2014 Tertiary Sector Performance

Operating Environment

In 2014 the Government invested approximately $2.8 billion in direct funding to TEOs to achieve the goals detailed in its Tertiary Education Strategy. This equated to an increase of $83.6 million on 2013. In early 2014 the Government released the Tertiary Education Strategy 2014–19, which signalled new priorities for tertiary education in New Zealand. The new TES emphasised a shift in focus from system outputs to outcomes and the opportunity for New Zealand to develop a tertiary system that is more flexible, outward-facing, engaged and focused on improving outcomes for learners and the country.

With the New Zealand economy continuing to show healthy growth, the labour market increased by approximately 80,000 people throughout 2014 and the unemployment rate continued to fall. Tertiary education enrolment numbers of domestic students were down on 2013, which may be due in part to improving labour market conditions as employment becomes a more attractive option. Around a third of employment growth was in the construction industry (concentrated in Auckland and Christchurch), arts, recreation and other services, and public administration. International student numbers continued to increase, with an additional 3,072 EFTS (5,142 students) or 11 percent for 2014.

In 2014 the TEC continued to move funding from low-performing provision to high-performing provision that accelerates skills development and contributes to our economic growth. It also continued to respond to labour market demand by focusing tertiary education in the areas of engineering, ICT and primary industries. Over the year, the TEC focus for the tertiary sector remained on making a bigger contribution to New Zealand’s economic growth within current levels of Government investment. This meant focusing on outcomes and raising performance – especially for Māori and Pasifika learners, where the biggest gains are to be made. Many of the initiatives underway have been outlined in the previous section.

Tertiary education is delivered or arranged by many types of TEOs, with each sector making a unique contribution, responding to different learner and community needs and offering specialised training and education opportunities. In 2014 each sector was responding to a range of different challenges.


Funding increased by approximately 1 percent to $1.47 billion in 2014 for universities. Student demand decreased slightly (1%) from 116,660 EFTS in 2013 to 115,769 EFTS (150,712 students) in 2014. However, international student demand increased slightly, by 1 percent (114 EFTS) to 14,422 EFTS (19,260 students).

Research continued to be a major focus for the university sub-sector in 2014. PBRF funding increased by $13 million in total, most of which was invested in universities.

The ongoing recovery of the University of Canterbury and Lincoln University, which experienced reduced student volumes and damaged facilities as a result of the Canterbury earthquakes, was a continuing focus in 2014.

Institutes of technology and polytechnicsTop

ITP sector student demand continued to decrease from 2013, with a drop of 3 percent in domestic students from 63,088 EFTS in 2013 to 61,194 EFTS (118,917 students) in 2014. However, the volume of international enrolments grew by 14 percent from 7,595 EFTS in 2013 to 8,668 EFTS (14,115 students) in 2014. Following a drop in overall funding for the ITP sector between 2012 and 2013 as a result of the Levels 1 and 2 competitive funding process, funding remained relatively unchanged in 2014 ($595 million).

Some smaller regional ITPs in particular have struggled in a capped funding environment and were seeking efficiencies through closer collaboration with larger ITPs in close proximity to them in order to continue to provide high-quality tertiary education opportunities for students in their respective regions. In December 2014 Aoraki Polytechnic and Christchurch Polytechnic Institute of Technology announced that they would be exploring the feasibility of forming a new combined entity. More formal discussions between the two institutions are continuing in 2015 and other providers may be considering similar arrangements.

In 2014, ITPs played a key role in the new Māori and Pasifika Trades Training initiative. In 2014, 1,189 Māori and Pasifika learners accessed fees-free places in the ITP sector, to study toward trades qualifications.

Private training establishmentsTop

Funding decreased by 4 percent to $311 million. Tuition subsidies between public and private providers equalised through the provision of $28.7 million in extra funding for PTEs over four years. By 2014 PTEs had achieved SAC funding rate equalisation with TEIs. Additionally, to recognise that some PTEs have capacity to over-deliver, the cap on over-delivery was adjusted slightly to allow PTEs to take on additional learners. The tolerance limit for PTEs remained at 99 percent to 105 percent of agreed EFTS in 2014.

PTE sector student demand decreased by 4 percent to 26,767 for 2014. However, international demand increased by 28 percent, from 6,690 EFTS in 2013 to 8,578 EFTS (14,411 students) in 2014.


Funding for wānanga decreased slightly (1%) for 2014 to $168,501,166 for 2014. Student demand decreased by 3 percent from 24,702 EFTS in 2013 to 23,945 EFTS (37,636 students) in 2014.

Policy changes to the eligibility criteria for foundation Level 1–2 programmes and access to the student allowance for those aged over 55 years impacted on learner enrolments.

Te Wānanga o Aotearoa (TWoA) is the largest provider of foundation education in New Zealand. In 2014 TWoA delivered an additional 170 EFTS in Youth Guarantee, an increase from 318 EFTS (398 students) in 2013 to 568 EFTS (675 students) in 2014, and is now the largest provider of Youth Guarantee.

The wānanga sector continued to focus on improving educational performance of Māori, supporting Māori learners to achieve at higher levels of study and improving the literacy and numeracy of learners at Levels 1 to 3.

Industry training organisationsTop

ITO sector delivery decreased for the second year in a row in 2014. However, funding increased from $157 million in 2013 to $185 million in 2014 due to an increase in funding rates for trainees and government support for initiatives including the Māori and Pasifika Trades Training initiative, the Apprenticeship Reboot and the Direct Funding Scheme.

ITOs have responded to the Government’s priority to simplify and strengthen the sector, including through a number of mergers. As a result, the performance of the ITO sector in 2014 showed a significant improvement in educational outcomes for trainees when compared with previous years. There were 11 TEC-funded ITOs at the beginning of 2015, compared with 40 in 2011.