Government's $339m first year fee-free tertiary education policy expected to attract 2000 additional full time students or trainees next year

The Government expects its $339 million first year fee-free tertiary education policy will see an additional 2000 people enter into study or training next year.

In other words, it expects the number of students enrolled in full time equivalent courses at universities, polytechs or other industry training courses, to increase by 3% in 2018.

The Government has committed to providing fee-free tertiary education from January 1 to anyone who has done less than six months full time tertiary education or training.

It aims to extend the policy to two years’ free in 2021, and three years’ free in 2024.

Education Minister Chris Hipkins says: “We expect the policy to halt, and over time reverse the current trend of fewer people going into post-school training and education.”

Ministry figures show the number of people in formal tertiary education has declined from 488,265 in 2006 to 429,490 in 2011 and 415,870 in 2016.

While the number of international students has increased by 46% since 2006 to 62,570, the number of domestic students has dropped by 21% to 353,300.

A Cabinet paper reveals the Government expects to spend $339 million on fee payments in the 2017/18 financial year, followed by $391 million in 2018/19 year, and $426 million in 2019/20.

Taking its policy to increase weekly student allowances and student loan living cost limits by $50 into consideration, it expects to spend $380 million in 2017/18, $524 million in 2018/19 and $593 million in 2019/20.

National's Tertiary Education Spokesperson, Paul Goldsmith, says Labour's policy has "confirmed a return to the bad old Labour days of funding international hip hop study tours and family reunions".

He points out that even though the Government has justified the spending by saying it wants greater participation in tertiary education, its own estimates confirm the policy won't encourage many more people to enrol in study or training.

“New Zealand’s tertiary education system is already heavily subsidised and the average student loan is paid off in less than seven years," Goldsmith says.

“The policy represents a colossal missed opportunity and grossly untargeted spending. Surely it would be better to invest public money into targeting the very small group for whom cost is a barrier?

“And with all the money being sucked into supporting every full-time student in their first year, it leaves nothing to invest in the tertiary institutions themselves so that they can deliver world-class education..."

See this site for more information about the eligibility and implementation of the fee-free offering.

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Dear New Government
Try supporting the trades and make universities & poly techs work with businesses. Internet technology courses need to advance in NZ because of the countries isolation , electric vehicles & robots & artificial intelligence are coming faster than we think.
Train people in relevant future career pathways that employers will need

The legal profession for example will see radical change with artificial intelligence eliminating jobs from law clerks to lawyers. Accountancy also will experience great transformation
Sometimes I wonder what NZs politicians do when they travel up here They obviously do not attend technology conferences
The problem with universities is like Here in US they have Golf degrees and lots of Physical Ed degrees
Degrees with no jobs available
Give the money to students who show aptitude & perseverance
Or is this just another vote grab like the Jenny Shipley lowering of the drinking age ?

Of course it's a vote grab.

The cost will be about $190,000 for each additional student they expect.

Tertiary Education Organisations could attract more students without bribes, by reaching out to the communities they serve (like AUT has done) and by offering more relevant and higher quality courses.

How could it cost $190;000 per student ?
My kids have degrees and it did not cost either 190K for either

I was talking about the money the govt is planning to spend in order to attract an extra 2,000 students.

As a former CFO (although we had no such lofty titles in them days) of a major Polytech, I saw the effects of dragging entire cohorts of unprepared entrants into the system, and the effects of undirected (bums-on-seats) funding at first hand, because I had to corral Budgets for the hot mess:

  • Foundation courses to get the worst cases literate, adequately numerate, and able to comprehend English. Pure overhead as little to no funding was directly available until well along in the piece.
  • The start of a proliferation of 'soft' courses designed expressly to mop up EFTS-based funding by getting Mo' Bums.
  • The realisation, very late in the piece, and I was out of it by then, that by seriously limiting Class Materials expenses and Teaching Hours, certain courses generated massive internal subsidies for Other Stuff. Because the EFTS funding took no account of Costs, only Bums, and was generous to a fault.
  • Students from privileged backgrounds who constantly applied for Hardship Grants despite rocking up in cars, expensive mountain bikes, or motorbikes. I did make some of them cry (sat on the Approving or in these cases Disapproving Committee). But a nice little rort.
  • It took a decade or two before the EFTS funding model (it came in in 1989/90 IIRC) started to distinguish Costly versus Costless courses. It was brought into sharp relief when one Polytech which shall remain nameless, dished out a CD to the students. That was the entire course cost....but the EFTS fundling even on the lower scales was only a little south of $10K per Bum.
  • Then Degree courses started to come in (why? because the EFTS funding per Degreed Bum was much higher), so we saw Degrees in Naturopathy and Diplomas in AromaTherapy start to proliferate to take advantage. That did not last long because they were so Luminously Bonkers. But the issue was that they could Start in the first place.
  • The race for funding also pitted institutions against each other, as they vied for the same student base, and duplicated, often badly, courses run better elsewhere.

