Hon Steve Maharey
Associate Minister of Education (Tertiary Education)

Ensuring access to tertiary education

Budget 2003 delivers long-term fee predictability for students, in addition to $71 million of student-focused initiatives, says Associate Education (Tertiary Education) Minister Steve Maharey.

Over the last three years, the government has used negotiated fee stabilisation agreements to bring to an end the spiralling fee rises of the 1990s.

This year and in future, the maximum fee (inclusive of fees and course costs) that can be charged in particular course areas for the following year will be set out at budget time. The schedule will be adjusted annually by the estimated rate of inflation and will also set out indicative rates for the two subsequent years. (Table attached.)

“The effect is that fees will be linked to the CPI and will not be permitted to rise in real terms,” said Steve Maharey.

“The government has worked closely with the tertiary sector, through a representative reference group, to develop this fee policy and in line with their advice the maxima are being set nationally. They will apply to degree and non-degree courses.

“The rates have been set to ensure that all public institutions are able to at least maintain their income per student in real terms. Because the government has increased tuition subsidies for next year by more than the projected CPI increase, most institutions will not need to raise their fees by the rate of inflation to achieve this.

“We are confident they share our concern to preserve the affordability of tertiary education to students and that they will seek to keep any increases to a minimum.

“Fee maxima are not being set for postgraduate courses. Striking maxima across the wide range of postgraduate fees would have been very difficult and the importance to institutions of recruiting postgraduate students will keep fees low.

“We are however introducing a requirement that the Tertiary Education Commission approve increases of more than $1,000, and a review will be undertaken after two years to ensure that postgraduate fees have not risen excessively.

“The reference group also raised issues around the treatment of private training establishments.

“There is a lack of solid data around PTE fees, making it difficult to predict how the introduction of the maxima will affect them, particularly those which are already financially vulnerable.

“Therefore, we are proposing that PTE entry into the new regime be "grand-parented" for one year. In the interim, PTEs whose fees are above the maxima are not permitted to raise them.

“I will next week publish a notice in the Gazette setting out the proposed fee maxima rates and inviting comments from interested parties. I intend to finalise my decision about the schedule of fee maxima by the end of July.

“Funding of $23 million has been set aside for a bonded scholarships and research fellowships package to attract students into study and professions critical to New Zealand’s future success.

“Details of this package will be announced next month,” Steve Maharey said.

Other initiatives for students in Budget 2003 include:
-additional funding of $2.8 million for students with disabilities;
-$36 million over four years (capital and operating) for part-time part-year students to access the Student Loan Scheme;
-$4.8 million over four years for 16-17 year old students who have completed year 13 to apply to receive student allowances (announced on 9 May);
-$4 million over four years to Student Job Search; and
-$353,000 to be spent on a study identifying the information needs of prospective tertiary students and their families. The study will be used to develop an information package for use by those contemplating study.

ENDS

Attached: Fee maxima rates 2004 to 2006.

Fee Maxima 2004 to 2006 ($/EFTS, GST inclusive).

Funding Category Description 2004 2005 2006
A Arts; Social Sciences; General, including Community Education 3,900 3,990 4,074
B Science; Computing; Engineering (non Degree); Agriculture (non Degree); Nursing; Trades; Architecture (non Degree); Fine Arts; Music 4,500 4,604 4,701
C Engineering (Degree); Agriculture (Degree); Architecture (Degree); Audiology 5,500 5,627 5,745
G Dentistry; Veterinary Science; Medicine 10,000 10,230 10,445
H Specialist Large Animal Science 5,500 5,627 5,745
I Teaching 3,900 3,990 4,074
J Business; Accountancy; Law 4,200 4,297 4,387

For courses of 0.06 EFTS or less

Funding Category Description 2004 2005 2006
A Arts; Social Sciences; General, including Community Education 234 239 244
B Science; Computing; Engineering (non Degree); Agriculture (non Degree); Nursing; Trades; Architecture (non Degree); Fine Arts; Music 270 276 282
C Engineering (Degree); Agriculture (Degree); Architecture (Degree); Audiology 330 338 345
G Dentistry; Veterinary Science; Medicine 600 614 627
H Specialist Large Animal Science 330 338 345
I Teaching 234 239 244
J Business; Accountancy; Law 252 258 263

These fee maxima are based on 2004 scenarios, plus 2.3% for 2005 and 2.1% for 2006. These are the BEFU inflation figures for those years (December years) for Budget 2003.

A new funding category, Category J, has been created for business and law courses, which were previously part of Funding Category A. The funding rate for Category J is the same as for Funding Category A.

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