Te Pūkenga's chief executive and the chair of its council appeared before the Education and Workforce Select Committee today. Photo: supplied
Te Pūkenga's leaders have revealed the national polytechnic and workplace training organisation is heading for another big deficit this year.
In a sometimes tetchy appearance before the Education and Workforce Select Committee they also revealed that only two of its 16 polytechnics made a surplus last year.
The institute's chief executive Peter Winder and the chair of its council Murray Strong appeared for the committee's annual review of Te Pūkenga.
Just days earlier the institute published its 2022 annual report, which showed an $80 million deficit.
Committee member National Party MP Penny Simmonds asked early in the hearing how much of a surplus Te Pūkenga's work-based learning division made last year and how much that had cross-subsidised losses from its polytechnics.
The meeting moved on while Winder tried to locate the figures prompting Simmonds to later complain that he should know which business units were profitable and which were not.
"My inability to find a table with all of the numbers on it that is 100 percent accurate for the year-end audited figures, on the fly in this meeting, is not a commentary about our ability to understand the details of the financials. My hesitancy in providing you an off-the-cuff answer that may be inaccurate is that I do not want to mislead you and it is important that we fairly and accurately represent the information," Winder responded.
Strong then advised the committee that the institute's work-based learning division made a $52.9m surplus last year, while its polytechnics' collectively made a deficit of $118.8m.
He said the Open Polytechnic and Otago Polytechnic were the only polytechnics that made surpluses last year.
When asked for this year's financial forecast, Strong and Winder twice tried to avoid revealing the figure by noting that the hearing was a review of the institute's performance in the previous year.
However, Winder then shared the figures.
"We began this year with a Budget that expected a deficit of 26.5 million. That was rather optimistic," he said.
Winder said domestic student enrolments and work-place training were lower than expected and the institute was borrowing money to fund IT changes rather than receiving a government grant for the work.
Those factors combined to push the most recent forecast to a deficit of more than $100m, but that would reduce at the next forecast because the institute's finances were $35m better than expected, he said.
Strong said the institute was increasing its international student enrolments, rationalising its property and reducing duplication in order to improve its financial stability.
The institute was trying "recognise benefits at scale" and recently completed consultation on changes aimed at restructuring 90 percent of the organisation, Strong said.
Winder said rationalising the property leased by former industry training organisations and by Weltec, Whitireia and the Open Polytechnic across Wellington was a priority this year.
Auckland it needed to deal with the leasehold properties formerly used for international students, he said.
Winder said the institute had a new operating model which would require the complete reworking over every business process across the institute.
Earlier, Penny Simmonds challenged the institute's assertion that without the creation of Te Pūkenga, polytechnics would have collectively lost $280m last year.
She said that estimate was based on an absolute worst case scenario that assumed the institutes would not cut costs to reduce the size of their deficits.
