Education Minister Chris Hipkins announced yesterday that polytechnics, universities and other tertiary institutions will see an increase of 1.6 per cent to per-student subsidy rates from 2019, equating to $31.7 million a year.

Hipkins says tertiary education providers have collectively seen a steady decline in enrolments from 2010 to 2016, which has affected providers’ ability to maintain the quality of what they deliver to students.

“The increase in tuition subsidies will help address some of the pressures faced by the sector, but is only a first step.”

The Minister is currently undertaking reviews of the vocational and training education system and Institutes of Technology and Polytechnics (ITPs), including how they are funded.

Consultation will also begin soon on the maximum amount tertiary education providers will be able to increase their fees in 2019.

The New Zealand Institutes of Technology and Polytechnics (NZITP) have welcomed the increase.

“NZITP believes that the failure to inflation-adjust this subsidy over the past 10 years (apart from a 1 per cent increase in the previous government’s last year in office) is a big contributor to the current financial challenges being faced by some in the sector,” said NZITP Spokesperson Charles Finny.

University vice-chancellors have also acknowledged the increase; however, are pleased to hear that it is just a “first step”.

“This starts to address the real funding pressures being faced by the sector, but there is still a long way to go and we look forward to the Government’s next steps in this space,” says Universities New Zealand executive director Chris Whelan.

“To ensure that the Government can deliver on its policies for building a resilient and adaptable workforce, it must continue to invest in maintaining the quality of the education provided to students, not just attempt to lower the cost to them.

“Universities will struggle to provide young New Zealanders access to a world-class university education. Despite the hard work and commitment of university staff, continued underfunding makes it harder for New Zealand’s universities to maintain their international rankings. They will struggle to develop innovative research that benefits all New Zealanders. And it will be more difficult to attract international students to New Zealand universities—students who currently bring $1 billion to the economy annually.

“Government should be investing more in the development of skills and knowledge to build an innovative, internationally competitive, knowledge-based economy.”

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