The Good Times effectively came to an end with EFTS limits per study category, directed funding for certain institutions, and incentives about Cooperation to cut out the hideous duplication and waste that was apparent. The result was TEC, which now (I understand, far away from the game now) exerts an Iron Fist over who offers What, to Whom, and at what Cost. Current practitioners may care to Common Tate further.

But I bet TEC won't have much of a Xmas Break. Because our idealistic crew, shopping for the Youf Vote as always, has perhaps taken us right back to the Old Schemozzle. I'd put a bob each way on the fact that many of the New Starry-eyed Entrants to Tertiary as a result of the massive incentives now offered, will need just as much Pastoral Care to get them Fit to Teach, as PT's Housing tenants are gonna get to sort their appalling lifestyle choices.


Sound like great reasons not to treat education as a business, eh. This whole foray into competing to offer low value courses to foreign students (piggy-backing a work visa on the other end) seems incredibly misguided.

But..a little counterfactual.

I work in IT/BI, and education for this sector is almost entirely private. And, just as with mechanics, construction-industry gear, and other highly specialised areas, that instruction is both Proprietary and Application/Vehicle/Equipment - specific. Your Cat warranty is gonna go away at the speed of light if a Dog mechanic lays a spanner on the beast. A Cisco qual is only vaguely useful if you move to a Citrix or a Microsoft environment. These segmentations are now decades old and ain't gonna change anytime soon.

So an awful lot of the STEM sector is already private as to instruction/education.

Not just the STEM sector - checked out LGNZ's EQuiP training offerings lately - e.g., 45 minute webinar on everything you need to know about implementing a freedom camping policy for the pricey sum of $150.00 + GST per person;

Whereas LGNZ used to have a free-of-charge series of very good print resources called "How to Guides' or some other such name. Went out of print when they decided to go all out 'commercial'.

STEM people are being employed by say Facebook on H1B Visas These are foreigners from say India
who are hired on lower pay scales yet are extremely smart qualified employees.
The tech industry here does not care where you are from as long as you fit the role.
Artificial intelligence will replace a lot of the work in the STEM sector
Not only will they be replaced physically by robots but mentally with artificial intelligence that can learn for itself and unlike a human never forget or have a day or night off.
If the govt were truly looking ahead it would see a future with far fewer human jobs.
Nite nite NZ

That's a limited, outsider view. Automation - compilers, the various All-singing-all-dancing logic builders - have been around for decades, but somehow wetware hangs on in there.

Automation and AI can build you a perfectly respectable website, UI form, sort algorithm or other fractional component of an Application. And it can do exactly the same for your every Competitor, which is a sure way to remove your business from the gene pool.

It cannot build a national payroll system (Novopay), a Police Intelligence System (INCIS) or even a useful Gubmint transactional hub or shared-services back-end for Health or Education (often announced, never delivered). The characteristics of these domains are constant environmental (e.g. legal) change, inconsistencies in that legal framework (Holidays Act...), incumbent inertia, and imperfect appreciation of desired outcomes (rife in the public sector). Plus pollies greasy fingers all over the process.

All these challenges take warm, educated bodies, and lots of 'em. To narrow/articulate objectives, get opinions on the prevailing legislation, specify environments, seek budgets, acquire and manage teams, keep a watch on the pollies and their fads, and finally to build something which even vaguely resembles the original spec with (of course) multiple through-course variations. Just ask IRD......

