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Dr Muriel Newman

Challenges in Education

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TertiaryEdParents have always gone to great lengths to impress on their children that education is the key to the future. According to this age old wisdom, those who are well educated can look forward to good jobs and higher wages. In addition, there are spin-offs for the nation as better-educated countries grow faster, embrace innovation more readily, and have higher living standards.

Or do they?

While this was certainly the case in the past, things are not so straight forward these days.

This week’s NZCPR Guest Commentator, Dr Roger Bowden, formerly of Victoria University’s School of Economics and Finance, has been looking into what’s been described as a growing ‘over qualification phenomenon’ and explains:

“By some estimates, up to 60% of graduates in the US, Canada, and the UK are working in jobs for which their qualifications are not needed. It’s hardly a surprise.  I had observed the same thing right here in NZ, with Masters level graduates working in clerical jobs, or with marketing and management graduates pumping petrol.

“Though even here, a recent OECD study found 7% of graduates could not read a fuel gauge properly. The OECD report goes on to say that a three year undergraduate degree was too expensive and unsuitable for people with poor literacy and numeracy. It warns the removal of a cap on student numbers could make the problem worse. And there’s another can of worms, as to whether more vocationally directed degrees in things like Events Management or Interior Design don’t exacerbate the over-qualification problem.”

That OECD study referred to by Dr Bowden found that while young people aged 16-24 have more and better qualifications than those aged 55-65, in some countries their basic skills are no better. It points out that In England one in ten university students have such low skills that they would find it difficult to understand the instructions on an aspirin packet. They attribute the problem to the fact that the threshold for entrance to university has been set too low.

In his article Dr Bowden also makes reference to the Labour Party’s new “free” tertiary education policy, which will undoubtedly result in a substantial increase in the number of students wanting to attend university – exacerbating the problem:

“Just in case you missed it, the NZ Labour Party under their ‘Working Futures Plan’ is proposing to offer free post school education, with a projected cost of $1.2 billion per annum. This, they say, will help rectify declining student enrolments, which in turn are because of escalating tertiary fees. They don’t pause to ask just why the escalating fees, but that’s another story.”

Labour’s plan is to provide three years of free tertiary tuition over a person’s lifetime – for anyone who has received no previous tertiary education. It could be used for any type of training, apprenticeship or higher education approved by the New Zealand Qualifications Authority, and for fulltime or part-time study. The three years wouldn’t have to be consecutive and there would be no age limit. To be eligible for the second and third year, graduates would need to pass more than half of their courses in the first year.

If Labour is elected to Government next year, their policy would be introduced in phases – the first year’s free education would be available from 2019, two years from 2022 and three years from 2025. Labour says that when fully enacted in 2025, the cost will be $1.2 billion. The first year would be funded from money earmarked by National for tax cuts.

However, before considering a major expansion of the tertiary sector through the offer of free tuition, surely the issue raised by Dr Bowden, over whether tertiary education is providing value for money, needs some answers.

This is a question that is also exercising the Government. They are concerned that while New Zealand has a comparatively high level of tertiary attainment among the working age population, this has not translated into higher levels of overall productivity – nor higher incomes.

In fact, the OECD has found that the value for money spent on a tertiary education in New Zealand is smaller than in most other developed countries. While the sector receives around $3 billion in annual funding – not to mention substantial taxpayer subsidies through the student loan scheme – the difference in incomes between graduates with a tertiary education, and school leavers, is the smallest amongst the 34 member countries.

While the return on the state’s investment in tertiary education – measured in terms of a higher tax take and lower welfare payments – is positive overall, it is only a fraction of the norm in other OECD countries.

The fact that the record numbers of graduates entering the workforce is not lifting the country’s productivity is a major concern for the government, especially as the effects of the country’s long term decline in birth rates look set to increase the future cost of tertiary education.

