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Change is on the horizon for New Zealand's 16 polytechnics following the announcement Mr Hipkins will scrap a tertiary education funding model of the previous government.
The Government will end competitive allocations of funding at New Zealand qualification framework levels 1 to 4 to give providers greater funding certainty so they can focus more on students.
"The competitive model is another failed ideological experiment of the previous National government," Mr Hipkins said yesterday at a vocational education and training forum in Auckland.
Questioned further on whether one or more of New Zealand's polytechnics could be forced to close, Mr Hipkins said this was not the case.
"There will be change," he said.
"But what it looks like will ultimately be influenced by the process that has started," Mr Hipkins said.
Mr Hipkins referred to an article published on the Tertiary Education Commission (TEC) website, which looked at the financial issues faced by institutions and studied potential ways forward.
The article quotes TEC chief executive Tim Fowler talking about changes that have already occurred within the sector.
"The ITP [institutes of technology and polytechnics] sector has already undergone a lot of structural change over the last two decades, merging or forming partnerships to improve their quality and efficiency," he said.
"New Zealand had 25 ITPs in 1990, and now has 16. So change is normal, and when done well, and with right motivation and focus, can drive better outcomes for everyone."
Following the change announced yesterday, funding for organisations would return to being based on student enrolments.
"We don't do competitive funding for schools or university degrees, so why would we do it for non-degree tertiary study?" Mr Hipkins said.
"It removes uncertainty and will enable providers to properly plan and develop programmes, build tutor capacity and focus on what they do best and improving the quality of outcomes for New Zealand's learners," Mr Hipkins said.
The change affects all student achievement component funding at levels 1 and 2, and levels 3 and 4 funding for agriculture, horticulture and viticulture courses.
Funding from 2019 will be allocated by the TEC through the 2018 investment plan process.