Government has no role funding private capital

Posted By TEU on Jul 29, 2010 | 1 comment

Te tumu whakarae o TEU, Dr Tom Ryan, says the minister of tertiary education’s discussion about removing the differential in subsidy between private training enterprises (PTEs) and public tertiary institutions is a revival of a failed lobbying effort in the 1990s.

“Simply put it is not the government’s job to be funding capital costs and capital development from private companies,” said Dr Ryan.

PTEs were given the same subsidies as public tertiary education institutions in the late 1990s as one of the last-gasp initiatives introduced by minster at the time Max Bradford towards the end of that National-led government. AUS and ASTE attacked it vigorously at the time and for some period thereafter.

Dr Ryan says TEU’s position is really quite straightforward.

“There is a long tradition that the Crown normally does not provide capital for private businesses. And if it does then it is entitled, like any shareholder, to participate in the governance of the enterprise. The Crown’s rights to appoint council members are related to its ownership of tertiary institutions.”

If it is going to remove the funding distinction between PTEs and public tertiary institutions, by equally providing capital to both, then it is effectively subsidising businesses with low capital overheads to profit at the expense of public institutions with large community assets like libraries and facilities.

The subsequent government following Mr Bradford’s decision re-introduced a differential subsidy, explicitly acknowledging that there needs to be a capital component in public tertiary education institutions funding to recognise Crown ownership.

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