The scheme had given university students their final year of study free, but had now been scrapped.
Luxon said economic growth was key to making sure young people were successful in New Zealand.
He said the harsh reality was that the scheme had been "quite a failure" and it was better to stop it and redirect some of that funding to trades training.
The government needed to make sure it was actually growing the economy.
"The fees programme is not working... it would be absolute insanity to support something that isn't meeting its objectives."
Luxon said he wanted to put more support behind trades in New Zealand.
Several things were being done to make sure young people were work ready, Luxon said, and there were some programmes which were getting good outcomes.
"But again. what we have to do is get this economy growing."
According to Stats NZ, the NEET (not in employment, education or training) rate for young people was 14.4% in the March 2026 quarter.
Luxon would not say things were tough for young people in New Zealand specifically, but did say it was "tough for New Zealand".
"What I say to those young people is we're building and rebuilding a country... you should have a great education for your kids and great healthcare for your parents and that's the proposition that we are rebuilding in our government."
This story was first published on rnz.co.nz |  |
