Labour’s flagship policy never quite fulfilled its promise, writes Madeleine Chapman in today’s excerpt from The Bulletin.
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No more fees-free
Fees-free study for tertiary students will be scrapped in this year’s budget, reports Julia Gabel for the Herald.. First announced by Winston Peters on Friday and soon after confirmed by finance minister Nicola Willis, the fees-free scheme currently allows for those in their final year of study to have up to $12,000 of their course fees covered by the government.
Willis confirmed this year will be the last year students can access the scheme, which has cost about $350m per year.
Greens promise to bring it back
Students studying a three-year bachelor’s degree who began study in 2024 or 2025 will no longer receive the $12,000 final year subsidy. Victoria University Students’ Association president told Newstalk ZB’s Francesca Rudkin that those students were feeling “that the rug’s been pulled out from under them”. He argued it would be the “bare minimum” to allow current students to access the scheme once they finished their degrees.
The Greens have called the decision “outrageous”, with co-leader Chlöe Swarbrick telling RNZ the party would fight to reinstate fees-free support. “The Greens know that it is a fantastic, wise, smart investment to invest in tertiary education for students and our communities,” Swarbrick said.
Labour’s flagship policy
The fees-free scheme was a flagship policy from Labour’s 2017 election campaign. The original scheme, rolled out from 2018, offered students their first year of tertiary education (or two years of work-placed learning) free – up to $12,000 – with an initial promise to extend support to three years of free study by 2024. The policy details were announced at decile five Aotea College in Porirua, where Jacinda Ardern asked students how many of them planned to study or train after finishing school. “We can prepare you by giving access to education or training,” she told them (NZ Herald).
After lower than expected uptake in its first year, Labour softly signposted killing the extension of the scheme, reported Stuff, and confirmed in 2020 it would remain only first year free.
In 2023, the Herald’s Derek Cheng revealed (paywalled) that the scheme appeared to be having the opposite effect as it intended. “The share of the fees-free pie for students from deciles 1 to 6 has steadily shrunk over the five years the policy has been in place, and grown for students from deciles 7 to 10,” wrote Cheng. “The biggest leap in participation has been for decile 10 students, whose share of first-year tertiary students went from 11% in 2017 to 16% in 2022 — a 43% increase.”
First year to last year
When NZ First and Act negotiated coalition deals with National following the 2023 election, Act requested details on the costs of the scheme, with a mind to scrapping it. In the end, National adopted NZ First’s policy of switching it from first year free to last year free, reported Cheng for the Herald again. And when the change was announced in 2024, there was Cheng again (paywalled), outlining how the policy would likely continue to fail in its original purpose (to increase student enrolments across all demographics) but would save the government about $130m a year.
What now?
Little detail has been provided as to where the $350m per year wrapped up in the fees-free scheme would be redirected. Peters suggested there would be a fees-free scheme in some form: “We are going to reshape and repurpose it for the trades and all sorts of industries where we do need it,” he said. “We can get a far better payback for our money.”
