International Education Conference

E ngā mana, e ngā reo, e ngā hau e whā.

Tēnā koutou, tēnā koutou, tēnā koutou katoa.

Thank you Robert [Robert Stevens, Chief Executive, Education New Zealand] for inviting me to be here. I am delighted to have the opportunity to address this eighteenth annual New Zealand International Education Conference.

International education is one of New Zealand’s leading export industries. We would not be where we are today without the hard work of many of the people here today and I want to acknowledge your contribution.

Export education plays a critical role in our economy.

It contributes $2.1 billion in foreign exchange to our economy.

It supports about 32,000 jobs.

Providers received nearly $600 million in fees last year.

And the sale of our education expertise overseas was estimated in 2007/08 to be worth at least $70 million.

So it’s not surprising that export education has become one of New Zealand’s top three services exports.

Comparisons between this year and last year’s figures show it can be more significant still:

• International student enrolments for the first four months of 2009 increased by 7% compared to the same period for 2008 - nearly 51,000 students were enrolled here from January to April 2009.


• private training establishments reported an 18% increase in their enrolments, compared to 2008 – that’s a real stand-out performance.


• Tertiary education institutions reported an overall 3% increase in the first four months of 2009 – this reverses years of decline.

It’s clear the industry has come a long way since the boom and bust period from 1998 to 2005. Student numbers have stabilised and we have raised the quality of our education and student support. This has been the result of concerted effort by the sector working in partnership with government agencies.

We want this cooperation to continue, and we want to improve on it. We also need to maintain a balance  between the rate of growth and mix of students we attract from overseas, and the priorities we have for our domestic system.

New Zealand has a competitive position in the international demand for education, based on quality, safety, and reasonable cost. It is up to us all to help build on this positive reputation to sustain the sector into the future.

Objectives for growth

The Government is keen to work with the sector to help grow international education.

The global recession has actually tended to increase underlying demand for New Zealand education, especially for providers that are able to offer better value for money than their competitors.

One of our key advantages over newer players in the export education market such as Japan, Malaysia and European nations is that we are a predominantly English-speaking country.

We need to ensure that students gain top quality English language skills and have the opportunity and the encouragement to integrate into our communities.
To learn a language is to begin to understand a culture. It is an invitation to enjoy being part of the diverse global community. All of us are enriched by having international students learning in our country.
There are the wider benefits of building connections with domestic students and homestay families, as well as encouraging providers to broaden their activities.
The presence of overseas students provides greater and valuable exposure by young New Zealanders to foreign citizens, their languages and cultures.

Government working with the sector

The government is interested in learning from the views of providers on how best to grow international education. 

In April and July this year two top-level Roundtables were held on Export Education with a wide group of invited sector representatives. I took part in those Roundtables, along with the Ministers of Trade and Immigration.

The meetings were informative and productive because of the direct and honest feedback we received on the issues the sector faces.

Some of the key discussion points of the first Roundtable included:

• growing the value of international education to the New Zealand economy


• a recommendation for smarter marketing of international education, by leveraging off larger-scale investments in tourism promotions


• recognition that international education is a very diversified sector, with widely varying capabilities amongst providers


• recognition that export education is largely viewed as a funding side-line by many tertiary institutions and schools


• the relatively low level of understanding around outward investment by our education providers in offshore markets, and


• barriers affecting export education that need to be addressed, including the rate of the International Student Levy.

The second Roundtable held at the end of July focused on ideas to grow the contribution of export education, given the world recession and strong competition from other countries.

This discussion covered:

• the need to have a stronger trade and business focus


• the scale and nature of the investment in generic marketing


• the organisation of offshore outreach by government and the sector


• the balance between incentives and regulation


• understanding how the industry fits within a broader ‘NZ Inc’ approach to economic development, and


• the need for industry to explore development of new products and more sophisticated business models.

So we have covered a lot of ground and mapped out some of the territory for further action. We want to continue to work with the sector - your input is valuable.
Promoting international education

Budget 2009 demonstrated the Government’s commitment to grow and strengthen the international education industry.

We budgeted an extra two million dollars towards marketing New Zealand as an international study destination. This is additional to the $1.45 million baseline contribution provided for promotions.

I am looking at the way this funding is delivered. Developing a strong national brand and promotions campaign requires a good level of support within the industry.

We are also more than halving the International Student Levy to state schools, and maintaining the successful policy of extending domestic fees status to international PhD students.
 
Given the budget limits, we still need to ensure that we gain the maximum benefit from investment in New Zealand’s international promotions.

We want to improve links between education and tourism promotions and the potential for each to benefit the other. Rob Fyfe of Air New Zealand spoke on this potential this morning, and along with the Minister of Tourism, who happens to also be the Prime Minister, I look forward to further progress in this area.

Marketing investments are a particular issue for the universities, which enrol around 19,000 international students each year. I understand that New Zealand universities re-invest a much lower proportion of their international revenues into marketing than Australian universities do.

While this may reflect the internal budget priorities of universities, I am concerned at the effect this must have on the level of overseas marketing compared to our closest competitors.

