19 May 2011

Modest increase for education spending

4:16 pm on 19 May 2011

Total spending on education will rise more than $100 million in the next financial year, from $12 billion to $12.16 billion.

The net increase is in the school and early childhood sectors, while tertiary education spending will fall slightly, according to a Budget announcement on Thursday.

The Government says new spending on schools and early childhood services will total $1.4 billion over the next four years. Most of that money goes on roll growth and inflation-linked increases.

However, there is also extra funding for flagship initiatives, including national standards, keeping more 16- and 17-year-olds in education and training, and extending early childhood education to more poor families.

The early childhood sector will be disappointed to see the Government has backtracked on a plan to remove the six-hour limit on the number of hours per day for which the 20-hours subsidies can be claimed for a child.

Its removal will save the Government $16.5 million a year.

School operation grants increase 2.92% at a cost of $118 million over four years. There is also $78 million over four years to cover roll growth in schools.

For Maori education, the Budget reprioritises $60 million over four years to build new kura kaupapa Maori and upgrade existing buildings.

Tertiary sector

The Budget includes a separate vote for tertiary education for the first time.

It shows overall spending on the sector, not including loans and allowances, will fall from $2.79 billion this financial year to $2.78 billion next financial year.

The fall is due largely to previously flagged cuts in spending on adult and community education and industry training. It occurs despite new spending in the vote.

The Budget increases subsidies to tertiary institutions by 2% - but only for degree and post-graduate enrolments. Lower-level enrolments get no increase.

The Government has also increased the number of students it will subsidise only in the private sector, where it will pay for 750 new enrolments a year.

Changes to student loans

The Government had already flagged changes to student loans.

They include restricting access to loans for people who have an overdue loan repayment, preventing people aged over 55 from borrowing for living costs, and holding the loan repayment threshold at $19,084 for the next four years.