Facing the challenge: Tertiary Education Strategy monitoring 2010

Publication Details

This is the 2010 annual monitoring report for the Tertiary Education Strategy. It provides baseline data to monitor progress against the 2010-15 Strategy. The report is framed around the seven priority areas of the Strategy. Each section discusses key indicators relating to the priority, includes a summary of key points and identifies key challenges for achieving the goals of the Strategy.

The report is accompanied by a set of Cross-strategy Indicators that provide enduring measures of the overall health of the tertiary education system.

Author(s): Tertiary Sector Performance Analysis and Reporting, Ministry of Education

Date Published: December 2010

Please consider the environment before printing the contents of this report.

This report is available as a download (please refer to the 'Downloads' inset box, top right). The "Where to Find Out More' inset box (right) has links to related publications/information that may be of interest.

The changing context of tertiary education

The recent performance of the tertiary education system needs to be considered in the context of wider economic, demographic and educational changes.

Key Points:
  • Demand for tertiary education has been increasing. It is expected to peak in 2011 and return to 2009 levels over the following two or three years. The increased demand has been the result of the recession and increases in the youth population.
  • The New Zealand economy is beginning to recover from the recession. However, government finances are not predicted to recover in the short term.
  • The growth in the 18 to 22 year old population is predicted to peak in 2012. The proportion of school leavers going on to degree studies continues to increase.

Overall demand

Overall demand for tertiary education has been increasing, with enrolments exceeding the funded baseline in 2009. Demand is forecast to continue to increase until 2011, and then start to decrease towards 2009 levels over the following two to three years.

This increase in demand has been driven by the impact of the recession, demographic changes in the youth age group and the rising school attainment of young people.

Impact of the recession

In late 2007, the New Zealand economy went into downturn, firstly as a result of prolonged drought affecting agricultural production and then in response to global economic conditions and economic downturns in its major trading partners. The New Zealand economy was in recession between mid 2008 and mid 2009 and is now starting to show signs of recovery.

Figure 1: Economic growth and labour demand
Image of Figure 1: Economic growth and labour demand.

  1. Sources: Statistics New Zealand and New Zealand Institute of Economic Research, Quarterly Survey of Business Opinion.

The demand for skilled labour closely follows the economic cycle. In the growth period to 2008, there had been a high demand for skills. This dropped off with the recession. There are signs that some demand is returning.

The recession has also had an impact on unemployment, with rates for people with no qualifications and school qualifications increasing significantly during 2008 and 2009. There is yet to be any sign of a sustained decrease in unemployment. Unemployment rates for young people remain high.

Figure 2: Unemployment rates by qualification level
Image of Figure 2: Unemployment rates by qualification level.

  1. Source: Statistics New Zealand, Household Labour Force Survey

The recession also had a significant impact on government finances. It has resulted in falling revenue and increased pressure on social spending. Government spending went into deficit in 2009 for the first time in several years. Spending is forecast to remain in deficit for several more years, accompanied by increasing government debt.

Growing youth participation

The number of young people aged 18 to 22 has been increasing significantly over the last 10 years. The population in this age group is expected to peak in 2012. This will be followed by a period of decline and then renewed growth over the following 20 years.

School achievement has also been increasing. The proportion of school leavers attaining university entrance increased from 29 percent in 2005 to 39 percent in 2008. This is reflected in higher rates of participation in tertiary education. Tertiary education participation rates of 18- to 22-year-olds increased from 39 percent in 1999 to 43 percent in 2009, and are estimated to have increased to 45 percent in 2010. Most of this increase is happening at degree level, where students are nearly all studying full-time.

Figure 3: 18 to 22-year-olds in the population and in tertiary education
Image of Figure 3: 18- to 22-year-olds in the population and in tertiary education.

  1. Sources: Statistics New Zealand, population estimates and projections and Ministry of Education.

Students aged over 25 made up 44 percent of equivalent full-time students in 2009. While the number of students in this age group has been decreasing since 2005, there was an increase in full-time study in this age group in 2009.

A key challenge for the tertiary education system is to allocate existing resources to areas of greatest value.