Government funding of tertiary education

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.  It also needs to provide all New Zealanders with a wide range of choices and educational opportunities.

Government support for tertiary education takes a variety of forms and reflects the diversity of learners and their needs.  It helps remove barriers to participation and ensures that the tertiary system can cope with increasing levels of demand.

Indicator description

This indicator includes three measures of government funding of tertiary education:

  1. Government funding of tertiary education:
  2. Government funding of tertiary education, including student allowances and the write-down on new lending for student loans.

  3. Inflation-adjusted government funding of tertiary education:
    Numerator:  
    Government funding of tertiary education, including student allowances and the write-down on new lending for student loans.
    Denominator:  
    Consumers Price Index (all groups).
    Inflation-adjusted expenditures allow a more accurate comparison of how government funding has changed over the years.
  4. Government funding of tertiary education as percentage of gross domestic product:
    Numerator:
    Government funding of tertiary education, including student allowances and the write-down on new lending for student loans.
  5. Denominator:
    Gross domestic product (nominal expenditure-based measure ex New Zealand Treasury).

Notes:

  1. Data is for June years.
  2. Data sources:  Statistics New Zealand and Ministry of Education.

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Interpretation Issues

Data from a variety of sources is used to determine government expenditure on tertiary education.  A broader view is taken than that in the core Crown accounts published by the Treasury in the budget economic and fiscal update.

Data includes both funding for research distributed to tertiary education organisations via Vote Science and Innovation and capital expenditure.  In this indicator, total expenditure on student loans is the write down on new lending in each year.  This approach is different to the treatment of student loans in the core Crown accounts – see below for more details.

Treatment of student loans

In the core Crown accounts, the write-down on new lending and the impairment on the Student Loan Scheme are used to measure government’s operating expenditure. The impairment can vary significantly between years as a result of changing economic conditions, so using this to measure student loan expenditure is of limited value for the analysis of actual levels of government expenditure over time.

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