will stick strictly to Part 2 of the bill because it deals with industry training organisations. There were some good submissions particularly from Competenz which submitted that the bill legitimises existing implementation tools. However it said that the Tertiary Education Commission’s decisions were negating the intent of those tools. 
Competenz contended that the tertiary education strategy and the investment guidance required industry training organisations to develop more qualifications at levels 5 to 7 of the national qualifications framework to ensure that training took place. However the Tertiary Education Commission’s cap on industry training organisation funding at levels 5 and above constrained its ability to meet this requirement. 
Those are the sorts of topsy-turvy things that the Government has done. On the one hand it has said that it wants organisations to offer higher-level training but on the other hand it is bringing in these caps which will make it more difficult. 
Just to conclude it is important to say that this bill was supposed to be about quality value for money and relevance. Yet we have a situation with Modern Apprenticeships. I am sure my colleague Colin King who is an expert on them will expand a little further on this aspect. Modern Apprenticeships were supposed to be the great new thing of the Labour Government but we know now that the scheme’s completion rate is abysmally low. The Labour Government has lauded the scheme as being the grand new thing yet we know that back in 1992 the industry training organisations had to come in. The old apprenticeships system was a shambles. We needed to modernise training within industry and that was done very well by the National Government of the time. 
Over the last 7 to 8 years the Labour Government has poured millions of dollars into its so-called flagship Modern Apprenticeships scheme only to find that an abysmally low number of apprentices have actually completed the courses. 
KATHERINE RICH (National) 
: 
 As I rise to speak to Part 2 I would like to say that it is good to have a Minister in the chair Maryan Street who at least listens to the debate and responds to some of the concerns we raise unlike other Ministers who sit and do crosswords. 
I would like to start by commenting that here we are as late in the piece as this after nearly 8 years of a Labour Government still looking at tertiary sector reform. Every 2 years as my colleague said we are right back here looking at tertiary reform. I think out there in tertiary land a number of people are suffering from reform fatigue. They have seen it all before. A lot of tertiary providers bought into the production of their charters and their profiles. They spent a huge amount of money genuinely going through the processes only to be told that everything was going to change and we were to move to a 3-year plan. I would like to hear what Steve Maharey has to say on this. I would like him to take a call actually to tell us whether he will change his tune on tertiary reform because when he takes on his new role he will find he will be asked to plan plan and plan again. 
I draw members’ attention to some of the comments made by representatives of the Vice-Chancellors Committee which gave a very powerful submission—and I know that Minister Maharey will enjoy taking part in Vice-Chancellors Committee meetings. The vice-chancellors had some very serious things to say about the bill. They said there would be an unwarranted loss of academic freedom and autonomy. They said the bill was going to be uniformly directive and controlling and they talked about it providing the Minister with greater powers than ever before. They said they were concerned that the bill would open universities to direct ministerial intervention and they made the point that none of the world’s leading universities were subject to the degree of control proposed in this bill. So I am sure that when Steve Maharey gets out there into tertiary land he perhaps will change his tune on a lot of these things as he finds it increasingly difficult to run a university under this bill. 
This bill proposes less bureaucracy and more focus on quality and value. That is what the rhetoric says but what we have in here is something quite different. The Minister said that things will no longer be demand-led. I do not think we can ever turn our back on demand because a lot of the services provided in our tertiary sector are in increasing demand. In the early childhood education area there is a shortage of trained teachers and of course there is an increasing demand on some of the services to provide education for people who want to learn and to get them out into the market place. 
Through this bill the Tertiary Education Commission is proposing that it puts a cap on the number of seats for prospective students at a time when there is an increasing demand for those services. So there must be some flexibility there because the country does need people with the sorts of skills provided by those services and we need to ensure that we can support and train as many as we wish. On the other hand in some areas there are not as many positions available for people to go into afterwards. 
