Total public expenditure on education

What We Have Found

In 2011/12, government spending on education amounted to 5.8% of the GDP. 

Date Updated: November 2012

Indicator Description

Total government investment in education.

Why This Is Important

The level of the public expenditure in education provides a measure of the government's commitment to education. Evaluating how governments in different countries invest in education provides important context for examining how education participation and outcomes vary between these countries.  Investment in education is greatly influenced by supply and demand factors such as demographic structure, enrolment rates, income per capita, and prices for educational resources.

How We Are Going

New Zealand

In 2011/12, government spending on education amounted to 5.8% of the GDP.The data are sourced from The Treasury and include expenditure on programmes outside Vote Education such as student loans and student allowances.  Government expenditure on education as a percentage of GDP (gross domestic product) has remained relatively stable between 1996/97 and 2004/05 at around 5% of GDP.  In 2010/11, government spending on education amounted to 5.9% of the GDP. In 2011/12, it amounted to 5.8 % of the GDP.

Increases in expenditure in 2005/06 and 2008/09, were caused by student loans re-evaluations. 
 

Figure 1: Government expenditure on education in New Zealand (1996/97 to 2011/12)
 

 

In 2011/12, government spending on education as a percentage of total government expenses was 16.9%.

International comparison

The source of data for international comparisons of public expenditure on education is the annual OECD data collection. The definition of the public expenditure on education differs from that used by The Treasury.

In 2009, New Zealand's public expenditure on education as a proportion of the GDP (7.2%) was above the OECD average (5.8%) and was also higher than Australia (5.0%), Ireland (6.5%), the United Kingdom (5.6), and the United States (5.5).

Figure 2: Total public expenditure on education as a percentage of GDP (2009)

Source: OECD Education at a Glance 2012 (Table B 4.1)

Broken down by level of education, New Zealand's public expenditure on primary, secondary, and post secondary, non-tertiary education institutions as a proportion of the GDP was above the OECD average (3.8%), at 4.8% in 2009.  This was also higher than in Australia (3.8%), the United Kingdom (4.5%), and the United States (3.9%), but slightly lower than Ireland (4.9%).

New Zealand's public expenditure on tertiary education as a percentage of GDP (1.9%) was above the OECD average of 1.4%, and also higher than in Australia (1.1%), United States (1.3%), United Kingdom (0.8%), and Ireland (1.5%).

Student loans in New Zealand play an important part of the public expenditure on tertiary education.  When we exclude the public subsidies to households, which include student loans, scholarships and grants, New Zealand's public expenditure on tertiary education as a percentage of the GDP (1.1%) was equal to the OECD average (1.1%). The percentage was lower than that of Ireland (1.4%), but higher than Australia (0.7%), the United States (1.0%), and the United Kingdom (0.6%).

Figure 3: Total public expenditure on tertiary education as a percentage of GDP (2009)

Source: OECD Education at a Glance 2012 (Table B2.3)

References

New Zealand Treasury. Financial Statement of the Government of New Zealand for the Year Ended 30 June 2012. Wellington: New Zealand Treasury.

OECD (2012). Education at a Glance 2012: OECD Indicators. Paris: OECD.

Scott, D., Gini, P. (2010). How does New Zealand's Education System compare? OECD's Education at a Glance 2010.  Wellington: Ministry of Education