More student enrolments bankrolled in New Zealand budget

Some succour for NZ universities and students in budget aiming to support training for those who have lost jobs in crisis

May 14, 2020
New Zealand Beehive
Source: iStock
New Zealand Parliament

New Zealand universities will attract a portion of some NZ$1.6 billion (£784 million) in new tertiary education spending outlined in the 2020 budget.

The government has handed down the budget as scheduled on 14 May despite the massive uncertainty generated by the pandemic, with a NZ$50 billion Covid-19 Response and Recovery Fund as the centrepiece. However, vocational colleges will draw the bulk of the new tertiary education money, with policymakers’ hopes invested in a skills-led recovery.

How much will be left for universities is unclear, with limited detail available so far, and with about NZ$20 billion of recovery money still remaining to be allocated.

Caralee McLiesh, the treasury secretary, said some spending decisions had been left out of the budget projections. “The swiftly evolving…impact of Covid-19 has meant that the government has continually needed to make decisions to respond to this crisis,” she said.

The announced measures include NZ$412 million to help employers retain their apprentices and NZ$320 million for free trades training. The government has extended eligibility for “fees-free” vocational training to all unemployed people rather than just school-leavers.

“As we emerge from this health crisis, it is important that we now invest in training and education for people who might have lost their jobs or want to move into a different sector where prospects are better,” said Chris Hipkins, the education minister.

An extra NZ$334 million has also been earmarked for additional tertiary enrolments. Policy analyst Dave Guerin, editor of the Tertiary Insight industry newsletter, said most providers operated “within a few per cent” of their enrolment caps and the extra money would allow them to increase their load.

He said universities would also benefit from a 1.6 per cent subsidy rate adjustment to their tuition funding, although research grant rates would remain unchanged.

Universities New Zealand anticipated some NZ$600 million in extra funding for its members over the next four years. “Our institutions can be a real part of getting this country going again,” said chairman Derek McCormack.

“This will help enable universities to be part of the rebuild, just as we have played an important role in informing and helping to keep the public safe over the past weeks.”

The budget includes a NZ$20 million hardship fund for students, who also stand to benefit from an eight-week extension to the country’s multibillion-dollar wage subsidy scheme.

The programme allocates up to NZ$585.80 a week for staff at businesses significantly affected by the crisis. Tighter eligibility rules will apply, with the extra two months’ subsidies restricted to businesses that can demonstrate a 50 per cent loss of revenue over the previous month – up from the 30 per cent threshold that applied in the scheme’s first 12 weeks.

Mr Guerin said businesses in sectors that often employ students, such as retail, tourism and hospitality, could meet the higher threshold. Some international education providers such as English-language schools could also benefit from the subsidy extension.

The budget also includes NZ$10 million to repair earthquake-damaged science facilities at Lincoln University, near Christchurch, confirming commitments announced last year.

While further details on the budget measures are expected in coming days, New Zealanders may have to wait for a pre-election update in August for information about the unallocated NZ$20.2 billion of the recovery fund.

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