In respect of Part 2 I refer now to industry training organisations. We have heard a lot of discussion about the Modern Apprenticeships system and the Government has patted itself on its back endlessly about the number of Modern Apprentices that have been created. [ 
Interruption 
] I tell Lesley Soper that her Government does not know how many apprentices are completing their apprenticeships. It is all very well to have thousands and thousands of apprentices but we would quite like them to finish their apprenticeships and go out into the workforce. I know that when I have asked the Minister for completion rates—as have my learned colleagues—we have been told time and time again that he does not have a clue and that the Government does not have a clue how many of these young men and women are actually finishing— 
Lesley Soper 
: Go and tell all those business people about what wonderful things you did for the apprenticeship system and see what they have to say about it. 
KATHERINE RICH 
: Deluded! I rest my case. That member obviously does not understand this bill. She was a useless member for the New Zealand Educational Institute in Invercargill and I think she proves the point by some of her inane utterances here in the House. 
COLIN KING (National—Kaikoura) 
: 
 It is interesting to compare Part 2 of this Education (Tertiary Reforms) Amendment Bill in respect of industry training organisations with related amendments to other enactments. It is just a little bit of material compared with what is in Part 1 and it sort of indicates where the problems are in the tertiary education system. 
When I stop to think about industry training organisations and the Industry Training Act I would say there are about 40 such organisations. It was a marvellous concept that went forward with cross-party support and it was seen to be a solution at that time—before 1992—to an apprenticeship model that was not quite meeting needs. It worked itself through very very effectively and by 1999 some 50000 people were employed in training under the industry training organisations’ standard training measure model. They effectively covered a full range of industries. 
So when we look at Part 2 we see the changes around plans and proposed plans are transferred into the Industry Training Act. On that basis it is significant to appreciate that a proposed plan is what it says—it is a proposed plan; it is not an approved plan. Basically it is a plan put forward with consultation and discussion to be approved by the Tertiary Education Commission. Once it has been approved it becomes the plan. However it is worth noting today that a complex situation has been created around tertiary education whereby some 15 percent of people go to university and some 85 percent of kids leaving school go into trades-related or industry training provider types of training and employment. Therein lies some of the concern in relation to this entire bill but which is particularly highlighted because of the Industry Training Act 1992. 
Very little has been said about the New Zealand Qualifications Authority but it is a fascinating beast in itself because it is meant to ensure the quality of training of the qualifications of the moderation and of the approval of new qualifications. The industry training organisations manage industry training. They manage the qualifications which are put on to the New Zealand Qualifications Authority framework and those providers that are contracted by the industry training organisations deliver to those qualifications. 
However the Plumbing Gasfitting and Drainlaying Industry Training Organisation which has been trying to align its qualifications with the exams and registration that come from the Plumbers Gasfitters and Drainlayers Board has taken virtually 2 years to get that approval through. I recognise—as highlighted by Hazel Armstrong—that some personality problems were involved but in putting questions to the Minister for Tertiary Education the feedback we were getting was that things were pretty well in line. On that basis it is hugely concerning for the many people involved in industry training that it is taking as long as this. It is not good enough. When reference is made to a plan and people are interfacing with the Tertiary Education Commission the fatigue and demoralisation caused because of the time it is taking is concerning. Quite often the comment that comes back to us is “We’re being thorough.” Unfortunately we are hearing from the industry training organisations that every time they make contact with the New Zealand Qualifications Authority they are making contact with a different person. There seriously needs to be a way of managing institutional knowledge so that things are moved forward quickly. 
When we look at the plan in Part 2 it is worth noting that the industry training organisations have been capped for many years at a total of $174 million. In the last Budget they were given $14 million to take on a leadership role. On that basis it is interesting to see that the private training establishments and the industry training organisations were capped. In fact the majority of the industry training side of things has been capped which leaves us with an interesting challenge in the middle. 
I want to talk for a few minutes on the issues that this bill does not address but which are referred to in Part 2 “Related amendments to other enactments. Amendments to Industry Training Act 1992”. It is the overlapping provision and it is something that no doubt an incoming National Government will have to get to grips with. 
