Budget 2021 – Key Messages

20 May Budget 2021 – Key Messages

Today’s Budget had large increases for VET, $25pw student support increases, a 1.2% adjustment for tuition funding, and no increases for major research funds.

Relevance: high relevance to all.

Our Take

• VET is the main winner on the day, with $279.5m of extra spending. Agencies will score an extra $47.3m to support RoVE transition work. Universities are less likely to be enthused by flat research funding, and a small CPI adjustment of 1.2%.
• We have more work to do on looking through the Estimates to see exactly where funding has been used, shifted or cut. Some of the “new” funding announced by Ministers seems to continue initiatives that have been funded for some years, for example. Most of the VET funding increase also hasn’t been specified in the top-level documents.
• The table below represents our initial view of how stakeholders might view Budget 2021. We are working on a more complete review of the Budget.

Key Facts

• We have summarised key items relevant to the tertiary education sector from Budget documents. Spending figures are over 4 years unless stated otherwise. You can find Budget material here, including links to all the media release titles listed in italics below. Some of the detail below draws on the document Wellbeing Budget 2021: Securing Our Recovery.
• Budget 2021 delivers on education plan.
  • $279.5m to boost vocational education subsidies by 13.4% by 2024. The justification given was that degree tuition rates went up by 11.4% from 2014-19, while VET rates went up by 2.4%. In 2022, funding rates for apprenticeships and industry training will go up by 5%, to align work-based and provider-based learning ahead of the unified funding system. Money will also be spent on “improving the fairness and reach of Equity Funding”.
  • $110.7m for a 1.2% increase in tertiary education tuition and training subsidies from Jan 2022 (ECE received a 1.2% boost, and schools received a 1.6% boost).
  • Student allowances, and student loan living costs, will increase by $25/week on 1 Apr 2022 (other benefits are increasing by $32-55 per adult by 1 Apr 2022).
  • $10m to extend the temporary hardship fund for tertiary education learners for the 2021 calendar year ($4.2m came from reprioritised funding).
• Government supports Pacific people’s wellbeing approach to strengthen recovery efforts.
  • $30.3m to extend the Tupu Aotearoa programme to support about 7,500 people into employment, education and training (funded from the CRRF).
• Government invests in the wellbeing of whānau Maori.
  
  • $32.3m to support research and education delivery in the wānanga sector.
• Training Incentive Allowance to support 16,000 New Zealanders into jobs
  • $153m will be spent on restoring access to the Training Incentive Allowance from 1 Jul 2021 for L4-7 students (it has only been available for L1-3 students since 2009). This could support 16,000 students on eligible benefits with costs such as fees, books, transport and childcare. The allowance is up to $114.19 pw or $4,567.60 pa.
• Budget boost to tackle on-farm emissions.
  
  • $24m for agricultural greenhouse gas mitigation R&D ($13m will be spent via a Strategic Science Investment Fund managed by MBIE). Topics will include vaccine development, methane and nitrous oxide inhibitors, and low emissions animal breeding.
  • $37m will be spent on a national integrated farm planning system, including a training programme and career pathway for farm advisors.
• Backing small business as economy recovers
  • $44m will be spent over the next 2 years on continuing the Digital Boost to provide training and advice to SMEs.
• Budget 2021 safeguards the future of Scott Base.
  • $306m in capital and $43m in operating expenditure will be used to redevelop Scott Base in Antarctica, supporting scientific research. The work is subject to Cabinet approval of an implementation plan and an environmental evaluation.