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National says the Government's plans to reform polytechnics and institutes of technology will lead to 1000 job losses, a radical centralised model, and the closure of polytechs in the regions.

Prime Minister Jacinda Ardern rubbished those claims today, adding that the Government needs to intervene in order to save polytechnics in the regions and stop job losses.

Education Minister Chris Hipkins, however, conceded that the proposals had "implications" for people's jobs, but it was irresponsible to speculate about job losses.

In her State of the Nation speech to a business audience in Auckland this morning, Ardern said the vocational education sector needed urgent restructuring, and that Hipkins would release a consultation document next week.

"They are far reaching. But we firmly believe they must be," she told the audience, which was hosted by Business NZ.

The tertiary institutions have cost the Government $100 million in recent bailouts.

The restructure was expected to recommend turning the vocational education sector into a flexible network that focuses on greater co-operation between institutions to meet the needs of business.

National leader Simon Bridges said this morning his party had been leaked details of the document, and it recommended abolishing regional polytechnics and centralising a number of functions into four regional hubs.

He said it would also lead to 1000 fewer jobs and a "very radical, nationalised" model more typical of Venezuela, which would take control away from communities.

National's tertiary education spokesman Shane Reti said the job losses would hit lecturers in regional polytechnics as well as administrative jobs.

He conceded the sector needed change and National may have centralised some functions, "but we would not have consolidated regional polytechnics into hubs and mass-moved" administrative functions to a centralised model.

Bridges said the Government's plan was similar to proposals to overhaul the school system by moving some of the school boards' responsibilities to regional hubs. The Government is currently considering these proposals.

However, the Prime Minister said it was "speculative" to say there would be regional hubs for polytechnics, but "absolutely" refuted that there would be 1000 job losses.

She said the vocational education sector was dysfunctional and losing jobs at the moment, and that would continue if the Government did not reform the sector.

"This is about saving jobs. And it's about high quality courses, and keeping these training providers in the regions," Ardern said.

"It requires intervention. What we run the risk of, if we do nothing, is that we will lose them [regional polytechnics] because we have had to put money into providers thus far who have been failing.

"I want to ensure they continue to have a place in regional New Zealand. We need to have training facilities across the country. But if we don't do something differently, we risk losing them altogether."

Hipkins said that next week's announcement would have "implications" for people's jobs, but it was irresponsible to speculate about how many job losses there might be.

"To be clear, if we don't do something, the regions are going to lose their polytechnics. We must do something about this. The polytechnics have been haemorrhaging students , haemorrhaging money, and it's simply unsustainable."

Tertiary system struggling: PM

The Prime Minister, who was accompanied by several ministers including Hipkins, Finance Minister Grant Robertson, Trade and Economic Development Minister David Parker, and Small Business Minister Stuart Nash, told business leaders the tertiary system was struggling and had been "left to drift, to muddle through".

"How is it, for example, that at a time when we're facing critical skill shortages, our polytechnics and institutes of technology are in many cases going broke?

"Over the last two years this Government has been forced to spend $100 million to bail out four polytechnics, and that is a pattern that started before we took office ... That is not the sign of a healthy and sustainable sector."

The main issues, Ardern said, were a lack of integration, difficulties in engaging with business, and inconsistent results across the country, including the duplication of courses.

"We need a model where businesses, iwi and local government in every region play an active role in driving skills development.

"We need a system of training and skills development that is more flexible and more nimble so we can get people with the rights skills into the right jobs much faster."

This would become increasingly important as jobs become increasingly automated, which Ardern said is estimated to see the loss of up to a million New Zealand jobs.

Ardern opened her speech by repeating her wish to have the unemployment rate below 4% by the end of the parliamentary term; the latest figures, released yesterday, saw the rate rise from 3.9% to 4.3%.

She said the global economy was already beginning to slow down, with the International Monetary Fund projecting worldwide growth to ease from 3.7% in 2018 to 3.5% in 2019.