Speech To Massey University, Albany Campus
Noon, October 6th, 1999

by Hon Max Bradford
Minister of Tertiary Education

Let me start by saying that I believe the future of New Zealand depends to a large degree on the quality and focus of our tertiary institutions.

I want New Zealand to succeed in the global knowledge economy.

Success will be based on tertiary education giving our people the skills needed in the 21st Century.

It is an issue of fundamental importance. We can not afford to fail in this area.

We need a genuine vision of how the tertiary sector will function.

The Tertiary White Paper did examine this issue but I was not satisfied with the results.

That’s why I announced a Higher Learning Sector Taskforce as part of the $223 million Bright Future package.

The Taskforce will consult widely and consider issues relating to structure, research funding, ownership and governance.

It will be charged with bringing together a picture of how the tertiary sector will function into the next century and how it will interact with Government and business.

We need to move beyond platitudes about “privatisation” or “academic freedom” and enter into a genuine dialogue over these issues

I would encourage everyone here today, and everyone who has an interest in the sector, to make their views known to the Taskforce.

The second issue I want to address is that of funding.

I want to reaffirm National’s commitment to the Universal Tertiary Tuition Allowance (the UTTA) and to funding all students who take quality courses.

To me, it is the quality of education that matters – not the nature of the provider.

Furthermore, this form of funding encourages tertiary institutions to be more responsive to the needs of the students.

Since 1991 National-led governments have increased tertiary education funding by $358 million or 22.8% to $1.93 billion a year.

Next year, the Government will be funding over 1500 scholarships at graduate, post-graduate and doctoral level.

That’s another $30 million into tertiary education to ensure our brightest and best provide New Zealand with the ideas it needs to prosper in the knowledge economy.

Under National, students will be asked to make a contribution towards the costs of their tertiary education.

This shouldn’t come as a surprise.

New Zealand does benefit from a highly educated and skilled population, but so do the individual students.

The State pays nearly three-quarters of the cost of tertiary study.

But, there is the simple fact that a graduate can expect to earn, on average, $525,000 more over their working life than their non-graduate colleague.

That represents a significant return on investment in anyone’s books.

The phrase investment brings me onto my final issue – Student Loans.

Loans are without a doubt the most topical, if not controversial issue in education at the moment.

This is due in part to the extravagant promises other parties are making.

I want to step back and take a moment to explain how the loan scheme works.

The money students spend on tertiary education is an investment.

They have to front up with fees and most defer starting their working lives for a number of years.

The payback happens in the rest of their lives – added knowledge, better skills and generally more money.

What the loan scheme says is: “if you can’t afford to pay your fees upfront, if you need help with your course costs and if you need some money to live on – the taxpayer is willing to lend you the money. You then pay it back as you start to earn.”

It’s like a contract.

In this way, the Government helps students overcome financial barriers to study.

It is working.

There are over 64,000 more Equivalent Full Time Students in tertiary education today compared with 1990.

We have managed to make tertiary education more accessible and less elitist.

That is something to be very proud of.

National has shown a willingness to improve the scheme.

Late last year we announced a package of changes, which will see a 25 per cent discount on real interest rates while studying from 2001.

Some of the key changes, such as directing at least 50% of repayments towards the loan principal, have effectively been endorsed by the Labour Party.

But first, let’s establish a few more facts.

Only half of all students take out a loan.

A recent study shows that the average male graduate will pay back their loan in 11 years - the average female in 14 years.

Not 51 years.

Not 29 years.

You should know these figures, used by many student union representatives, are based on a flawed and outdated model.

Repaying loans can be difficult – but overall, the investment is worth it.

Policies that promise interest free loans may be attractive, but they are irresponsible.

They encourages students to borrow to the maximum and will lead to an overall increase in student debt.

Never forget – someone has to pay for increased borrowing.

The taxpayer pays first and the student keeps paying for longer.

Ladies and Gentlemen, thank you for this opportunity. Now, some questions….

Ends.

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