Under Labour\u2019s original version of the policy, students were entitled to up to $12,000 to cover their first year of tertiary study. When the Luxon Government came to power, it was already clear that \u201cfees-free\u201d was a colossal waste of money. But instead of scrapping it, the incoming Government shifted it to the final year of study. Now they are finally putting the failed policy out of its misery. Better late than never.<\/p>\n
Critics of the fees-free scheme argue that public investment would deliver greater economic returns if redirected towards apprenticeships and industry training.<\/p>\n
Reaction to Peters\u2019 Budget preview has been relatively muted, although there has been some criticism, mostly from interested parties. University students\u2019 groups were understandably upset. For those who have already commenced university and expecting their final year to be free, Peters\u2019 announcement would have come as a rude shock. <\/p>\n
Former Labour Finance Minister Grant Robertson, now University of Otago vice-chancellor, said the cancellation would be \u201cvery disruptive\u201d to students. Green Party co-leader Marama Davidson called the decision \u201coutrageous\u201d, saying her party would fight to have the scheme reinstated. Again, this is understandable. The Greens draw disproportionate support from university students.<\/p>\n
Labour\u2019s tertiary education spokesman Shanan Halbert was also critical but did not go so far as to commit Labour to reinstating the scheme. Instead, he said: \u201cWe need to see what [the Government\u2019s] plans for the fees-free money are in more detail before we can make any commitments ourselves.\u201d<\/a><\/p>\n That was a wise move on Halbert\u2019s part. When Peters foreshadowed the Budget move, he also signalled the savings would not simply be used to help the Government\u2019s ailing fiscal position. Instead, he implied the money would be reinvested in education, saying the Government would \u201creshape and repurpose it for the trades and all sorts of industries where we do need it\u201d.<\/p>\n If that turns out to be true, there is a good chance it will be a sound investment. In Trade Routes, a 2025 report for The New Zealand Initiative, I show that the status and quality of New Zealand\u2019s industry training system is poor. More of our school leavers become unemployed than undertake apprenticeships. In contrast, half of German school leavers become apprentices.<\/p>\n The non-university tertiary sector is still reeling from the Te P\u016bkenga misadventure. Established in 2020, the mega polytechnic quickly got into financial difficulty and was disestablished again at the beginning of this year. Some of its successor organisations remain cash-strapped. Investing some of the savings from the fees-free scheme in those institutions could go a long way towards making them viable.<\/p>\n Some of the fees-free funding should also be invested in the new industry-led subject initiative for secondary schools. Industry-led subjects will form part of the new school qualification system scheduled to replace NCEA in 2029 for Year 12, and 2030 for Year 13.<\/p>\n For the first time, secondary schools will have formal curricula for trades-track education. That could be a game-changer for an industry training system that has long been seen as a second-rate alternative to university. But most schools are not currently geared to offer industry and trades education at scale.<\/p>\nThe debate over fees-free education has increasingly shifted from affordability alone to questions of value, outcomes and workforce priorities. Photo \/ Jupiter Images<\/p>\n
The Government\u2019s decision to scrap the fees-free scheme signals a broader shift in education spending priorities under the current coalition. Photo \/ Mark Mitchell<\/p>\n