There is a bad relationship between the industry training providers and the industry training organisations. It has been brought about by an overlapping of provision. What that means is that the industry has developed qualifications that are funded at a standard training measure rate of $3200 per year per 120 credits. However the polytechnics are funded at a rate of up to and above $8700 per standard training measure. So this is an area that a National Government will have to sort out because it is untenable. 
Sue Moroney 
: Oh like you did last time! 
COLIN KING 
: If I may seek the indulgence of the Chair I would like to talk for a few moments about the Modern Apprenticeships scheme because for the benefit of the new junior whip it too has now been embroiled in this. The Minister Pete Hodgson said the other day that there are now 13000-odd Modern Apprentices and that barely 4000 of them have completed their apprenticeship. An example of the butchered nature of what would otherwise have been a very good policy is the case of Masterlink which is a Modern Apprentice coordinator receiving $165000 and having only one completion. That is only half of the equation because if we put in the standard training measure funding which is probably another $50000 there is in excess of $200000. I want the junior Government whip to remember that. There has been a good policy. This member was a Modern Apprenticeship coordinator and the first time I met the Minister Steve Maharey was when I shook his hand when Labour introduced the policy. Unfortunately it has been totally butchered. 
Sue Moroney 
: Labour introduced the policy! 
Lesley Soper 
: There we are. 
COLIN KING 
: If the two members who are interjecting would just listen they will learn. Last year in Auckland under the building and construction industry training only 9 percent of building apprentices completed their apprenticeships. The Manukau Institute of Technology’s managed apprenticeships—we now have managed apprenticeships being run by the industry training providers—had 90 percent of completions. So now we have a real issue. The Modern Apprenticeships scheme which was the Labour Party flagship has an abysmal completion rate and on the other side there are high levels of completion on the managed apprenticeship programme which is actually an overlapping provision that the Government—or National when it becomes the Government—is going to have to sort out. We have a massive problem there and it has all been due to the problems associated with a 7-year butchering of the tertiary education sector. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I appreciate the opportunity to rise and speak to Part 2 of the Education (Tertiary Reforms) Amendment Bill. It does give me an opportunity to correct an omission when I spoke on Part 1. I acknowledged the role of the officials and the fine outstanding work of Dr Hutchison which I want to repeat and of the National members on the Education and Science Committee. I really should have paid tribute to the Hon Brian Donnelly who led the committee through very difficult and complex stuff without a yawn without missing a point and with a very very good grasp of detail. Although I disagreed with some of the things that Mr Donnelly said when he spoke in the House earlier this afternoon I certainly do respect his grasp of the detail. There is no doubt about it when Mr Donnelly abandons the sinking ship to go to the Cook Islands the select committee will very very much miss his chairmanship. 
Colin King 
: A very good man. 
ALLAN PEACHEY 
: As Mr King says the committee will be losing a very very good man. In speaking to Part 2 perhaps I could reflect for a minute on one of the things that so many of us are noticing in this Chamber now—Mr Donnelly’s defence of the Government was far more rigorous than the Government has been able to put up for itself. It was interesting to listen to the comments of the Minister in the chair Maryan Street when she spoke; and I just take the opportunity to congratulate her on her promotion and to wish her well. 
When we think about Part 2 the words that kept coming out were “plans plans plans”. Goodness gracious me it took me way back to fifth-form history and the lessons one learnt about the failures of the 5-year-plans of the Communist systems of Europe. I hope we are not falling into that sort of trap—the view that somehow one can plan plan plan and somehow things will get better. Then that marvellous word “commissariat” came out. It is not a word that I have heard for many years but it was dropped into the conversation so readily and so easily and with so little thought that it really does give those of us on this side of the Chamber a little bit of cause to wonder just what the underlying driving ideology is that has come from the other side. 
I also want to take a minute to acknowledge the previous Minister of Tertiary Education and to congratulate him upon his appointment to the vice-chancellorship of Massey University. I think I am right in saying that he will not be the only former member of this House to hold that position. It is going to be really interesting to talk to Mr Maharey in a couple of years’ time and see the extent to which his perspectives have changed and see the extent to which he will be pulling his hair out trying to run a university under the plans and other constraints that are being imposed by his very colleagues. 
