Education Minister Chris Hipkins has defended the tertiary fees-free policy as National calls out Labour over what it calls a failed election bribe.
Photo: RNZ / Richard Tindiller
The policy, which offers all new students one free year of full-time tertiary study or training, is expected to cost $350 million in its first year, yet enrolments are just 0.3 percent higher than the same time in June last year.
Figures showed there are 2400 fewer students in tertiary education and training than a year ago.
Mr Hipkins told Morning Report that figure was actually a reflection of the strong labour market.
"We know from historical trends that when there's very low levels of unemployment there also tends to be a flow-on effect to tertiary education, particularly around vocational education. So the polytech sector in particular feels the effects of a strong labour market," he said.
"Young people in particular will go straight into employment because there are plentiful opportunities in a low unemployment environment and therefore they're less likely to go into polytech training.
"What this fees-free policy is doing is meaning they're getting less debt, so they can get on with their lives faster" - Education Minister Chris Hipkins
"The forecasts would suggest that it's gone down less than it was going to so we've helped to arrest a decline in participation."
National Party's education spokesperson Paula Bennett told Morning Report the figure was a concern for the industry training sector.
"We're seeing nearly 5000 fewer young people undergoing industry training and that's a skill area that we desperately need."
"I mean they categorically said that there would 2000 more students studying at that tertiary level and industry training and we're not seeing that."
But Mr Hipkins said it was still early to criticise Labour's policy.
"We'll see the full effect of it over two or three years as behavioural patterns change as a result of fees free."
"It just means they haven't lived up to their promises" - National Party education spokesperson Paula Bennett
Mrs Bennett also criticised the party for investing $2.8 billion on an area where she believed it was not needed most, and said the policy failed to deliver on their promises.
"What we've got is young people not equipped to go into further tertiary study and it could be spent there, we've got teachers that are desperate for a pay rise and they're making that heard, we've got special needs, we've got all of those things that are needed in classrooms and instead they made an election bribe but they've had to come through with it and $2.8 billion is a lot of money."
Mr Hipkins said the money would end up getting spent on student loan borrowing anyway.
"We pay a lot of this money anyway, because through the student loans scheme, the majority of people who are benefiting from fees-free [policy] would've otherwise borrowed their tuition fees and we would end up subsidising them that way anyway.
"To put that into context, when students borrow under the loan scheme we end up getting back about 55 cents of a dollar. So we actually do end up heavily subsidising them one way or the other anyway."
However, Mrs Bennett said there were fair subsidises in place before the fees-free policy.
"Before this, certainly students were subsidised to the equivalent level of about 82 percent of their study and they were paying for about 18 percent of it.
"We've got others that do go straight into work and they are effectively subsidising people that are getting further qualifications which means they are likely to be on a higher income bracket, so they're actually participating and paying something towards their study."
Tertiary Education Commission figures showed about 17 percent of fees-free learners in provider-based study and industry training were Māori as of August.
The minister also acknowledged Māori were missing out more on the policy than European learners, because they usually have prior studies making them ineligible, but said that would improve over time.
Wānanga students accounted for only 100 fees-free enrolments as of August. But Mr Hipkins said much of what Wānanga did was fees-free anyway and therefore that figure might be misleading.