Finance Minister Nicola Willis has confirmed that the fees free tertiary education scheme will be wiped out in the upcoming Budget, ending a flagship Labour era policy and prompting warnings from former Finance Minister Grant Robertson that the move will reduce access for the very students least able to absorb the cost.
Willis announced the decision on Friday 8 May, telling reporters that the scheme had not delivered the participation lift its designers had promised. Prime Minister Christopher Luxon went further, describing the policy as “quite a failure” and signalling that some of the saved money will be redirected into expanded trades training. Deputy Prime Minister David Seymour, speaking after the announcement, said the scheme had been costing the Crown roughly 350 million dollars a year and had failed to boost student numbers in any measurable way.
The fees free scheme was introduced by Jacinda Ardern’s Labour government in 2018 and originally covered the first year of study for new tertiary learners. The current coalition pared it back last year so that only the final year of study attracted the subsidy, on the argument that students who actually finished a qualification should be the ones rewarded. Friday’s announcement removes the final year benefit as well, with the only carve out being that students completing study during 2026 will still be eligible. New students enrolling from 2027 will pay full fees from day one.
The most pointed response has come from Grant Robertson, who as Labour’s Finance Minister oversaw the policy and is now Vice Chancellor of the University of Otago. Robertson said the timing was particularly hard on families who had already mapped out the next three years of household budgeting around the assumption that one year of study would be free. “Really that’s my concern in an environment where I see the impact of the cost of living on the young people around us here at the university and on their parents,” he told RNZ. He argued that the cancellation would reduce accessibility and inclusion for students from lower income households and warned that tertiary education was already expensive enough to be discouraging for many school leavers. The scrapping would, in his words, be “very disruptive”.
At the University of Auckland, where reporters spent Monday talking to students between lectures, the reaction was sharper. Second year student Eva said her year group felt actively misled, given that many of them had “only made the decision to come to uni based on the fact that they would only have to pay for two years”. Coco, also in her second year, said she was now seriously thinking about finishing her studies in Australia, because “it’s just even less incentive to stay here”. Another student, Joseph, told the broadcaster that he “would not be surprised if a lot of students felt like leaving” altogether.
First year student Najesty argued that simple fairness would have meant honouring the scheme for anyone already enrolled. “I think it would have been fair for them because now they have to figure out a way to pay for it because it’s gone,” she said. Samantha called the cost of a New Zealand degree without subsidy “unaffordable” and said the prospect of a free year had been “a driving force” in her decision to enrol at all. Matt focused on the equity implications, saying the change “takes away so many opportunities for people who can’t afford it”, while Adam said that at a time when youth unemployment is climbing the policy sent “quite an unnecessary discouragement of higher education” to school leavers.
The political fight from here will turn on two questions. The first is whether 350 million dollars a year was in fact buying any extra participation, or whether, as the government argues, it was simply discounting fees for students who would have enrolled anyway. The official evaluations of the original first year scheme found mixed effects, with a small lift in some courses and effectively none in others. The second question is whether redirecting the money into trades training will draw in young New Zealanders who would otherwise have gone to university, or whether it will simply subsidise a different cohort of trainees, while leaving the cost of a degree higher than it has been since 2017.
Labour, the Greens and Te Pāti Māori have all lined up against the change, framing it as a tax cut for higher income households dressed up as a savings measure. Labour’s tertiary education spokesperson said the timing, midway through the academic year, was particularly cynical and would force families to find an additional year of fees they had not planned for. The Greens argued that even on the government’s own numbers the savings were small relative to the recently legislated landlord tax changes, which restored interest deductibility at a cost the Greens put well above the fees free figure.
For the government, the calculation appears to be that the political base it needs in 2026 is older home owning voters and parents of children heading into apprenticeships, rather than current undergraduates. Whether the Auckland students quoted above follow through on talk of leaving for Brisbane and Melbourne is another matter, but the underlying trend of young New Zealanders crossing the Tasman is well documented and recent net migration figures continue to flatter Australia at New Zealand’s expense.
The fees free decision will sit alongside the coalition’s broader Budget story, but it is the one that has cut through to households fastest. The 2026 general election is now only months away, and tertiary policy looks set to become a much sharper dividing line than anyone expected at the start of the year. If you are eligible to vote, take a look at where each party actually stands on tertiary funding, student loans and trades training by running the Newswire voting tool before you cast your vote.
What do you think — was the fees free scheme worth keeping, or is trades training a better use of the money? Should current students at least have been allowed to finish on the old rules? Leave a comment below and join the conversation.
This article was written by AI, briefed to report the facts, hopefully without some of the bias people bring to the job 🙂
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