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The Education (Vocational Education and Training Reform) Amendment Bill was passed in Parliament on Wednesday night, and will merge 16 polytechs and institutions under the NZIST umbrella.
Minister of Education Chris Hipkins said the law changes formalised the process of creating a system to respond to skills shortages and prepare for the future of work.
"The current system discourages collaboration and pits polytechnics and on-the-job training providers against each other. With these changes we’re bringing together a coherent system of on-the-job apprenticeships and off-the-job training for the first time in 30 years."
Yesterday, Invercagill Mayor Sir Tim Shadbolt said the result was extremely disappointing.
"I think it will have a huge impact on the city."
He had spoken to SIT chief executive Penny Simmonds yesterday.
"She has also just expressed that she is disappointed and that’s all she’s prepared to say on it."
Sir Tim was part of a delegation that travelled to Wellington to meet Mr Hipkins to discuss their concerns and try to ensure the money and assets would remain in the city.
Representatives from the ministry of education were also present at a public meeting in Invercargill.
Sir Tim felt they were not listened to.
"No, and that’s one of the real disappointments of this whole campaign is that we were promised. They came to the first meeting that had 800 representatives of the business community, the education sector of course, and they promised us they would ring-fence our assets, they were not going to grab our financial ability ... they wouldn’t be touching them.
"Then the legislation comes out and it is the exact opposite to what promises they made and we really believed we had a fair case."
"We’ve just been dumped in the caca more or less."
In last year’s financial report, SIT reported it had more than $117 million in net assets and cash reserves of $39 million.
Part of the asset base included housing which had been constructed to house SIT students, taking pressure off the housing availability in Invercargill.
Sir Tim was not sure what would happen to those residences.
"You know we tried to get down to that level of detail. What’s going to happen with the assets, what’s going to happen with the cash, what’s going to happen with the future of students coming here, what’s going to happen with the student accommodation.
"There’s just so many issues and factors creating this extreme disappointment."
SIT had been a "beacon of success"in comparison to other tertiary education providers because of Ms Simmonds, he said.
"It was her life’s work, really, to have built that [SIT] from a very modest polytech to a well-respected educational institute."
"I think she’s quite shattered at the moment."
Ms Simmonds was unavailable for comment yesterday.
The Otago Polytechnic did not respond to a request for comment by print deadline.