Government funding of tertiary education
What We Have Found
In real terms, government expenditure on tertiary education has increased by 32% between 2001/2002 and 2009/10.
Date Updated: June 2011
Government funding of tertiary education as a percentage of GDP.
Why This Is Important
The Government plays a crucial role in ensuring lifelong access to education and skills development through its investment in tertiary-level learning outcomes. A knowledge economy places a premium on innovation, ideas and the ability to adapt to new technologies and ways of working. Access to tertiary-level education helps ensure individuals and their communities are equipped for life in a knowledge economy.
In this context, an accessible, high-quality, tertiary-level, learning outcomes system must be financed to meet many needs and provide a wide range of choices and educational opportunities for all New Zealanders. Government support for tertiary education takes a variety of forms and reflects the diversity of learners and their needs, helping to remove barriers to participation and to ensure that the tertiary system is able to cope with increasing levels of demand.
How We Are Going
In 2009/10, the government's total spending on tertiary education was $5,387 million, a 4.8% increase on the 2008/09 actual spending of $5,142 million. Of this expenditure, $3,827 million was operational expenditure and $1,560 million was capital contributions.
Figure 1: Total government expenditure on tertiary education (2001/02 to 2000/10)
In nominal terms, total government spending (including capital expenditure) on tertiary education grew over the period from 2001/02 to 2009/10 by 61%, from $3,336 million in 2001/02. In real terms, this represented an increase of 32%.
The major items in the government's tertiary education expenditure between July 2009 and June 2010 were:
- $2,413 million (45% of the total expenditure) for tuition subsidies1 to fund student places at tertiary education providers
- $1,543 million (29%) for student loans
- $589 million (11%) for student allowances, and
- $374 million (7%) for other programmes, including industry training and programmes such as Youth Training, Modern Apprenticeships, Gateway and Skill Enhancement.
As a percentage of gross domestic product, total tertiary education expenditure increased from 2.8 in 2008/09 to 2.9 in 2009/10. The increase was in both operating expenditure and capital expenditure. The main difference between total and operating expenditure is the amount of the Student Loan Scheme that was treated as a capital expense.
Figure 2: Government funding of tertiary education as a percentage of GDP (2001/02 to 2009/10)
- Due to changes in output classes over time, this figure includes the following list of funds to allow for consistency in the time series data: Student Achievement Component funding and the Tertiary Education Organisation Component funding along with Adult and community education.
- Ministry of Education (2010). Profile & Trends 2009: New Zealand's Tertiary Education Sector. Wellington: Ministry of Education.
- Ministry of Education (2014). Tertiary Education Strategy 2014-2019. Wellington: Ministry of Education.