Treasury has released its advice on tertiary education spending leading up to this year’s budget.

Unsurprisingly, the Treasury papers reveal that it took its usual doctrinaire line against any price adjustment to tuition subsidies or increase in additional funded EFTS places in universities and polytechnics. It did, however, support the new limits on access to student loans.

Treasury argued that a CPI adjustment “would be a direct price increase, for which there is no direct improvement in quantity or standards.”

“We understand that the Minister is considering a 2 percent, 2.2 percent (CPI) or a 2.5 percent increase… We consider that there are other, less costly options that could be used to increase the revenue received by institutions.”

Treasury’s ‘less costly’ alternative options included relaxing fee regulations further than was already proposed so that institutions could charge higher fees, or applying funding as a performance bonus through the new performance funding system.

Treasury opposed the government’s proposal for additional EFTS places in universities and polytechnics. It argued instead that the Tertiary Education Commission could manage demand pressures by reprioritising lower value provision or by relaxing the current 103 percent cap to allow tertiary institutions to take higher numbers of unfunded enrolments.

When considering student loans, Treasury argued that the impact of the government’s student support package would be approximately 17,000 fewer people drawing down a student loan and 400 fewer people receiving a student allowance.

It also noted that the student support package has a proportionally higher impact on Māori, Pasifika and Asian students who borrow. While just over 5 percent of borrowers of European/Pakeha ethnicity would be affected, nearly 10 percent of Māori borrowers, 16 percent of Pasifika students, and 20 percent of Asian borrowers would be affected.