I’d say you had the limited view on the subject
You’re full of your own importance but it’s just IT
Up here we have robots performing operations on people every day where I work
You’re performing a task that at the moment requires a human
If you believe that will remain the paradigm then you’re in for a shock in your lifetime

Just out of interest, did your robots program themselves? Or did someone like Waymad do that?

schools are still teaching whole word spelling and quick trick maths
If the education system went back to the 1950s it would prepare more students to a better standard
I was unlucky enough to have the silly California new maths experiment
Luckily my teacher gave us the old 1950s arithmetic books too so we learnt long division & multiplication
My own children I forced to learn all the times tables up to 12X12 and they each had to sit and write them all out on paper to win a canoe each.
They’re both better educated than I Yet elementary schooling was not as good as in the 1950s & 60s or even 70s
Time the new government bypassed its teacher union pals and did something to improve the educational foundation in the countries primary schools
Then adopt a policy of placement of students in high schools into courses appropriate to their intellectual abilities Target the funding instead of this scattergun approach.
People are different we can’t all be everything yet the system is funding us to do anything we wish

Good point on various professions seeing change, as there are a fair few that will be in the firing line. Stock investors can get consolidate tax reports from some investing platforms, removing the need for accountants. Robo advice platforms (like Stockspot and QuietGrowth) are also coming more and more popular and accessible, removing the need for financial advisers. Microinvesting and investment apps (e.g. SelfWealth and Robinhood) allows investors to bypass traditional brokers that charge stupidly high fees. The massive growth in popularity of ETFs and index funds means a move away from active to passive investing, and less reliance on traditional managed fund suppliers. Kitset and pre-built homes are slowly becoming available, along with house building robots like the Hadrian X which will impact builders and tradies.

As for your last comment, it's very much a vote grab. Just like National vowing to bring NZ into wage parity with our Trans-Tasman cousins and wanting to make housing more affordable, or Labour's WFF.

Thank you for your reasoned response
The ETFs are fine but active investment done properly can work well
Milford Asset Management is an active investor in NZ
Up here we all love Boston’s Vanguard which offers low fees and is customer focused not like the banks investment advisors.
NZ could do well with specialized software A friend of mine sold her company to an American Corp and is in process of repeating her success . It is easier to find talent up here for projects because of the money and career advancement opportunities.

Sorry Labour, I'm not a fan of simply throwing money at a "free" year of study. The last thing we need is more muppets wasting taxpayer money on a year of undergraduate education they won't utilise. It would be better to spend the funds on trade and STEMM vocations, or introducing coding and programming and other STEMM skills into the primary/intermediate/secondary school system. Introduce trade skills through NCEA, and offer more work placements. Create scholarships or grants for the trades or subjects like engineering or robotics. Promote startups and businesses in high school though subjects such as economics and business management. Continue to expose women to the STEMM fields. Invest in the future and where the world is going.

Agreed. If they must hand out a free year, give it to the post-grads.

That's a good idea actually. Give it to those who have already proved they can study and pass courses.

Rather than an 18 year old with nothing else to do.

trouble is, then the 18 year old will have nothing else to do.

Tertiary education now serves three purposes
- keeps reported unemployment down
- helps add to the debt ponzi
- supplies a (shrinking) pool of necessary graduates

Unfortunately we have been sold and fallen for the "human capital" line ... we were told investing in education grows wealth & opportunity .... when in fact It doesn't actually hold true in the aggregate.
It was the leverage of energy resources that always provided our wealth

Since the post grads usually work on highly specialised doctorates and research that can be made into highly valuable companies & benefit the country that would actually make a lot more sense. Especially as even a loan is not available for post graduate students. Often they rely on a married partner or family funding them which means all too many would skip NZ instead so even post doctoral work is lost to NZ and all those patent opportunities.

Why women ? Sweden tried this and it made the gap in the sexes bigger
Why can't people choose their own future , including having kid -

In capitalism, one cannot simply 'choose their own future'. We collectively decide our future.

In fairness, it's a potentially more productive investment of money than just handing it over to 65 year olds to squander on beer and sherry.

2,000 seems like blissful ignorance to me.

They have opened up to anyone who hasn't undertaken previous tertiary education. We could be talking 10s of thousands signing up to get something that is "free" rather than getting an "education"

Make the third year free so students with the ability to get through have the incentive to succeed.

Im a new government supporter but this policy is absolutely terrible. I am all for free education like all those generations before me had but it has to be directed at the right people and managed in the right way. This could potentially be a disaster with everyone trying thier hand at something. Question, will it apply to pilot training for example which can typically be close to $100k in its first year?

No it's capped at (I think) 8,000 p.a. fortunately.

I don't know that anyone thinks this policy is a good idea - even among Labour supporters.