Budget 2015 – Ministers’ Key Messages

Fee increases will be held to 3%, not the current 4%, under a Budget 2015 proposal. University science and agriculture courses will get the bulk of funding rate changes, while most others will receive nothing. Student parents will get slightly higher allowances in 2016, but students aged under 24 face frozen parental income thresholds until 2019.

Relevance: high relevance to all.

Our Take

  • Our key highlights are shown below.
    • The Annual Maximum Fee Movement will drop from 4% to 3%, subject to consultation. This will affect all SAC funded providers. While inflation is low, tuition fees are the only place most providers can increase funding, as government funding is generally fixed. This will have the biggest impact on budgets.
    • Universities are the big winners, with science and agriculture degree level programmes getting most of the new tertiary education funding. Lincoln will love the 20% boost to agriculture SAC rates. Optometry, pharmacy and physiotherapy also get a boost.
    • Engineering gets a small funding boost, as do Maori and Pasifika Trade Training, Trainee Medical Interns, and Trades Academies.
    • Student allowance applicants aged under 24 face another freezing of the parental income threshold – until 2019. 9,000 student allowance recipients who are parents will get a $25/week increase in 2016.
    • A new Border Clearance Levy will increase costs for international students, but it’s not huge.
  • Universities are the winners again, which is what we say most years, but it’s generally true.
  • This update takes Ministerial media releases at face value, which is usually unwise but gets material to you quickly. We will provide more detailed information, and our analysis of it, later today.

Key Facts

  • This update summarises today’s key items relevant to the tertiary education sector from Budget speeches and Ministerial media releases. You can find the releases at www.beehive.govt.nz.
  • Bill English Budget Speech and Media Release
    • A small $176m surplus is predicted for 2015/16.
    • The highest profile initiative is a $790m package to help low-income families, but health got the biggest allocation ($1,660m). Education received $443m over 4 years, with tertiary education getting about $113m of that.
  • Steven Joyce – Tertiary Education
    • $112 or $113m (the media release used two figures) will be spent on tertiary education, with $86m going on higher SAC rates in 5 areas. Most money will go to science and agriculture degree courses (the rest is for optometry, pharmacy and physiotherapy).
    • $11m will be spent on engineering promotion and places, $8m on Maori and Pasifika Trade Training (500 places), and $6m on Training Medical Intern Grants. $2m goes on a youth literacy tool and there is baseline funding for Rate My Qualification.
    • Funds freed up from lower tertiary education demand are being used for priority areas.
    • The parental income threshold for children to access student allowances will remain fixed until 2019.
    • Fee increases for SAC programmes will be limited to 3% for 2016 (now 4%), subject to consultation.
  • Steven Joyce – Science and Innovation
    • Up to $25m for 1-3 Regional Research Institutes over the next 4-5 years. They will be outside Auckland, Wellington and Christchurch and focus on technology transfer. They will be privately led and modelled on the Cawthron Institute.
  • Hekia Parata
    • 300 extra places will be funded in Trades Academies.
    • $4.2m will be spent on two programmes aimed at helping vulnerable students entering Year 9 at school, and helping Maori and Pasifika who have left school to reengage in education.
  • Nathan Guy and Nicky Wagner
    • A new Border Clearance Levy will cost $16 for arriving passengers and $6 for departing passengers, with the funds covering biosecurity and customs activities at the border. It replaces $100m of existing taxpayer funding, and will apply from 1 January 2016. The rates are subject to consultation.
  • Nick Smith
    • $52.2m has been put aside for a capital contingency to support housing development on Crown-owned land in Auckland. Media reports said this would include TEI land, but no extra details were supplied.
  • Jonathan Coleman
    • $24m will be spent on palliative care staff, with a partial focus on training.
  • Anne Tolley and Bill English
    • 9,000 families receiving student allowances will get a $25/week increase from 1 April 2016 (the net gain may be lower if they receive income-related accommodation support).
    • Sole parents will have to start part-time work of 20 hours/week (now 15) when their youngest child turns 3 (now 5)
    • Childcare Assistance rates will go from $4 to $5 an hour for low income families, boosting access to ECE, OSCAR and school holiday programmes.
  • Anne Tolley
    • $15.4m will be spent on the Limited Service Volunteer programme, a 6-week residential programme for 18-25 year olds.
  • Michael Woodhouse
    • Earlier announcement of $33m for border security staff.
  • Peseta Sam Lotu Iiga
    • Earlier announcement of $6.2m for offender rehabilitation programmes.

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