02/06/09
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Like you didn’t see this coming: no new funding for tertiary sector in budget

Any hope for an increase in funding for tertiary education was sidelined as the Government delivered a budget largely focused on controlling national debt.

In his budget speech delivered last Thursday, Finance Minister Bill English said the government’s priority of curbing debt had meant for a budget with a strongly fastened belt.

English noted a number of departments faced spending reprioritisations, with the ministries of Education, Economic Development and Foreign Affairs and Trade being fingered particularly for large savings.

The government’s promised tax cuts have also been deferred, with English claiming they were largely unaffordable in the current economic climate.

The tertiary education sector also felt the savings pinch, with funding no longer allocated in response to inflationary pressure.

Universities will receive a stationary amount of funds that will not be adjusted to match the Consumer Price Index (CPI).
The removal of CPI adjustments is expected to save the Government $173M a year.

The rationale for the allocation of tertiary funding was based largely around unwinding pre-commitments and reducing high-compliance funds, while maintaining the core provisions of education.

VUWSA President Jasmine Freemantle expressed disappointment with the removal of the CPI adjustment.

“The government has effectively cut spending to tertiary education by failing to meet predicted inflation levels,” she said.

The Tertiary Education Commission was more optimistic, seeing the budget as the first steps towards a new tertiary education strategy set to be released later this year. 

A number of new initiatives were also mentioned, including the introduction of job summit summer scholarships, and the already announced voluntary repayment bonus for student loans.

Outside the realm of tertiary education, the budget included funding increases for health services, the police force, and the promotion of primary sector growth.

English also confirmed that KiwiSaver and the Working for Families Scheme would be maintained.

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