The Government is signalling a shake up of the tertiary education sector with Prime Minister John Key today highlighting it as an area to be targeted this year.
Mr Key, during his statement to Parliament, said there were "increasingly urgent" problems in tertiary education.
He highlighted courses with high drop out rates and students who took financial support but did not try or were studying for personal satisfaction rather than in order to get a job.
"We are concerned that as a consequence of previous ad-hoc policy changes, there are a large number of tertiary programmes, particularly below degree level, that have drop-put rates as high as 50 percent, and that some of these programmes fail to properly equip students for the jobs they seek."
The Government would make policy changes to ensure providers offered courses that were relevant to job opportunities and that courses were high quality, he said.
The Government would look at policy settings around student support to ensure "taxpayers' generosity is not being exploited by those who refuse to take their tertiary studies seriously, or who show little inclination to transition from tertiary training into work."
Mr Key said universities suffered under an inflexible and bureaucratic funding and policy framework.
Last month Mr Key separated off tertiary education from Education Minister Anne Tolley's responsibilities and gave it to high-flyer first term MP Steven Joyce.
In an interview about that appointment Mr Key said the sector faced challenges that were "quite economic in nature".
He said some polytechnics were struggling financially and highlighted issues around how the student loan policy works. Mr Key later clarified that the interest free loan scheme would be retained.
"At the margins, at the boundaries, there are specific issues where, as I understand it, the universities and the student associations have been having some discussions. But zero percent loans remain."
Industry Training Federation executive director Jeremy Baker agreed the country needed to improve the value it got from tertiary education spending, and said ITOs could help.
“It is our long held belief that much can be done to better match what is funded in tertiary education with the skills that are needed by industry,” Mr Baker said.
“Under the current system there is no process to ensure that funding committed to tertiary education is targeted to the areas where there is a clear skill demand. ITOs have developed approaches that would ensure that money invested in tertiary education was towards courses and qualifications our workforce needed.
“ITOs are also keen to work with government to provide better connections between schools, tertiary education and the workplace. We can provide clear vocational education and training pathways linked to qualifications that have real value
More than 35,000 businesses and more than 180,000 apprentices and trainees are involved in industry training every year.
