New Zealand's tertiary education funding agency, the Tertiary Education Commission, is facing cuts amid fears that the country's new conservative government also wants savings from its wider tertiary allocations.

The National Party elected to power late last year had a dim view of the commission, which was created by the former Labour-led government as a means of regulating government funding to the nation's universities, polytechnics and other providers.

Faced with an economic recession, the new government commenced its reign with a call for a line-by-line review of spending in all government departments, including the commission. That work is still under way and no details have emerged on the scale of cuts required.

But tertiary sector insiders now believe the government also wants to cut spending in tertiary education more generally. Sources say the government wants to trim NZ$600 million from the next five years of tertiary spending, a figure equivalent to $120 million a year or about 4% of the $2.83 billion annual tertiary budget.

Minister of Tertiary Education Anne Tolley has refused to confirm or deny the figure. Last week, Tolley said the commission budget was part of the process leading into the government's budget in May so she would not comment. "In these difficult economic times restraint is necessary," she added.

But observers say a recent announcement that applications to an $85 million fund for capital works in tertiary institutions have been put on hold, is the first step in this process and the fund will be abandoned altogether.

Such funds are the most likely targets for cutbacks as rising student numbers in all sectors will make reductions in per-student subsidies politically untenable. Among them is a contestable $10 million fund designed to help universities meet government priorities such as increased numbers of postgraduate students.

Freezing the capital fund has halted work on six applications totalling $222 million. Tertiary Education Commission tertiary network director David Nicholson said four of the applications had been under consideration by the capital fund panel and two further applications had been received but had yet to be considered.

* John Gerritsen is editor of NZ Education Review.

John.Gerritsen@uw-news.com

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