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Students and staff at tertiary education institutions say today's budget continues a trend of underfunding the sector.
Finance Minister Bill English's second budget would do nothing to enhance the innovation, learning and research going on in tertiary education institutions around the country, said Tertiary Education Union (TEU) national president Dr Tom Ryan.
"New Zealand has a world class tertiary education system, with world class people staffing it, and is a crucial driver of a healthy, productive economy," Dr Ryan said.
"But it can't do that effectively when the Government keeps shrinking the pool of public money to fund the sector."
The total Vote Education had not even kept up with the rate of inflation, he said. Within the tertiary education sector things were even worse, with most budget lines either remaining static or falling behind.
"For instance, the Minister of Tertiary Education says pastoral care for students is crucial to education quality," Dr Ryan said.
"In practice, what that means is cuts of over $40 million over the next four years due to the Finance Minister's prescription for improved efficiency within the student support system."
The New Zealand Union of Students Associations said continued underfunding by successive governments had led to students graduating with high student debt due to increasing fees, as well as under-investment in staffing and critical facilities such as libraries.
Two universities in the past week had also closed their doors for 2010, citing a lack of funding.
Budget announcements today indicated that already-high tertiary fees were set to rise even higher, access to student loans would be cut, and many students would continue to borrow to live while studying, the association said.
However, there had been a small increase in funding rates and funded places.
"We welcome the one off boost in tuition subsidies, however, the extra funded places are woefully inadequate given the current climate," said NZUSA co-president Pene Delaney.
"For example, universities nationwide will get an extra 1735 places next year yet over 1500 students alone will be turned away by Victoria University in 2010."
Co-president David Do said Mr English said he wanted to build a more prosperous ambitious New Zealand where Kiwis had opportunities to get ahead.
"However by choosing not to increase total tertiary funding, the Government has failed to build a strong sustained recovery and deliver on its vision. It has failed to meaningfully tackle the real issues of underfunding and student debt."
It was also announced that the current fee maxima policy would be scrapped and replaced with a 4 percent annual limit on fee rises across the board, as well as funding 20 new medical places.
"The Government's abandonment of maximum fee caps is a disturbing development and will mean already expensive fees will climb much higher," said Mr Do.
"Graduates and their families hope that beyond this budget, the Government will move away from reactionary policies to ensuring New Zealand has a well resourced system delivering quality education, contributing to a sustained economic improvement and recovery for all."