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From the Chair

The recently published Productivity Commission report into ‘New Models of Tertiary Education’ should be of concern to everyone.  It ignores the fact this country has one of the world’s most efficient and effective university systems.  And it doesn’t ever say what a good system should look like.  Instead it proposes a curious mix of deregulation, over-regulation and experimentation and, despite international evidence to the contrary, suggests more competition is the way forward.

At no point in its 500-page report does the Productivity Commission acknowledge that New Zealand already has what is probably the world’s most efficient and effective university system.

Despite having the lowest funding levels per student in the developed world, all New Zealand’s universities are ranked in the top 3% of universities internationally.  Our teaching is regarded as world-class and our qualifications are internationally recognised and highly regarded around the world. 

Compared to every country for which we can locate statistics, our graduates have amongst the best qualification completion rates (84%), highest graduate employment rates (98%) and lowest under-employment rates (12%). Our research is also outstanding – with international citation rates at 1.4 times the world average. 

Universities create huge value for New Zealand, even though our average expenditure per student is 5% below the OECD average and only 77% that of Australia and 60% that of the United Kingdom.

The fundamental issue is that government policy continues to leave us with highly constrained revenue streams despite the fact that, as we all know, “quality costs”. In short, if you want a high-quality system then you have to be prepared to invest more in each teacher and each student.

Instead, successive governments have added layers of prescriptive funding rules and regulatory requirements to the sector.

Our funding system hasn’t really changed since it was introduced in the early 1990s. It hasn’t evolved to reflect the opportunities and challenges of today’s mix of internet-based delivery, workplace-delivered teaching, or work-integrated learning. Instead they’re still being funded as though they were delivering in the old classroom-based model.

The Commission fails to address these issues and of course its suggestion that interest to be put on student loans was immediately thrown out by the government. Instead, it takes an illogical approach to quality and innovation, proposing to throw out proven quality assurance systems in exchange for the potential of isolated pockets of “innovation”.

It has suggested opening the market to international providers to deliver better quality for students, despite offering little evidence that quality (in the university sector at least) is currently problematic.  The international evidence shows that where this has been done elsewhere you get for-profit providers setting up shop offering low quality degree programmes that usually leave students with large debts and with qualifications that employers don’t value.

While continued evolution is vital, the Commission’s determined focus on the “new and shiny” over the proven and recognised is troubling and not in students’ long-term interests.  

In fact, the sector is already fiercely competitive with eight universities, sixteen polytechnics and institutes of technology, three Wānanga and hundreds of private training establishments all competing to attract degree-level students.  What’s more, we’re competing with better funded international universities who regularly visit New Zealand and offer generous scholarships in an effort to lure our best and brightest school leavers overseas.  On top of this, we’re competing with universities from around the world to attract top academic staff and full fee-paying international students to work or study in New Zealand.

Far from acting as a cartel, as the Commission implies, our universities are highly ranked internationally, and have excellent graduate employment rates because we have an effective quality assurance system built on peer review and cooperation between the eight universities, to ensure a strong and cohesive university system, and because we use our limited resources so efficiently.

It’s therefore of concern that the Commission has recommended getting rid of University Entrance and the quality system that is applied to all university qualifications.  While universities would agree that there are opportunities to tweak settings, we oppose these recommendations. A key reason so few young people fail at university is because University Entrance sends a signal that they are academically ready for university-level study and because we invest heavily in those who may need additional support to meet our standards.

The sector agrees that we need a better joined-up careers information system, enabling secondary students and their families to make better informed choices. Similarly, we welcome a more differentiated tertiary education strategy, to reflect the different roles and objectives of the wide range of tertiary education providers.

But the truth is that we will not have the truly great universities New Zealand needs and deserves until we are, as a nation, prepared to invest properly in them.

Professor Stuart McCutcheon

Chair, Universities New Zealand