2. Hon BILL ENGLISH (National—Clutha-Southland) Link to this
to the Minister for Tertiary Education
What advice has he received on the Ministry of Education’s expectation that it will need to assist as many as 15 financially troubled institutions in the coming financial year and to introduce formal interventions at up to five?
Hon Dr MICHAEL CULLEN (Minister for Tertiary Education) Link to this
The advice I have received is that the figures referred to are a statement of capability to be maintained, and do not reflect the situation pertaining to any specific institution.
Why would the Government be willing to fund the Ministry of Education to maintain the ability to help 15 troubled polytechs if the ministry believes that nothing like that number is going to get in trouble, and, if the fund is more than is required, why does the ministry not give the money back?
Hon Dr MICHAEL CULLEN Link to this
For many years the ministry has maintained a capability in excess of likely demand, in the same way that the United States maintains what it calls a one-and-a-half-wars capacity, not expecting to fight one and a half wars at any particular time.
Dr Ashraf Choudhary Link to this
Has the Minister seen any previous similar capability statements relating to the monitoring of tertiary institutions?
Hon Dr MICHAEL CULLEN Link to this
Yes. These kinds of statements have been within reports for a long time. For example, in 1996 a departmental forecast report referred to avoiding the possibility of the financial failure of institutions, and estimated that 40 institutions were going to be monitored. I assume the Associate Minister of Education at the time, Mr English, did not expect as many as 40 institutions would actually fail in that year.
Hon Brian Donnelly Link to this
Could the Minister tell us whether any tertiary institutions had to be financially bailed out in the years 1995-99, what were those institutions, and what level of financial bail-out was required?
Hon Dr MICHAEL CULLEN Link to this
I am aware that three institutions were in significant financial difficulty during that period. Subsequently, the current Government had to act to rescue them all. For example, in 2002 Wanganui Polytechnic, Wairarapa Polytechnic, and, of course, the Central Institute of Technology were in very serious trouble indeed.
Can the Minister explain to the House why, in the example he gave of the Universal College of Learning in Palmerston North taking over the Wanganui and Wairarapa campuses, the Government injected $32 million into the Universal College of Learning to fund the write-off of Crown debts on Wanganui Polytechnic and consolidate the campus on one site, but 4 years later the campus has not been consolidated and the $32 million has gone?
Hon Dr MICHAEL CULLEN Link to this
It is true that full consolidation has not occurred yet at this point. We anticipate it will occur at some time in the future.
Hon Dr Nick SmithHon Dr MICHAEL CULLEN Link to this
The money has gone into restoring the balance sheet and covering the costs of the merger. There are a number of institutions where such injections will be required, and I am sure that members opposite will be the first to come with a begging bowl for their local institution, should that be necessary.
Is the Minister willing to provide to the House on another day, if he can, an account of the $32 million, given that some of it was provided to write off Crown debts and the rest of it was provided to buy out leases and consolidate the campus on one site, and 4 years later that has not happened—the leases have not been bought out, the building has not gone up, and not only has the $32 million gone but he has just given the institution another $3 million on top of it?
Hon Dr MICHAEL CULLEN Link to this
I do not have the information in front of me in respect of that. I will come back to the member with further information as soon as I can—hopefully by the end of the week.
Why does the Minister continue to run a funding policy that forces polytechs to subsidise their core trades and skills courses because they make losses on them, and to fund that with high-margin, low-cost courses like computing, and is that not the central problem for smaller polytechs, which he plans to merge when they fail?
Hon Dr MICHAEL CULLEN Link to this
The member might have missed it, but the Government made key policy announcements a few short months ago, indicating that it is developing a new funding system to move away from the system inherited from the National Government—the so-called “bums on seats” policy.
Rt Hon Winston Peters Link to this
How many extensive reports or how much correspondence has the Minister got from the National Party front bench on the bail-out of the Wanganui Polytechnic to the tune of $10 million in 1998?
Hon Dr MICHAEL CULLEN Link to this
I have no correspondence in front of me on that matter, but I have no doubt that such actions took place. I also have no doubt that should any polytech in the country get into any significant difficulty, a local National Party MP, if there is one, unfortunately, will write to me seeking assistance.
Rt Hon Winston Peters Link to this
I raise a point of order, Madam Speaker. I think that answer was important, but I had a barrage of interruptions from the National back bench, so I could not hear what the Minister was saying. Frankly, I will make it a policy that if I cannot hear an answer, I will ask that the question be answered again, until we get some proper courtesy in this House where the back bench on the Opposition side of the House is concerned. We simply cannot hear.
Madam SPEAKERI ask members to be considerate of other members, and I also remind members that questions are to be heard in silence. In the last question there was, in fact, an interruption, so people are now on their last warning.
Is the Minister aware that the new funding policy he has just talked about has no certainty or rules as of now and will not come in until at least 1 January 2008, and that in the meantime most of the smaller polytechs are predicting that they will be in financial difficulty; what will he do about that between now and then?
Hon Dr MICHAEL CULLEN Link to this
Of course, there is no finality on a policy that is being developed. The difference is that we are developing such a policy. We inherited the failed “bums on seats” policy from Mr English.