Vote Tertiary Education

The Government's total direct spend on tertiary education is approximately $4.250 billion per year (this does not include additional expenditure from other portfolios and Votes including contestable research funding from Vote Science and Innovation).

Initiatives in Budget 2015 will allocate $112.3 million of operating funding and $1.0 million of capital funding for new initiatives in tertiary education over the next four years.

Vote Tertiary Education Budget Package

Note: Numbers on the left and right may not add exactly due to rounding.

Vote Tertiary Education spending initiatives

Tertiary Education InitiativeDescription
Targeted Tuition Subsidy Increases for Science, Agriculture and Horticulture, Optometry, Pharmacy and Physiotherapy

Operating funding
  • 2015/16 $12.250 million
  • 2016/17 $24.500 million
  • 2017/18 $24.500 million
  • 2018/19 $24.500 million

Four Year Total $85.750 million

The initiative delivers targeted tuition subsidy increases at degree level and above for:
  • science – a 7.5% increase costing $65.299 million
  • agriculture and horticulture – a 20% increase costing $15.766 million
  • optometry and pharmacy – a 5% increase costing $2.684 million
  • physiotherapy – a 7% increase costing $2.001 million.

These increases will:

  • bring government funding into closer alignment with relative costs of delivery
  • invest in priority areas
  • direct funding to research-based institutions
  • contribute to the Government’s Business Growth Agenda.

A report outlining an overview and the key results of the Ministry of Education’s analysis of NZBT data is available at http://www.educationcounts.govt.nz/publications (external link)

Investing to Increase the Number of Engineering Graduates

Operating funding
  • 2015/16 $1.837 million
  • 2016/17 $2.692 million
  • 2017/18 $2.404 million
  • 2018/19 $4.447 million

Four Year Total $11.380 million Debt impact costs

  • 2015/16 $0.050 million
  • 2016/17 $0.055 million
  • 2017/18 $0.181 million
  • 2018/19 $0.866 million
This initiative takes a staged approach to lifting our engineering graduate numbers by investing in:
  • additional full-time places (50 from 2016, increasing to 300 by 2019)
  • a public awareness campaign in 2016
  • workforce challenge grants to encourage innovative ideas for supporting student success and transitions to work
  • secondary-tertiary pathways programmes to prepare students and help them transition into engineering study.
Expanding Māori and Pasifika Trades Training

Operating funding
  • 2015/16 $1.200 million
  • 2016/17 $2.400 million
  • 2017/18 $2.400 million
  • 2018/19 $2.400 million

Four Year Total $8.400 million

This initiative sets aside funding sufficient to fund 500 additional learners a year in Māori and Pasifika Trades Training (MPTT) from 2016. MPTT has deepened linkages between providers, employers and communities, started to connect to people who are disengaged from tertiary education, including people with high needs requiring significant pastoral care and academic support, and lifted the profile of Trades Training in Māori and Pasifika communities.

This investment is a step toward increasing the number of MPTT learners to 5,000, in line with the Government’s manifesto commitment.
Fully Fund Trainee Medical Intern Grants

Operating funding
  • 2015/16 $0.841 million
  • 2016/17 $1.676 million
  • 2017/18 $1.669 million
  • 2018/19 $1.714 million

Four Year Total $5.900 million

This initiative provides sufficient funding for all forecast trainee medical intern grants. This is needed because more medical students are staying in study until the sixth year, and more international students are gaining residency and becoming eligible for trainee medical intern grants. 

Trainee medical intern grants are stipends paid to students while they intern in hospitals.
Expanding the Youth Option of the Literacy and Numeracy Assessment Tool

Capital funding
  • 2015/16 $0.500 million
  • 2016/17 $0.500 million

Operating funding

  • 2015/16 $0.020 million
  • 2016/17 $0.185 million
  • 2017/18 $0.330 million
  • 2018/19 $0.330 million

Four Year Total $1.865 million

The youth option of the Literacy and Numeracy Assessment Tool (the Assessment Tool) helps educators identify the literacy and numeracy needs of learners aged 15 to 25.
 
