Fact Sheet 2 – Innovative New Zealand: $256.5 million Tertiary Education, Skills and Employment

  • Steven Joyce
Tertiary Education, Skills and Employment Science and Innovation Economic Development Budget 2016


A total of $256.5 million in operating funding over the next four years will be invested across the tertiary education sector through Budget 2016’s Innovative New Zealand package as the Government continues to incentivise the provision of skills for the 21st century.

This package will encourage training in disciplines such as science, engineering, agriculture and the trades as we continue to grow a high-value, diversified New Zealand economy.

The total investment includes $132.5 million from base line savings and reprioritised funding in Vote Tertiary Education.

The availability of highly-skilled people is crucially important to meeting the aims of the Business Growth Agenda and encouraging competitive businesses to invest and grow.

What is new?

1. $86.1 million over four years for tuition subsidies

A total of $86.1 million over four years will be provided for targeted tuition subsidy increases at degree level and above to better match tuition subsidies with the cost of provision, and to remove the remaining disincentives for degree providers to grow provision in core areas such as science and technology.

The funding will be used to lift tuition subsidies in science subjects (by 5 per cent), agriculture (by 16 per cent), veterinary science (by 9 per cent), and undergraduate medicine (by 6 per cent).

2. $36.9 million over four years to increase tuition subsidies for sub-degree provision at Level 3 and above by 2 per cent

This will align most sub-degree subsidies with degree-level subsidy rates and improve the quality and sustainability of sub-degree tertiary education. It will also support more people aged 25-34 into advanced trade qualifications, diplomas and degrees.

3. $14.4 million over four years to fund 5,500 more apprentices by 2020 (previously announced)

The stronger labour market, a rebuilt industry training system, and improvements in school achievement are resulting in greater demand for apprenticeships as young people rightly see them as a great way to get into, and stay in, a rewarding career.

4. $43.5 million over four years for initiatives to help more New Zealand students develop international linkages and connections

5. $14.6 million over four years to ensure foundation education at Levels 1 and 2 will be completely fees-free from 2017

This will encourage second-chance learners to gain the basic skills they need to progress to higher study or gain employment.

6. $11 million to fund 600 more places in the 2016 Workplace Literacy and Numeracy programme, and around 900 places from 2017 onwards

This, along with more New Zealand apprenticeships, further strengthens the Government’s commitment to workplace-based learning.

7. $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

8. $1.6 million in additional funding over 4 years for Engineering to Employment (E2E), which supports the transition from education to employment for the increasing number of engineering graduates

The E2E fund encourages students into a career in engineering, a field which is central to growing a modern economy and to New Zealand’s future success. It’s a priority of the Government’s Business Growth Agenda.

9. $35 million in contingency funding for new innovation initiatives in the university sector

10. An additional $9.6 million over four years for Māori and Pasifika Trades Training as demand for the programme continues to grow (previously announced and funded from a contingency established in Budget 2015)

This funding will provide places for 2,500 young Māori and Pasifika in trades training this year, and 3,400 next year, up from just 1,200 in 2014.

11. The annual maximum fee movement for 2017/18, the amount by which tertiary education organisations can increase their domestic fees, is proposed to be reduced to 2 per cent

This balances the need of providers to have flexibility to provide a quality education in a competitive international environment, ensuring affordability for students in a low-inflation environment.