Government reveals new funding for tertiary education amid concerns of job losses, programmes cut

The Government is investing an additional $128 million into the under-pressure tertiary sector, which it says will increase tertiary subsidies by a further 4 percent in 2024 and 2025.

The funding comes as a number of universities across New Zealand face significant budget deficits and are in the process of proposing redundancies and ending programmes. 

There was a $248.5 million investment into the sector announced in Budget 2023, but Education Minister Jan Tinetti said on Tuesday that Budget process began when universities were forecasting enrolment increases.

"The opposite has occurred, and it is clear that there is a need for additional support," the minister said in a statement. 

She said the $128 million in new funding over two years that will be invested to increase tuition subsidies at degree level and above by a further 4 percent in 2024 and 2025 will "help maintain the quality and breadth of higher education offerings and research capability in our tertiary institutions".

"This is vital for our students, our tertiary workforce, our broader research system, and for economic and social wellbeing in New Zealand. It will not resolve all the issues that universities are facing, but it should make a positive difference."

The Government is also going to review higher education funding. Decisions on the scope of this will be taken before the end of the year.

Tinetti said the money will go to all institutions offering degrees, including Wānanga and Te Pūkenga. 

"It should be noted that while recent focus has been on Victoria and Otago Universities, other institutions have previously managed declines in student numbers. We did not want to disadvantage those institutions which in some cases had already made difficult decisions."

Jan Tinetti.
Jan Tinetti. Photo credit: Getty Images.

She said the sector was 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. Similar issues are being faced by tertiary providers worldwide."

The new funding will come from underspends in Vote Tertiary Education, including from the fees free scheme "caused by lower than expected enrolments", said Finance Minister Grant Robertson. 

"Tertiary institutions are autonomous and make their own decisions on how best to respond to their financial situation. This funding increase will help universities and other institutions deliver their strategic plans as agreed by their Councils. 

"The Government expects the subsidy increase will be considered by when universities make final decisions on their offerings for 2024 and 2025.

"As part of its decisions Cabinet has asked for a report back by the end of July on whether recently announced changes represent a threat to capability or provision of programmes nationwide."

Victoria University of Wellington Student Association president Jessica Ye told AM on Tuesday morning that programme languages like Italian are currently expected to be cut entirely without funding.

"It's not sure what's in store for them, they've been guaranteed they'll [be able to] finish their programmes, but what that actually looks like, I doubt the quality of the education will be just as good."

Tertiary Education Union’s Victoria University branch president Dougal McNeil said "the world will be a poorer place, New Zealand will be a poorer place" if the cuts go ahead. 

"There's a whole range of subjects from geophysics to Italian, to secondary teaching that looks set to go. Earthquakes don't stop happening just because the research has been diminished."