New Zealand Prime Minister Christopher Luxon has described the government's 'fees-free' university scheme as 'quite a failure' and proposed redirecting some of its funding into trades training. Speaking on Morning Report, Luxon argued that the scheme has not delivered the expected returns on investment, particularly in terms of higher pay for graduates.
Data from the Ministry of Education shows that median earnings for graduates with a bachelor's degree are higher than those with a trade qualification, but the gap narrows over time. For example, after 10 years, the median income for degree holders is around NZ$70,000, compared to NZ$65,000 for those with a Level 4 trade certificate. However, trades graduates often have lower student debt and enter the workforce earlier.
The government is considering a policy shift to increase funding for apprenticeships and vocational training, aiming to address skills shortages in sectors like construction and engineering. Luxon emphasized that the goal is to ensure that all training pathways lead to good jobs and that the system is 'fair for taxpayers'.
Critics argue that the fees-free scheme has increased university participation among low-income students and that cutting it could reduce social mobility. The government has not yet announced specific changes to the scheme's funding.
