Budget 2012 preview

Posted By TEU on May 17, 2012 |

Finance minister Bill English will unveil an austere ‘zero’ 2012 budget next week.

The zero, budget (meaning there will be no overall increase in spending, even to account for inflation) is being preceded by several pre-budget announcements highlighting  some areas that will see increased spending as well as preparing voters for some of the less popular cuts.

Within tertiary education, Treasury forecasts from December indicated that tertiary education funding for 2013 will fall to be nearly $400 million below 2009 levels and will continue to fall until 2015. It also shows that numbers of funded full-time equivalent students will reach a record level this year (244,000) and will remain significantly above 2009 levels until at least 2016.

Within the confines of a ‘zero’ budget, the minister of tertiary education has already signalled that funding for degree-level science, maths, technology and engineering will be up but that funding for humanities and commerce may be down. Funding for PBRF research will be up, but funding for level and 1 and 2 courses may be down.

The budget’s big news story within tertiary education is likely to be restrictions on student allowances to four years of study, and the requirements to pay back loans more quickly. TEU views both these changes as an attack on equity and accessibility. There is no doubt that limiting people’s access to allowances, and increasing the financial burden that loans place on some people (especially low income earners, or those from low income families) will prevent some people from studying.

However, the other important equity issue is the gradual shift in funding from level 1 and 2 courses to degree and postgraduate study and research. All levels of study are important but the government is choosing to sacrifice the opportunities of first-time learners who are trying to get basic skills so that it can fund high-end research and study.

The other issue of note is that the Mr English appears only to be looking at the expenses side of the ledger in an attempt to balance future budgets (with the exception being he is not re-examining the 2009 tax cuts for New Zealand’s wealthiest earners, which took an estimated $2 billion out of our economy). He is not looking at investing in areas that can create more jobs, more skills and more opportunities – all of which would lead to more tax revenue and less expense for the government. Tertiary education has a critical role to play in solving New Zealand’s financial problems, but it needs support and resources to do it.

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