In this morning's email we led with the news that the forced closure of an Auckland education provider could pose a serious threat to the export education industry.
1. A China risk for export educators
The $4.5 billion export education industry faces a new and immediate threat that could prove every bit as dangerous as the one that crippled it for a decade after the collapse of two big schools in Auckland in 2003.
News broke overnight that the forced closure of the New Zealand National College in Auckland has left dozens of Chinese students feeling betrayed by the industry and the Government, and agitating for China's Government to intervene.
On Tuesday I interviewed two of these students in the abandoned classrooms of the College in an office tower on Queen Street. They were distraught and felt let down by the New Zealand Qualifications Authority (NZQA). It shut the College down in January (having previously approved it) and allowed the school to take thousands of dollars in fees in cash and bank cheques that are now missing. It also told them they would not receive their qualifications, even though they had completed the course and had been told by their tutors they would pass.
Dozens of the students have been told their English language standards (which were tested by the College itself under NZQA rules) are not good enough to study elsewhere, even if they could recover their fees.
The system is currently designed so fees are refunded from a trust so a student can transfer to another school if NZQA pulls the registration from a school. But not all the fees were in the trust in this case and the quality of the teaching was so poor the students cannot be transferred.
Some are now set to be deported without their money within weeks if they cannot renew their student visas.
NZQA has effectively washed its hands of the case and is being backed up by Education New Zealand, which has said NZQA must crack down to protect the industry's reputation.
The trouble is the industry just went through a period of barely controlled growth where NZQA-approved schools quickly expanded to take on a surge of new students encouraged by agents after a relaxation of English language standards and the addition of work rights for sub-degree level courses in 2013. The changes were part of the previous Government's push under the Business Growth Agenda to double the sector's export revenues to $5 billion by 2025, but the changes simply increased the volume rather than the quality of revenues.
And now the result of that decision to 'go for growth' is coming home to roost.
The previous Government realised the loosening of standards had gone too far and spent 2016 and 2017 trying to ratchet the quality back up again, particularly after a surge in fraud in India and a lowering of the quality of graduates. English language standards were tightened again in 2016 and NZQA has ramped up its checks on the schools, closing four international education schools in the last seven months.
Was NZQA asleep at the wheel?
The big question now is: how did NZQA approve the private providers in the first place and how did this one get away with taking cash from students without putting it into trust? The IRD will also no doubt be asking some tough questions about the use of cash and whether GST was paid.
During our visit to the college, which appeared like some sort of educational Marie Celeste with books and files still strewn around the offices, we found a large cash counting machine on the front desk. One of the books was a textbook to study Microsoft 2000.
Here's the video of that interview on Newsroom, along with one with immigration lawyer Alastair McClymont (lower in the article), who is representing them.
"I don't know why a school recognised by NZQA can be shut down, and how we had a visa and promising future, and now it's all gone. We don't have anything," one of the students, Cora, told me.
"I would say NZQA is worth nothing to trust, and I would not recommend them to come to New Zealand education, because we got involved in a scam and we feel that we've been cheated, and that's such a disappointment," she said.
A second student, Genie, became emotional as she said she had yet to tell her parents in China that she now had no qualification and could not get her money back.
"Before this shocking news, I told my parents I'm going to spend Chinese New Year with them and I'm going to be a very proud graduate, and they're going to be very proud of me," she said through tears.
"But now I've got nothing. I feel so humiliated. I don't know what to say to them. I don't want to disappoint them."
Even the translator was crying by this point.
McClymont described to me a systemic problem with poor quality teaching that was not picked up during the boom by NZQA.
"The problem is we had so many schools teaching New Zealand Government-approved qualifications to international students who were incredibly sub-standard. And only when NZQA decided to finally monitor them did they discover that there were so many flaws in the teaching and the quality of everything about the whole school," he said.
"Many of the students have spent tens of thousands of dollars and they came here because it was a Government-approved qualification, the school was approved by the Government and their money would be looked after by the Government.
"They don't feel that the owner of the school has conned them. They feel like New Zealand has conned them. Everyone involved in this whole scam has been conning them, from the agents in India (and China), from the school owner who stole their money, and from the New Zealand Government who gave them guarantees about the quality and the security of their money, who turned around after one year and said 'ah we've changed our mind, we're not going to give you the qualification', and then potentially from Immigration New Zealand.
"It makes New Zealand look like the only thing we're interested in is taking money from young students from around the world and that we don't care about giving them a quality education. We don't care about looking after their money and protecting them. We don't care that they're vulnerable and easily exploited. It's just about taking the money and shipping them out and getting in a new bunch and doing the whole thing all over again."
Hipkins concerned about risk
Education Minister Chris Hipkins said the Government was concerned about the industry's reputation when these situations occurred.
“That is why we are working hard to address low quality operators. The sector grew too big, too fast under the previous National Government, which took its eye off the ball and let the overall industry down," Hipkins said.
“It is important to state, however, that the vast majority of operators do provide quality education," he said.
The incident risks a repeat of a slump in international student numbers from China after the collapses of the Modern Age and Carich English language schools in 2003 stranded more than 1,000 students in Auckland.That led to warnings from the Chinese Government against studying in this country. Chinese student numbers imploded from over 14,000 in 2003 to just 2,500 in 2007.
2. Rod Oram on this week's digital summit
The big event for business and government this week was the Digital Nations Summit 2030 in Auckland, where New Zealand hosted some 450 delegates from 20 countries to talk about the digital future.
