Redirecting the tertiary system

What is the point of tertiary education? Point one: to develop individuals to their greatest potential. Point two: to fuel the “knowledge society” so we all get richer. So the government says.

To fulfil the first the government would just stump up whatever money it is prepared to commit and leave students to do what they want. To fulfil the second the government, as a funder, needs to take an active interest in what is taught and to whom — and channel its money accordingly.

The first gave us the EFTS system — a dollop of money for every student in every course. It jacked up quantity. But it hacked into quality.

Universities and polytechnics scrambled for every EFT they could get. They dreamt up diverse courses to entice students, spawned satellite campuses and fished in each other’s territory. Every university had to have a law school. EFTS for Russian were in short supply. PhD students in geological earth sciences have to go to Australia because there are eight university courses but none with critical mass in this most logical of topics in these shaky isles.

The market ruled in another sense: anyone with half a brain knew some sort of tertiary certificate, diploma or degree was near-indispensable for a halfway decent job. Better a degree than a diploma. Large numbers unsuited to university turned up, dragging their EFTS behind them. v EFTS got spread thinly. Spending went up but spending per student went down.

New Zealand is not alone. British educationalists fret about the dumbing of universities and a threat to Oxbridge’s intellectual eminence.

The government’s answer is the Tertiary Education Commission (TEC): when in doubt, the rule in Wellington is now, reach for a bureaucrat. Tertiary Education Minister Steve Maharey is, after all, a social democrat, a Labour man.

He came into office proclaiming the government would encourage courses that build the “knowledge society” — implying also discouraging courses that don’t.

Some in the industry forecast we would see this begin in this year’s Budget. Instead it set “fee maximums”, applying equally to all institutions: no carrots or sticks for particular courses.

Contrast that with Australia’s Budget. Education Minister Brendan Nelson has gone for choice. Institutions will set their own fees, up to a 30 per cent excess over the maximum the government subsidises, and will be able to take on up to 50 per cent full-fee-paying students.

Thus, strong universities or schools, such as Melbourne’s law school, will be able to charge a lot more and so hire top academics. Do you hear the word “excellence”?

This is what John Hood would like for Auckland University. The fee maximums scheme will limit his ability to bid for high-quality academics and maintain Auckland’s finger-tips hold on a creditable international ranking. Under Maharey’s scheme the only flexibility is downwards (though there are some limited exceptions).

The government has two objections to Hood’s ambitions.

One is dislike of the “elitism of exclusivity” it thinks they represent. Remnants of old-style egalitarian ideals linger in a cabinet stuffed with an elite of educational meritocrats.

The second objection is that only Massey University commands genuine international respect as a leader — and that is as a “land-based biological university”, as one minister puts it, and only at its original Palmerston North campus.

This assertion reflects an attitude that is increasingly driving ministers’ approach to research, education and economic policy: that this country’s real economic strength, and therefore most logical and promising path to high-tech, high-end-products and high-wage jobs, are the biological industries — climate plus animals and plants plus ingenuity plus lateral thinking.

Maharey does want elitism in that, “because that is what we want to be known for”.

This is certainly the way TEC chair Andrew West thinks. West in fact is putting money where his mouth is, in a sheep development venture in the Hawkes Bay.

So Auckland, which doesn’t grow a lot of animals and plants, except on leashes (sometimes) and in parks, is back in the pack.

But there is more to Maharey’s plan. The fee maximums policy does pave the way for differentiation among courses, he says. The difference with Australia is that the state, through the TEC, will determine the differentiation. His description of the difference: “Australia is partially deregulating. We are partially reregulating.”

For now the institutions are hacking their way through a jargon jungle. They are establishing “portfolios”, getting their “charters” approved and detailing their “profiles”. This should be completed next year.

This will provide the base information on which the TEC will begin to rejig the balances, Maharey says. This will be done in “dialogue” with the institutions, not by bureaucratic ukase, he says — an iterative process, identifying strengths, weaknesses and opportunities over time.

Maharey hopes the institutions “will see for themselves where they can make the shifts”. He and West are touring campuses selling their programme to staffs.

That looks like a recipe for foot-dragging and political relitigation, at which vice-chancellors are skilled. West will need a thick hide and tough-minded cabinet backing. For his part, Maharey does not rule out “the big stick” if there is resistance.

But generally, he says, it will be “management by exception”: the TEC will not go through institutions’ profiles line by line but look for standout features.


* The TEC will jawbone institutions into removing overlaps and duplications and maybe merging. For example, Victoria and Massey Universities are to have their Wellington music schools cooperate and teacher colleges are being folded into universities. The aim is over time to encourage specialisation and enable a limited number of institutions to build critical mass and depth, perhaps by collaboration — in the case of geological earth sciences, for example, by pooling resources to buy the necessary capital equipment.

* The separately funded research centres of excellence, started last year, are also aimed at specialisation and depth.

* For some courses (Maharey gives journalists as a hypothetical example) the TEC will assess the number of graduates needed in some particular courses and then buy that many places from the institutions — in effect, impose a cap. The institutions will be free to teach more students but will not be paid for the extra places. Total subsidised student places will be allowed grow by a maximum of 15 per cent or 1000 students, whichever is the greater.

* The TEC will identify gaps in what is taught and buy places for students to take those courses. This has been done for Maori broadcasters and could be done to ensure Russian is taught somewhere.

The student component of fees will rise overall. Students have been marching against Labour politicians, a nice turn of events from the love-in of 1999-02.

But keeping fees low is regressive. Better-off kids disproportionately go to university, so they benefit more than less-well-off kids — a sort of upwards redistribution, the opposite of core Labour philosophy. Maharey’s answer is more scholarships for fee-less study for the less-well-off, though he is approaching this cautiously to avoid deadweight costs of paying for what students would do anyway.

What’s in this for business?

If institutions specialise, they should be able to deliver higher quality courses in their specialties and so produce higher quality graduates than if resources are spread thinly over all institutions.

But the acid economic test will be whether it produces graduates who make a difference, in research and business development.

When will we know that? Maharey has taken three and a-half years to get to this point. Don’t hold your breath for fast results.