Free tertiary education possible…

…by cutting staff salaries.

I don’t think that will go do well  with some.

Stuff: Free tertiary education possible by cutting staff salaries

Labour leader Andrew Little …one of his big election promises this year is free tertiary education. His soup? A cost to the taxpayers of $1.2 billion.

Taxpayers already hand over plenty of cash to tertiary institutions. Last year the Tertiary Education Commission gave $2.8b – almost 4 per cent of the total government budget – to universities and polytechnics across the land.

Only one tertiary institute uses that money to provide free education. The Southern Institute of Technology.

The only catch is that you have to be a New Zealand citizen or resident, go to class, pass a certain grade and pay for course materials.

SIT’s “Zero Fees” was launched in 2001 when SIT’s chief executive Penny Simmonds realised that all the polytechnic needed was a cash injection to bring the student roll up to critical mass.

The zero fees programme has become completely self-sustaining, relying mostly on the government grant it gets every year.

So why can’t the other 23 universities and polytechnics in New Zealand pull it off with the funding they get?

One of the main answers seems to be a fairly simple one. Staff costs. SIT spends 43 per cent of its budget on staff while the others spend closer to 60 per cent.

Executive Director of Universities New Zealand Chris Whelan said it was practically impossible for universities to offer free education with the existing government grants.

Executive Director of Universities New Zealand Chris Whelan said it was practically impossible for universities to offer free education with the existing government grants.

Stuff contacted New Zealand’s eight universities and 18 polytechnics for comment. Almost none responded.

I’m not surprised almost none responded. Cutting staff costs substantially would not be popular in most tertiary institutions, especially universities.

Unless they radically change their teaching models by going online, and substantially reduce the number of staff rather than wages.


Editorials question education policy

Labour’s free tertiary education policy has received some favourable coverage – see Anthony Robins’ Praise for Labour’s tertiary bombshell:

Although there have been predictable howls of outrage from the usual suspects, the media reaction to Labour’s bold tertiary education policy has been generally great.

But it has also been scrutinised and questioned in editorials at the Herald and Otago Daily Times.

NZ Herald: An expensive fix which has little purpose

The Labour Party has made the first delivery on its promise to produce bold new policy in 2016. Free tertiary education is a daring reversal of the thrust of educational and economic policy of the past 30 years.

The proposal is simple, radical and will be popular with tertiary students and their parents, and the parents of intending students, not to mention those who teach in universities, polytechnics and training institutes. It may be enough to give Labour the lift in the polls it sorely needs after so long in Opposition.

It’s purpose is to regain support for Labour. Beyond that?

A universal entitlement to three years’ free tertiary education has overwhelming public appeal. Whether it is in the public interest is another question. The policy is expensive: $2.5 billion when fully implemented.

That is a considerable lump of public spending. As always when something of this magnitude is proposed, we should not look at its merits in isolation. Governments do not have infinite budgets and there is a limit to the taxation an economy can provide and remain healthy.

Labour needs to be asked, is this the most worthwhile use of $2.5 billion? Is it even the most worthy use of funds allocated to education?

More broadly, extensions of paid parental leave, more generous welfare benefits and wage subsidies would have been expected to rank higher in Labour’s priorities.

Doubtless it will say it plans to boost all of these things, and more, but that only underlines questions about free tertiary education. With so many worthy calls on Labour’s compassion, why has it chosen to answer this one?

Another Standard author Tat Loo asked similar questions in So, how would you spend $1.2B per year?

The Herald continues:

Tertiary education has seen spectacular growth over that period, attracting foreign fee-paying students as well as meeting New Zealanders’ needs. Why change the funding system now?

Or to put it another way, what problem is this policy designed to fix? Labour’s leader presents it as an answer to the frequent and unpredictable career changes people will need in the workforce of the future. But this “future” has been present for many years now and there has been no sign the costs of retraining have become a problem.

The economy is strong in large part because public spending is under control. Expensive proposals that waste money purely for political gain could put the country’s prosperity in peril.

Obviously Labour will want some political gain from their policy but will the country gain from the money spent?

The ODT also looks at Free tertiary education.

Labour’s policy of three years’ free tertiary education for all has spiced up politics and created a clear point of difference from National.

It has, in these early days since leader Andrew Little’s announcement last Sunday, received a fair amount of support.

