The Government's pumping an additional $128 million into the tertiary sector over the next two years in order to increase tuition subsidies at degree-level in response to an enveloping crisis in the sector.
The additional money represents a 4% rise in tuition subsidies in each of 2024 and 2025. All this is in in addition to the 5% increase provided at Budget 2023.
This follows serious financial problems in the sector, leading to huge deficits and hundreds of redundancies at Otago and Te Herango Wake - Victoria Universities.
“The Government has heard the concerns of the sector," Education Minister Jan Tinetti said.
"When we began our Budget process Universities and other degree providers were forecasting enrolment increases. The opposite has occurred, and it is clear that there is a need for additional support."
She says the funding will help[ maintain the quality and breadth of higher education offerings and research capability in tertiary institutions.
The money will go to all degree granting institutions including Wānanga and Te Pūkenga.
Tinetti adds that while recent focus has been on Victoria and Otago Universities, other institutions have previously managed declines in student numbers, and she did not want to disadvantage institutions which in some cases had already made difficult decisions.
“Presently, our tertiary institutions are experiencing an unexpectedly large decline in domestic enrolments and increased cost pressures. In addition, although international enrolments are increasing, they remain well below pre-COVID levels," Tinetti says.
"Similar issues are being faced by tertiary providers worldwide.”
The Government says it will also review higher education funding, including the Performance Based Research Fund, and the latest funding is a temporary boost for two years.
“The current financial situation of some tertiary institutions points to the need take this broader look into the way our higher education system is funded and financed," Finance Minister Grant Robertson says.
"Decisions on the scope and approach to the review will be taken before the end of 2023."
The three largest recipients will be Auckland, Otago and Massey universities.
33 Comments
That's a good example of the problems most country face, broke governments like NZ, spend more money they don't have, to satisfy various needs, whilst the central banks plead to spend less to reign in inflation. All the while many segments of the country scream out for more money to be spent by the government to alleviate their problems.
It can't end well :-(
What are YOU smoking?
You criticised the government for throwing public money around to address an issue, and support institutions and jobs, and a public good (education)
How is that fundamentally different from the government throwing money at motels, to support their existence and provide a public good (emergency housing) - ie. your livelihood. Would your motel have survived without that? As a taxpayer, I am subsidising your motel business.
This is nearly as bad, in terms of hypocrisy, as when you called people on the North Shore opposing apartments ‘NIMBYs’, yet submitted in opposition on the council’s plan change to enable apartments where you live! Astonishing…
Yep, I thought you didn't understand my original post. As always you assume too much. I didn't criticise the government at all, I simply described a very tricky situation many governments find themselves in. Unlike you, I didn't associate a qualitative value of good or bad to it, I just said it's a typical example of the huge problems governments are facing.
Couldn't be that inflation is fine so long as the cause money is spent productively? ie on education? And that inflation is bad if the cause money is spent on non-productive assets? ie the same house again and again?
The government can spend what it likes so long as it balances this with tax take. Banks which flooded the market with money for non productive assets, which are given tax breaks, that's what tips the balance sheet. A major influx of money with nowhere to go.
Pick your poison;
Increase in productive spending, credit crunch, CPI inflation and real HPI deflation.
Reduction in productive spending, credit crunch, CPI disinflation and nominal asset price destruction.
Agreed. They sit on a goldmine of land assets. If the they cashflow problems they should utilise these assets more efficiently or sell them. Work with local government to re-zone some land or somthing. Universities are meant to be hubs of innovation.... yet they can't be innovative when it comes to their own financial situation.
Yes and no. The universities have a strange relationship with the government and are only semi-independent. They can't, for example, set their own prices on their primary product. So they don't necessarily have the latitude that you expect in other contexts.
The $ is just a plaster. The real question is what comes out of the last part that you perhaps didn't read:
“The current financial situation of some tertiary institutions points to the need take this broader look into the way our higher education system is funded and financed," Finance Minister Grant Robertson says.
"Decisions on the scope and approach to the review will be taken before the end of 2023."
What comes out of that (if anything) is the real question.
Agreed. Fees-free tertiary education for first year students was costing the NZ taxpayer almost $200m a year back in 2019. This was put in place despite industry advice to make the subsidy more targeted towards skill shortages (apprenticeships, nursing, etc.).
What has that cash-splash achieved to date? We know for a fact that enrolments did not increase in NZ in any of the years since the subsidy was introduced.
Perhaps the people thinking of going to university have changed their minds. It is becoming very obvious that most of what they trying to teach young people today is not helping those who have to go into debt to do it. Perhaps they might like to teach the students some real useful education like how to get a job, attend it every work day & in doing so they get to learn what the real world is all about & how they can get ahead within it.
Yes, I know. I'm old fashioned like that.
Unis have become a make work job creation scheme for non jobs, particularly in the public sector.
https://www.spectator.com.au/2023/01/elite-revolt/
Perhaps insisting on teaching "Maori Science" wasn't the smartest plan. Now serious STEM students need to go find a real University overseas to attend in order to get a qualification that wont be laughed at by global employers.
As for international students, who wants to pay $100k for mandatory indigenous studies in every degree? Its bad enough we force foreign nurses to pay $13k to complete a compulsory Treaty of Waitangi and "cultural safety" course, but its a joke if we think University level students are going to pony up for it. Its a fair bet that even foreign immigrants long resident in the country are sending their kids back to their home countries to attend University.
Lastly the Govt destroyed the last 3 years of high school students education with the lockdowns, school closures, mandatory home isolation every time someone you knew had covid, and shutting down classes whenever a teacher or student got Covid. Most of them wouldnt even be equipped to cope with University now. That's generational damage that will never be undone.
When the borders shut and we had zero covid there was a massive business case to bring in a lot of students from overseas. We were virtually the only country where you could have a normal university experience. The army barracks could have been quarantine facilities and you could have done it all at a profit.
The additional money represents a 4% rise in tuition subsidies in each of 2024 and 2025. All this is in in addition to the 5% increase provided at Budget 2023.
Tuition subsidies - I'm assuming it's all funding linked to bums on seats - not enough bums and your fixed/sunk costs don't get the boost, I assume..
An absolute waste of money, there aren't going to be the students available to fill them, we may as well start merging and closing some of them.
That's right. It is also worth noting that Vic and Otago somehow have more employees than they did pre-Covid for some reason.
Education has become more accessible for better or worse with online courses becoming available.
I'd recommend grads to get an online masters from TU Delft that costs the same as masters from Waikato Uni.
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