May 9, 2026 • 12 mins
Winston Peters has leaked, and the Government has confirmed, that this will be the final year of fees-free support for tertiary students.
The support was first introduced as a first year free incentive to help get more young people into further education, and was changed to be final year free last year.
The policy has cost almost $350 million a year since it was introduced, but it seems the Government has decided that money is better spent elsewhere.
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Speaker 1 (00:05):
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:09):
I'd be so yes.
Speaker 3 (00:12):
I think the word is leaked, a bit of a
budget leak from Winston Peters anyways, and the government has
confirmed that this will be the final year of fees
free support for tertiary students. And the support was first
introduced as a first year free incentive to help more
young people get into further education and was changed to
be the final year free last year, which seemed like
(00:34):
such a bad idea. The policies cost almost three hundred
and fifty million a year since it was introduced, but
it seems the government has decided that the money is
better spent elsewhere anyway, and at Leader at David Seimo
is with me now after hang on a second, let
me just click that button and David, good afternoon.
Speaker 2 (00:53):
Good afternoon, Tim.
Speaker 3 (00:56):
What's the story with the leak was? I don't want
to dig into this too much, but has Winston been
a bit naughty or clumsy or what?
Speaker 2 (01:03):
Well, there's a pretty simple mention in New Zealand you
do not release budget information because often it's very sensitive
and can influence people's financial decisions. The Minister of Finance
is put in charge of publicity. I can only assume
that Winston released that information because he had permission from
(01:27):
the Minister of Finance. I'm not sure if he did.
I haven't asked either of him, but I assume that
he must have had authorization to release budget sensitive information
ahead of time.
Speaker 3 (01:40):
Okay, well, what's the space I guess on that little issue?
Speaker 2 (01:44):
Now?
Speaker 3 (01:45):
Why?
Speaker 2 (01:47):
Well, this first and foremost, I think we have to
recognize that we have finite money in this country, and
finite money in the government. We've recently had warnings from
two of the three big racings agencies, being Fitch and Moodies,
putting New Zealand's government onto a negative watch for our
(02:09):
credit rating. And people know, just like a credit rating
for yourself or your household, if your credit rating goes down,
you're going to pay higher interest gets harder to borrow,
and of course paying higher interest rates actually puts you
in an even more precarious financial situation. So there's a
risk of a real spiral here. I don't think this
has been properly understood. So we've got to be cautious
(02:32):
with taxpayer money. Is point number one? Point number two
is that, yeah, we absolutely need investments in the next
generation's education so that we can be a wealthy and
sophisticated society. You know, the way that all of us
have grown up conceiving of New Zealand that requires investment
in education. However, when you put those two ideas together,
(02:57):
the conclusion is that every dollar spent must deliver the
best possible upcomes. And the facts are with these free
we have not achieved any clear objective. We haven't seen
more disadvantage students entering tertiary education than otherwise would. We
have seen a bunch of tire kickers come and do
(03:19):
their first year, decide it's not for them, move on,
someone else paid whatever, And the net result is we're
getting basically the same amount of education as we would
have otherwise had. However, the government's debt has been three
hundred and fifty million a year higher than it would
otherwise be. It's been a bit lowers since our government
(03:41):
came in. But basically you're looking at a couple of
billion dollars worth of debt that students will graduate into.
That hasn't made the boat go faster, is it?
Speaker 3 (03:52):
I mean, just reading between your earlier comments, when you
began to answer that question. It seems to me that
it would be nice to have if we had more money.
Is that fair or that it was always going to
be cut?
Speaker 2 (04:06):
Well, let's imagine for a moment that we're in very
different circumstances and the government was in surplus and we
had a lot of cash sloshing around. I mean, you know,
this is obviously a bit of a fantasy right now,
but just imagine then. I still think you'd have to
ask yourself, do we want to put taxpayer money into
(04:26):
a policy that is not achieving any clear objective? Now, yes,
it is. If you're one of those people who got
a year of fees free, then of course you're going
to appreciate that. I don't know anyone who doesn't like
free money, and if you're not smart enough to take it,
you probably shouldn't be going to a tertiary institution. But
(04:47):
on the other hand, is it good for New Zealand
as a whole? No, it means more debts and the
same amount of education, plus a bit of time wasting
on the side. That's not something If we keep defending
things like that back in the world we're actually in
where we are cash strapped, then that's one way ticket
to being a country a bit more like FG than
(05:09):
the country we would like to have.
