Vote Tertiary Education - Supplementary Estimates 2018/19

Vote Tertiary Education#

Details of Appropriations and Capital Injections#

Annual Appropriations and Forecast Permanent Appropriations#

Supporting Information#

Part 1 - Vote as a Whole#

1.2 - Trends in the Vote#

Summary of Financial Activity

Part 3 - Details of Non-Departmental Appropriations#

3.1 - Non-Departmental Output Expenses#

Access to Tertiary Education (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation decreased by $1.390 million to $24.159 million for 2018/19 due to lower than budgeted payments for programmes administered by Tertiary Education Commission outside of the Tertiary Tuition and Training MCA.

Administration of and Support for the Tertiary Education and Careers Systems (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation increased by $5.185 million to $69.199 million for 2018/19 due to:

• a transfer from other expense Fees-free Payments (in Tertiary Tuition and Training MCA) for the Reform of Vocational Education work programme ($5 million), and

• a transfer from output expense Community Education (in Tertiary Tuition and Training MCA) for coordination of search and emergency management training ($185,000).

International Education Programmes (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation increased by $3.667 million to $34.564 million for 2018/19 due to a combination of:

• provision for temporary advances to the Export Education Levy Fund (funded by capital withdrawals from the Ministry of Education) to meet unexpectedly high international student reimbursement costs ($4 million increase), and

• the transfer to the Ministry of Business, Innovation and Employment for The New Zealand Story initiative ($333,000 decrease).

Tertiary Education Research and Research-Based Teaching (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation increased by $10 million to $326.500 million for 2018/19 due to provision for a grant under section 321 of the Education Act 1989 to Te Wananga o Raukawa.

Tertiary Sector / Industry Collaboration Projects (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation increased by $2.204 million to $27.805 million for 2018/19 due to a combination of:

• a transfer from 2017/18 for exemplary postgraduate initial teacher education programmes ($1.676 million increase)

• the transfer of the Maori and Pasifika Trades Training (MPTT) Tools Subsidy funding from benefit or related expense Support to Apprentices to the MPTT Consortium fund from 2019 to enable consortia to improve support for MPTT learners ($952,000 increase), and

• reduced funding for Information and Communications Technology (ICT) Graduate Schools ($424,000 decrease).

University-led Innovation (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation decreased by $5.061 million to $5.772 million for 2018/19 due to the reprioritisation of unallocated funding for Entrepreneurial Universities in Budget 2019.

3.2 - Non-Departmental Benefits or Related Expenses#

Support to Apprentices (M26)

Scope of Appropriation

Reasons for Change in Appropriation

This appropriation decreased by $2.082 million to $108,000 for 2018/19 due to the transfer of the Maori and Pasifika Trades Training (MPTT) Tools Subsidy funding to the MPTT Consortium fund (under non-departmental output expense Tertiary Sector/ Industry Collaboration Projects) from 2019 to enable consortia to improve support for MPTT learners. Goods and services tax (GST) has been taken out as part of the transfer.

3.4 - Non-Departmental Other Expenses#

Impairment of Loans to Tertiary Education Institutions (M26)

Scope of Appropriation

Expenses

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the recognition of an impairment loss to reflect the recoverable value of Crown loans to tertiary education institutions.

How Performance will be Assessed and End of Year Reporting Requirements

An exemption was granted under section 15D(2)(b)(ii) of the Public Finance Act 1989, as additional performance information is unlikely to be informative due to the technical accounting nature of the appropriation.

Reasons for Change in Appropriation

This appropriation was established in 2018/19 to provide for the impairment of the concessionary loan to the Unitec Institute of Technology (under Part 3.5 - Non-Departmental Capital Expenditure appropriation Support for Unitec Institute of Technology).

3.5 - Non-Departmental Capital Expenditure#

Support for Unitec Institute of Technology (M26)

Scope of Appropriation

Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the continued operation of the Unitec Institute of Technology, providing continuity for students and staff while reviewing options for the future.

How Performance will be Assessed and End of Year Reporting Requirements

End of Year Performance Reporting

Performance information for this appropriation will be reported by the Unitec Institute of Technology in its annual report.

