What the Commission found

October 2016


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The education sector has had much to say about the Productivity Commission’s eagerly anticipated draft report on its inquiry into new models of tertiary education.


Commission foundThe New Zealand Productivity Commission says there is “considerable inertia” in New Zealand’s tertiary education system, with many tertiary providers clinging to traditional models rather than exploring more innovative options.

This was one of the key findings discussed in the Commission’s draft report on its inquiry into new models of tertiary education. Reactions to the draft report’s 68 findings, 33 recommendations and 11 questions have been varied.

Universities New Zealand is concerned that the Commission has failed to support many of these recommendations with in-depth analysis and evidence.

“Our key concern is that this draft report does not yet provide a vision for a coherent and connected tertiary education system,” says executive director Chris Whelan.

Industry Training Federation (ITF) chief executive Josh Williams, who has described the report as “wide-ranging” and “brave in places”, agrees that this should be the end goal of the Commission’s inquiry. 

“This inquiry is an important chance for the Government and all parts of the tertiary system to engage in a joined-up conversation about how our system is coherent, competitive, and innovative,” he says.

The Government asked the Productivity Commission to investigate how trends in technology, internationalisation, population, tuition costs and demand for skills may drive changes in models of tertiary education. In February 2016 the Commission released an issues paper that looked  at how the tertiary education system might respond to these trends. In response, the Commission received 102 submissions from interested parties.


More student-centred approach needed

The Commission says the prescriptive regulatory and funding rules are stifling tertiary education. The rules are limiting flexibility and constraining providers’ abilities to innovate.

“The system is not good at trying and adopting new ways of delivering education and does not have the features that will allow it to respond flexibly to the changing needs of New Zealand and New Zealanders,” the report states.

The Commission believes we need to move towards a system that is more focused on the student.

“The system does a good job of supporting and protecting providers that are considered important, but it is not  student-centred. Nor does it reach out, as much as it could, to extend the benefits of education to groups that have traditionally missed out on tertiary education.”

Quality Tertiary Institutions co-chair Tommy Honey says the ideal outcome would be the tertiary education system picking up to ‘cruising speed’, allowing providers the freedom to get on with meeting student need and innovating more.

The Commission’s push towards a more student-centred system includes proposals for more flexibility for students to move between tertiary institutions. It says students should be able to mix and match courses from different providers more easily.

The NZUSA is supportive of this idea.

Study should be able to move with a student and their life needs, rather than penalise them by not acknowledging prior study,” says president
Linsey Higgins.

However, the New Zealand Union of Students’ Association is not so sure about the Commission’s suggestion of the Student Education Account. The Commission has raised the idea of changing the current funding approach to a Student Education Account system and is keen to get submitters’ views on this.

It proposes that the $2.8 billion that the Government spent on tertiary tuition and training in 2014–15 is instead distributed to every resident who turned 16 that year; a young person could have access to $45,000 to be spent on qualifying courses of study that they and their advisors judge are best suited to their future.

The Commission claims such an approach would result in a more student-centred system by improving access to education and providing more options to those who are currently missing out.

The ITF is also cautious.

“We support a student-centred system, but are not convinced that giving purchasing power to 16-year-olds will most reliably line up with industry skill needs, or promote high-quality provision,” says Williams. 

Sandra Grey from the Tertiary Education Union agrees.

“Rather than tinkering with the measurement dials and privatising the system with a student voucher scheme, let’s free up the people in public tertiary education, staff and students, to get on with teaching and learning,” she says.


Other key recommendations

The Commission recommends that competent institutions should be able to self-accredit.

It also views the EFTS (Equivalent Full-time Student) as a barrier to more innovative education models that accelerate the delivery of learning. It recommends that the Government alter the definition of an EFTS to allow alternatives to the input-based ‘learning hour’ as a basis of calculation.

The Commission recommends that the legislative requirements to bundle teaching and research are relaxed. It states that some of the more innovative models of tertiary education delivery in other countries involve greater specialisation in teaching.

It says the performance-linked funding should be discontinued owing to the weak incentives it provides for good performance.

It recommends that the Government has less control over tertiary education institutions, allowing them more autonomy and responsibility to provide them with the capability and incentive to direct capital investments towards new models
of education.

In a similar vein, it recommends that the Ministry of Education systematically identifies and removes regulatory barriers to new entrants of suitable quality in the tertiary education system.

“While these may be threats to the market share of incumbent universities, the successful introduction of new models (such as international or aggregator providers) into the New Zealand tertiary education system could be a boon for students. It could offer students greater choice and access to new programmes and modes of delivery,” the report states.

It also suggests that we should be better preparing students for tertiary education by reviewing career education in schools and the University Entrance standard.

Ako Aotearoa director Dr Stanley Frielick welcomes the emphasis on developing career management skills and making it easier for learners to move between organisations and have their prior learning recognised.

“As the Commission notes, this is especially important given the increased importance of retraining, upskilling, and lifelong learning.

“This is a major opportunity to shape the future of New Zealand’s tertiary education system. We encourage all organisations with an interest in education outcomes to read and respond to the Commission’s report,” says Frielick.

 The Commission is now seeking submissions on the draft report by 21 November 2016.  

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