One would have to reflect a little bit on the irony of the situation. We are debating Part 2 because Mr Maharey when he was Minister for Tertiary Education made a bit of a botch of things. They put Dr Cullen in to sort of tidy it up and now they have landed it on poor Pete Hodgson. In 12 months’ time the original cause of the trouble will be trying to run a university under this constraint. 
When I reflect on the provisions of clause 2 I must say is not the House fortunate to have a man with the understanding of the industry training sector that my colleague Mr King has? Did he not speak well in drawing the Committee’s attention to the issues being faced? Would it not have been good if the Labour members on the committee and those in the Chamber had actually instead of being in such a rush to get these controls and these plans and goodness knows what into place taken a little time to listen to what Mr King has been saying and to reflect on what sound observations and advice he has on this subject? 
LESLEY SOPER (Labour) 
: 
 I move  
That the question be now put 
. 
ALLAN PEACHEY (National—Tamaki) 
: 
 I appreciate the call in enabling this debate to carry on because these matters are important to the future of New Zealand. One should reflect on why the Government keeps trying to shut down the debate. 
I want to finish my contribution because I have a very very important point to make. We have to see Part 2 in the context of the future that may lie out there for the New Zealand economy. One has to wonder why a Government—at a time when everybody is talking about the abilities knowledge skills and attributes that graduates will need in the future to be successful in a modern market-based knowledge-driven economy—wants to plan to restrict the universities in particular from the ability to produce that sort of graduate. 
When we look at the provisions in Part 2 and consider them together with Part 1 and the rest of the bill we have to ask ourselves how the tertiary education sector which this bill seeks to shape control design and plan—that word again—will contribute to producing both the quality and attitude of graduates that this country will need whether they be from universities polytechs or trade training organisations. 
I have heard Labour members defend Part 2 and talk about rationalising resources getting the best result out of them and all the rest of it. That is a smokescreen for the real purpose of this bill. Much of the purpose of this bill is what lies behind so much Government legislation that is brought to the House. This bill is not about the best outcome for New Zealanders or about strengthening the tertiary sector; it is all about Government control. For that reason alone it is vital that the Committee votes the bill down. 
A party vote was called for on the question  
That Part 2 be agreed to. 
Ayes 68 
New Zealand Labour 49; New Zealand First 7; Green Party 6; Maori Party 4; Progressive 1; Independent: Field. 
Noes 49 
New Zealand National 48; Independent: Copeland. 
Part 2 agreed to. 
Clauses 1 to 3 
The CHAIRPERSON (Hon Clem Simich) 
: There will be three votes and one debate. 
Dr PAUL HUTCHISON (National—Port Waikato) 
: 
 Thank you Mr Chairperson for the opportunity to speak on the very important title and purpose clauses. As National has said many times this bill was supposed to be about reforming the tertiary education system in New Zealand. It was supposed to be about introducing quality relevance and value for money. But the very opposite is happening as we see the burgeoning bureaucracy and complexity that have thrived before our eyes through the evolution of this bill. 
I think the title should be something like “The Labour Government (Let’s Reform the Tertiary System Again) Bill” because the last reforms were so bad. We have been through the evolution of that. We know that 2-yearly over the last 7 years there has been a reform in the system whereby a billion dollars which should have gone into tertiary education was misspent and wasted. Perhaps the title should be “The Labour Government (Let’s Add More Bureaucracy to the Tertiary System) Bill” because the Government likes complexity. 
But the really important and poignant title would be “The Labour Government (Let’s Trample Over Academic Freedom and Autonomy) Bill”. It was indeed poignant earlier when we heard Maryan Street say the word “commissariat”. It just slipped off her tongue. That reminds us of the central control that is taking place in institutions right around New Zealand. As just one example I note that the Southern Institute of Technology has had 2500 equivalent full-time students ripped from it because it was performing so well. This is not quality and value for money; this is punishing quality and instead controlling it—just like a commissariat does. 
