Organising dollars and scholars

By AUDREY YOUNG political reporter

A powerful new Government agency comprising up to 300 staff is about to be born, and Tertiary Education Minister Steve Maharey is the proud parent.

But a parliamentary storm will be whipped up when the Tertiary Education Reform Bill goes through its committee stages, which is expected to be tonight or tomorrow.

The Government believes the new agency, the Tertiary Education Commission, will bring some rationality to the $1.6 billion spent annually on tertiary education and training, and that universities, for example, should not be funded solely on the basis of what courses students want to take, but on what is best for the country.

The argument is that the market-led approach has produced an over-supply of some types of graduates, such as in commerce and law, and at the same time allowed small specialist courses to become defunct.

But the National Party says the commission is evidence of Labour's "we know best", heavy interventionist approach.

National says the initiative will create centralised command planning which will smother innovation and make largely autonomous tertiary institutions subject to the dictates of the minister.

The Minister of Tertiary Education has the authority to hire (after consultation with the Maori Affairs Minister) and fire commissioners and will have the power to formally direct them to fulfil certain policies.

For example, the minister could tell the commission its funding decisions should help to develop expertise in marine biology, psychiatric nursing, radiography or hair dressing if industry training organisations (ITOs) in those areas predicted shortages.

In line with the aim of a more integrated approach to tertiary education and training, Skill New Zealand, which oversees ITOs, will be integrated into the new commission.

ITOs, which are funded by the Government and the relevant industry to organise training and set standards, will be given new powers under the act to impose a levy on an industry or part of an industry if the majority of employers vote to do so. It must get a 60 per cent majority on a 60 per cent return to impose the levy.

The money is to be used for designing qualifications and "providing leadership" in the industry.

The commission will make its funding decisions on the basis of broad charters of long-term principles and annual profiles or shorter-term direction, both of which must be approved by the commission.

The commission, for example, may decide that it will pay for places for only 3000 law students a year and in which organisations. An organisation that misses out on money would still be able to offer a law course but would probably have to charge full fees.

Tertiary institutions and ITOs will be required to produce charters and profiles, which the minister and commission respectively can change.

It is unlikely, for example, that the commission would approve profiles of four polytechnics all wanting to set up new journalism courses.

One of the most controversial clauses of the bill - dealing with tertiary fees - has not yet been considered by the select committee.

Mr Maharey plans to introduce an amendment in the committee stages of the bill allowing the Government to set maximum tertiary fees by regulation, for the 2004 academic year onwards.

It already has the agreement of institutions for next year's fees.

Some oppose it as selective price-fixing. Others see it as setting a minimum, not a maximum.

If the Government decrees that fees should be increased no more than 5 per cent, institutions are most likely to increase their fees by 5 per cent. Some object because it will cut off an income stream for tertiary institutions.

Another aspect of the bill is a proposed unspecified levy (but thought to be about 1 per cent) on the full fees of foreign students - the subject of a discussion document to be issued tomorrow by Education Minister Trevor Mallard.

Officially called an export education, it is being described by critics as a new tax. The levy will go towards a fund to market New Zealand generically as an English-language learning destination and to monitor standards of quality.

Labour, the Progressive Coalition and the Greens support the bill. National, Act and United Future oppose it. New Zealand First will support the main bill but oppose the export education levy.

Simon Power, National

"The commission is a mechanical device for the minister to dictate directly the future roles of universities in New Zealand.

"The minister is able to distance himself from sector groups ... and at the same time control the commission sufficiently to make pretty significant decisions about funding, profiles and charters of universities.

"The knowledge wave talks about innovation and meeting markets, whereas the minister is trying to centralise and control tertiary education through the formation of more bureaucracy.

"That goes against everything the Knowledge Wave conference was about."

Nandor Tanczos, Greens

"It is extremely useful that we are going to finally have a strategic approach to tertiary education.

"It is as important to keep highly specialised small courses like the School of Antarctic Studies at Victoria as it is to address the glut in other courses.

"But while we think the idea of a strategic approach is good it is important that the members of the Tertiary Education Commission are independent and the new approach is properly monitored by Parliament."

Brian Donnelly, New Zealand First

"Surely a Government has got some sort of direction to a tertiary system, particularly if it is trying to harmonise that with its strategic plans.

"If you don't have some sort of control over the general direction of your tertiary education system, then it can have a life of its own.

"The old system was very, very elitist and led us to having very small participation rates compared with our trading partners. The market-led approach certainly increased participation rates very well but there was not connectedness.

"The export education levy [which New Zealand First opposes] is just an imposition without any involvement of the players in the industry."