Speaker 3 (05:11):
Are you I mean, I must say as a parent, look,
I haven't quite got to that stage when my kids
are going to be thinking about university yet, but you
know it's going to be it's an expensive exercise. Are
you worried about university becoming something that is increasingly for
wealthy New Zealanders in the middle classes.
Speaker 2 (05:32):
No, There'll be people who will say that, but you know,
I don't know that the evidence supports that concern. There'll
always be people that can think of an example and
they'll say, intuitively, you know, surely more government spending on
education can only ever be a good thing. But you know,
I'm someone who worked just about every week, if not
(05:54):
every single week that I was a student, didn't get
a huge amount of help, but managed to eat my
way through, get my degrees, graduate with a loan, and
pay it off. That is possible. It's also I think
worth acknowledging that if you look at the total cost
of a tertiary education, there are enormous subsidies in the
(06:15):
back end of the university. The money that you can
borrow interest free. There's a cost to the government every
year to write off the interest. In accounting terms, you know,
it turns out that about three quarters of the cost
of a degree is already paid for by the taxpayer
one way or another. Now, I just put it to you,
if someone's not prepared to pick up a quarter to
(06:38):
a third of the cost of their degree, then I
don't know what the justification is for the taxpayer to
pick up the other two thirds to three quarters on
the tab. If you're not prepared to pay a minority
of the cost, why should the taxpayer pay the majority,
(06:58):
Especially when you consider the way that trades, training and
trades have been left as the poor cousin frankly priced
out of the business. When actually, as I often joke,
I wish I'd been smart enough to choose it being
an electrician instead of being an electrical engineer, because they
actually probably would have been better off.
Speaker 3 (07:17):
What in your preparation for a Korean politics.
Speaker 2 (07:21):
Well, of course that was a complete curve fall. But
in terms of the time taken, the debt taken on,
and the earning potential I might have been better off
as an electrician.
Speaker 3 (07:31):
Well, I mean that makes me worry about you know,
the way university is viewed in a way it's like,
go get a trade. I mean, are we you know
it's easy to have a crack at the sort of
intellectual elites and all that sort of thing. I mean,
do you think universities have got a problem in terms
of their sellibility right now?
Speaker 2 (07:47):
Well? I think what's happened in the last thirty or
so years is that politicians from both sides of the
aisle have sold middle class parents the cap and gown dream.
You know, your kid can go to university and you'll
get the cap and gown photo. But during that time,
the degree have been increasingly dumbed down as the participation
(08:08):
rates have increased. Students find they have no choice. They
have to take on the debt, have to take on
the degree in order to maintain their relative position. They're
not better off. And I always remember a conversation I
had once with the plumbers Guild, and I said, well,
how are you going recruiting students? They said, it's going great, gun,
(08:28):
our number one source of new apprentices. And I won't
name the university or the course, but it was insert
university here, an insert course here. And I thought, those
poor kids, they were sold the dream and now they're
finding that they need to retrain immediately.
Speaker 3 (08:44):
Yeah, what was I mean? Look when Labor had the
announced I think it was a labor policy initially. Then
we when the new government came in, they shifted it
to the final year. What is the goal of a
policy like that under the National Acts New ze On
First coalition, how would you have divided up to the
(09:05):
point of cutting it.
Speaker 2 (09:08):
Well, let's go back to very basic brass tacks. We
have a system where your university degree is overwhelmingly subsidized
by the taxpayer. The remaining costs you can borrow plus
living cost, and then you get that interest free for
the rest of your life to pay it back at
(09:28):
pretty generous terms. So we already have a generous system.