Reasons for Change in Appropriation

Establishment of an appropriation to provide an interest-free concessionary loan facility of up to $50 million over two years ($35 million in 2018/19 and $15 million in 2019/20) to meet the Unitec Institute of Technology's cash shortfall in 2018 and 2019 and support its right-sizing initiatives. A non-departmental other expense appropriation (in Part 3.4) has also been established to provide for the impairment of the loan in 2018/19.

Support for Whitireia New Zealand (M26)

Scope of Appropriation

Capital Expenditure

What is Intended to be Achieved with this Appropriation

This appropriation is intended to achieve the continued operation of Whitireia New Zealand, providing continuity for students and staff while reviewing options for the future.

How Performance will be Assessed and End of Year Reporting Requirements

End of Year Performance Reporting

Performance information for this appropriation will be reported by Whitireia New Zealand in its annual report.

Reasons for Change in Appropriation

Establishment of an appropriation to provide a capital injection of $15 million in 2018/19 to Whitireia New Zealand to support its cash flow and manage normal operations and organisational change.

Part 4 - Details of Multi-Category Expenses and Capital Expenditure#

Multi-Category Expenses and Capital Expenditure#

Stewardship of the Tertiary Education System (M26)

Overarching Purpose Statement

Scope of Appropriation

What is Intended to be Achieved with each Category and How Performance will be Assessed

DISCONTINUED Note 1 - The independent assessment of the Ministry's policy advice will have a technical robustness score, using the measurement of robustness provided by the Treasury.

REPLACEMENT Note 1 - Based on a five-point scale: 1 = 'Poor'; 2 = 'Borderline'; 3 = 'Adequate'; 4 = 'Good'; 5 = 'Very good'.

Tertiary Tuition and Training (M26)

Overarching Purpose Statement

Scope of Appropriation

Expenses, Revenue and Capital Expenditure

Reasons for Change in Appropriation

This appropriation decreased by $206.995 million to $2,622.598 million for 2018/19 due to a combination of:

• one-off savings in 2018/19 due to the end of the funding recovery exemption applied to tertiary education institutions affected by the Canterbury earthquakes ($95 million decrease)

• one-off savings in 2018/19 in non-departmental output expense categories within the MCA due to 2018 calendar year enrolments being lower than the level budgeted for ($60 million decrease)

• savings in the funding conservatively appropriated for fees-free tertiary education and training as data is reconciled with initial estimates that reflected maximum eligibility ($49.465 million decrease)

• a transfer to departmental output expense Research, Data Analysis and Monitoring (in Stewardship of the Tertiary Education System MCA) to fund New Zealand's participation in the second cycle of the Programme for International Assessment of Adult Competencies ($5.630 million decrease)

• a transfer to non-departmental output expense Administration of and Support for the Tertiary Education and Careers Systems for the Reform of Vocational Education work programme ($5 million decrease)

• a transfer to Vote Social Development to fund the extension of the Student Loan Scheme borrowing limit for students in certain long programmes ($3.757 million decrease)

• a transfer to Vote Education non-departmental output expense Secondary-Tertiary Interface to fund 1,060 additional Trades Academy places from 2019 by discontinuing the DualPathways Pilot ($3.750 million decrease)
• a Budget 2019 initiative to reduce funding for Information and Communications Technology Graduate Schools ($645,000 decrease)

• a transfer from 2018/19 into 2019/20 ($422,000) and 2020/21 ($211,000) for Information and Communications Technology Graduate Schools ($633,000 decrease)

• a transfer to non-departmental output expense Administration of and Support for the Tertiary Education and Careers Systems for coordination of search and emergency management training ($185,000 decrease)

offset to an extent by the following increases:

• a transfer from 2017/18 into 2018/19 to help fund a 1.6% increase in tuition subsidy rates at qualification Level 3 and above from 1 January 2019 ($15.843 million increase)

• provision for Computers in Homes programmes in 2018/19 ($1 million increase), and

• a Budget 2019 initiative to improve the quality of educator-child interactions in home-based early childhood education by providing funding to tertiary providers to enable the existing educator workforce to upskill to a Level 4 early childhood education qualification ($227,000 increase).