Bryan Gould: Education's sinking lid crushing industry's vitality

In 1995, a year after my return to New Zealand to take up the Vice-Chancellorship of Waikato University, I was invited to lead a delegation to visit universities in China - the first such invitation to be issued.

Seventeen years earlier, in 1978, I had been a member of a British parliamentary delegation who were the first westerners to visit China since the fall of the Gang of Four.

The contrast in what I saw on the two visits was startling. On the earlier visit, the only shops had been Friendship Stores, reserved for foreigners, the only transport for ordinary Chinese was by cart and bicycle, and the only colour - in a sea of Mao tunics - was the red of Party banners. But by 1995, China was clearly a country on the move.

My 1995 visit was the first of many to China over the coming years. My association with that wonderful country and civilisation led to the first institution-to-institution arrangements between New Zealand and Chinese universities, and ushered in a huge expansion in the numbers of Chinese students studying at New Zealand tertiary institutions.

Since those days, providing tertiary education to students from overseas - China, India, the Americas, the Middle East and many others - has become big business for New Zealand. Earning over $3 billion a year, export education is more than twice as valuable to our economy as the wine industry. There is scarcely a tertiary education institution in this country that does not rely to a large extent on that income to balance the books.

The net inflow to this country of people from overseas is substantially accounted for by the numbers who now come for their education. This success is rightly a cause for self-congratulation. Our ability to compete with other Western providers is testament to the quality of our education. So, what is there to cavil at?

The answer is that it is all a matter of balance. Each institution will have some idea of what is an optimal proportion of foreign students, although opinions will vary. The calculation is not made easier by the tendency of overseas students to focus on particular disciplines, such as business management, so what might seem to be an acceptable proportion for the institution as a whole might conceal a concentration of foreign students in a few areas.

A class that has a high proportion of students from overseas, particularly those for whom English is a second language, may not serve the interests of domestic students as well as it should - and the overseas students themselves may feel it is not quite the New Zealand education they had bargained for.

And the institutions themselves may find there is a downside. There are considerable costs involved in attracting foreign students and in looking after them properly while they are here - marketing overseas, paying commissions to agents, providing appropriate facilities, accommodation and support all mean the fee will often be substantially offset by those outlays.

There is also a world of difference between treating overseas fee income as a useful supplement for discretionary purposes that might not otherwise be afforded, and the situation most tertiary institutions now find themselves in - that is, increasingly reliant on that income to keep their heads above water.

The truth is that our tertiary institutions have, by international standards, been underfunded for many years - and the sinking lid is still being applied year after year. In typically Kiwi fashion, we expect outcomes of international standard to be produced from funding that is only two-thirds or - in some cases - only half of that provided overseas.

That disparity is bound to tell eventually - and once it becomes apparent, it will inevitably reduce the attraction of a New Zealand education in overseas markets.

Looked at in that light, our income from foreign students is better regarded as a sticking plaster or as a life belt - a cry for help, rather than a badge of success. It represents another casualty in the drive to cut public spending at any cost - requiring our tertiary institutions to see themselves as commercial and trading operations, with a year-to-year time horizon, rather than as focusing primarily on providing the best education for the communities they serve.