Tertiary education featured prominently during the election campaign, and policies to increase student support significantly are a key component of the new government’s 100 day plan.

At the time of writing final costings of these policies hadn’t been released, but Ministers have suggested the ‘fees free’ policy alone could cost around $1 billion a year when fully implemented. Increased student allowances and access to interest free loans will augment that by hundreds of millions. So the total tertiary education budget (currently around $4 billion including the costs of the loans scheme) could be increased by 25 per cent – with all of that devoted to extra student support.

This will, no doubt, be popular with future tertiary students – less so with those who have just paid and now face higher taxes to pay more for those who follow – but we argue it represents grossly untargeted spending on a colossal scale.

It may be that fees provide a barrier to tertiary education for some, notwithstanding the current subsidies which average around 80 per cent including interest free loans. However no evidence of this has been provided. Extra support could have been provided for those most in need.

Instead, we have scarce education resources being spread everywhere – including to the sons and daughters of the richest New Zealanders, who will go on to earn high incomes and can easily contribute to the cost of their education.

Meanwhile my concern is that since all the extra money has been devoted to extra student support, it’s difficult to see how there will be much left to fund the sector directly to ensure it remains strong and effective, and that it builds on its strong international reputation.

Faced with intense international competition our leading universities are struggling to hold their rankings. It will take careful investment in quality to arrest a downwards trend and unless the new government has indeed found the magic money tree, I struggle to see how they will do it given the choices they have already made.

That will have long-term consequences for our international competitiveness.
Given the incredible haste in which the ‘fees free’ policy is being implemented there is no time to consider unintended consequences. One that worries me is the impact it will have on the long-standing challenge to attract bright and talented young Kiwis into apprenticeships and trades, where they are desperately needed.

One of the best arguments in favour of taking up an apprenticeship was that it was virtually free and you earned money as you learnt. That point of difference has now been eliminated, surely making the task harder.

I also hold grave concerns for the export education sector which has grown to a $4.5 billion sector, employing around 30,000 New Zealanders and helping to diversify our economy beyond commodities.

Like every industry, this one has challenges and poor performers which we had empowered the regulators to root out. The new government campaigned on an explicit target to reduce the number of international students by 15,000-22,000 per year – around a quarter of the average inflow.

In government, Ministers now appear to be back-peddling on that promise. That would be welcome, but they should then explain why they cynically stoked anti-immigrant sentiment during the election campaign with promises they never intended to keep.

Paul Goldsmith, National Party Tertiary Education Spokesperson


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