Budget 2016: Vote Tertiary Education Initiatives

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

Tertiary Education InitiativeDescription
Targeted Tuition Subsidy Increases for Science, Agriculture and Horticulture, Veterinary Science, and Medicine

Operating funding
  • 2016/17 $12.307 million
  • 2017/18 $24.614 million
  • 2018/19 $24.614 million
  • 2019/20 $24.614 million

Four Year Total: $86.148 million
The initiative delivers targeted tuition subsidy increases for:
  • science at degree-level and above: $12.6m per year – an approximate 5% increase in funding
  • undergraduate medicine: $6.7m per year – an approximate 6% increase in funding
  • agriculture and horticulture at degree-level and above: $4.2m per year – an approximate 16% increase in funding
  • veterinary science at degree-level and above: $1.1m per year – an approximate 9% increase in funding.

These increases will:
  • build on previous targeted increases to bring tuition 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 and Innovative New Zealand.

Tuition subsidy increases in Budget 2016 are funded from new funding, unspent tuition funding from 2015/16, and future baseline funding that would otherwise remain unused due to decreasing demand.
Alignment of sub-degree and undergraduate tuition subsidy rates

Operating funding
  • 2016/17 $5.273 million
  • 2017/18 $10.545 million
  • 2018/19 $10.545 million
  • 2019/20 $10.545 million

Four Year Total: $36.909 million
This initiative increases tuition subsidy rates for sub-degree provision by 2%, aligning most with degree-level rates.

This will improve the quality and sustainability of sub-degree tertiary education and provides a significant funding boost to polytechnics, wānanga and private training establishments. It will also support more people into advanced trade qualifications, diplomas and degrees.

Tuition subsidy increases in Budget 2016 are funded from new funding, unspent tuition funding from 2015/16, and future baseline funding that would otherwise remain unused due to decreasing demand.
Additional New Zealand Apprentices

Operating funding
  • 2016/17 $0.900 million
  • 2017/18 $2.700 million
  • 2018/19 $4.500 million
  • 2019/20 $6.300 million

Four Year Total: $14.400 million

Ongoing funding is $7.200 million a year from 2020/21
This initiative will help support 5,500 extra New Zealand Apprenticeships by 2020 to deliver more skills for industry.

A strengthening labour market, refreshed industry training system and improvements in school retention and achievement are resulting in greater demand for apprenticeship training.

This increase will contribute towards the Government’s Business Growth Agenda and support more people aged 25-34 into advanced trade qualifications, diplomas and degrees.
International Connections for New Zealanders

Operating funding
  • 2016/17 $6.500 million
  • 2017/18 $12.000 million
  • 2018/19 $12.500 million
  • 2019/20 $12.500 million

Four Year Total: $43.500 million

This is a package of initiatives that will incentivise more New Zealand students to develop international linkages and connections.

This initiative contributes to goal 3 of the Government’s Leadership Statement for International Education and priority 6 of the Tertiary Education Strategy 2014-2019 – growing international linkages.

The Minister for Tertiary Education, Skills and Employment announced further details on 19 July.

Entrepreneurial Universities– (Contingency)

Operating funding
  • 2016/17 $5.000 million
  • 2017/18 $10.000 million
  • 2018/19 $10.000 million
  • 2019/20 $10.000 million

Four Year Total: $35.000 million

This initiative involves investing $35 million over four years in ‘Entrepreneurial Universities’, a new initiative to help universities attract world-leading entrepreneurial researchers to New Zealand to further strengthen our universities and our broader fast-growing innovation ecosystem.

The Minister for Tertiary Education, Skills and Employment announced further details about the initiative on 20 July 2016.

Fees-free Foundation Education

Operating funding
  • 2016/17 $2.080 million
  • 2017/18 $4.160 million
  • 2018/19 $4.160 million
  • 2019/20 $4.160 million

Four Year Total: $14.560 million
This initiative implements the Government’s manifesto commitment to make foundation education at levels 1 and 2 fees-free for all eligible learners from 2017. This will enable second-chance learners to gain the basic skills they need to progress to higher study or to gain employment.