The tertiary sector consists of some 418,000 students studying in 8 universities, 18 institutes of technology and polytechnics, 3 wananga, and more than 270 government-funded private training institutes. While only half of students are enrolled in universities, they receive the lion’s share of the tertiary education funding due to their high fixed costs – especially bricks and mortar.

In the past, the impact of demography and falling student numbers, have been offset to a large extent by the growth in fee-paying international students. But with the global competition for these students heating up, it is becoming clear that a new approach is needed.

What especially concerns the government, however, is the inertia and risk aversion of established institutions. They are reluctant to change, even though their traditional business models are now under extreme pressure.

Not only that, but the government is concerned that the tertiary sector is not keeping up with the changing needs of the workplace – nor of students, who increasingly want to do more of their study through distance-learning, on-line and part-time.

To get to the bottom of the discrepancy between the high expenditure in the tertiary sector and the relatively low economic returns, the government has asked the Productivity Commission to undertake a wide-ranging inquiry. The terms of reference set for the inquiry are very broad, giving the Commission the opportunity to explore the issue as widely as possible in order to come up with some new models of tertiary education.

In particular, this review provides an opportunity to review some of the ideological changes forced onto the sector by the Labour Government, including the Performance-based Research Fund, which some critics believe has severely compromised the quality of tertiary teaching – a view expressed by Dr Ron Smith, the former Director of International Relations and Security Studies at the University of Waikato, in his 2011 NZCPR research report Performance-Based Research Funding: why it should end now.

Without a doubt, the government wants the tertiary sector to become more responsive to the needs of students and employers, and to take greater advantage of a rapid change in technology that could see lectures from world famous scholars streamed directly to Kiwi students.

Technological change could transform tertiary education business models as well – instead of providers being paid to train students, access to learning might be free, with students paying for their certification instead.

But tertiary education does not stand alone, and the decline in basic skills amongst students mentioned by Dr Bowden, does complicate matters. The Tertiary Education Commission found that tertiary students studying at foundation level are performing poorly in tests of functional, everyday literacy and numeracy. This not only backs up what employers are saying, but what international studies are showing as well.

Their research compared the literacy and numeracy requirements of Level 1 of the National Certificate of Educational Achievement (NCEA) – the secondary school qualification phased in by the Labour Government between 2002 and 2004 to replace School Certificate, University Entrance, and Bursary – with measures of adult literacy. Using the test results of thousands of school children and young people in low-level tertiary courses in 2012, the study found 40 percent of Year 12 students and 50 percent of tertiary students who met the benchmark NCEA requirements did not meet the level of reading and numeracy regarded in adult testing as the minimum for life in a knowledge economy.

This casts doubt on the value of the NCEA as a reliable indicator of student capability and as a benchmark for the literacy and numeracy competencies of school leavers.

The point is that schools are tasked with the responsibility of ensuring their students’ understanding of literacy and numeracy equips them for further learning and for work. If employers hiring school leavers are finding that their literacy and numeracy levels do not enable them to carry out basic competencies such as comprehending written instructions, keeping themselves safe, carrying out simple size and volume measurements and conversions, then it suggests that NCEA standards are set too low and need to be raised.

At present, to meet the requirement of NCEA Level 1 literacy and numeracy, 10 credits from literacy-rich subjects and 10 from those rich in maths, must be obtained. But under the current system, these credits can come from more than 700 standards, including subject areas where teachers have had little experience in assessing literacy and numeracy, such as physical education.

Tightening up NCEA requirements would impact on enrolments in tertiary education and on the government’s goal of 85 percent of 18-year-olds achieving NCEA Level 2, but if basic standards are found to be too low, then they must be raised.

To further complicate things, it now seems that the exuberance, with which schools have embraced technology, to help improve standards, might be hurting rather than helping their students.

Based on the results of the Programme for International Student Assessment (PISA) tests, the OECD has found that, “Countries that have invested heavily in information and communication technologies for education have seen no noticeable improvement in their performance in PISA results for reading, mathematics or science.”

