State of the Nation: Labour announces multi-billion dollar plan

•Labour announces it would bring in three years of free post-school education over a person's lifetime.

•Can be used for any training, apprenticeship or higher education approved by NZQA and can be used for full-time or part-time study. The three years don't have to be used all at once.

•Will cost $1.2 billion a year by 2025, with the first year funded from money earmarked by the government for tax cuts.

Labour has announced a multi-billion dollar plan to provide every New Zealander with three years of free tertiary education.

Party leader Andrew Little announced the long-term "Working Futures" plan today at a State of the Nation speech in Auckland, which would stretch over three terms of a Labour government.

It will provide three years of free post-school education over a person's lifetime and can be used for any training, apprenticeship or higher education approved by NZQA. It includes both full or part-time study and does not have to be used at once.

The plan will not affect the existing living allowances and course-related costs. It would cost $265 million in the first year and $1.2 billion once fully implemented in 2025.

Mr Little said the plan was designed with the future of an automated workforce in mind.

"The nature of work is changing rapidly and our education system must keep up if we are to seize the opportunities of the future. To compete in the new economy, New Zealand needs one of the best educated workforces in the world," he said.

"Our Working Futures Plan will mean that no matter what path someone wants to take after school, be it university or an apprenticeship, they will be able to get the skills they need to succeed without being shackled with years of debt.

He said the education would be available throughout a person's lifetime, so can be used for re-training, meaning businesses will always be able to find the skilled workers they need to succeed.

"Right now, New Zealand is being left behind in the global economy. Our economy is stalled, inequality is rising and the Kiwi Dream of a home of your own, a stable income and time with family and friends is slipping away.

"Labour will prepare New Zealand for the future - with a world leading education system supporting the innovative and job-rich economy we need to get ahead."

If Labour were elected, the plan would be introduced in phases, with one year's education available from 2019, two years from 2022 and three years available from 2025.

Mr Little said the policy was affordable from within current budgets. It would use money the government has earmarked for tax cuts.

The party would be conducting a line by line review of the tertiary education sector to ensure courses are providing value for money.

Labour leader Andrew Little talks with supporters during the Labour family picnic held at Albert Park. Photo / Dean Purcell

In documents released alongside the announcement, Labour said that under the current government it had become harder and more expensive to access education after high school.

The material said since National became the government, the number of tertiary students has fallen by 20% and the number of apprenticeships is down 22%. In that same time, total student debt had increased by over 50% and is expected to hit $15 billion this year.

It said National had put in more barriers to post-school education, while at the same time institutions were forced to raise fees. It said that was a direct result of the Government increasing funding by only 3.5% while training providers faced costs rising by 9%.

The government has made it harder to get student allowances and has put caps on the length of time students can study. Student numbers are now forecast to keep falling until 2020, it said.

The policy is a departure from Labour's previous position, where at the last election it focused more on reducing costs for parents at schools and early childhood education, and on supplying technology for all school-aged students.

Tertiary Education Minister Steven Joyce on Twitter described Mr Little's announcement as "stealing" a massively expensive Internet Mana policy on free tertiary education from the last election.

"Labour Party wants to take more than a billion dollars a year more off taxpayers to achieve absolutely nothing."

Labour more desperate than we all thought. Stealing massively expensive InternetMana policy on "free tertiary education" from last election

— Steven Joyce (@stevenljoyce) January 31, 2016

Act leader David Seymour said if the policy was introduced, it would lower the quality of education.

He said the "tumble" in world rankings since interest-free loans were connected, quoting stats that showed since 2006 the University of Auckland has fallen from 46th to 82nd and the University of Otago to 173rd from 79th.

"Labour's approach to education is funding for votes, and quality be damned," he said.

He said the party had a history of introducing politically popular policies that emphasised quantity over quality.

"Moreover, students will have no skin in the game. Right now the deal is: you back yourself, borrow a quarter of your course cost and the taxpayer picks up the remaining three quarters. Labour are now saying the taxpayer pays the lot.

"With Labour everybody will have a certificate, it just might not be a very good one."

Head of the Tertiary Education Union, Sandra Grey, said the policy gave "people from all walks of life" an opportunity to learn.

"It has been a long time since anyone has talked about investing money in tertiary education for the good of students, and for the good of people, rather than for the benefit of business," Grey said.

"This policy will help people get jobs but it will also help them give back to their communities and inspire their families."

"Fantastic" policy

Former Internet-Mana co-leader Laila Harre said she thought Labour's policy was "fantastic" and slammed Mr Joyce's tweet as "negative spin" from National.

"There are a lot of people who've campaigned for a long time for free tertiary education, and I'm one of those, and so have other people from other political parties. It's really great that Labour's adopting this as a key policy for the next election," she said.

She added: "Politics is about change, and it's fantastic that with Internet-Mana not succeeding that in its [wake] somebody has picked up the ball. There is absolutely no monopoly on good ideas."

Accusing Labour of stealing her former party's ideas was a "non-story", she said.

"To my mind, trying to put a negative spin on an entirely positive development is really a sad indication of where National's PR machine is at."

Speaking to the Herald from Fiji, she said she did not mind if the policy had similarities to Internet-Mana policy.

"Why would I have a problem with it? I support free tertiary education, unmitigated support. It [the announcement] is fantastic.

"It's really good to see Labour, who will be part of the next government, leading the next government, making it a priority. I think it's entirely 100 per cent great news."

It was also a financially viable idea, she said.

"It's always been feasible. Any government could have implemented free tertiary education and it's very good to see that a future government will."

What does the policy contain?

•Three years of free post-school education over a person's lifetime.

•Can be used for any training, apprenticeship or higher education approved by NZQA and can be used for full-time or part-time study. The three years don't have to be used all at once.

•Will cost $1.2 billion a year by 2025, with the first phase funded from money earmarked by the government for tax cuts.

•Would be introduced in phases, with one year's education available from 2019, two years from 2022 and three years available from 2025. It will not affect the existing living allowances and course-related costs.

•The first year will be available to all new school leavers from 2019 for all NZQA approved courses, including all apprenticeships, and to every New Zealander who has had no previous tertiary education.

•There will be no age limit, reflecting the increased importance of lifelong learning in the 21st Century economy.

•To be eligible for the second and third year, graduates will need to pass more than half their courses in the first year.

Timeline

• 1869: New Zealand's first university, The University of Otago, opened.

• 1962: A grant that covered fees and boarding costs was introduced, encouraging students to study full-time.

• 1989-1990: A standard tertiary free is introduced, and the tertiary grants scheme is replaced by student allowances based on parental income for those under 20.

• 1990-1991: A 'bums on seats' funding model is introduced, where universities are funded based on the number of equivalent full-time students enrolled.

• 1991-1992: The standard tertiary fee is abolished, with tertiary education institutions allowed to set their own fees. Targeting for student allowances is extended to those up to 25. The student loan scheme is developed.

• 2000-2001: Fee stabilisation introduced, to provide extra funding to tertiary education providers in exchange for putting a hold on fees.

• 2002-2005: The fees freeze is replaced by a system that allows fees to rise subject to limits.

• 2006: The creation of the Tertiary Education Commission. The interest component on student loans is abolished for students who live in New Zealand.

• 2006-2008: Demand-driven funding is removed, replaced by funding and equivalent full-time student targets.

• 2009-2010: Limits placed on access to student loans aimed at focusing loans on those more likely to succeed and gain value from tertiary education, as well as reducing the cost of the loan scheme. The repayment rate increased to 12 per cent, from 10 per cent.

Working Futures Plan