It is being seen as a definite move towards the left in a world where Jeremy Corbyn (Britain) and Bernie Sanders (United States) have gained traction.

It will, nonetheless, appeal to many across the centre of the political spectrum where Labour has lost to Prime Minister John Key’s pragmatism.

It is, in the end, the middle classes who are most likely to take up tertiary education in its various forms, just as they have gained from the costly interest-free student loans.

A middle class, centre voter target.

While the policy is to cover post-school education, including apprenticeships, it is not the poor and disadvantaged who will be the primary beneficiaries.

And that is receiving some critical attention from the left.

Whatever the politics of the matter, is it a good idea?

Overall, will it assist the country and its citizens sufficiently given the cost?

Will it really help New Zealand cope with the challenges of a world where change is accelerating?

Is it the best way to spend $1.2 billion a year, or whatever the final cost will be.

The Herald put the cost at $2.5 billion.

There must also be doubts about the price tag being limited to $1.2billion.

For a start, it is clear extra spending on free fees will have to be matched by extra institutional funding for increased demand.

And also more uptake of education because it is free. It could become a hobby option for retired baby boomers.

It is also true the current system of part-payment – the Government still pays the majority share of most courses – focuses the mind.

Not only are students likely to give more consideration to the value of their courses to them, but it also means more accountability from teachers.

Students paying for studies have proved much less likely to put up with second-rate teaching or second-rate programmes.

Labour have introduced this policy well out from next year’s election. This will give them plenty of time to explain and refine the policy, and to respond to criticisms.

But having committed to an expensive policy already they will have to be careful about what else they offer the voters. Their fiscal credibility can’t afford too many expensive promises.


Labour miss the target

Goldie suggests that Labour have missed the target with their three free years tertiary education policy.

Labour should be praised for raising an important issue – whether the current/future workforce is able to meet the likely challenges of the mid-21st century, and Labour do seem to get that automation is not only inevitable but potentially beneficial (provided we have the workforce with the skills to take advantage of that).

And the opposition should be praised for trying to engage with the big problems of the future (a criticism of the current government is they are very risk-averse and they have stopped asking the big policy questions).

Fair praise and valid criticism.

But having identified the problem, Labour then miss the target.

First, they focus on automation, but in fact much of the change is being driven by new production processes in the workplace (esp. HACCP systems) which demand much more technically proficient workers.

And many 21st century jobs are still labour intensive, like aged care, tourism – and I saw a report recently that claimed baristas are the new rock stars of a modern society.

On the other hand, education may become more automated with on-line options increasing, and self learning.

Second, any solution would surely be aimed at technical training at levels 2-5 (where most training is done through ITOs). However, it has been pitched at tertiary (i.e. university), where there isn’t the problem (NZ produces more than enough graduates with degrees, often in the arts, but we don’t produce enough people with lower-level certificates/diplomas in technical/trade skills).

This is something Labour haven’t been clear on – what type of retraining will be most useful and what will be covered by their policy.

Third, the stated reason for the policy is to allow workers to re-skill. But three years of free tertiary education for someone who already has quals does not do that.

Another diploma or degree each time a job change is required is not always going to be the best approach.

Fourth, the policy is not ‘free’. No government policy is ever free – someone has to pay for it. And practically the government can bulk-fund education providers, but they cannot stop those education providers from then charging students what they want. The best that government can do is to provide a very generous subsidy to education providers that they hope will meet the estimated tuition costs.

Is targeting tertiary the best approach? There are still major problems with large numbers failing at primary and secondary level, and most of them will probably never go to tertiary.

So kudos to Labour for trying to engage with a big question. But they have missed the target with this proposal.

It depends on what their target is. They may genuinely think their policy is the best and most cost effective solution, but perhaps at least in part they were primarily targeting votes with an easy to sell policy.

Labour may be aiming at the wrong target

More on who isn’t eligible

A followup to Who isn’t eligible for Labour’s ‘free’ education?.

A number of other people have sought clarification on exactly who won’t be eligible for Labour’s proposed free tertiary education – limited to people who have had no prior tertiary education, which would appear to rule me out due to doing a short course at Polytech over forty years ago.

