Tertiary Education Minister Steven Joyce has denied suggestions that Government short-sightedness is to blame for moves by two universities to restrict or stop enrolments this year.

Victoria University last night announced it would not accept any more domestic applications for undergraduate study for the rest of the year.

Otago University decided on Tuesday to cap enrolments for several of its second semester courses.

A rise in demand, and limited resources have been blamed for the moves.

However, Mr Joyce said tertiary enrolments were up, but the Government was also funding more places than ever before.

Labour's tertiary education spokeswoman, Maryan Street, said a failure to allocate adequate funding to tertiary institutions meant young New Zealanders were being restricted in their ability to grow through a smart economy.

"The Government can spout all it likes about 'step changes' in the economy. If it can't properly fund tertiary institutions, which are the powerhouses of smart economic growth, then its words will simply ring hollow."