Policy turns $43m into $8m

Modelling work suggests that just $8 million of the Southern Institute of Technology’s $43m in cash reserves will be ring-fenced for the region.

The Government’s vocational education reforms resulted in 16 polytechnics being merged on April 1. They are now run under one national umbrella organisation, the New Zealand Institute of Skills and Technology (NZIST).

Much of the concern from within in Southland was what the merger would mean for the $140m in assets the SIT had built up over the years. Included in that $140m was $43m in cash reserves.

In April NZIST’s governing council passed a policy to ring-fence assets.

However, it has emerged that the policy formula was likely to see just $8m of the $43m ring-fenced for the SIT area.

SIT chief executive Penny Simmonds confirmed at a board meeting that SIT had carried out some work in line with the policy that has been put forward.

She was quizzed by the SIT directors as to what figure they had come to in relation to the ring-fencing policy.

‘‘From a starting point of $43.45m, the initial equation we have done is $8.345m ring-fenced,’’ Simmonds responded.

That SIT modelling has been sent to the governing board to look over, but it is not expected that the figure will be increased further.

SIT Board chairwoman Alison Broad said the matter of finalising the ringfencing figure would be ‘‘a fascinating discussion in due course’’.

Fellow director Murray Bain was also interested in the $8.3m figure.

‘‘I’ve just been through this particular discussion with another subsidiary and the amount that came out of that conversation was fascinatingly low, so I’m interested,’’ Baird said.

SIT limited director and NZIST councillor Barry Jordan was keen to get a better understanding of the situation by looking at the formula used.

SIT’s Zero Fees scheme was kickstarted with support from the Invercargill Licensing Trust, Community Trust of Southland, the Invercargill City Council, and the business community.

Much of the Stand Up for SIT campaign, which ran throughout the reform consultation, centred on a belief that SIT’s assets should stay in Southland.

Meanwhile, Simmonds has pointed to Queenstown as a possible future quarantine capital as a way to help get international students into the country.

‘‘I have been in touch with [Queenstown Lakes District mayor] Jim Boult and we consider that Queenstown would be a very good quarantine destination for all of the South Island,’’ she said.

‘‘So Jim is writing a letter of support for me around that it would help Queenstown’s recovery plans.’’