Gordon Campbell | Parliament TV | Parliament Today | Video | Questions Of the Day | Search

 


Tertiary savings fund new investment

Hon Steven Joyce

Minister for Tertiary Education, Skills and Employment

24 May 2012

Tertiary savings fund new investment

Budget 2012 rebalances the Government’s $4.3 billion investment in tertiary education between expenditure on student support and investment in tuition and research, says Tertiary Education, Skills and Employment Minister Steven Joyce.
“We have one of the most generous student support systems in the world. Rebalancing it allows us to free up money we can reinvest in improving the quality of tertiary education we provide, and help our overall fiscal position,” Mr Joyce says.

Key changes include:

• Increasing the student loan repayment rate for all New Zealand-based borrowers over the repayment threshold from 10 cents to 12 cents in the dollar, saving $184.2 million operating over four years.
• Broadening the definition of ‘income’ for student loan repayment purposes, saving $3.1 million operating over four years.
• Removing the voluntary repayment bonus, saving $43.5 million operating over four years.
• Implementing information-matching between Inland Revenue and the New Zealand Customs Service to identify borrowers in serious default.
• Limiting the number of courses students can borrow for in one year to two effective fulltime equivalents (EFTS).
• Keeping the parental income threshold at current rates until 31 March 2016, saving $12.7 million operating over four years.
• Removing eligibility for student allowances for postgraduate study, saving $33 million operating over four years.

The student support changes in Budget 2012 will provide operating savings of $240.3 million in 2011/12. A further $65 to $74 million a year of operating savings over the next four years will be largely re-invested across the wider tertiary system.

“The Government is committed to interest-free student loans, but we are determined to reduce the write-off on taxpayers’ investment.
“Since coming into government, we’ve reduced the write-off from 47 cents in each dollar of student loans down to 45 cents. Changes we are announcing today will reduce it further to 41 cents – close to our target of 40 cents,” Mr Joyce says.

“From 1 April 2013, graduates and ex-students will have to pay off their student loans faster so the Government can invest more in the next generation of students. This involves increasing the repayment rate from 10 cents to 12 cents for each dollar of income above $19,084 a year.

“We will cancel the voluntary repayment bonus, because it is not creating the increase in repayments we were hoping for, and we now have other priorities for expenditure. That will save around $43.5 million over the next four years.

“We will introduce measures to start tackling the blow-out in the cost of student allowances. Costs have increased from $385 million in 2007/08 to $624 million in 2010/11, due in part to policy settings of the previous government.

“We are going to focus student allowances on the initial years of study – and to assist low-income families who need it most.

“We will freeze the parental income threshold at its current rate until 31 March 2016, and ensure the limit of 200 weeks’ access to student allowances is consistently applied.

“Postgraduate students will no longer be eligible for student allowances. This refocuses allowances on students working towards a first qualification, and acknowledges that students studying at postgraduate level gain a higher private return from their study. Those students will continue to have access to interest-free loans.

“Alongside these changes, we have recently consulted on our commitment to limit the annual amount a student can borrow on their loan to that equivalent to the workload of two fulltime students, stopping people over-using government support.”

Other key Budget savings over the next four years (unless stated otherwise) include:

• Removing short-term funding to support the embedding of literacy and numeracy into level 1 to 3 programmes, which is now largely completed. This will mean a saving of $22.4 million.
• $5.4 million from the Government ceasing funding for Adult and Community Education in universities. The Government will instead fund some of these programmes directly through community providers.
• $8.9 million over one year due to reduced demand in industry training courses following the operational policy changes This will be reinvested in the university sector.

“Changes in Budget 2012 release $240.3 million in 2011/12 and $276.3 million over the next four years in student support funding for the Government to reprioritise, while reinvesting in strengthening overall tertiary education provision for students in priority areas like engineering, science, and research.”

ENDS

© Scoop Media

 
 
 
 
 
Parliament Headlines | Politics Headlines | Regional Headlines

 

Max Rashbrooke: A Failure Of Measurement: Inside The Budget Lock-Up

Shortly after the embargo lifted at 2pm news organisations started filing reports claiming that health, and to a lesser extent housing and education, were the ‘big winners’ out of the Budget. It failed to take into account the fact that in most cases the apparent increases were in fact cuts. Because of the twin effects of inflation and population. More>>

ALSO:

DOCtored Figures: Minister Clarifies DOC Budget

“Commentators have overlooked the fact $20.7m of that perceived shortfall is new funding for Battle for our Birds 2016, provided for in last week’s Budget...” DOC also has approval in principle to carry over a further $20m to 16/17 due to unexpected delays in a number of projects. More>>

ALSO:

For The Birds: Gordon Campbell On The Budget

Budgies, so their Wikipedia page says, are popular pets around the world due to their small size, low cost, and ability to mimic human speech. Which is a reasonably good description of Finance Minister Bill English eighth Budget. . More>>

Max Rashbrooke On The 2016 Budget

The best label for this year’s announcement by Bill English might be the ‘Bare Minimum Budget’. It does the bare minimum to defuse potential political damage in a range of areas – homelessness and health are prime among them – but almost nothing to address the country’s most deep-rooted, systemic social problems. Indeed the Budget hints that these problems may get worse. More>>

ALSO:

Gordon Campbell: On Bank Scandals (And Air Crashes)

Last month, the Australian Securities and Investment Commission (ASIC) filed proceedings against Westpac over activities that have some distinct echoes of the Libor scandal. More>>

Budget: Health Funding Must Keep Up With Need

NZNO: “The nursing team has been doing more with less for years. It’s getting to the point that we’re really worried about our colleagues, our patients, our jobs and the level of health care available for people in our country." More>>

ALSO:

Emissions Inventory: Time For The Government To Do The Right Thing

It’s time for the National Government to step up and do the right thing to reduce climate pollution as data shows New Zealand’s greenhouse gas emissions are higher than ever, the Green Party said today. More>>

ALSO:

Budget 2016: More Partnership Schools To Open

Seven new schools will join the eight Partnership Schools already open, along with further new schools opening in 2017. “The growth of this policy is a reflection of the high level of interest from educators and community leaders,” Mr Seymour says. More>>

ALSO:

No Correspondence With English: Did Brownlee Make Up Sale Of Navy Ships ‘On The Hoof?’

Having revealed that several Royal New Zealand Navy vessels have not left port in years, New Zealand First is now asking the Minister of Defence to prove he did not come up with the idea of selling HMNZS Taupo and Pukaki until the media asked him. More>>

Get More From Scoop

 

LATEST HEADLINES

 
 
 
 
 
 
 
 
 
Parliament
Search Scoop  
 
 
Powered by Vodafone
NZ independent news