Their research found that two of the highest performers in the international tests, Korea and Shanghai-China, used computers much less than countries such as Australia – and New Zealand – where computer use at school is almost universal.

The report also notes that between 2000 and 2012, countries that encouraged students to use the internet for schoolwork saw a decline in their students’ performances in reading. Worse, the report says an overemphasis on computers in the classroom disadvantages at-risk students, who would benefit more from achieving a basic proficiency in reading and mathematics, rather than learning how to use hi-tech devices.

The OECD also found that children who spent too much time on computers could experience negative consequences, such as information overload, an inability to concentrate, and exposure to online bullying.

The reality is that to help young minds develop, students must be taught to memorise spelling, their times tables, poems, and a host of other information that is needed for automatic recall and to expand their abilities. Relying on computers and calculators too early interferes with this basic skills learning, making it difficult for students to move onto more complex tasks.

As the OECD’s director for Education and Skills, Andreas Schleicher said: “Technology can amplify great teaching but great technology cannot replace poor teaching.”

Education is a lifelong process. While the government’s focus in this review is on the future direction of tertiary education, it is important that contributing factors – such as a student’s ability to move into higher education and training – are also factored into the Productivity Commission’s inquiry. If on-going concerns continue to be raised about the veracity of the NCEA, as the gateway to tertiary studies, then perhaps it is time it was replaced – or maybe that’s the subject for another inquiry!

The Commission’s final report on New Models for Tertiary Education is not due until February 2017. They are very keen to hear from anyone who has suggestions on how to improve the operation of the tertiary education sector – submissions are open until the 4th of May and full details can be found HERE.


Would you like to see the money earmarked by National for tax cuts, used for tax cuts or to fund free tertiary education?   

Vote x 120

*Poll comments are posted below.


*All NZCPR poll results can be seen in the Archive.

