8. Question No. 8—Tertiary Education and SkillsHon Dr DEBORAH RUSSELL (Labour) to the Minister for Tertiary Education and SkillsQuestion No. 8—Tertiary Education and Skills8. Hon Dr DEBORAH RUSSELL (Labour) to the Minister for Tertiary Education and Skills: Does she stand by her statement that Te Pūkenga is a financial mess drowning in debt of over $250 million"; if so why?Hon PENNY SIMMONDS (Minister for Tertiary Education and Skills): Yes I do. Te Pūkenga has $8.426 million of commercial debt $35.391 million of Crown debt and $207.311 million of intercompany debt amounting to a total debt of $251.128 million.Hon Dr Deborah Russell: Is Jeremy Morley—Te Pūkenga Council member former director at PricewaterhouseCoopers chair of the Te Pūkenga finance audit and risk committee—wrong who when asked "Is Te Pūkenga $250 million in debt?" replied "As a consolidated group as a family group no."; if not why not?Hon PENNY SIMMONDS: Because he is a member of Te Pūkenga Council and so as Te Pūkenga stands yes they have taken reserves from some entities and applied it to debt of other entities. However as Te Pūkenga is disestablished that debt will have to lie where it was generated and the reserves will have to go to where they are generated. However I understand that the member and her party take a much more cavalier attitude to using other people's money and so they are possibly thinking that that doesn't have to occur. [Interruption]SPEAKER: That was a totally unacceptable level of noise. Just keep it down.Hon Dr Deborah Russell: Is Gus Gilmore CEO of Te Pūkenga wrong when he said "We are a viable institution."; if not why not?Hon PENNY SIMMONDS: No he's not wrong. It is a viable institution; I have never said it isn't a viable institution.Hon Dr Deborah Russell: Is Tertiary Education Commission (TEC) deputy chief executive Gillian Dudgeon right when she said just last week that "there wouldn't be a single ITP business division that could stand alone independently"; if so why is the Minister proposing to dismantle a structure that supports them?Hon PENNY SIMMONDS: She is correct because of the actions of that previous Government that the member was a part of—first of all bringing in the unified funding scheme which took 20 percent of the funding away from the polytechnics. So as it stands today those individual business units have indeed been decimated by the actions of the previous Government but we are working through a process with intervention by TEC to get the cost out of those institutions that should have been done four long years ago.Hon Dr Deborah Russell: Is the independent team of specialist advisers appointed to give advice on the future structure of vocational education wrong when they advised that any structure that splits institutes of technology and polytechnics (ITPs) into some independent ITPs and some grouped ITPs would continue to run deficits of tens of millions of dollars until 2028?Hon PENNY SIMMONDS: Those individual specialist advisers did not have the benefit of all the financial information that is being gathered now and so they put a number of options with some estimates of the financial situation.Hon Dr Deborah Russell: Why is the Minister proposing to break up a viable institution with little debt and sustainable finances to replace it with independent institutes of technology and polytechnics none of which can stand alone independently?Hon PENNY SIMMONDS: Because we intend to ensure that they can and because the communities that have those institutions wish to have a say in the running of them and in how they operate rather than a head office. It is localism."