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Education and skills

Treasury sees quality of education as an important contributor to raising living standards for New Zealanders.

High quality education is an enabler of opportunity, and contributes to raising living standards for New Zealanders. Education and skills are key to sustainable and inclusive economic performance as they lift New Zealanders’ levels of social, human and economic capital. People with higher levels of education tend to do better on a range of economic and social outcomes and education is an important avenue for enabling children to overcome disadvantage. A workforce with the right knowledge and skills – and the effective utilisation of these skills in workplaces – supports economic performance through enhancing productivity and facilitating innovation. Skilled workforces are also, in general, more adaptable and agile, which is becoming increasingly important in a changing labour market and global economy.

New Zealand has a high-performing education and skills system. We have:

  • high participation rates in Early Childhood Education;
  • above OECD-average performance in reading, writing and maths;
  • are in the top three countries in the OECD for the proportion of adults with a level 4 qualification or higher;
  • have a tertiary education system that is well performing by international comparators;
  • and are seeing an increasing number of graduates with tertiary degrees.

New Zealand has high adult skill levels and high rates of retraining for older workers. The quality of jobs in New Zealand also generally compares favourably internationally on the comparative measures available.

However, our system faces challenges related to our overall performance, equity and sustainability:

  • In ECE, the quality of provision is variable; we lack good data on outcomes; and despite improving, Māori and Pasifika children have lower participation rates and are more likely to attend poorer quality services.
  • In schooling, reading, writing and maths skills have stayed static or declined, and socio-economic background has a greater impact on educational attainment than in other OECD countries, particularly for Māori.
  • At the tertiary level, achievement disparities persist, with Pākehā and Asian students outperforming Māori and Pasifika students. We also have relatively low returns to tertiary qualifications. 
  • Future trends in the labour market, such as changing skill needs from technological change and the transition to a low-carbon economy pose challenges for the resilience and adaptability of our education and skills system. 

Our Role

At the Treasury, we see education as an investment in the future of New Zealand.  We strive to help create a system that is equitable, sustainable, and excellent; we believe that all New Zealanders should be able to reach their potential. This means that we think broadly when we consider education issues, using the Treasury’s living standards framework.

To do this, we look across the education system, from classrooms to agencies, to explore how system policy settings support quality teaching and learning.  We work closely with education agencies and key stakeholders, and also across government to understand how other sectors can support educational achievement.  We also provide independent advice to the Government on education policy settings and expenditure across the education and skills system, from early childhood through to tertiary education and the labour market.  

The Treasury works on a daily basis with the:

We also work with other education agencies such as the:

Read more:


Education spending is reported in the:

The most recent figure for core Crown education spending in New Zealand is $13.3 billion for the 2016/17 financial year. This figure is taken from the Analysis of Expenses by Functional Classification which is a section of the Financial Statements of the Government of New Zealand for the Year Ended 30 June 2017.

The Budget Economic and Fiscal Update 2018 (BEFU) published on 17 May 2018 forecasts that core Crown spending on education for the 2017/18. Refer to the Core Crown Expense Tables for forecast spending out to 2021.

Treasury Research and Policies

Treasury's priorities for education are outlined in our Briefing to the Incoming Minister. We also discussed these priorities in a speech to the Trans-Tasman Business Circle in March 2012, and in the accompanying evidence brief on Lifting Student Achievement in New Zealand.

To read more Treasury papers on education see the following subject lists in the Research and Policy Papers section of the Publications search:

Last updated: 
Thursday, 13 October 2016