Click to view x 120


I consider that our current student numbers are too high for a small country and the quality of a large number degrees and courses are not good and in many cases are abysmal as they are not being taken in practical subjects which the individual could gain practical help. Paying for students for a number of years attendance at a learning or Uni center is not the way to go. We have only to look at the number of people with degrees etc from NZ who now live overseas to the benefit of other countries. The current student unpaid loan debt is outrageous this would only go higher. The taxpayer would be the looser. I know – I have a B Comm degree & 3 of our 4 sons have degrees & only 1 lives in NZ. Brian
Only if entry standards to tertiary institutions are appropriate. The entry standards have dropped because the Govt funds the institution based on student enrollment numbers. Huria
Because those nasty communists like Uncle Helen and Aunty Andrew need to get out of our lives. We neither need nor desire your Global Marxist State…so GFY and good riddance. Mark
Tax cuts for middle & lower classes well over due. Free tertiary education leads to entitlement for everything else. Race-based courses need to cease as well. Monica
Just another bribe by labour to buy votes. Don’t they ever learn one mans subsidy is another mans tax. Take education back to the old days of reading writing and arithmetic and a bit of good old discipline might help. Get rid of the ppta first as its not about the kids its all about the teachers. Morrie
Education is the first step to the future for all New Zealanders. Laurel
Or neither – maybe it would be better spent on health. Hilary
Socialists just love the current education system that encourages indoctrination, rather than factual education, just look at the Treaty grievances & global warming scams as examples. So many courses available now, that have no merit whatsoever when it comes to improving the future of NZ. Those who want to succeed will succeed. Those who expect life to be a free ride, will continue to vote Lefty.. A.G.R.
Cut taxes and make Government smaller, not bigger. Funding degrees which will not help the national economy, or worse, harm it is a total waste of resources. Peter
Must first raise standards. Raising the number “educated” will not be good for the country or the individual if the standard of learning is not improved. Ken
Scotland had compulsory and free education 200 years before any other country and led the Industrial Revolution and surgery. Education all through to university level is still free there. Education is the backbone of any nation, of course students should be supported by the Government but university placings need to be controlled in order students find employment in their chosen profession. Merit, not race. should come first with all subjected to rigorous entrance and qualifying exams in order to EARN taxpayer subsidy. George
Teach the student dicipline first. They do spend to much money and time partying. Throw away all those soft degrees like hairdressing etc. Real degrees like engineering have value. any student who does not measure up the end of the first year is out and joins army bootcamp. Johan
Student debt is a blight on our future.  Many students will never be debt free.Tougher qualification for university entrants and make its free. Pete
Free tertiary education is a nonsense but I would give up some tax cuts to provide better standards of teaching. Jim
Take laptops away at all primary schools and get back to the basics of becoming fluent in Reading Writing and Maths which will benefit in becoming more Employable. Ken
I suspect Free tertiary education would be open to use and abuse. Likely to be wasted by a few who would not appreciate it’s worth. Don J
Taxing of income earned in NZ by Overseas owners of NZ operations is pathetic.. It should take the form of a tax on turnover. Brian
Free tertiary education is nothing but a vote catcher. Tom
Maybe money should be spent on making sure education is increased at under college level. JC
Students need to own their education to make it relevant. Willy
Having had some exposure to working at a university I would suggest cutting their budgets by about 30% as they just waste so much money. I think their service and quality could still be improved even with these cuts. Much the money saved should then be spent on educating young kids to ensure they have the skills necessary for tertiary education BEFORE they start it. In this day and age there is no justifiable reason for so many kids to fail at basic numeracy and literacy. The teaching unions always moan about any initiative to try to raise standards whilst always pointing the finger of blame at someone else and never making any useful suggestions themselves. Gary
“Free tertiary education” is a bit like “interest free loans for students” and is sending the completely wrong message to young people. “Everything in life will be interest free or free if we play our cards right.” Students are not stupid and like most people will take anything free without thought as to where the money is coming from. Let students work to earn money to pay for their own education or get an interest bearing loan. Just another Labour bribe. Well, beware the influence of the aging population!!!! Neil
The more money Govt gets, tyhe more money govt spends, so lets give us a tax cut. Sam
Neither I would like to see any surplus used to pay off debt. Debt is good until it isn’t and then it is too late….. and I have to use one of the answers…. Jim
Tax cuts for lower incomes and increases for those on higher incomes. Plus a clamp down on those peoples and “charities ” that pay no taxes. Graeme
