Budget 2016 announced

26 May 2016

Budget 2016 has been announced today, with an investment of $256.5 million over four years in tertiary education.

What was announced today?

The tertiary education package for Budget 2016 focuses on ensuring the tertiary education system helps New Zealanders. It’s important that people have the opportunity to develop the skills they need to thrive in a successful and innovative New Zealand.

Through Budget 2016, the Government is investing $486 million over four years in science and innovation, and tertiary education initiatives that form an ‘Innovative New Zealand’ package. This package will help achieve a more diversified high-wage economy and ensure investment and growth through regional development initiatives.

The Government continues to focus investment on subjects and disciplines that are experiencing high employer demand. We need more skilled people in disciplines like science, engineering, and agriculture if we are going to continue to grow our economy.

Where will the money go?

Tuition increases

  • The Government is incentivising the provision of skills for a 21st century economy. We need more skilled people in disciplines like science and agriculture.
  • $86.1 million over four years will be provided for targeted tuition subsidy increases at degree level and above in science subjects (5% increase), agriculture (16% increase), veterinary science (9% increase), and undergraduate medicine (6% increase) to better match tuition subsidies with the cost of provision.
  • A further $37 million over four years will be invested to increase tuition subsidies for sub-degree provision at Level 3 and above by 2%. This will improve the quality and sustainability of sub-degree tertiary education. It will support more people aged 25-34 into advanced trade qualifications, diplomas and degrees.

Other initiatives

  • Employer involvement in tertiary education and training helps ensure the system delivers the skills industry needs.

      -  The package responds to increasing demand for New Zealand Apprentices with $14.4 million over four years to fund 5,500 more apprentices by 2020.

      -  The Government has also announced an additional $9.6 million over four years for more Māori and Pasifika Trades Training.

      -  Engineering Education to Employment (EE2E), which supports the transition from education to employment for the increasing number of engineering graduates, receives $1.6 million over four years for implementation and evaluation.

  • Literacy and numeracy skills are crucial for building a competitive, skilled and productive workforce. Budget 2016 includes:

      -  $14.6 million to ensure foundation education at levels 1 and 2 will be completely fees-free from 2017 to encourage second-chance learners to gain the basic skills they need to progress to higher study or gain employment

      -  $11 million to fund 600 more places in the 2016 Workplace Literacy and Numeracy, and about 900 places from 2017 onwards 

      -  $2.3 million over four years for the Refugee English Fund, to provide fees-free study for refugees so they can progress to higher-level tertiary study or employment. 

  • The package includes funding for a maximum tuition fee increase of 2% for each of the next two years, reflecting the historically-low inflation environment in New Zealand.
  • The Government is investing in strong research-based institutions and growing international linkages:

      -  There is $43.5 million over four years for initiatives that will incentivise more Kiwi students to develop international linkages and connections

      -  $35 million is set aside in contingency funding for new innovation initiatives in the university sector

      -  In addition, universities are expected to gain significant new research funding from new funding in Vote Business, Science and Innovation as part of the Innovative New Zealand package.

Where to find more information

For more information see the Ministry of Education website and the Beehive website.

  • Last changed: 26 May 2016
  • Last verified: 26 May 2016