This initiative is funded from within the existing foundation education baseline. Demand for foundation education has decreased since 2012 and is expected to continue decreasing, as more young people gain foundation qualifications (NCEA Level 2 or higher) at school and through Trades Academies and Fees-Free Youth Guarantee.
Boosting achievement of Māori and Pasifika

Operating funding
  • 2016/17 $2.400 million
  • 2017/18 $2.400 million
  • 2018/19 $2.400 million
  • 2019/20 $2.400 million

Four Year Total: $9.600 million
This funding will provide places for 2,500 young Māori and Pasifika learners in Māori and Pasifika Trades Training (MPTT) programmes this year, and 3,400 next year.

The additional $9.6 million, funded from a contingency established in Budget 2015, means young people can progress directly to MPTT from school or other training at 16 or 17 years of age, rather than waiting until they turn 18. The maximum age for entry was also raised, from 34 to 40 years of age.

Brokerage funding increased from $733 to $1,000 per student, with 30 per cent of this paid only when learners progress to workplace-based training such as a New Zealand Apprenticeship.
Annual Maximum Fee Movement

Operating funding
  • 2016/17 $1.516 million
  • 2017/18 $2.971 million
  • 2018/19 $3.262 million
  • 2019/20 $3.380 million

Four Year Total: $11.129 million

Funding appropriated to:
  • Vote Social Development; and
  • Vote Revenue.
The Annual Maximum Fee Movement (AMFM) regulates the level to which tertiary education providers can increase their course fees for domestic students each year. The Minister for Tertiary Education, Skills and Employment determines the AMFM each year following consultation.

This initiative provides funding for an AMFM of 2% in 2017 and 2018. In a period of low inflation, students should not face course fee increases that are significantly more than increases in their other costs.

The cost to Government of the AMFM is the write-down on additional fee borrowing through the Student Loan Scheme.
Workplace Literacy and Numeracy

Operating funding
  • 2016/17 $2.000 million
  • 2017/18 $3.000 million
  • 2018/19 $3.000 million
  • 2019/20 $3.000 million

Four Year Total: $11.000 million
Workplace Literacy and Numeracy provides high-quality literacy and numeracy programmes that are customised for an employer’s workplace. Demand for literacy and numeracy tuition in the workplace is increasing.

This initiative funds approximately 600 more places in 2016 and approximately 900 more places from 2017.

The TEC will manage the $2m increase in 2016/17 from unspent or unallocated funding from the $2.5 billion of grants funding it manages.

The ongoing increase is funded through a reduction in the maximum funding rate for tertiary education organisation-led Workplace Literacy and Numeracy provision. (Although the funding rate will still be significantly higher than for other literacy and numeracy provision).
Refugee English Fund

Operating funding
  • 2016/17 $0.325 million
  • 2017/18 $0.650 million
  • 2018/19 $0.650 million
  • 2019/20 $0.650 million

Four Year Total: $2.275 million
The Refugee English Fund provides fees-free study for refugees in English for Speakers of Other Languages courses at Level 3 and above. The fund was increased by $0.65m a year for two years in 2015 and 2016 to meet demand for additional fees-free places and to provide pastoral care funding for learners.

This initiative continues the funding increase for the Refugee English Fund from 2017.

The TEC will manage the increase in the Refugee English Fund from unspent or unallocated funding from the $2.5 billion of grants funding it manages.
Engineering Education to Employment

Operating funding
  • 2016/17 $0.400 million
  • 2017/18 $0.400 million
  • 2018/19 $0.400 million
  • 2019/20 $0.400 million

Four Year Total: $1.600 million
Budget 2015 allocated $5.5m (as part of an $11.4m engineering education package) to deliver activities to increase the number of students studying engineering and successfully entering engineering careers.

The funding in Budget 2016 will be used to implement the wider Engineering e2e project (including a public awareness campaign, Workforce Challenge Grants and Secondary-Tertiary Pathways) and related work to increase enrolments and completions in engineering (such as the e2e website and newsletter).

This initiative is funded from recovered and unallocated tuition funding from 2015/16.

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