It is important to go back to the Education Act 1989. Part 14 of that Act talks about the establishment and disestablishment of tertiary education. Section 160 “Object” states: “The object of the provisions of this Act relating to institutions is to give them as much independence and freedom to make academic operational and management decisions as is consistent with the nature of the services they provide the efficient use of national resources the national interest and the demands of accountability.” So it was quite extraordinary when the Vice-Chancellors Committee came to the table at the Education and Science Committee and told the committee that this was one of the most damaging situations they have ever seen. They said: “It should be noted that none of the world’s leading universities are subject to the degree of control proposed in this Bill” and that “in no other western democracy has a state sought this degree of control over a university’s teaching and research or claimed either ownership of or an ownership interest in universities.” They also said: “Nowhere else in the world is bureaucratic control of universities seen as the route to educational excellence.” 
That has to be a damning indictment on this Labour Government. But the victory is that the select committee process did indeed see the Labour Government—in fact Dr Cullen—dragged screaming and agreeing to a qualification being put into the purpose clause to say that academic freedom and autonomy would be retained. Thank goodness for the select committee process and thank goodness for the National Party! 
As I said before this was a demonstration of just how arrogant and tired this Labour Government has become over the last 9 years and how lacking of insight it has become. It is quite ironic that in the context of the Electoral Finance Amendment Bill the Government is squashing democracy and at the same time through the Education (Tertiary Reforms) Amendment Bill it is trying to quash academic freedom. 
KATHERINE RICH (National) 
: 
 I think a better name for the Education (Tertiary Reforms) Amendment Bill would be the “Education (Tertiary Reforms) Here We Go Again Amendment Bill” because frankly this Government continues to reform and reform but does not get anywhere. A lot of tertiary providers are suffering from reform fatigue because here we are again talking about stuff that Labour has been talking about for the last 8 years but getting nowhere. After the expenditure of $419 million here we are again. Talk about value for money! And that is one of the objectives of the bill. 
My question to the Minister of Education would be how it is value for money that here we are debating this bill 8 years after Labour started talking about reforming the tertiary sector and having spent that amount. That money did not go on students; it basically went on the production of a whole set of glossy documents and “thinkpieces” culminating in this bill here today. 
This bill is supposed to increase transparency. It is supposed to ensure that there is better spending in the tertiary sector. Well I have not seen any evidence that this bill will contribute to that. In effect it will contribute to a greater amount of bureaucracy that tertiary providers have to face and a greater number of plans strategic plans documents workshops hui and sitting around on yoga mats with crossed legs and talking about stakeholder engagement. That will make no difference to students. Ultimately I think tertiary reform has to make a difference to students. I would like to hear from the Minister why this bill will make a difference for students. 
Lesley Soper 
: How many tertiary students have you spoken to recently? 
KATHERINE RICH 
: There is Lesley Soper again the most useless member of the New Zealand Educational Institute. During the Invercargill reforms she said nothing and did nothing. The schools in Invercargill just about kicked her out of there. 
Lesley Soper 
: How many tertiary students have you spoken to recently? 
KATHERINE RICH 
: She is still going on. 
Hon Member 
: The Labour Party is trying to get rid of her. 
KATHERINE RICH 
: That is right. Labour people do not want her in Dunedin. They are bending over backwards to make sure they do not have her in Dunedin—that is for sure. 
I turn back to the bill. This bill was designed to move away from a “bums on seats” mentality in universities to one that was less demand-led. But this Government has put more bums on the seats of courses such as radio singalongs homeopathy for pets knitted jackets for small pets and pendulum swinging for beginners. The expenditure on those kinds of areas has increased over a period of time. 
Simon Power 
: The member can’t be serious. 
KATHERINE RICH 
: Well I might have made up the knitted jackets for small pets course. I will admit that but the others are true. 
This bill will not lead to a greater amount of relevance and transparency. 
Lesley Soper 
: What was the unemployment rate under National? What happened to the apprenticeship system under National? 
KATHERINE RICH 
: There is Lesley Soper again. Her dress sense is inspired by a Prince video. That is right; she could have had a part in the “Raspberry Beret” video. 