In NZ Politics Daily: Labour’s return to radicalism Bryce Edwards gives anothe rexample:

Another leftwing critique has been raised on Facebook by Labour Party activist and former election candidate Patrick Hine, who is unconvinced that the policy adequately covers those who will need to retrain in the future, long after they have undertaken tertiary education:

“Now I don’t want to be a spoilsport, but Labour’s policy was presented in Andrew Little’s speech as originating in the economic policy context of the Future of Work Commission and aimed at people who have had jobs and lost them because of changing technology, outdated skills etc.

But if you’re 40 now and the skills you learned doing that polytechnic certificate 20 years ago are obsolete, you won’t be eligible under the policy. Anybody who has undergone tertiary education in the past will be ineligible.

Many of the people it professes to be for won’t be eligible for it. It’s a free tertiary education policy mainly directed at 18-20 year olds – why not argue for it as such? Others will quickly interpret it that way anyway.”

Grant Robertson has replied to this criticism to say that Labour has further announcements to come that will deal with this problem.

I can’t find Hine’s comments on Facebook but others have also brought this up:

Mark Baxter Great start, and I look forward to its implementation. But it does nothing for people like me recently made redundant and needing retraining. I guess like Lange said to me when I asked about Labour’s user-pays education – words to the effect of “Yes, your generation is being screwed sorry”.

Grant Robertson Hey Baxter. We will have more to say about retraining options for people late in the year. A big issue in rapidly changing world of work.


Stu Pearce So under the proposed policy, will mature students above the age of 40 also be entitled to 3 years funding?

Grant Robertson Yes, if they have not studied at tertiary level before.

Gregory Stuart Shepherd Not enough. Chicken shit actually, in a world where most of us will have many career changes in our lives.

Grant Robertson We will have more to say about workplace training and retraining in coming months, but I think this is an important start.

So it looks like we will have to wait until later in the year to find out more about this.

Who isn’t eligible for Labour’s ‘free’ education?

I’m having trouble finding out specifically who won’t be eligible for Labours’ ‘free’ (taxpayer funded) tertiary education.

Labour’s Fact Sheet states it will be available to “to every New Zealander who has had no previous tertiary education”:


As workplaces become increasingly automated, many jobs will become obsolete. A school-level qualification won’t cut it in the future workforce.

The first year will be available to all new school leavers from 2019 for all NZQA approved courses, including all apprenticeships, and to every New Zealander who has had no previous tertiary education.

There will be no age limit, reflecting the increased importance of lifelong learning in the 21st Century economy. To be eligible for the second and third year, graduates will need to pass more than half their courses in the first year.

So everyone with previous ‘tertiary education’ is excluded.

I did a 9 week course at Polytech in 1973 – does that mean I can’t get free retraining for the workforce?

Does it exclude every current apprentice? Or just apprentices who have done Polytech courses (as all have had to do for some time)?

I’m genuinely interested in finding out.

From Andrew Little’s speech yesterday:

We are going to build an education system that fits the new realities of our economy.

A free education system that doesn’t stop once you leave high school.

We are entering an age where education throughout your life is more necessary than ever.

Skills, knowledge, training and retraining — they are the currency of the future of work.

I am announcing that the next Labour government will invest in three years of free training and education after high school throughout a person’s life.

That’s right.

Three years of free skills training, of apprenticeships or higher education right across your working life.

Everything you need to train and retrain as the world changes.

He’s not speaking to some of us here.

Our Working Futures Plan will be available to everyone going into education after high school from 2019. It’ll also be available to everyone who’s never studied past high school before.

Department of Statistics 2013 census data shows that out of a total of 3,376,419 people 1,587,222 had ‘no post-school qualification’.

These suggests that less than half the population would be eligible for Labour’s free education.

This policy seems mainly targeting those who haven’t left school yet.

I’ll update if if get an answer clarifying who will miss eligibility for free education.

Steven Joyce claims tertiary success

From just released tertiary league tables (in Otago institutions enjoy rankings success):

Tertiary Education Minister Steven Joyce said the overall results showed the Government’s continued focus on performance in the tertiary sector was working well.


  • course completion had risen from 77% in 2009 to 82% in 2011
  • qualification completions had increased from 62% in 2009 to 71% in 2011

“This is exactly the type of improvement we have been working towards. It shows the tertiary sector is responding to our signals to focus on performance and to deliver better value for taxpayers’ money,” he said.