The only rational basis for offering a year fees free
was frankly, vote buying. That's all Labor we're trying to do.
Labor formed a government with New Zealand First and twenty seventeen,
and may Or went along with it. Now, I think
(09:49):
we've got to a point in this country where we've
realized that if we don't get real productivity and wage
growth and make the economy work properly, then this whole
era of just trying to vote ourselves a better deal
hoping someone else will pay is over because there is
no more money. And that's why we've got to start
(10:09):
being a little bit more honest about some of this
stuff and just asking ourselves, as Peter Blake would ask,
will this make the boat go faster? This policy did not,
And I'm glad it's gone.
Speaker 3 (10:20):
Okay. If we are trying to encourage, you know, people
who think that university is out of their reach, what
can we do? You know, obviously you know that was
a policy. Good point too. Well, if you stick around
long enough, we'll pay your last us fe But what
are the challenges around getting people to at least be
able to consider that university is one of their options.
Speaker 2 (10:41):
Well, frankly, it's having the academic excess criteria in the
first place, you know, the biggest scandal in New Zealand.
But we believe the dream of the first Labor government
and it was I think Sir Clarence Babe who said
the government's attention is that every New Zealander, whether they
be boy or girl, rich or poor, from town or country,
(11:04):
be given an edge to extend them to the full
extent of their powers. Now, that is a first Labor
Government nineteen thirty's cradle to the grave Welfare Street ideal
that I sign up to. That we have never ever
got close to it because overwhelmingly children don't get the
qualifications at high school to enable them to access what
(11:27):
they'd like to do. That's why I'm proud of charter schools.
We're taking children that weren't previously going to school, re
engaging them and showing that they can actually achieve. So
I'm proud of what the government's doing with new curriculums
and teaching techniques and replacing the NCA with a more
meaningful qualification. If we want to increase access to university,
(11:49):
money is one thing, but there's no point throwing money
at it if we aren't doing the academics to make
it worthwhile in the first place.
Speaker 3 (11:56):
Hey David, I really appreciate your time stapening, Thanks so much.
Speaker 1 (11:59):
For more from the Weekend Collective, listen live to News
Talk ZB weekends from three pm, or follow the podcast
on iHeartRadio.
You're listening to the Weekend Collective podcast from News Talks.
Speaker 2 (00:09):
I'd be so yes.
Speaker 3 (00:12):
I think the word is leaked, a bit of a
budget leak from Winston Peters anyways, and the government has
confirmed that this will be the final year of fees
free support for tertiary students. And the support was first
introduced as a first year free incentive to help more
young people get into further education and was changed to
be the final year free last year, which seemed like
(00:34):
such a bad idea. The policies cost almost three hundred
and fifty million a year since it was introduced, but
it seems the government has decided that the money is
better spent elsewhere anyway, and at Leader at David Seimo
is with me now after hang on a second, let
me just click that button and David, good afternoon.
Speaker 2 (00:53):
Good afternoon, Tim.
Speaker 3 (00:56):
What's the story with the leak was? I don't want
to dig into this too much, but has Winston been
a bit naughty or clumsy or what?
Speaker 2 (01:03):
Well, there's a pretty simple mention in New Zealand you
do not release budget information because often it's very sensitive
and can influence people's financial decisions. The Minister of Finance
is put in charge of publicity. I can only assume
that Winston released that information because he had permission from
(01:27):
the Minister of Finance. I'm not sure if he did.
I haven't asked either of him, but I assume that
he must have had authorization to release budget sensitive information
ahead of time.
Speaker 3 (01:40):
Okay, well, what's the space I guess on that little issue?
Speaker 2 (01:44):
Now?
Speaker 3 (01:45):
Why?
