'Blatant waste of taxpayer money'

01:43, Jan 31 2009

The Government is wasting millions of taxpayer dollars training thousands of real-estate agents a year, many of whom will never make it in the industry, a training expert says.

Increasing enrolments in the Real Estate Salesperson's Course and rising course costs during a downturn in the property market have prompted the National Party and industry insiders to question whether the Government is being ripped off.

"People going into an occupation like that should be paying for it themselves," said Training and Further Education (Tafe) College chief executive Ross Vernall.

"It really upsets me when I see schools who really need the funds, and they are just throwing this money away on training real-estate agents."

Last year, 8815 students enrolled in the real-estate sales courses nationwide, up from 1968 in 2000.

More than 8000 of them were at polytechnics, attracting a government subsidy of about $800 each, totalling $6.4 million. The subsidy has since been increased to $1200.


The same course is offered by private provider Tafe at no cost to the taxpayer.

Vernall said the course generally took three months by correspondence and cost $745.

He said it was ridiculous some polytechnics were teaching the course in just three weeks and attracting a subsidy on top of about $700 in fees.

Turnover in the real-estate industry was about 6000 people a year. The taxpayer was therefore funding 8000 students to train and another 6000 agents were dropping out.

"It's just an ongoing waste of money," Vernall said.

Work and Income often referred people to the course, he said.

"To really succeed in real estate you need at least $5000 to $10,000 in the bank and you need a good car. It's just ridiculous sending unemployed people on the course, and they have been doing it in large numbers for the last 10 years," he said.

"They just want to get people off their books but they certainly don't get into employment or have success."

In the past, people could enrol only if they were seconded by an agent so they were guaranteed a job. Without that, many students were being set up for failure, he said.

According to government standards, the Real Estate Salesperson's Course requires 280 learning hours. Unitec offers it as a three-week, 60-hour course and the Open Polytechnic of New Zealand (OPNZ) offers 50 hours teaching time.

"I don't know how they (polytechnics) get away with it. They put in claims saying they are teaching 280 hours but are starting and finishing the course in two to three weeks," Vernall said.

New Zealand Qualifications Authority course approvals and accreditation adviser Lynsey Gedye said it was difficult to see how a 28-credit course could be completed in three weeks as students needed time to reflect on their studies.

"I would expect more than mere regurgitation of facts in the assessments," he said.

"My personal perspective would be that it can't be done."

National Party tertiary education spokesman Paul Hutchison called for an investigation to ensure "no rorting is taking place". He said he wanted to know how many people were completing the course and whether they were becoming registered agents; otherwise it was a "blatant waste of taxpayer money".

According to the Real Estate Agents Licensing Board, 3931 people registered between April 2007 and March this year.

OPNZ Real Estate Centre manager Kelvin Cooper said the polytechnic provided 50 hours teaching time in two-week workshops, but students were expected to spend another 200 hours learning the material on their own. He said the polytechnic received some Work and Income-referred students.

The Ministry of Social Development could not give the number of Work and Income clients referred to real estate courses because the information was on individual files.

A spokesman said clients would be referred only if they had a genuine interest in the career and good job prospects. Their course costs would sometimes be met through the Training Incentive Allowance scheme.

Tertiary Education Minister Pete Hodgson said the course was "relatively inexpensive".

The increase in numbers training as real-estate agents was in line with the property boom and he expected numbers to drop off this year.

The head of the Harcourts training academy, Irene Green, said Harcourts agents were required to complete another 56-day programme after doing the sales course.

"We have never felt that it was enough," she said.

A lot of people went into training believing real-estate agents drove around in nice cars showing people property but those people rarely made it in the industry.

"The first six to 12 months are really lean times," Green said.


The Press