Skip to text

Note: You are reading this message either because you can not see our css files, or because you do not have a standards-compliant browser. Although the content of this site will be accessible in any browser, please consider upgrading to a web standards-compliant browser such as Mozilla, Netscape, Opera, or Internet Explorer to better enjoy the new design and functionality of our site (all links open in a new window).

Welcome to the Tertiary Education Commission (TEC). Please visit our Accessibility Page for a list of the Access Keys we have assigned to enhance your navigation of this site. Alternatively, you can skip directly to the global site navigation, to our Search and site tools, to our User Group Quickfinder, to the page content, or to our news and recent updates.
Search
info@tec.govt.nz
0800 601 301

 

Sector Funding Budget Baselines

Budget Baselines for Student Achievement Component and TEO Component Funding

Under the controlled funding system, the Tertiary Education Commission (TEC) manages Student Achievement Component (SAC) and TEO Component (TEOC)allocations within sub-sector baselines. These are set at each Budget.

Budget 2008 was the first budget in the new system, establishing a rolling three year cycle of funding (2009-11). This will provide greater certainty over a three year period and allow the TEC to start discussing any changes in Investment Plans for 2009 and 2010.

Sub-sector baselines are being published for the first time, representing an important milestone in the tertiary reforms. This introduces greater transparency on spending across the tertiary sector and allows the TEC to make available meaningful baseline funding information to the sector.

Under the new system, data has been translated from fiscal year appropriations into calendar year baselines. Baseline funding will continue to increase through a series of Consumer Price Index (CPI) increases and the numbers of students in the tertiary system.

CPI Increases to Funding Rates

In December 2007 the government made the decision to index funding in the Student Achievement Component, the Industry Training Fund and Adult and Community Education at community providers. This decision was made to recognise cost pressures across the tertiary sector.

The indexation rate used at that time was 2.6% for 2009.  This was the latest forecast CPI rate available at that time. The figure came from Treasury’s "preliminary Half Year Economic and Fiscal Update".

Under the tertiary sector’s new controlled funding system, the government now has to budget for CPI increases earlier than it did under the old forecast driven system. Therefore, the figure used in future is likely to be that forecast in the half year economic and fiscal update.

It is important to note the following:

  • The 2009 SAC rates include the 2.6% confirmed CPI for 2009
  • The indicative SAC rates for 2010 are based on the current estimate of 2.5%
  • The actual rate to be used for 2010 will be confirmed in Budget 2009.

SAC and TEO Component Budget Management Rules

Government approves all tertiary funding levels. It approves the total for the SAC and TEOC, and within these approves baselines for each subsector.

There is limited flexibility to move funding:

  • The TEC can balance funding allocations across different sub-sectors, up to set limits
  • Ministers can transfer some funding between the SAC and TEO Component, and between different parts of the TEO Component.

Cabinet needs to approve all other budget transfers, including any transfers into or out of the Performance-Based Research Fund. 

Details of Sector and Sub-sector Baseline Funding

Tertiary Education Organisation Component Baselines

 

back to top