Speaker 2 (01:47):
Well, this first and foremost, I think we have to
recognize that we have finite money in this country, and
finite money in the government. We've recently had warnings from
two of the three big racings agencies, being Fitch and Moodies,
putting New Zealand's government onto a negative watch for our
(02:09):
credit rating. And people know, just like a credit rating
for yourself or your household, if your credit rating goes down,
you're going to pay higher interest gets harder to borrow,
and of course paying higher interest rates actually puts you
in an even more precarious financial situation. So there's a
risk of a real spiral here. I don't think this
has been properly understood. So we've got to be cautious
(02:32):
with taxpayer money. Is point number one? Point number two
is that, yeah, we absolutely need investments in the next
generation's education so that we can be a wealthy and
sophisticated society. You know, the way that all of us
have grown up conceiving of New Zealand that requires investment
in education. However, when you put those two ideas together,
(02:57):
the conclusion is that every dollar spent must deliver the
best possible upcomes. And the facts are with these free
we have not achieved any clear objective. We haven't seen
more disadvantage students entering tertiary education than otherwise would. We
have seen a bunch of tire kickers come and do
(03:19):
their first year, decide it's not for them, move on,
someone else paid whatever, And the net result is we're
getting basically the same amount of education as we would
have otherwise had. However, the government's debt has been three
hundred and fifty million a year higher than it would
otherwise be. It's been a bit lowers since our government
(03:41):
came in. But basically you're looking at a couple of
billion dollars worth of debt that students will graduate into.
That hasn't made the boat go faster, is it?
Speaker 3 (03:52):
I mean, just reading between your earlier comments, when you
began to answer that question. It seems to me that
it would be nice to have if we had more money.
Is that fair or that it was always going to
be cut?
Speaker 2 (04:06):
Well, let's imagine for a moment that we're in very
different circumstances and the government was in surplus and we
had a lot of cash sloshing around. I mean, you know,
this is obviously a bit of a fantasy right now,
but just imagine then. I still think you'd have to
ask yourself, do we want to put taxpayer money into
(04:26):
a policy that is not achieving any clear objective? Now, yes,
it is. If you're one of those people who got
a year of fees free, then of course you're going
to appreciate that. I don't know anyone who doesn't like
free money, and if you're not smart enough to take it,
you probably shouldn't be going to a tertiary institution. But
(04:47):
on the other hand, is it good for New Zealand
as a whole? No, it means more debts and the
same amount of education, plus a bit of time wasting
on the side. That's not something If we keep defending
things like that back in the world we're actually in
where we are cash strapped, then that's one way ticket
to being a country a bit more like FG than
(05:09):
the country we would like to have.
Speaker 3 (05:11):
Are you I mean, I must say as a parent, look,
I haven't quite got to that stage when my kids
are going to be thinking about university yet, but you
know it's going to be it's an expensive exercise. Are
you worried about university becoming something that is increasingly for
wealthy New Zealanders in the middle classes.
Speaker 2 (05:32):
No, There'll be people who will say that, but you know,
I don't know that the evidence supports that concern. There'll
always be people that can think of an example and
they'll say, intuitively, you know, surely more government spending on
education can only ever be a good thing. But you know,
I'm someone who worked just about every week, if not
(05:54):
every single week that I was a student, didn't get
a huge amount of help, but managed to eat my
way through, get my degrees, graduate with a loan, and
pay it off. That is possible. It's also I think
worth acknowledging that if you look at the total cost
of a tertiary education, there are enormous subsidies in the
(06:15):
back end of the university. The money that you can
borrow interest free. There's a cost to the government every
year to write off the interest. In accounting terms, you know,
it turns out that about three quarters of the cost
of a degree is already paid for by the taxpayer
one way or another. Now, I just put it to you,
if someone's not prepared to pick up a quarter to
(06:38):
a third of the cost of their degree, then I
don't know what the justification is for the taxpayer to
pick up the other two thirds to three quarters on
the tab. If you're not prepared to pay a minority
of the cost, why should the taxpayer pay the majority,
(06:58):
Especially when you consider the way that trades, training and
trades have been left as the poor cousin frankly priced
out of the business. When actually, as I often joke,
I wish I'd been smart enough to choose it being
an electrician instead of being an electrical engineer, because they
actually probably would have been better off.
Speaker 3 (07:17):
What in your preparation for a Korean politics.
