English challenged on tertiary education investment

Finance Minister Bill English was challenged about the Government’s level of investment in tertiary education today at Finance 2012, an annual business event organised by Massey University and the Auckland Chamber of Commerce.

Albany Students’ Association president Stephan van Heerden asked Mr English about New Zealand’s newest export industry – graduates – and how tertiary education funding fits into the government’s overall plans for creating a sustainable economy.

“Tertiary funding has gone down in the time that National has been in government and student debt is now at around $16 billion,” said Mr van Heerden. “I understand that the Government’s priority right now is strengthening the economy, but I would like to see education move up the list of priorities as an educated population goes hand in hand with a productive economy.”

Mr English stressed it was important to not “over engineer” the education process because 60 per cent of people end up in jobs that have nothing to do with their qualification. But Mr van Heerden said later that graduates may be taking any job they can get, simply to pay off their debt, and others are heading overseas for the same reason.

Mr van Heerden put his question to the finance minister, following Mr English’s keynote address where he told 160 invited business leaders that running up more debt was not the answer to the government’s finances.

Mr English said the rationale for offering New Zealanders minority stakes in four energy companies and Air New Zealand was to allow the government “to invest in other public assets like modern schools and hospitals, without having to borrow in volatile overseas markets”.

“Our political opponents need to honestly explain to New Zealanders why it would be better to borrow $5-7 billion from overseas lenders at a time when the world is awash with debt and consequent risks,” he said.

But according to Associate Professor David Tripe, a banking specialist from Massey’s School of Economics and Finance, the government has taken the wrong approach to selling the merits of its privatisation plans to the public.

“Part privatisation would boost volume and activity on the New Zealand share market, it is a way for New Zealand businesses to raise funds. I don’t understand why the government is only telling half the story because it makes it much harder to sell the idea.”

Mr English praised Massey and the chamber’s initiative of bringing together academics and business leaders to share ideas about improving the nation’s prosperity.

“Eighteen years ago you wouldn’t have had a university turn up to a business conference, let alone organise one,” Mr English said. “It’s important for universities and business to get together to make practical plans about issues like filling the skills gap.”

Massey Vice-Chancellor Steve Maharey said there was a 25 per cent gap in the skills currently needed in the Auckland region’s workforce. Chamber chief executive Michael Barnett said his staff were working with the Auckland Council to provide work experience for up to 500 young people each year – an idea he hoped would spread.