Too much untargeted education spending in budget - Business NZ

Too much untargeted investment in education and skills, and an insufficient focus on critical issues such as adult literacy - that's the assessment of the 2004 Budget from small business representative Business NZ.

The lobby group said a 7.7 percent increase in Industry Training Organisation funding and an additional 500 Modern Apprenticeships were welcome but tiny in comparison with spending on student support (an additional $222 million over four years) and additional funding for tertiary institutions for tuition ($99 million over four years).  Business NZ said industry training and modern apprenticeships needed the same funding status as institutional learning.

Funding of $2.35 million to improve teaching quality in literacy, numeracy and language for adults was also welcome, but was nowhere near the scale needed to help the 20 percent of the population with 'very low' literacy and numeracy skills.

The increase in school base line funding - an additional $99 million over four years, with no clear performance accountability requirements - should have been targeted. The extra funding for the Gateway programme (for school students to learn in the workplace while still at school) was good targeting of funds.

The funding for polytechnics and institutes of technology to engage in technology transfer and with the business community was also welcomed. It was critical that the additional $9 million dollars per year for the Tertiary Education Commission (TEC) resulted in a tertiary education sector more responsive to the needs of business, Business NZ said.

"The TEC will need to take a strong role in ensuring that the views of business are communicated and reflected in its purchasing decisions. It should not rely on tertiary institutions to do this alone."

Meanwhile, Industry Training Federation chairman Pieter Burghout said the extra $25 million over four years in industry training for skilled career development recognised the contribution it made to the tertiary sector and to the broader economy.

"However, there remains an apparent funding gap to achieve the government's published target of 250,000 people in industry training in 2007 - the target is double where we are now, but the level of funding available in 2007 isn't," Mr Burghout said.