Introduction
New Zealand has experienced a global economic downturn and recession, and this has led to the loss of jobs. For New Zealand to be successful economically it must ensure that each member of its workforce produces at their maximum. This can only be done by making it easy to access further training and life-long learning that matches the economic needs and not just the desired outcomes of the education sector. The action had to be taken and in 2008 the national government responded to the crisis with the job summit. Measures to be implemented in relation to workers’ education and training were suggested. Conversely, when the 2009 budget was released a number of funding cuts and rearrangements were made in tertiary education. This caused much confusion.
The purpose of this paper is to identify core the issues in the Job Summit and the 2009 Budget. In addition, the paper shall endeavor to evaluate the reaction to tertiary education policies by such stakeholders as Business New Zealand and the New Zealand Council of Trade Union. The paper also examines the tension brought about by the contradictory measures in the 2009 Budget. The paper will be done using publications about workers’ training found on the government’s website.
Background Theoretical ideas
The human capital theory looks at the skills and levels of training present within a workforce. Human capital can be increased through training and education. The theory suggests that the cost of education and training is costly, but it should be considered an investment. This is because it increases personal income. The theory explains the differences in occupational wages.
Social capital /democracy theory explains the connections that exist among individuals, norms, and social networks of reciprocity and trustworthiness that arise (Putman, 2000, p.19). This theory was developed by socialists who believed that the working class deserved to be treated right. Social democracy aims to defend individual rights. They argue that the political democracy should expand to include economic and social democracy for example an equal right to medical care, employment and conducive working conditions, education, and so on (Social Democracy, 2009, para. 1,2 ).
Neo-liberal refers to making trade free by removing barriers such as tariffs, regulations, restrictions in investments and capital flows, and so on. The aim of neo-liberalism is to make maximize profits by finding cheaper resources. The theory proposes that the market should be self-regulatory. It advocates for the government’s reduction in social expenditure in services like education, health (Shah, 2009, neoliberalism, para.1).
Context of New Zealand
New Zealand has been hit by the global downturn and the business community has grown pessimistic. Its economy slumped into its worst recession in ten years. This led to a reduction in exports. New Zealand depends on other countries to buy its horticultural products and because the other countries are also reeling under the effects of the economic crisis they are buying less. This has led consumers in New Zealand to curb their spending. While preparing its 2009/2010 financial budget, the government was forced to cut its expenditure on social services such as the funding of tertiary education and the roads sector.
According to the Telegraph, New Zealand’s economy has grown in the last eighteen months. Thanks to a slight growth witnessed at the end of June 2009, New Zealanders are showing optimism towards the economy. This also prompted Bill English, New Zealand’s finance minister, to assert that there was a sign of good tidings ahead and that the economy was going to stabilize albeit unemployment would keep on rising for some time.
Labour Government Policies
The policy on workers’ education and training were to ensure that every potential employee has skills that the employers want. The government had increased participation in training to about a hundred and ninety thousand in the year 2008. It also developed Modern Apprenticeship Scheme. The scheme served many students under the funding of the government (Labour Tertiary Policy, 2008, para. 6).
The labor party policy on tertiary education was to provide quality education to all students regardless of their financial background. They acknowledged the importance of tertiary education as well as training systems to promote the country’s social and economic development. The Labour government had hoped to avail more funds to improve the quality of tertiary education and cut down on the interest rates charged on students’ loans (Labour Tertiary Policy, 2008, para. 9).
The tertiary education in New Zealand will change through the School Plus policy that aims to keep students in school until they reach the age of eighteen. This will make it easier for the youngsters to acquire skills thus raise their standards of living. They will be able to have some qualifications that will make it easier for them to join apprenticeship programs. This will give them a base for lifelong learning (Labour Tertiary Policy, 2008, para. 12).
National Government Policies
The National Government Policy on tertiary education is to improve the quality of education. The ideology of the National Party is neo-liberalism and they aim to reduce central planning. This means that tertiary education should be driven by the needs of the economy as well as the students’ needs. Tertiary education should yield maximum profit for every dollar that is spent in its provision. The government aims to provide incentives just like in a free market to stimulate a high performance of the tertiary sector. This will be done by making information available to students so that they can make wise choices (Tolley, 2009, para, 12).
The institutes of technology and the polytechnics will be used to provide low-cost or free training to the people who will opt for the government’s program which will be given on a nine–day fortnight. This will give workers time to train when they are off duty. This is aimed to improve their language, literacy, and numeracy, upskilling skills, or their computer skills. However, this policy is contradicted by the budget, which cut funds to this vital sector. Thus, this policy is only on paper (Tolley, 2009, para.16).
Funding to the tertiary sector will be reduced. This is due to the economic crisis which will force the government to constrain its spending. The government will prioritise its efforts in putting its finances in order before it can spend more on the tertiary education. Some of the undertakings the government plans to take will influence the tertiary education for example the trade academies will prompt many young people to go to into vocational pathways (Tolley, 2009, para. 13).
They also aim to link all education providers such as the secondary schools, tertiary institutions and the workplace. This will be done to ensure that the kind of education offered is relevant to the job market. This will improve employability and the new Zealanders can be employed and paid higher wages and pay. The Youth Guarantee will provide an alternative pathway for students aged between sixteen and seventeen years in the tertiary education. The Youth Guarantee will be expected to cover a large geographical area. The community will also be expected to support the initiative. The teachers in the institutions will be chosen from high performers to give the students the best training (Tolley, 2009, para. 16).
