Vocational Education Minister Penny Simmonds says the government will look at removing Otago Polytechnic from its newly created "federation" model but there was still a "little bit of work to do" for the institute to get to a surplus.
Simmonds on Monday unveiled the polytechnics that would emerge from breaking up Te Pūkenga, the mega-institute set up under Labour with the aim of making the sector more cost-effective.
That merger in 2020 combined 16 polytechnics and nine industry training organisations, with most retaining their branding and continuing to operate but using Te Pūkenga as a "head office".
Simmonds' proposed approach makes nine of those polytechnics independent once more, beginning operations from 1 January.
Three of them will become a "federation", with the Open Polytechnic leading and providing services to Otago Polytechnic and the Universal College of Learning (UCOL).
Otago Polytechnic has criticised the federation model, saying it would risk undermining its achievement rates, teaching quality and independence.
Simmonds backed the federation as a solution to any rural-urban divide.
"Putting the Federation in place, the regions are going to have access to online delivery through the Open Polytechnic and are going to have a wider range of programs available to be able to deliver blended delivery to smaller cohorts of classes.
"Otago, for example, were running courses with quite small numbers in Central Otago. This gives them an opportunity to run those courses with blended delivery using the open polytechnics, online sources, resources.
"The reality is, you can't run a course with five or six people in it on campus, fully sourced, fully staffed. But if you can have access to online learning as well, you can have that blended delivery online and on campus with smaller cohorts."
A further five polytechnics - NorthTec in Northland, Western Institute of Technology at Taranaki (WITT), Whitireia and WelTec in Wellington, and Tai Poutini Polytechnic on the West Coast - would be required to show a path to financial sustainability or face either closure or mergers. Simmonds signalled on Monday they would all likely be included in the federation.
The former Industry Training Organisations would be replaced with Industry Skills Boards.
Tertiary Education Union national secretary Sandra Grey is adamant the approach will be a disaster for regional education, saying the sector's become a political football.
She told RNZ it was important for polytechnics to be financially viable, but the funding model had not worked and needed to change. The $16.6m surplus Te Pūkenga reported last month was only possible because of drastic cuts and there was more to come, she said.
"We've seen hundreds of jobs cut, dozens of dozens and dozens of courses go just to ensure they could reach this day... five polytechnics still have very uncertain futures, and we've got hundreds of job cuts coming just to meet the demands of the minister."
"The only courses are [that] surviving are those that can get lots and lots and lots of students... I was at the Western Institute of Technology in Taranaki yesterday and one of the courses going is the course in agriculture - given that community is full of dairy farms, you cannot tell me they don't want agriculture courses."
That agriculture course needed to be small because the students were working with heavy machinery like chainsaws and tractors, she said.
"You can't have hundreds of students in a classroom when that's the activity you're doing, and that's what the minister's got to look at: a fit-for-purpose model that allows courses to run to meet community needs."
Simmonds later acknowledged courses like that would need to be smaller, but said $20 million over two years had been set aside to support polytechnics to run them.
"They have to have smaller classes for health and safety, and so that's what that additional funding is: to support them to be able to continue with those smaller classes that aren't viable but are really strategically important," she said.
"It does give recognition to those areas where we really need to have training, but it can't be viable under the current funding system."
She said the funding was specifically for regions like the Far North and East Coast that had a high need for such courses. She was confident her model would not impact rural training.
"No, it won't. Because by putting the Federation in place, the regions are going to have access to online delivery through the Open Polytechnic and are going to have a wider range of programs available to be able to deliver blended delivery to smaller cohorts of classes."