We need more university graduates in non-productive areas like we need a hole in the head. We do need skilled people in productive areas and continue to rely on imported know-how in a number of those areas. The alignment between educational output and the needs of the economy is not satisfactory. As for the IT con, a fool and his money are easily parted, as the old saying goes. But not my tax money, please! Barend
Actually I would rather see the Government pay off some of the country’s huge monetary debt. Forget about free tertiary education because we already have to many disruptive losers there now. Mike
Yet more vote bribes from Labour. Lee
Taxes need to be increased, not cut. David
Neither. Use it to pay off the huge deibt the country has. Carroll
“Free” things are not valued by most people. Dianne
Freebies do not encourage results and excellence. Elizabeth
Incentive. Edward
Does anyone ever talk about less government? 5000 years of written history show that governments ALWAYS end up over taxing and over spending to their own demise. Larry
If anything it needs to be spent on better basic education, setting necessary levels in Maths and English rather than those achievable by anyone. Robbie
As much I don’t like saying this – NO! Because so much of our education is not general beneficial education but driven by personal, political and racial agendas. As one commentator said “many students are ‘educated’ to be useless!” Stuart
My pension is not worth as much today as it was when I was first receiving it. Tax cuts could go some way to address the balance. When I went to university I worked all holidays to pay my way through. I didn’t rely on my parents or the government and in doing so I learnt life skills along the way. I can’t see any reason for things to change. Dennis
It is senseless giving students a tertiary education unless they have basic reading and numeracy skills.They should have to pass examination to prove they have been taught theses skills.Future employers need to be confident that the qualifications the people they are looking to employ actually have the education and not just a worthless set of credentials.Why is it that we now have an education system that says everyone must not fail where is the insentive to study hard so you can get good results, when those that just have a good time can still get qualifications. Bryan
Anything that’s “free” will just get abused in the end. Andrew
I favour tax cuts of the 2 choices simply because funding of tertiary education is so wasteful, with such a large proportion spent on meaningless non employment related qualifications. If there had been a third choice I would have favoured health funding over either of them. Bruce
The other option is not money well spent. Too many will abuse the opportunity and besides a productive economy does not need all so-called qualified people. It must have practicable members not necessarily with a useless University degree. Albie
Tertiary education shouldn’t be so easily accessible – more bursaries for poorer families with bright children. Chris
Enough money at education, just needs to be directed to better resources, stop throwing money at it. Graeme
Education comes before everything else. Ian
Education for everyone, not just the rich. Ned
We need more trade skills. Joan
Learn more to earn more. Ray
Neither, really. How about using it to repay some of our horrendous national debt that all politicians pretend doesn’t exist? NZ is rapidly becoming another ‘Greece’. I wonder who really owns us? Mitch
President Kennedy said that if you want to increase the total tax income you lower the rate of tax. This may seem a contradiction but when it becomes more profitable to work or take time off and play golf or go fishing people will respond accordingly. Colin
People need more money in their pockets simply to survive. It also creates more revenue for struggling business and the economy as a whole. Robert
We need to encourage productivity and investment, tax cuts do help in this area while increased spending on tertiary education tends to go into buildings technology and administration with little improvement in skill development of students. John
Should those without children fund education for other peoples’ offspring? I think not! Bryan
I could conclude that something achieved for free has no value. More important to make sure that any qualification is going to be some benefit to the poor old taxpayer who is funding this extravagance. Could I suggest helping employers take on more workplace trainees. Tim
Excellent and irrefutable points raised in that article. Lesley
Don’t mind paying tax providing the money is used the way it ought to be. Andy
Tax cuts are a better option than educating people for non existent jobs. Peter
I was one of those people fortunate to be paid during my teacher training time in the 70’s supplementing the amount with a part-time job waitressing. Our children have paid off their loans, with parental assistance so they can undertake their adult life debt free. Perhaps parameters as to free tertiary education subjects – those in high demand? Christine
That which is free is rarely valued. It is high time to reward those who are contributing to society by paying taxes rather than make it easier for those who do not contribute to continue to not contribute and to obtain, sometimes totally irrelevant ‘qualifications’. Alan
I wouldn’t want that money going towards free education if that education is not of a high standard and is not contributing to NZ’s economy in a positive way. Fiona
People work hard in this country to make a dollar. So we should have a tax cut. As we do pay a lot of Tax’s in this country; Road tax, gst, income tax, tax through petrol to fix our roads. Yes a cut will be nice. Robert
Tax cuts would be good. No good throwing money at education if the student hasn’t fully understood the basics. Kerin