Speaker 2 (07:21):
Well, of course that was a complete curve fall. But
in terms of the time taken, the debt taken on,
and the earning potential I might have been better off
as an electrician.
Speaker 3 (07:31):
Well, I mean that makes me worry about you know,
the way university is viewed in a way it's like,
go get a trade. I mean, are we you know
it's easy to have a crack at the sort of
intellectual elites and all that sort of thing. I mean,
do you think universities have got a problem in terms
of their sellibility right now?
Speaker 2 (07:47):
Well? I think what's happened in the last thirty or
so years is that politicians from both sides of the
aisle have sold middle class parents the cap and gown dream.
You know, your kid can go to university and you'll
get the cap and gown photo. But during that time,
the degree have been increasingly dumbed down as the participation
(08:08):
rates have increased. Students find they have no choice. They
have to take on the debt, have to take on
the degree in order to maintain their relative position. They're
not better off. And I always remember a conversation I
had once with the plumbers Guild, and I said, well,
how are you going recruiting students? They said, it's going great, gun,
(08:28):
our number one source of new apprentices. And I won't
name the university or the course, but it was insert
university here, an insert course here. And I thought, those
poor kids, they were sold the dream and now they're
finding that they need to retrain immediately.
Speaker 3 (08:44):
Yeah, what was I mean? Look when Labor had the
announced I think it was a labor policy initially. Then
we when the new government came in, they shifted it
to the final year. What is the goal of a
policy like that under the National Acts New ze On
First coalition, how would you have divided up to the
(09:05):
point of cutting it.
Speaker 2 (09:08):
Well, let's go back to very basic brass tacks. We
have a system where your university degree is overwhelmingly subsidized
by the taxpayer. The remaining costs you can borrow plus
living cost, and then you get that interest free for
the rest of your life to pay it back at
(09:28):
pretty generous terms. So we already have a generous system.
The only rational basis for offering a year fees free
was frankly, vote buying. That's all Labor we're trying to do.
Labor formed a government with New Zealand First and twenty seventeen,
and may Or went along with it. Now, I think
(09:49):
we've got to a point in this country where we've
realized that if we don't get real productivity and wage
growth and make the economy work properly, then this whole
era of just trying to vote ourselves a better deal
hoping someone else will pay is over because there is
no more money. And that's why we've got to start
(10:09):
being a little bit more honest about some of this
stuff and just asking ourselves, as Peter Blake would ask,
will this make the boat go faster? This policy did not,
And I'm glad it's gone.
Speaker 3 (10:20):
Okay. If we are trying to encourage, you know, people
who think that university is out of their reach, what
can we do? You know, obviously you know that was
a policy. Good point too. Well, if you stick around
long enough, we'll pay your last us fe But what
are the challenges around getting people to at least be
able to consider that university is one of their options.
Speaker 2 (10:41):
Well, frankly, it's having the academic excess criteria in the
first place, you know, the biggest scandal in New Zealand.
But we believe the dream of the first Labor government
and it was I think Sir Clarence Babe who said
the government's attention is that every New Zealander, whether they
be boy or girl, rich or poor, from town or country,
(11:04):
be given an edge to extend them to the full
extent of their powers. Now, that is a first Labor
Government nineteen thirty's cradle to the grave Welfare Street ideal
that I sign up to. That we have never ever
got close to it because overwhelmingly children don't get the
qualifications at high school to enable them to access what
(11:27):
they'd like to do. That's why I'm proud of charter schools.
We're taking children that weren't previously going to school, re
engaging them and showing that they can actually achieve. So
I'm proud of what the government's doing with new curriculums
and teaching techniques and replacing the NCA with a more
meaningful qualification. If we want to increase access to university,
(11:49):
money is one thing, but there's no point throwing money
at it if we aren't doing the academics to make
it worthwhile in the first place.
Speaker 3 (11:56):
Hey David, I really appreciate your time stapening, Thanks so much.
Speaker 1 (11:59):
For more from the Weekend Collective, listen live to News
Talk ZB weekends from three pm, or follow the podcast
on iHeartRadio.
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