Moves to curb NZ market forces

March 16, 2001

The move from a competitive market model to a more interventionist and cooperative system for New Zealand's higher education took shape this week with the release of a report the Tertiary Education Advisory Commission.

It recommends the establishment of an autonomous agency whose functions would include allocating funding and providing policy and regulatory advice to government.

The report also proposes new centres and networks of research excellence, as a matter of priority, to develop the country's capability for high-quality research.

The report says that while the demand-driven funding system has increased participation in tertiary education, it has also contributed to financial difficulties for many providers, promoted intense competition and duplication of programmes and threatened the quality of research. The report says there is little opportunity for discretion in the allocation of funding and the government does not have enough powers to intervene in the national interest.

The new commission would have 12 members and be responsible for all sectors of tertiary education. It would cover industry training, second chance learning and private training establishments as well as polytechnics, Maori tertiary institutions ( wananga ), colleges of teacher education and universities. It would take over the tertiary education functions of the ministry of education and the industry training functions of the government agency Skill New Zealand.

The commission would use a three-pronged mechanism of "functional classification", charters and individual provider profiles to allocate funding and to steer the tertiary education system towards greater specialisation, co-operation and collaboration.

State charters would be strengthened and extended to all publicly funded providers. There would be greater focus on the special character of each provider and how it could contribute to the tertiary education system as a whole.

While the government has yet to adopt any of the 97 recommendations, Steve Maharey, minister for tertiary education, said the government was keen to give a new direction to the sector.

While Mr Maharey wanted the government to have more of a voice in tertiary education, he did not want a system as interventionist as that of Finland or Singapore, as he said that could stifle the benefits of innovation that came from an autonomous system. Initial response to the report has been positive but cautious.

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