But I will go back to the bill. If this bill is so popular why did the Vice-Chancellors Committee come out and make such damning comments about it? Why did it say that the bill would bring in unprecedented control of the tertiary sector put academic freedom at risk and put more control in the hands of the Minister than we have seen? 
Lesley Soper 
: Read clause 3. 
KATHERINE RICH 
: She is still going. I think we on this side of the Committee have really hit a nerve with our debate. By sitting in that seat she obviously has aspirations to be the chief whip. But even Dunedin will not have her and Invercargill is not very keen either. 
I would like to pay tribute to the chairman of the Education and Science Committee Brian Donnelly because I think he did a good job in terms of trying to address some of the industry’s concerns. But a lot of people within the tertiary education sector are still deeply concerned about the impact on academic freedom and deeply concerned that this bill will bring in more red tape and bureaucracy—not less. The concentration on planning to the nth degree does not make a single bit of difference to students and ultimately that has to be the focus of all tertiary reform. The Minister may wish to move away from a demand-led approach but demand still plays a part. Certainly we have shortages in the area of the early childhood sector as I have outlined. I hope that the Tertiary Education Commission is able to deal with that as well. 
Lesley Soper 
: Don’t take any trouble to read it. 
KATHERINE RICH 
: She does not give up. 
Simon Power 
: Take a call! 
KATHERINE RICH 
: The member should take a call. She manages not to give any speeches in the Chamber. The only thing I have ever heard her say is “I move that the question be now put.” That is obviously the sign of a frustrated speaker. [ 
Interruption 
] And there is Sue Moroney the only person in the Committee who can knock the last two letters off her name and get “moron”. Thank you. 
Hon MARYAN STREET (Associate Minister for Tertiary Education) 
: 
 I am pleased that the National Party in Opposition has got to the end of a Thursday and clearly the National members’ levity has overcome them because they seem to be unable to comprehend the seriousness of the purpose of the legislation in front of us. It is absolutely critical that this country has a high-performing tertiary education sector and that is not only to do with the universities but to do with polytechnics and the industry training organisations that serve the training purposes for those people in trades and occupations that this country needs. This country needs well-equipped and competent people for those occupations. 
This Education (Tertiary Reforms) Amendment Bill implements the Government’s reforms of the system and contrary to the lunatic assertions that we have heard in some of the speeches just given by members of the Opposition the reforms of the tertiary education sector have been long in coming. These reforms are being set in place because they are sensible and they give the tertiary education organisations some security and forward planning capability and because the kinds of synergies that exist between the plans outlined in this bill and the requirements of students which are at the heart of this bill are aligned. The fact that there is a 3-year plan should not come as any surprise to members opposite—although clearly it does—because most of our tertiary qualifications take 3 years to complete. I have had the privilege of being a member of staff in an academic capacity for 9 years at Auckland University and I know how long it takes to prepare degree courses diploma courses and postgraduate courses and I know the kinds of things that are involved in developing contemporary qualifications that young people require these days in order for this society and for our country to be able to meet contemporary and future challenges. That is what this bill is about and no amount of levity or inanity from the Opposition can detract from the serious purpose of this bill. 
This is a good bill. It prepares our tertiary education sector to engage with the community and to assess the needs of its community on a regular and planned basis. It allows our tertiary education sector to be responsive to need but it also gives the sector security of funding on an ongoing 3-year basis. That is the kind of mechanism that this bill delivers. It is a technical bill in that sense but let us not for a moment lose sight of its overriding purpose. Its purpose is serious. The mechanism needed to deliver quality planned tertiary education and therefore to contribute to the skills and the economic transformation of this country is the underpinning of this technical bill. The sooner the members opposite take it seriously the better. 
Progress to be reported presently. 
House resumed. 
The Chairperson reported the Appropriation (Continuation of Interim Meaning of Funding for Parliamentary Purposes) Bill with amendment progress on the Education (Tertiary Reforms) Amendment Bill and no progress on the Building Amendment Bill. 
Report adopted.