Inflation figures released last week by Statistics NZ show that while the consumer price index (CPI) rose 4 percent last year the cost of tertiary and further education rose 6.4 percent. The sharp increase in inflation was influenced by a rise in goods and services tax (GST). There was a 2.3 percent increase in CPI for the December quarter, which was the largest quarterly increase since the last time GST increased in the September 1989 quarter.

Tertiary education costs however did not rise at all during the December quarter, as would be expected. The 6.4 percent increase in the cost of tertiary education was recorded all at the beginning of the year when most students pay fees and so does not yet include the flow on costs from the increase in GST.

As well as facing the increased costs of higher GST and inflation when buying goods, tertiary institutions will also find they have less money this year from government, with government funding forecast to fall every year until at least 2014.

TEU National President Sandra Grey said it was time someone in government did the maths.  Currently we have less government funding every year, more students, and higher costs.

“It’s not hard to see that the other side of that equation is skyrocketing fees, staff redundancies and pressure on high quality New Zealand education,” said Dr Grey.

Meanwhile, CTU secretary Peter Conway said that we can expect to see the inflation rate go higher in the year ahead.

“Real wages are falling as a result, causing New Zealand to drift further and further behind Australia. The Government must take all these factors into account when it considers the upcoming annual adjustment to the minimum wage.”

Mr Conway said that employers can expect unions to be seeking appropriate wage increases this year which take all factors into account including the on-going effect of higher prices.