An important item on Mary O’Kane’s Accord agenda is “engagement and alignment between the vocational education and training (VET) and higher education systems”. The two systems are sharply divided in Australia – with different regulators, different approaches to funding, radically different relationships to government …. It’s as if they operate in entirely different markets. So, inevitably, the idea of a single, more unified post-secondary education system is discussed – and advocated – in many submissions to the review.

Universities Australia, the TAFE Directors, the Go8, the Independent Tertiary Education Council Australia and other groups all address the question in their submissions, all reinforcing the need to ensure that HE and VET are seen as playing complementary roles in providing skills for the Australian population. In his personal submission, ANU VC Brian Schmidt reflects the view of many when he says that differences between the two systems in funding and regulatory approaches create obstacles to movement between the two sectors.

The idea of a truly seamless system is a common thread in the discussion

Look to the east to see one

In CMM last week , I pointed out that, in tertiary education policy, the Australian and NZ governments often mirror each other; many Australian tertiary education policy ideas, good and bad, have followed measures tried in NZ. But that doesn’t mean we are good at learning from each other.

So it is with the notion of a seamless system. A 1988 review of NZ post-secondary education argued that the tertiary system, as then structured, couldn’t meet the rapidly growing demand for skills, risking creating a group of people with very poor employment prospects. What we needed was learning for all – throughout life. Part of the problem was fragmentation of the system, creating barriers between different forms of learning[1].

So when the reformed system took off in 1990, universities, polytechnics, colleges and wānanga (focused on ahuatanga Māori (Māori tradition) according to tikanga Māori (Māori custom)) were governed by the same legislation, had the same governance arrangements, worked within the same (or similar) regulatory systems. And there was a common funding system – funding rates (at least initially) took no account of institution type. Universities lost their monopoly on degree teaching and polytechnics began to add bachelors degrees to their portfolios. Close to a third of polytechnic EFTS load is now in bachelors level qualifications.

But it wasn’t as unified as it looked …

That 1990 unification included only public tertiary education institutions. While VET in polytechnics was “in”, workplace-based VET – on-job training, apprenticeships etc – was managed separately. Industry-owned industry training organisations (ITOs) set standards and qualifications for training in trades. Under the industry training system, the employer was the primary trainer, with support and advice from ITO training advisors. ITOs also purchased the off-job training courses (usually from polytechnics) and arranged for the participation of trainees in those courses. The upshot was NZ ended up with two rival VET systems, one workplace-based led by ITOs and the other institution-based and led by polytechnics. And with radically different funding systems.

As for active labour market programmes, adult literacy and numeracy, adult and community education,  … Suffice it say that the system was only really unified after the creation of the tertiary education commission in 2003 – they looked after the lot. But even that left intact the rivalry between the two different strands of the VET system (but see the postscript below).

Transfers between VET and HE

On average, in the NZ system, around 27 per cent of people who finish a polytechnic certificate or diploma progress to degree study within four years of completing their qualification[2]. The rate of progression to degree level after one year for certificate/diploma completers averages 19 per cent[3]. Some of those transfers would have been to degree-level study at polytechnics, some at universities.

An earlier study[4] covering those who started diploma study at a polytechnic in 2000 showed that, by 2007, 21 per cent had progressed to “degree level … study, either before or after completing their diploma, and 8 per cent had gained a degree or postgraduate qualification by the end of 2007.” That study also stated the “most common transfer (for the polytechnic diploma starters) was to a university to do a degree”[5].

And it works the other way too. Data shows that 11 per cent of those who completed a bachelor degree at a university undertook study at a lower qualification level within four years of completion [6].

Some of those who undertake workplace-based industry training (an apprenticeship or other occupation-specific on-job training) had completed a bachelor degree before embarking on their industry training[7]. In some cases, graduates employed in professional occupations use the industry training system to gain industry-specific skills as part of their continuing professional development – for example, graduates working in museums and galleries may take training through ITOs in tourism and visitor service.

But questions remain on how easy it is to transfer

A 2016 review by Heather Kirkwood of how well NZ universities’ credit transfer practices compare internationally suggested that the NZ system doesn’t meet the good practice standards of some comparable jurisdictions[8].

The NZ Productivity Commission, in its 2017 report on the tertiary education system[9] complained that students find it hard to get good information on credit transfer and that the funding system doesn’t provide incentives for providers to facilitate transfer of credit. The Commission wanted stronger guidelines for providers’ credit transfer policies, and they suggested a credit transfer disputes resolution system.

Student mobility needs more than just regulatory unification

All countries need high-performing HE and VET systems. The complementarity of those two forms of tertiary education is a critical factor in boosting system outcomes. Many individuals benefit from having received training in both types. And Accord submissions – overwhelmingly and rightly – want to reduce barriers to students moving from VET to HE and conversely, or learning concurrently in both.

What is not clear from the NZ tertiary system is how much the unified system per se actually contributes to student mobility.

As Heather Kirkwood made clear, while unification of the system may help in achieving mobility goals, it is by no means a sufficient condition.

Institutional culture also matters. Openness to mobility from providers (especially from HE providers), the willingness of providers to work across the boundary, to build pathways across the boundary through articulation and credit transfer agreements, the availability of information, the opportunity to challenge institutional policy and institutional decisions …. these are more important.

And, as Margaret Gardner points out in her article in the Australian Financial Review, it may be necessary to incentivise new institutional forms and new approaches to institutional collaboration to deliver the outcomes needed for the 21st century.

Postscript – the VET system in NZ

I described above the rivalry between NZ’s two VET systems – the work-based industry training system and the institution-led system. The government has now moved to lance this boil, merging all the polytechnics and all the ITOs to create a single national provider of VET, on-job and institution-led.

In 2023, as part of that giant (and troubled) reform, finally, a new VET funding system, the Unified Funding System has been implemented, creating a common framework for all VET and removing a very sore point that caused strife for 31 years.


[1] Refer for instance to Crawford R (2016) History of tertiary education reforms in New Zealand NZ Productivity Commission.  Refer also to El-Khawas E, Hoffert M, Skilbeck M, Wagner A (1997) Thematic review of the first years of tertiary education: Country note: New Zealand, OECD Publishing

[2] Refer to the Ministry of Education progression statistics here. The data relates to domestic students who complete a certificate or diploma at qualification levels five-seven at a polytechnic. The data relates to those who completed the qualification in the years between 2007 and 2017.

[3] The data relates to those who completed in the years 2007 to 2020.

[4] Scott D (2008) Different tracks Ministry of Education

[5] Scott, op cit, page 19

[6] See the progression statistics here.

[7] Refer to the data here and also to this comment from Universities NZ. Note that many of those with a degree undertaking industry training are recent immigrants.

[8] Kirkwood H (2016) Credit recognition in New Zealand universities: Practice in an international context Universities NZ

[9] Productivity Commission (2017) New Models of Tertiary Education NZ Productivity Commission

Roger Smyth was a manager at Lincoln University, NZ until 2002 when he went to work in the Tertiary Education Group at the NZ Ministry of Education.  Since 2017, he has been a tertiary education consultant 


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