No extension to New Zealand’s fee-free scheme

The move by New Zealand’s governing Labour Party to abandon plans to make university free for latter-year undergraduates has been described by analysts as a sensible move that reflects some of the underlying flaws of the reform.

As Labour gears up for a 17 October election it is widely expected to win, education minister Chris Hipkins said the party would retain the current arrangements, with students paying no tuition fees for their initial year of tertiary education, but he ruled out extending the programme to subsequent years.

He said Labour would target its additional tertiary education spending at areas “critical for economic recovery”, such as apprenticeships and “targeted” vocational training.

Universities and higher education do not even rate a mention in the party’s education policy, which focuses mainly on early-childhood, school and vocational education. Tertiary education policy analyst Dave Guerin said that was unsurprising, with Labour riding high in the polls.

“They don’t need to do much,” he said. “They’ve got enormous support. Why bother risking it by doing anything that might concern anyone?”

The pre-election economic and fiscal update, released on 16 September, says the budget will be in deficit for the foreseeable future as the country accumulates more than NZ$200 billion (£105 billion) of crown debt over the next four years. “It’s pretty hard to argue for a large amount of extra money right now,” Mr Guerin said. “Voters do not care about university funding.”

The opposition National Party has promised to release a tertiary education policy before the election. But it has already pledged to completely abolish the fee-free programme, which “has failed to lift enrolments in tertiary education”, and use the proceeds for tax relief.

“We won’t be afraid to eliminate wasteful, low value for money spending such as fees-free,” the party vows in its pre-election fiscal plan.

Policy consultant Roger Smyth said that while eliminating fee-free would be a “brave” move politically, extending it beyond first-year students would be “reckless”.

He said the main criticisms of fee-free at its outset – that it would disproportionately benefit relatively wealthy people, and that it would not boost enrolments because tertiary participation “is not sensitive to fee levels” in countries with income-contingent loan schemes – had been proved correct.

Mr Smyth said Labour was right to focus on reforms to vocational education, where the “policy priorities are greater”, rather than on higher education. He also endorsed the party’s pledge to introduce a stronger focus on work-integrated learning (WIL) through a review of funding for all tertiary education, including degrees.

Mr Smyth said WIL was an area of weakness in New Zealand, and Labour had “woken up” to the problem. The party had produced a “coherent” policy that “responds to the challenges in the system reasonably well”.

But it is not contemplating deeper structural reform. Responding to a written question from shadow tertiary education minister Simeon Brown, Mr Hipkins said he had not received any memos, reports or briefings “regarding a restructuring of the university sector”.

Mr Guerin said this may be a missed opportunity, with the sector facing significant revenue losses from the absence of international students. “The pipeline effect is going to be experienced for five years or more. This could be a time to restructure if they wanted to.”

john.ross@timeshighereducation.com