The sector’s use of the Assessment Tool is growing, and expanding the number of questions in the Assessment Tool will support this growth and ensure that questions reflect the contexts, cultural references, and situations that young people can identify and engage with.
 
The Assessment Tool supports increasing numbers of young learners (particularly Māori and Pasifika) to participate in tertiary education in both secondary and tertiary settings.
Introduce Rate My Qualification

To be funded from within TEC baselines
Rate My Qualification will support learners to make informed study and career decisions. It will help prospective tertiary students assess the likely value of available tertiary education options.
 
Rate My Qualification is part of wider government work to improve the quality and accessibility of careers and study information to better support learners in making informed tertiary study choices.

Vote Tertiary Education savings/reproritisation initiatives 

Tertiary Education InitiativeDescription
Transfer Unspent Tuition Funding from 2014/15

Reprioritised funding
  • 2014/15 $29.346 million

Four Year Total $29.346 million

The tertiary education package draws on $29.346m of unspent funding from the 2014/15 financial year, to be transferred to 2015/16 ($12.745 million) and 2016/17 ($16.601 million).

This unspent funding results from recoveries of funding from providers (in response to under-delivery and under-performance), and also small amounts of unallocated funding.
Using funding made available by reduced demand for tertiary education

Reprioritised funding
  • 2016/17 $10.000 million
  • 2017/18 $20.000 million
  • 2018/19 $20.000 million

Four Year Total $50.000 million

The tertiary education package draws on future baseline funding that would otherwise remain unused due to softening demand.

A strong economy, and a reduction in the number of people aged 18-25 years after 2016, is reducing demand for provider-based tertiary education.

The amount of future funding that is being used to fund Budget priorities represents a portion of the expected fall in demand for places, with plenty of funding left in the system to:
  • fund providers that respond effectively and grow their domestic enrolments
  • support the Government’s updated BPS target to have 60% of 25-34 year olds with a qualification at level 4 or above by 2018.
Baseline adjustment to Training for Designated Groups (Youth Guarantee) Reprioritised funding
  • 2017/18 $0.330 million
  • 2018/19 $0.330 million

Four Year Total $0.660 million

A small baseline adjustment is being made to Youth Guarantee funding from 2017/18 to fund ongoing costs associated with expanding the Youth Option of the Literacy and Numeracy Assessment Tool.

This adjustment recognises that this initiative will contribute to the overall effectiveness of the Youth Guarantee programme.
Set funding for the Annual Maximum Fee Movement at 3% for 2016

Operating savings
  • 2015/16 $3.848 million
  • 2016/17 $4.513 million
  • 2017/18 $4.341 million
  • 2018/19 $4.124 million

Four Year Total $16.826 million Debt Impact savings

  • 2015/16 $8.939 million
  • 2016/17 $11.150 million
  • 2017/18 $11.400 million
  • 2018/19 $11.482 million
An Annual Maximum Fee Movement (AMFM) of 3% is proposed for the 2016 calendar year, subject to consultation.

The AMFM regulates the level to which tertiary education providers can increase their course fees for domestic students each year.

In a lower-inflation environment, it is appropriate that students should not face course fee increases that are significantly more than increases in their other costs.

Setting funding for the AMFM at 3% as part of Budget 2015 provides operating savings in the Student Loan Scheme.
Maintain the student allowance parental income threshold

Operating savings
  • 2015/16 $0.055 million
  • 2016/17 $0.839 million
  • 2017/18 $3.265 million
  • 2018/19 $4.973 million

Four Year Total $9.132 million Debt Impact costs

  • 2015/16 $0.063 million
  • 2016/17 $1.023 million
  • 2017/18 $3.738 million
  • 2018/19 $5.793 million
The parental income threshold determines eligibility for student allowances for students aged under 24 years based on their parents’ incomes.

It has been set at the current level ($55,027.96) since 2012 and maintaining it at this level will generate savings and better target this assistance to those who will benefit most, in particular, students from low-income families.

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