These vocational institutions are aimed at reducing economic burden on the young learners. The burden is high for learners who go to tertiary institutions. Therefore, the government has introduced a 10% voluntary repayment on the loans given to students. Shorter repayment durations will be introduced. This will enable students to repay their students loans faster. Thus, they will be debt free within a short time. This will give them more time to invest their money and even start families or buy property (Tolley, 2009, para. 17).
Comparison of Labour and National Parties Policies
The national party and labour party policies on tertiary education and workers training and education are similar in many ways. Both recognize the importance of tertiary education and aim to improve its quality and make it relevant. They have shown a commitment in ensuring that the young New Zealanders stay in school and acquire skills regardless of their economic background. The labour party has the School Plus policy and National Party has the Youth Guarantee policy.
The difference comes in the allocation of funds. The National Party reduced the funding to this sector and the Labour Party increased funding when it was in power. The ideology of Labour Party is social democracy therefore they aim to ensure that there is equality in the education sector. On the other hand, the National Party wants to leave the sector to its own regulation. This might lock out some needy students when the cost of education goes high.
Job Summit
In the year 2008 a job summit was held. Some of the core issues at the summit were the need to develop skills at all levels. This includes the literacy, language and numeracy, technical skills, degree level qualifications, trade skills, and leadership and management skills. Skills acquired at work informally through experience and learning from fellow workers are also very important. The skills that are acquired either formally or informally should be utilised well in workplaces to ensure maximum productivity. In addition, a system that supports the harmonization of skills that workers have and skills needed in the workplace should be developed (New Zealand Skills, 2008, p. 6).
The strategy aims at improving the situation by ensuring that the industrial needs are taken into consideration, when developing new courses that are offered at the tertiary education level.
Budget 2009
Funding to the tertiary education was cut. Yet, the tertiary education system is a key player in building skills for New Zealanders so that they can meet the modern day challenges. It is estimated that about 80% of the present workforce will be active in the year 2020. This workforce needs to be equipped with new knowledge because skills keep on changing as technology improves. The skills they have today might not be relevant in the year 2020 and they must be given new skills (Budget, 2009, para. 5). On the contrary, the National government simplified the funding to this vital sector by lowering compliance costs as well as reducing the central planning (Budget, 2009, para. 6). In the budget the government reduces funds to the tertiary sector while maintaining the same number of students as stipulated in the investment plans.
Teachers’ salaries were not reviewed. This could cause a shortage because many might opt to go to other countries that remunerate better.
The decision that had been made about giving funds to CPI has been removed from the year 2010. The Industrial Training Organisation (ITO) has the role of ensuring that national qualifications standards are maintained. The government needs to fund it so that it can do its role effectively. However, due to the current economic crisis the government’s intention to move the soft ‘capability funding’ in all the tertiary sector and the funding for the ITO component for strategic leadership component will be sliced by half from the year 2011 (Budget, 2009, para.7).
Literacy, numeracy and language skills are very important for the workforce. Unfortunately, this sector has not been spared and the government plans to remove some of the planned fund for literacy growth in the industry training and decrease funding for the existing baseline (Education savings, 2009, para. 8).
Reaction to the different policies by stakeholders
New Zealand Council of Trade Unions (NZCTU) responded to the National government policies of funding of tertiary education. They felt that the government had not done enough to invest in the sector to for skills. They faulted the government for cutting funding for workers training. Their response was that a rapidly world needs highly skilled workers. The future will depend on giving people the opportunity to develop and improve their skills as well as abilities. This should not be done as a strategy for competing on a global level. It should be done as a way to tackle poverty in the family. This will lift up the quality of work as well as security and enhance social mobility (New Zealand Skills, 2008, p. 5). Poverty will not be tackled because the government did not address the issue of unemployment. NZCTU favours Labour government’s policies.
Business New Zealand (BNZ) was fine with the National government’s policies. The body said that the policies were realistic. They prefer National’s policies. This seems to contradict their stand on the economy which states that, the economic development will depend on sufficient skills within the workforce. This will lead to innovation, productivity and economic growth. The organisation believes that the skills strategy can be achieved by cooperation of individuals and the various organisations in New Zealand (New Zealand Skills, 2008, p. 5).
Conclusion
The 2009 Budget contradicted most of the measures suggested in the 2008 Job Summit. The summit suggested that the literacy, language and numeracy strategy be implemented to equip the people in the workforce with the necessary skills. Some of the skills are very important in increasing the productivity of the workers. For instance, teamwork skills would enable the workers to work together for the common goal instead of competing against one another and this is both beneficial to the organisation as it gets more output and to the worker because they work in an environment that is harmonious. Unfortunately funding has been cut and decreased in some areas.
The government should increase funding to the tertiary education sector. This will ensure that students acquire skills that are relevant employers. This is very important especially now that the country is coming out of recession. It cannot afford to have skill shortage at this critical time. Every effort must be made to ensure that new Zealanders do not migrate to other countries as this will result in brain drain for the much needed skills. The workers’ policy on training and education needs to be given more attention and treated with the seriousness it deserves. It is the lifeline of the country’s economic prosperity.
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