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Making tertiary education and training affordable for all

"Labour’s objective is that every person, whatever their academic ability, whether they be rich or poor, whether they live in town or country, has a right, as a citizen, to a free education of the kind for which they are best fitted." – Peter Fraser, Labour’s First Minister of Education.

Education creates opportunity. It lets our children and young people be all they can be, and contribute fully to our society and economy.

As the economy has become more sophisticated, so we have needed our people to have a higher level of education. In 1904, it was expected that only 30 per cent of children would need an education beyond primary level, and they had to pass an exam to get free secondary education. The First Labour Government saw the need for the next generation to be better educated, and made secondary school free and universal.

Now more and more jobs need tertiary level education or training. By 2020, it is estimated two-thirds of jobs will require qualifications above high school level. We need more apprentices, people with specialist industry certifications and more university graduates. Yet we have gone backwards in the provision of post-school education and training.

Government investment in tertiary education and training has fallen and so has participation. In 2010, 40 per cent of 18-24 year olds were in tertiary education or training, but by 2015 (the latest data) that had dropped to 35 per cent. 

Despite Labour’s interest-free loans, cost remains a major barrier to post-school education. 65 per cent of parents list cost as a reason young people do not go into post-school learning, and 44 per cent of students report they do not have enough money to meet their basic needs. The cost barrier comprises both fees, which are up over 40 per cent since 2008, and rising living costs such as rent.

Study debt holds people back for years after they leave education. On average, people take eight years to clear their debt. Repayments make it harder to save and this is a contributing factor in plummeting home ownership among under 40s.


Labour will make tertiary education and training affordable for all by:

  • Increasing living costs support with both a $50 a week boost to student allowances and a $50 a week lift to the maximum that can be borrowed for living costs
  • Restoring post-graduate students’ eligibility for student allowances
  • Restoring the eligibility of students in long courses, such as medicine, to access student allowances or loans beyond seven years FTE study
  • Accelerating the three years' free policy, starting with one year fees free full-time equivalent for everyone starting tertiary education or training for the first time from 1 January 2018, and extending this to three years’ free by 2024.

This policy will mean that young people can better afford to live while studying and will leave study with less debt. 

The $50 increase to the maximum for student allowances and living cost loans, along with the increase in Accommodation Benefit payments of $20 a week in Budget 2017, will make it easier for students to get by while studying, lowering a significant barrier to education. In particular, it will help to offset the rapid increase in rents that many students have faced in recent years due to the housing crisis.

Reversing the current Government’s short-sighted decision to exclude post-graduate students from student allowances will mean more talented people can afford to go on to attain the very high skill levels New Zealand needs to lead our innovation.

With our population’s growing need for healthcare, it makes sense to restore access to student support for students in the medical, dental, veterinary, auditory and ophthalmological sciences.

The three years’ free tertiary policy will be accelerated from the previous timeframe, which would have begun with one year free in 2019, and an additional year every three years. Now, one year free will start in 2018, and this will be extended to two years’ free in 2021, and three years’ free in 2024 or more rapidly if conditions permit.

This isn't just for university students. It's also to cover the costs for students in apprenticeships, industry training or studying at a polytechnic. The entitlement is available for anyone who has not previously studied at tertiary level and can be taken throughout their life, either all at once or spread across more than one qualification.

To be eligible for the second and third years, students will need to pass more than half their courses in the previous year.

The investment in student support will cost $270m per year, and the first year of three years' free post-school education, which we are bringing forward, will cost $340m.

Together, these initiatives will help reverse the worrying decline in tertiary participation seen under the current Government, so that we can better equip the younger generation for the jobs of the future.

Along with our policy to increase funding for education at all levels, abolish school donations and introduce a dole for apprenticeship subsidy, this package advances Labour’s vision of world-class, free education for all.