Key Points:

  • School and preschool funding keeps pace with inflation and roll growth.
  • Big boost for children with the greatest learning needs.
  • Zero increase for tertiary institutions and no action yet on many pre-election promises.

Schools and preschools have gained some relief to cope with inflation but they are asking what has happened to most of the promises the Labour Party made for education before the last election.

Operational funding for schools and preschools will increase from next January by 1.6 per cent, in line with inflation.

"It's not going backwards," said Secondary Principals Association president Mike Williams.


Children with the highest needs will get a more significant boost with 1000 more children qualifying for the Ongoing Resourcing Scheme (ORS), up from 9049 last July, and more for English as a second language and for deaf and blind students.

But there is nothing new to tackle a desperate teacher shortage beyond continuing measures already announced last year.

Despite $470 million extra in the coming year for fees-free tertiary education and higher student allowances, funding for the tertiary institutions themselves has actually been cut by $12m because of lower than expected enrolments. Funding rates per student have been frozen.

And there is no sign of key pre-election promises such as higher funding rates for preschools with 100 per cent qualified teachers, more careers advisers in schools or a $150 per student grant to schools that stop asking parents for "donations".

NZ Educational Institute president Lynda Stuart, representing primary and preschool teachers, said the Budget was "just such a major disappointment".

Tertiary Education Union president Sandra Grey said she was "massively disappointed".

Universities NZ chairman Stuart McCutcheon said the tertiary funding freeze would cost the universities alone between $18m and $36m a year in unfunded cost inflation.

Education Minister Chris Hipkins said he was still committed to implementing all his promises within the Government's three-year term.

"We had to make some choices in the first Budget as to what came first," he said.

"In early childhood education our first priority was an across-the-board funding increase. That never happened in the time National was in power.

"In school funding, clearly we had to make sure the school operations grant was increased, and we invested in the area of highest concern which is kids with special needs."

He said lifting the funding for preschools with 100 per cent qualified teachers, which was planned to start in January 2019 in Labour's pre-election fiscal plan, would depend on increasing the number of qualified teachers available.

On tertiary funding, he said he was reviewing the whole funding model.

"Simply doing an inflationary adjustment to it isn't going to reduce the more fundamental problems, so we have to design a new funding system," he said.

On the $150 grant for schools that don't ask for donations, he said: "That is the subject of future Budget processes."

On careers advisers: "The issue with careers is that that is quite a significant piece of work. It does involve changing the basis of the current funding system for careers. Work has started on that."

Similarly, the Budget provides only $1.7m for "design work" on a "school-leavers' toolkit" which Labour had promised to fund with $50m a year from 2019, including driving lessons, financial literacy and "civics".

"Watch this space," Hipkins said. "It's subject to the next Budget."