Universal student allowance 'too high a cost'

A universal allowance for tertiary students would come at too high a cost to New Zealand, says Education Forum policy adviser Norman LaRocque.

His comments follow costings for a universal student allowance, requested by the Labour government, showing a $728 million annual price-tag.

Student groups have long called for all tertiary students to get an allowance, and it is New Zealand First, Green Party and United Future policy.

The cost would be a significant increase over what the government currently spends on tuition subsidies paid directly to tertiary education institutions (TEIs), Mr LaRocque said.

New Zealand already spends much more of its tertiary education budget on student assistance than similar countries (44 percent in New Zealand; 35 percent in Australia; 24 percent in the United Kingdom; 19 percent in Canada; 18 percent in the United States).

"Putting money into student support, rather than into funding for TEIs, would do nothing to improve the performance of the tertiary education sector in New Zealand," Mr LaRocque said.

"It would not help TEIs pay higher salaries to attract and retain top-flight academic staff, would not help universities finance cutting-edge research, and would not help support university/industry research linkages aimed at making New Zealand competitive in the global economy.

"Furthermore, government spending on tertiary education relative to Gross Domestic Product (GDP), a measure of the country's ability to pay, is already above the OECD average."

In 2004, public spending on tertiary education amounted to 1.5 percent of GDP (above the OECD average of 1.3 percent), and public spending on tertiary education was 4.9 percent of total public spending – second only to Norway (5.3 percent) and well above the OECD average of 3.1 percent.

"Other, higher-performing countries understand the need for balance in the amount of money spent on student support versus direct funding of TEIs.

"They also understand the need for a sensible mix of public and private contributions to tertiary education to get the 'best bang' for taxpayers' money. Increasing spending to pay for a universal student allowance would come at too high a price," Mr LaRocque said.

The New Zealand Vice-Chancellors Committee has also argued that money for a universal student allowance would be better invested in TEIs, which had "experienced a sustained rundown in their per-student funding".

New Zealand invested at more than twice the rate in tertiary students than it did in its tertiary education institutions, and government funding per university full-time equivalent student had fallen from $10,932 in 1991 to $9,098 in 2006 (in 2006 dollars), the committee has said.

Resources

An April 2008 speech by Mr LaRocque on student allowances is online as a PDF document.

A New Zealand Vice-Chancellors Committee statement is online as a Word document.

A story in the New Zealand Herald is at this web page.

An opinion piece from University of Auckland vice-chancellor Stuart McCutcheon on university funding is at this web page.

Cartoons from 2005 commentating on student support are at this web page.