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A simple tertiary education budget

Written By: - Date published: 10:53 am, June 3rd, 2011 - 11 comments
Categories: budget 2011, education - Tags:

When all the unders and overs are calculated, the maths for tertiary education is a lot simpler than all the commentary from the government would have us believe.

For the next four years, the minister, Steven Joyce, will be putting less money into tertiary education. That is a political choice. He could have chosen to invest in tertiary education knowing it strengthens communities and helps provide sustainable economic growth.

In his role as Minister for Transport and Communications, Steven Joyce made that choice to invest. Total crown expenditure for transport and communications rises steadily and consistently from $8 billion last year to over $9 billion by 2015. By comparison, Treasury forecasts tertiary education spending to fall from $4.5 billion last year to $4.1 billion in 2015. At the same time, it expects student numbers (EFTS) to rise from 240,000 last year to a high of 244,000 next year before settling down to 243,000 through to 2015.

Last year the government spent about $10,000 per student. Next year that will fall to about $9,700, and by 2015 it will have climbed back to $9,800. That means we will invest 2 or 3 percent less in the next generation of students than students who studied last year.

With that fact clear in our minds, let us look at what Mr Joyce has chosen to do with the money he has decided to spend on tertiary education.

The first point is that the minister has targeted most of the new spending in tertiary education at degree and post-degree education. The high cost new initiative in the budget is the 2 percent increase in the subsidy rate for degree and post degree courses. In contrast, he has aimed most of the cuts in tertiary education at people already out of school, second chance learners, part-time students and workers looking for skills.

The minister is effectively adding a tier onto the fence that divides the highly educated and those without a tertiary education.

This is particularly true of the changes he has made to the loans scheme. If you are older, you can no longer borrow for anything except course fees. If you study part-time, you cannot borrow for course related costs. Industry training has lost nearly $60 million over four years.

The second point is that the minister is betting that the tertiary education sector can either mask over his cuts or increase productivity because of them. For instance, he is choosing to fund 244, 000 EFTS next year despite knowing the sector actually trained 250,000 last year: 11,000 more than the government funded it to educate. Moreover, the sector has consistently taught more students than the government funded it to teach in previous years too.

Staff know how institutions mask budget cuts: class sizes, lectures and tutorials grow in size, ‘low value’ courses are cut in favour of high value courses that attract large numbers of post-graduate students, and salaries and working conditions are pressured down.

Students also know how institutions mask budget cuts: student fees rise, managers move pastoral care from a separate entity into an extra task for staff with other duties and courses are compressed.

The minister has presented this budget as being about chasing down errant borrowers who are not paying back their student loans. He has made big savings to the student loan scheme – although most of them are from suspending inflation adjustments to the student loan repayment threshold ($19,084) until 2015, rather than from tracking down devious debtors.

He has talked about getting tough on aviation schools teaching more pilots than we could ever need. However, that $40 million saved hardly compares to the $90 million he has taken out of industry training affecting around 180,000 workers in about 35,000 workplaces.

The budget is simple to understand and the minster’s goal is simple, in both senses of the word. It aims to discourage anyone who has not already had the best opportunities from getting an education. It aims to divide us into the educated and the rest. And it aims to pass not just the costs, but more importantly, the benefits of education from our public communities to those lucky private individuals who get the opportunity. With this budget the tertiary education sector will find it harder to help New Zealand out of the financial crisis, it will find it harder to help New Zealand grow and prosper, and it will find it harder to give opportunities to New Zealanders who otherwise would not have them.

Dr Sandra Grey

National President

Tertiary Education Union – Te Hautū Kahurangi o Aotearoa

11 comments on “A simple tertiary education budget”

  1. NickS 1

    This is particularly true of the changes he has made to the loans scheme. If you are older, you can no longer borrow for anything except course fees. If you study part-time, you cannot borrow for course related costs. Industry training has lost nearly $60 million over four years.

    I see Joyce is still firmly divorced from reality. Because “obviously” older students are going to have tons of money to spend each year on very expensive textbooks etc, instead of say being like many adult NZ’ers and being without a hell of a lot of savings stashed away. Then there’s borrowing for living costs, which if you’ve exhausted your student allowance is often the only means of income for post grads or those who’ve already gone through one degree and have found it kind of useless for getting work.

    Meh, I guess I wont be able to go back to uni until Labour’s back in and deal with this, as I’ve only got a year left on my student allowance and I’m saving that for the Post Graduate Diploma in Science I want to do, which will hopefully lead onto a Masters Thesis (preferably something to with evolutionary biology, but I’ll settle for ecology/invasive species with a mol.bio focus).

  2. Spam 2

    I find it really ironic that the left complain about not enough money being spent on tertiary education…. then complain that those that have a tertiary education and get high paying jobs because of it are “rich pricks” that should be hammered with envy taxes.

    • Peter 2.1

      Your reply does not do justice to a very informative post. Next time make the effort to argue the issues!

      • ghostwhowalksnz 2.1.1

        NZs richest prick left school at 16 !
        One of the reasons for increasing slightly the tax rate over $60,000 is that is where the bulk of graduates are, who got big subsidies for their tertiary training or have children who are currently students.

        Its better to milk the cow rather than make it yourself

  3. tc 3

    Wondered what Mudloons lovechild and sideshows favourite henchman had been up to in tertiary after aya-tolley had it taken off her, as expected another kick in the teeth for that ‘brighter future’ .

  4. Lindsey 4

    I retrained in my 50’s. Got 2 Masters degrees in my new field. Borrowed for course costs and living costs. Got a good job because I was trained and qualified and paid it all back. Why do the Tories hate people like me?

    • Draco T Bastard 4.1

      1.) They think only the rich deserve such chances and…
      2.) You’re showing them up proving that they’re not actually better than everybody else.

      • ghostwhowalksnz 4.1.1

        Education is what they hate. Havent you noticed ?

        • Draco T Bastard 4.1.1.1

          Well, that too – probably because education (research et al) inevitably proves everything they believe to be wrong.

    • Colonial Viper 4.2

      You got a job in your new field with two masters degrees gained in your 50’s, and short sighted NZ employers didn’t say that you were too old and too over qualified?

      Truly remarkable.

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