The 2014 Budget: Government locks in cuts and continues to lock out students

15 May 2014

Despite posting their first surplus, the National Government has continued to deprive students from much needed support.

After five consecutive deficit budgets, the National Government announced today a return to surplus. Finance Minister Bill English has forecasted an operating surplus of $372 million which should have translated into increased investment into education. The underfunded sector should be at the front of the line to receive the spoils of a boom economy. However, students have again missed out on much needed support.

Student support remains frozen, with the student loan repayment threshold flat lining. “Since 2012, any domestic student after earning above $19,084 must make compulsory 12 cents in the dollar repayments on their student loan”, says Daniel Haines, New Zealand Union of Students’ Associations (NZUSA) President. 

“The 12 percent repayment rate makes our student loan scheme of the most regressive in the world. It compares unfavourably to our Australian neighbours, their student loan repayment scheme starts at four percent after a graduate earns over $53,345, nearly three times out level. By freezing the repayment rate in New Zealand at a level bellow full-time minimum wage, payments are imposed  on those people who have the least ability to pay”, said Haines.

“Student debt continues to grow, not least because since 2010 the Government has made over 20 cuts to student support, a disinvestment valued at over $70 million dollars in the last three years. In a press release today Steven Joyce, the Minister for Tertiary Education announced he expects to save another $72.6 million over the next four years because of additional ‘funding freed-up from reduced demand and the suspension of inflation adjustments’. If effective, Joyce will have cut $144.2 million - mostly because his cuts have locked potential students out from tertiary study.

“Money cut from student support disproportionately affects postgraduate students who had their entitlement to receive allowances removed in 2012, students over 40 who have had their allowances restricted to 120 weeks, and students over 55 who have had all allowance eligibility completely removed. By arbitrarily restricting who has access, National arbitrarily picks winners and losers.

“By these policies, locked in in this Budget, we risk creating a society of those who can afford to access of higher learning, and those who can’t. Our public institutions should be open to those who have the ability to learn, not simply those with the ability to pay. It’s appalling that nothing has been done to give relief to this group of New Zealanders who bear the burden of a $13.5 billion dollar debt.

“The Tertiary Minister also announced an extra $83.3 million dollar subsidy for science, agriculture and some health science disciplines. These disciplines have been prioritised with funding - but not with fee reductions that might encourage more students to do them - at the expense of degrees which offer critical transferable skills. This is a continuation of Joyce’s meddling with the tertiary sector, also shown with his proposed changes to university and wānanga councils. By constantly interfering in the management of our tertiary institutions, this Government is undermining academic freedom and autonomy for tertiary institutions to set their own curriculum.

“With a rapidly changing economy, our tertiary institutions need greater, not less freedom. If the Government continues to prescribe which courses we should be teach the sector is being set up to fail”, says Haines.

In response to the budget announcement today, students at the University of Auckland have organised a protest tomorrow at 11.00am. Outraged at the increasing cost of education they are meeting outside the General Library and plan to march to SkyCity where John Key is delivering a speech. 

 

The voice of New Zealand's 400,000 students.

The New Zealand Union of Students’ Associations exists to advance the political, social and economic interests of tertiary students whatever they study and wherever they live. NZUSA is a membership body of local students' associatons. We believe in opportunity for all.

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