IT trainers threaten legal action over funding plug

Private IT training providers are considering a legal challenge to a government moratorium on the state funding of new education courses, saying it could represent an unfair restraint of trade.

Private IT training providers are considering a legal challenge to a government moratorium on the state funding of new education courses, saying it could represent an unfair restraint of trade.

The private educators say the funding moratorium is also hampering them from teaching the latest technologies, threatens a $100m-plus export industry and effectively means a creeping nationalisation of tertiary education.

Tertiary Education Minister Steve Maharey announced the move in July, preventing new private training establishments (PTEs) from accessing further taxpayer money, student loans and allowances until 2003. By denying them more cash, it also effectively stops the 840 existing PTEs from setting up new courses or altering existing ones.

The providers say they need some state funding to give new courses a sound financial footing, and extra cash also lets them “subsidise” New Zealand students.

Auckland-based St Helens Institute of Studies claims the moratorium has hampered a joint venture with an Indian company, one which recently hosted IT Minister Paul Swain during his visit to the subcontinent.

Executive business and financial officer Steve Keung says the organisation’s new Java-based courses are attracting 17 full-fee students, but the funding plug effectively hinders the institute educating New Zealanders — who often need loans — and introducing a daytime course for those not working.

Keung, who is also vice-president of the New Zealand Association of Private Education Providers, says he is “in heavy discussion” with the government over the matter. “The dilemma is that it really affects innovative products and programmes for New Zealanders,” he says.

Ames Training says it narrowly escaped its new combined language and computing courses being hit by the moratorium by working well in advance with the education ministry last year. It has just bought a new building in Queen Street, Auckland, to teach around 300 overseas students English alongside their MCSE and MCDBA courses, in the process hoping to earn up to $5 million in revenue and creating 20 teaching jobs and 10 support jobs.

“We want to make an export industry out of this,” says school head George Marr. “The government is throwing away $100m in overseas funds between all the PTEs.”

Marr says the moratorium could be open to action through the Commerce Commission as a restraint of trade. While industry upgrades of, say, Visual Basic or Java are allowable, Ames, for example, could not introduce a diploma or business. “All the private institutions have been hobbled so the polys and universities can catch up,” Marr says.

“If it goes on like this, legal action will have to follow. We are taking advice. Labour has caused schools a lot of grief.”

“[Due to the moratorium] we cannot offer what the students want. We are not teaching basket weaving. We are teaching IT. The government is making it as difficult as they can. That’s what happens when you get the whole thing run by well-meaning bean counters,” Marr says.

Maharey’s press secretary, Michael Gibbs, says the moratorium would only affect courses with “significant changes” or which are new.

The government, he says, has established a Tertiary Education Advisory Commission to see where courses are overlapping with other institutions. It wants to avoid unnecessary duplication of courses to get the best value in education for taxpayers’ money and avoid spreading the money too thinly. Providers could apply for exemptions to the moratorium, he says, which is a holding measure until the new commission is put in place in July.

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