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What’s the real cost of tertiary education?

New analysis exposing the real cost to taxpayers of tertiary education shows that work-based traineeships and apprenticeships are the most cost-effective and efficient way to provide the skills and qualifications New Zealand needs.

“We believe that the current tertiary system is overly skewed towards institutional learning, and these numbers bear that out,” says Josh Williams Industry Training Federation (ITF) Chief Executive.

The Ministry of Education reports data and statistics on industry training separately from other forms of tertiary education, and information about student loans and allowances is reported separately again. This has made it difficult to compare the real cost to taxpayers of the different types of education.

ITF studied the numbers, and had their analysis and assumptions tested and checked by the respected economic research firm BERL. The research found that:

• In 2016, the government spent $1.23 billion on universities to provide their facilities, staff and tuition, and an additional $680 million on loans and allowances - a total of $1.92 billion, to support 146,000 domestic university students.

• In comparison industry training received just $171 million, to support 147,000 trainees and apprentices – just six percent of publicly funded tuition and training subsidies.

• In 2016, the industry training system qualified 306 people for every $1million of government investment. For the same level of investment, polytechnics only qualified 51 people and universities 19.

• Industry training delivers the highest number of qualifications per year of any part of the system - 52,485 in 2016.

• In comparison universities delivered 36,085 qualifications, and polytechnics 45,650 qualifications.

• Each year, the government spends twice as much on student allowances as on industry training. Plus, every dollar lent through the student loan scheme ends up costing the taxpayer 40 cents – which adds up to around $700m a year.

“Industry training is efficient because it is co-funded and supported by businesses. Employers put money and resources into helping trainees and apprentices develop the skills their industry needs. The trainees and apprentices have jobs and are gaining and deploying their skills productively. Campus-based learning requires significantly more government funding and support, with no guarantee the qualification will lead to a job,” says Josh Williams.

Last year over half of all new industry trainees and apprentices already held a tertiary qualification, including 24% who had already completed a degree.

“Frontloading skills into young people will not be enough to meet the challenges of the future of work,” says Josh Williams. “It’s time to start re-balancing our education system. Boosting investment in workplace learning will help ensure our people are ready to meet the challenges posed by rapidly changing technologies and shifting skill requirements.”

Fully interactive stats and graphs which demonstrate the analysis are available at: www.tinyurl.com/costofprovision


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