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Fees-Free Scheme shift pleases tertiary students


Education has been a constant point of focus for the government (INL Stock Image)

Praneeta Mahajan
Hamilton, June 4, 2024

In a significant financial commitment to education, the government has announced an almost $1 billion increase in spending for schools and early childhood education for the next fiscal year, bringing the total to a record $19.1 billion.

This boost underscores the government’s focus on enhancing educational infrastructure and support systems, although the budget reveals that this figure will dip below $19 billion by 2025 and beyond.

Breakdown of the Budget Allocation

The 2024 Budget includes $2.5 billion in new spending over the next four years, along with $429 million redirected from existing savings, primarily within the Ministry of Education. A substantial portion of this investment, amounting to $1.5 billion over four years, is earmarked for school property. This allocation will fund the construction of new schools, maintenance projects, and cover depreciation costs.

Minister of Education Erica Stanford in Hamilton visited students at Rototuna High School in Hamilton last week (Facebook Image)

Key Investments and Enhancements

Several key areas have seen targeted increases:

  • Early Childhood Education: Subsidies for early childhood education have been increased by 2%, reflecting a commitment to foundational learning.
  • School Operations: Grants for school operations have been raised by 2.5%, with additional payments to schools addressing socioeconomic disadvantages, amounting to a 3% increase. This will cost $199 million over four years for schools and $191 million for early education.
  • School IT Infrastructure: A significant investment of $153 million has been allocated to enhance IT infrastructure and services in schools. This includes improvements in email protection, cybersecurity, software licenses, and equipment replacement through the Network for Learning (N4L).

Continuing and New Initiatives

The budget reaffirms previously announced initiatives such as:

  • Free School Lunches: $476 million will be allocated to continue the free school lunch program until the end of 2026.
  • Charter Schools: $153 million is designated for the establishment of charter schools.
  • Literacy Training and Resources: Structured literacy training and resources will receive $67 million.
  • Teacher Supply: $53 million is set aside for teacher supply, including school-based teacher education courses.

Changes in Tertiary Education Funding

In tertiary education, significant changes include a policy shift in the fees-free scheme for tertiary students, moving the benefit from the first to the last year of study starting next year, saving the government $877 million over four years. Additionally, government subsidies to tertiary institutions will increase by 2.5%, costing $266 million over four years. Institutions will also be permitted to raise student fees by up to 6%.

The tertiary education budget also includes $65 million over four years to continue monthly payments to employers hiring apprentices. Despite these increases, overall spending on tertiary education is projected to decrease by about $1 billion over four years. This reduction does not account for costs associated with the disestablishment of Te Pūkenga, the national skills and training institute, and the creation of a new entity to replace it.

Financial Adjustments and Savings

The budget outlines various savings measures within the education sector:

  • Ministry Savings: More than $367 million over four years will be saved within the Ministry of Education, with an additional $4.7 million cut from the Tertiary Education Budget.
  • Staff and Services: Cuts include $148 million from staff costs and over $100 million from outsourced professional services.
  • Education Review Office: Almost $2.5 million a year will be cut from the Education Review Office.
  • Tertiary Education Commission: Annual cuts of $3.7 million from the Tertiary Education Commission.
  • Education New Zealand: Annual cuts of $2.3 million.

Research Funding Reductions

The budget for Business, Science, and Innovation will see about $35 million cut from four major research funds—Health, Endeavour, Marsden, and Strategic Science—beginning in 2027. Despite these cuts, $756 million will remain in these funds for the 2027/28 year. Additionally, the conclusion of the National Science Challenges in June this year will save a further $173 million over four years.

The comprehensive budget adjustments reflect a balanced approach to enhancing educational facilities and support while implementing necessary financial prudence in other areas to ensure sustainable funding for the future.

Public Reactions

Sarah Thompson, a tertiary student studying engineering, commented, “Shifting the fees-free scheme to the last year of study will definitely help me and many others as we reach the crucial end of our courses. However, the increase in student fees and the rise in interest rates for student loans, especially for those of us who might work overseas after graduating, is concerning. It feels like we are gaining support in one area but losing it in others.”

Mr Williams, a high school teacher, expressed his views and said, “I am glad to see the increased investment in school infrastructure and IT. Our school desperately needs updated facilities and better tech support. However, I’m worried about the cuts in staff costs and professional services. We need more support in our classrooms, not less. These cuts might negate some of the positive impacts of the increased funding.”

Kelsey Johnson, a parent of two young children, said “The boost in early childhood education funding and subsidies is a relief. It’s a critical period in children’s development, and every bit helps. The continuation of free school lunches is also great news. Still, I hope the government maintains these funding levels in the future and does not let them drop as projected after 2025.”

Praneeta Mahajan is an Indian Newslink reporter based in Hamilton.

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