Rod Oram was the MC and has written a column for us on how New Zealand is actually in a small, elite category for digital capability, with only Singapore and the UAE in the “Stand Out” category at the top of a Digital Planet analysis by US academics.
Even more notably, we are in a category of our own – an open democracy that scores high on trust and institutional measures in digital societies, according to Ravi Shankar Chaturvedi, one of the authors of the report produced by the Fletcher School of international affairs at Tufts University in Boston.
We rank in the top five countries for the spread and speed of ultrafast broadband; and we are among leaders in online government services such as renewal of passports and payment of taxes. If you take the top 10 interactions between our government and citizens, 70 percent of them are online. But we lag somewhat behind the best in the world on the digital economy, the report shows.
Here's Rod's full column here on Newsroom Pro this morning for subscribers. It is not published on Newsroom until Sunday.
3. 'Don't sweep it under the rug'
Newsroom's Foreign Affairs Editor Sam Sachdeva attended what looked like a useful presentation and discussion about New Zealand's relationship with China last night in Wellington, particularly in the light of the revelations about National MP Jian Yang's historic ties to Chinese military intelligence and the academic work of Anne-Marie Brady on China's use of soft power in New Zealand.
Sam wrote up the presentation at a Victoria University event from Travis Gidado, a visiting research fellow from Beijing’s Peking University, in this report for Newsroom. He said we risk being "caught with our pants down" if we don't prepare ourselves for a future conflict and there also needs to be a more balanced discussion about China’s rise to avoid the debate turning toxic.
Gidado said it was not unusual for a rising power like China to seek to influence other countries around the world. He was critical of Brady's work, but said the Government should address the issues directly.
He noted countries were pursuing a number of different approaches to China, with Australia taking what he described as a more “vitriolic” and outspoken tone regarding China.
While New Zealand and Australia were largely similar in their “economic asymmetry” with China, the latter appeared to be “having your cake and eating it too”.
“It remains to be seen how long that will actually last, I predict it won’t last very long.”
The New Zealand Government needed to engage more seriously with the issue of Chinese influence and stake out a clearer position, rather than “sweeping it under the rug” as it seemed to have recently.
“They’re not going away here, they’re not going away across the Tasman, they’re not going away in the US - this is a question that is here to stay...
“When you start having this subtext, and you start having this dialogue where you’re kind of beating around the bush on Chinese influence and what it looks like, but it’s obviously playing itself out in the media, it’s obviously playing itself in the political realm, you need to be able to engage it head-on.”
4. So here's what a direct discussion looks like
Economist and blogger Michael Reddell has also been following the Jian Yang saga and Brady's work closely. He has written a strong commentary on the recent burglary of Brady's house.
Prime Minister Jacinda Ardern took an interest in the burglary earlier this week when asked about it in her post-cabinet news conference.
Reddell writes there seems little real political issue to address the issues raised by Brady. See his full commentary here on Newsroom Pro today.
5. A bevy of select committees
Newsroom's Thomas Coughlan and Shane Cowlishaw attended a selection of select committees in Parliament yesterday, including appearances by Police Commissioner Mike Bush, KiwiRail Chair Trevor Janes and NZTA Safety and Environment Director Harry Wilson.
Shane reported for Newsroom Pro early yesterday that Bush said a rise in serious offending committed by women and youth has possibly been caused by notoriety-seeking on social media.
Thomas reported Janes said KiwiRail was locked in to a “non-virtuous cycle” as it struggled to balance high safety standards with the commercial realities of an ageing fleet and infrastructure. Most interestingly, he said the average age of KiwiRail's locomotives in the South Island was now 46 years. That's the average, which means many will be older than me (50).
Elsewhere in the select committees, National MP Melissa Lee asked MBIE officials whether it was appropriate for Government to keep using Russell McVeagh given the recent revelations on Newsroom of sexual assault complaints. (RNZ)
Thomas also reported for Newsroom Pro yesterday that NZTA said a rise in truck movements linked to economic growth and an ageing car fleet were factors in a 50 percent rise in the road toll in the last five years.
Here's the ANZ chart to show the increase in heavy and light traffic movements (along with GDP) over the last 16 years.
6. Revolving door questions
The other story that has been brewing away around Parliament this week has been revelations that acting Chief of Staff for Jacinda Ardern, the Labour-aligned lobbyist and former journalist GJ Thompson, has returned immediately to his own lobbying firm after filling in for Mike Moore.
He has been joined by John Key's long-time former chief of staff Wayne Eagleson in a lobbying powerhouse packed with the very, very recent experiences of two people as close to the centre of power in New Zealand as it is possible to get.
Countries such as America would never allow a PM's chief of staff to go so quickly back and forth between the PM's office and a lobbying operation.
Lobbyists and PR professionals play an increasingly central role in New Zealand’s political system, and yet the public knows very little about what these people do. But we should, Edwards wrote.
More sunlight shone on the activities of communications professionals active in our democracy would offer greater protection against conflicts of interest and corruption.
7. One fun thing...
Michael Keyes via Twitter: "I knew it. Little bastards."
8. This morning's political links (and weekend reads)
The political links are available in the morning subscriber email. Here's a few longer reads that you might find useful.
This one from Neil Irwin at the New York Times on research from McKinsey about productivity got me excited. (Yes I need to get out more).
Dani Rodrik's piece on what a new populism might look like is excellent as well. He says it would look like Roosevelt's New Deal.
And finally, in the wake of the last week's revelations about sexual misconduct at Russell McVeagh, this piece in The Verge on the failure of whisper networks to protect women from sexual harrassment is a great read.