Hands-off policy stunts potential tertiary earnings

By Dita De Boni

A "change in psychology" could see tertiary education boost exports to around $1 billion annually by the year 2005, according to a new report from Massey University.

Report author Dr James Alvey, from Massey's Centre for Public Policy Evaluation, says a concerted marketing effort by the tertiary industry to meet demand from primarily the Asian market could see fees normally destined for prestigious British and United States institutions diverted here.

He says accommodation, travel and living expenses could eventually contribute almost as much to the balance of payments as traditional export products like wool.

But he says New Zealand is "hesitant" to reap the spoils of high demand from Asia and excess capacity in some tertiary institutions.

"It seems we don't want to be seen to be as mercenary as Australia in our pursuit of international students," he says.

Currently there are around 6200 full-fee-paying overseas students attending New Zealand tertiary institutions, paying an average of $13,700 a year in fees.

The average student is estimated to spend almost three times the amount paid in fees in living expenses annually.

Dr Alvey's report says although admissions of Asian students have stalled in the aftermath of that region's economic recession - falling 7 per cent in 1998 - the concurrent decline of the kiwi dollar kept New Zealand education relatively inexpensive by world standards.

But one factor continuing to prevent New Zealand from fully exploiting the market in prospective students from the coveted Asian markets, according to Education New Zealand CEO Lester Taylor, is the fact that "all [our] competitors put considerable taxpayer money into marketing and development," he says.

Education NZ, funded by the secondary and tertiary sectors to help promote educational services overseas, was established in January this year after the Government withdrew direct funding for marketing the industry internationally.

Under the Government's "hands-off" economic policy, Education NZ is now in the same situation as other exporters and receives only indirect help through Trade NZ to help develop new markets.

Mr Taylor says despite rapid growth in the market - from foreign exchange earnings of $50 million generated by the industry in the very early 90s - to $400 million today, the tertiary sector competes in the international arena against tertiary market leaders like Britain, where Prime Minister Tony Blair recently announced a cash injection of several million pounds for the marketing of prestigious competitors like Oxford and Cambridge.

Both Mr Taylor and Dr Alvey also point to the Australian Government's $21 million commitment to marketing and promotion of educational services throughout Asia late last year.

Australia's international education industry is that country's third most lucrative export earner after minerals and tourism, contributing $3 billion to the economy annually.

Victoria University Vice-Chancellor Professor Michael Irving says New Zealand can also attract students with a lower cost of living, lower fees, and a "superior university education system."

He says: "There are a huge number of significant benefits to be gained by supporting this industry - for example, there were many Malaysians trained in New Zealand who are now in senior positions within the [Malaysian] Government and in favour of trading and working with New Zealand.

"The Government needs to put hard cash on the table to promote the benefits of studying in New Zealand and significant advantages of doing it here rather than anywhere else in the world."