One of the Coalition Government’s flagship policies to pay tertiary students’ fees in their first year of study/training is proving to be less popular than expected.
Delivering a pre-Budget speech at a Wellington Chamber of Commerce event on Tuesday, Finance Minister Grant Robertson said there had been fewer enrolments than forecast so the Government was going to reduce the amount of money allocated to its fees free programme by $197 million over four years from the 2019/20 year.
With a Cabinet paper released shortly after the Coalition Government took office in 2017 showing the Government expected to spend $1.79 billion on the programme over this time, the $197 million reflects an 11% reduction.
Robertson said the Government’s assumption when it introduced the policy, that enrolments would increase by about 15%, was “generous”.
Education Minister Chris Hipkins a year ago also noted the Ministry's costings were deliberately set at the upper limit to ensure sufficient funding was provided to tertiary institutions.
Furthermore, Robertson pointed to the low unemployment rate, and said this typically coincided with low tertiary enrolments.
The Ministry of Education is yet to publish finalised data showing how tertiary enrolments changed in 2018 when the fees free policy kicked in.
Robertson said the $197 million would be redirected towards the implementation of the Reform of Vocational Education, which Hipkins is working on.
National's Tertiary Education spokesperson Shane Reti said: “Using the underspent $197 million from failed fees free to sustain his disastrous reforms in the polytechnic sector is simply one bad policy propping up another.
"The Education Minister needs to urgently re-evaluate fees-free and at least delay the rushed reforms of the polytechnic sector."
Ambiguity over extension of fees free policy
Robertson said extending the Government's fees free programme to tertiary students in their second and third years of study/training was still government policy, however a final decision around this would be made closer to the next electoral term when this would actually be implemented.
“We’re not going to play the ‘not ruling out’ game for 2021 just yet," Robertson told media when pressed on his lack of firm commitment to extending the fees free policy beyond one year.
"What I’m saying is, it’s still our policy, but clearly we want to make sure that whatever we do in the vocational post-school tertiary education space is appropriate for the future and those decisions will be made nearer to the time.”
$1 billion to be reprioritised over four years
Robertson said that altogether, over $1 billion of government spending over four years would be redirected in Budget 2019, to be unveiled on May 30.
“Most of the focus during the budget process is usually on where new spending will be allocated. But we also have to look at whether existing spending is delivering value for money and aligns with Government priorities,” he explained.
“During this budget I asked all Ministers to identify 1% of their baseline spending that was the lowest priority in their area. This spending was then assessed on the basis of its effectiveness and alignment with the Government’s priorities.
“Out of this we have identified just over $1 billion worth of spending over the forecast period that is no longer a priority or where the funding allocated is no longer needed."
See Robertson's full speech here.