This question is really too complex for a simple answer. However, tertiary education should never be free, for several reasons: firstly, those undertaking it are less likely to value it and, therefore, put their whole effort into it; secondly, it will only encourage low-wattage students into courses that they’re not really smart enough to meaningfully complete; thirdly, it fails to distinguish between trendy, low-value courses (Maori studies, drama, media studies, for example) and those with large potential payoff for society (engineering, mathematics, electronics, and so on); fourthly, it serves only to consolidate the sense of entitlement that pervades our society today, to our general detriment. This having been said, we certainly do need more highly qualified graduates from universities and trade institutions (forget the wananga – that’s just a great big rort). So it’s not just a question of pouring more money into the tertiary sector, or making it easier to get into: standards have to be toughened, even if that upsets some people who haven’t the ability to make it. We must also be more selective in not only the institutions that are funded, but also the individual courses within those institutions. And lastly – unless these students are properly proficient in the ‘three r’s’ we can usefully forget all the rest. Sadly, I can’t think of any of our populist politicians – and that means those from all of our parties in parliament – who might have the courage to put any of this into practice: short-term expediency always trumps foresight, especially in our MMP environment. Graham
Investing in education is a no brainer as long as the bar is set fairly high for admission. Chris
Too many kids go to university by default and end up with useless degrees or degrees they don’t actually use. There should be no “free” anything. ‘Free” actually means “stolen”. I.e Tax payer funded. Geoff
What a misnomer! There is no free education; it is paid for by taxes levied on almost everyone. In my view, it is wrong to allow young adults to commence tertiary education with the misguided thinking that their education will be “free”. I further think that this “free” attitude will likely permeate their thinking in other areas to this country’s detriment. No great countries have been built on socialism, but many have been compromised by it. Young people’s development, and the country’s too, might be better served by concentrating what they can do for themselves rather than looking for creative ways on how they can capitalise on other’s efforts, (read taxation). Peter
I would like to see some for tax cuts and some to free tertiary education to reduce the horrendous costs to students. Rog
There was never such a thing as “free” tertiary education – we all worked either full-time or several part-time jobs!! Young people these days want everything delivered on a plate, free, and at the taxpayer expense. Personal responsibility does not appear to come into the equation. Andrew
Labour has a fine tradition of spending like there’s no tomorrow. Indeed, no government creates money, they simply spend the income of those who create it. Stealing less from the productive is always preferable to over taxation and the vacuous claim that the government knows better than the income earner how best to spend her or his money. Basic skills need to be instilled and if subsidized,only the most educated permitted to study in fields that are likely to enrich the country as a whole. A PhD in hairdressing is not particularly useful, nor is a interior designer qualification of value stacking shelves in a supermarket. This touchy touchy feel good socialism is what has reduced New Zealand to third world status and continues to ensure we remain as such. Education needs to be targeted very specifically and if state funded, a realistic and measurable result should be seen. This requires soul-searching scrutiny of the system presently in place. Fat chance of that happening and even less if the clueless prats representing the labour party ever gain the treasury benches. Charles
Free tertiary distorts the supply of education more than the partial subsidy and cheap student loans do already. We risk falling closer to the situation the USA has. Worth less paper degrees that put you further up the line to get a job at a hamburger joint. Tim
Middle NZ is being Goudged by tax. Middle Kiwis are one of the highest taxed nations in western world.  Especially by indirect taxes like tax on rates, Fuel tax, ACC, Carbon tax. It is disgusting, the bludgers on our society pay no tax just consume tax, big business pay no tax, Maori busiess pay less tax than any other race in NZ. Big Aussie Banks pay little tax. Shonkey has sold us out. Greg
With some restrictions. No point in all students go on to tertiary study to fail. Apprenticeships are far better for some. I don’t see the point in having lots more students with a Ba for the sake of it and then work in a retail store. Study was free in Ireland did that work out?? Dianne
We have too many Universities with too many mediocre students and sub-standard teaching. I am an engineer and studied extra-murally for 7 years to succeed. [self funded] We need to train more scientists, engineers and technical specialists. Why are so many students studying political science and other soft subjects not required! My son left school at 17, got a cadetship at British Aerospace, completed a BSC and a Masters part time and now has a top job with global travel. We don’t need any more under-achievers like Phil Goff, who has never had a real job. David
Tax cuts, tax cuts, tax cuts! New Zealanders are grossly overtaxed – it’s about time they were reduced. Murray
Free tertiary education is a bad idea. Tax cuts are an excellent idea! Wendy
Lower taxes would help the country far more than free tertiary studies. John
National promised tax cuts years ago – it’s about time they delivered. Graham
Labour is just trying to buy votes with free tertiary education. The problem is that the country will not be able to afford it. Their estimate of $1.2 billion a year will turn out to be a gross under-estimate. Neville