Similarly, following the reduction in the International Student Levy, schools will retain an additional $3.6 million in revenues. I expect schools to use some of these funds to invest more in marketing and  in pastoral care for their students.

The government and the sector have recognised for some time the potential benefits of international education for work force development, research capability and knowledge exchange and international links with New Zealand’s economy. There have been some moves to develop these areas.

As I mentioned earlier, the domestic fees policy for international PhD students has trebled the number of those students studying here. That is a huge boost to our research capability, reputation and connectedness to international academic trends and thinking.

Immigrants who have studied here are much more likely to settle successfully here than other migrant groups. We are going to be critically dependent on successful inward migration in the years to come and this is where international students present a huge opportunity.

Tertiary providers could usefully increase work experience opportunities for their students as part of final-year studies. While their ability to do this may be limited by the small size of many New Zealand businesses and the current economic situation, it could help students get into employment.

The education service industry

International Education is not only about attracting excellent students, teachers and researchers to New Zealand. It is also about tapping into the opportunities to sell New Zealand’s innovative and high-quality educational products and services overseas.

As you know, New Zealand education providers and companies are already doing this successfully.

For example, Cognition’s role in the Arab States of the Gulf has significantly increased over the last five years. It is now estimated that their annual revenue from this region exceeds NZ$50 million per year.

Since 2004, Cognition has further improved the State of Qatar’s education system and helped implement a first-ever policy to improve teacher and school leader quality. And their Abu Dhabi Project currently involves three school community locations with a total of 16 schools across two projects.

Polytechnics International New Zealand was awarded a multi-million dollar contract in 2006 to establish the Bahrain Polytechnic, which initially was staffed by New Zealanders and Bahrainis.

An agriculture training mission to Chile in November last year showcased New Zealand’s agriculture training capability to the Chilean Government and Agriculture tertiary institutions. The mission resulted in the purchase of consultancy services and training.

A company that specialises in virtual field trips, Heurisko, is working with 10 schools in Thailand this year and expects this to rise to 100 in 2010. They are now close to signing a contract to run Virtual Field Trips as part of a capacity building project for the Thai Government.

There is much going on, but there is also untapped potential in this area to bring wider economic and social benefits to New Zealand and help transform the New Zealand economy.

I am keen for the Government to be involved with the sector to identify where the greatest opportunities might lie and plan some actions that might make the most of this potential.

Working collaboratively between sectors, government and industry is the only way we will be able to compete to reach the larger-scale, long-term international projects and commercial opportunities.

Importance of quality

As I said at the Roundtable in April, we need to keep an eye on our reputation for quality and delivering on our promises. This is critical. Promoting New Zealand as the cheap option could counter our quality reputation.

We need to continuously build provider quality. This can be helped by government measures, but the primary driver of quality improvement needs to come from providers themselves.

We need to ensure our pastoral care is second to none. I am sure many people here are aware of the recent Australian media reports on the serious concerns raised about their international education sector, in terms of crime, the quality of education offered by some providers, and the apparent wide-spread abuse of immigration rules.

New Zealand can simply not afford to have similar problems affecting our international education sector.

Students changing provider

A commitment was made at last year’s conference to work on the rules covering refunds for students withdrawing from enrolment with private providers.
This included possible adjustments to immigration procedures where students already in New Zealand are seeking to vary their student permits so they can study with a different provider.

Since then, as many of you know, the relevant agencies have sought feedback from providers on options to change these rules.

This is a complex matter. It is important for the credibility of the industry that we get the right balance between the sometimes competing demands of providers, agents, students and their parents who often may be financing their children’s study here.

I am pleased to announce today that the Education Act will be changed to alter the clause that requires private training establishments to refund all but $500 or 10% of the total fee paid where an international student withdraws from a course of more than three months duration within the first seven days of the course.

After consulting with the sector, it’s now proposed that private training establishments may retain up to 25% of fees charged as recompense for costs incurred in recruiting international students.

We still need to determine whether the new provisions should be explicitly stated in the Education Act itself. For example it could be done through regulations outside the Act to allow more flexibility in future.

You’ll be aware that changing legislation takes time, but you have my commitment that I will seek to make these changes at the earliest possible opportunity.

Pastoral care Code of Practice

The proposed changes to the Code of Practice for the Pastoral Care of International Students has been a long-running project, requiring extensive consultation with the sector.
I have asked the Ministry of Education to consult through education sector peak bodies on three possible options for relaxing the guardianship requirements in the Code.

I want clear and specific advice from the sector on how they will ensure the safety of all young international students enrolled in primary schools if they were to be here in New Zealand without their parents.

I will consider the matter further following consultation and make a final determination.

In conclusion, can I reaffirm that this Government strongly supports the development of international education.

We have demonstrated our commitment with the extra funding we allocated for promotions and levy reduction, in the face of very tight budget constraints.

We are listening to the sector at the highest levels, and progress is being made on several policy issues.

In return, I expect the sector to take full advantage of the competitive position which New Zealand has. We enjoy a reputation for providing quality education, a safe environment, and offer good value for money. 

There is every reason for this important sector to enjoy significant growth.

Thank you.