Budget 2026: What Schools, Universities And Early Childhood Educators Are Looking For

The government spends close to $20-billion a year on school and early childhood education and a further $3.8b on tertiary education.

Its previous two Budgets redirected more than $1b in education spending and provided $3.5b in new spending over four years.

It goes into this week's Budget with an ambitious change programme for schools, introducing new curriculums and a new secondary school qualification over the next four years.

Meanwhile in tertiary education it has cut polytechnics free from the former national institute Te Pūkenga and in early childhood it has a funding review under way.

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At the same time, enrolments in tertiary education and schools have increased sharply.

Representatives from each of the three education sectors told RNZ they were under financial pressure and government funding over successive years had not kept pace with rising costs.

Schools

School Boards Association president Meredith Kennett said there was a sense of "overwhelm" and uncertainty in schools because the government was making a lot of changes and funding was not keeping up with rising costs.

"There's been multiple reports come out lately about how the the ops grants haven't really kept up with CPI and schools are finding that they have less and less to spend in the current climate. There's a sense of nervousness, of 'what will be left with now'. I think people are a bit worried," she said.

The Post Primary Teachers Association last week shared calculations showing schools' operations grants were about 12 percent lower than they should be given inflation increases in the past five years and Kennett said schools had to cut spending in order to get by.

"It could be a classroom goes unpainted or something goes not updated or it could that resources can't be replaced and you're having to use old ones or it could be that staff don't get the professional development that they need," she said.

Kennett said boards were hoping for a decent operations grant increase in Thursday's Budget.

"It would be really great if the ops grant did keep up a little bit better with CPI. Our ops grant last year, that was a 1.5 percent increase on the year before when CPI was 2.8 percent, 2.9 percent so if inflation this year is three percent it would be nice to think that the ops grant would be at least somewhere near that. In an ideal world it would be more than that because there are lots of schools that have been operating in deficit for a long time," she said.

"Even if we could just keep up that would be a really great start."

Kennett said boards were also worried curriculum changes would initially disadvantage Māori and Pacific students and they wanted to see funding that might help them mitigate that effect.

"What will be in the Budget to support boards and their schools to maintain equitable outcomes. Because we know it's our job to make sure everybody's achieving but if we then aren't in a position to be able to do that it's a really awful position to be in."

The government last week announced the Budget would include $212m to continue the free school lunch programme for another year.

It also announced $131m over four years to help with reading, writing and maths, including funding for resources, tests and teacher training. That added to last year's $298m over four years, mostly for literacy and maths, but other curriculum areas and the new school qualification would need funding in this week's Budget.

Last year's Budget targeted learning support - a response to schools' repeated warnings that teachers were struggling with rising numbers of students with disabilities.

Schools said they were not yet seeing much impact from that and figures provided by the Education Ministry showed the then-$1.43-billion learning support budget increased six percent to $1.52-billlion in the current financial year, would be nine percent higher ($1.58b) in the coming financial year, 2026/27, reaching 14 percent by 2028/29.

However, the government said this year an additional 762 students received ORS funding, there were 612,120 more teacher assistant hours, and the Early Intervention Service supported 3242 children in years 0-1 of school.

It had also provided an additional 221 FTE Learning Support Coordinators, across 474 schools.

Early Childhood Education

Te Rito Maioha Early Childhood New Zealand chief executive Kathy Wolfe said early learning services were in a precarious position financially and there were no indications the Budget would provide relief.

"We haven't had a decent budget injection of investment into early childhood for quite some time," she said.

Wolfe said the sector had never recovered from three successive years in which government subsidies did not increase - 2015-2017.

"That put us behind the eight-ball," she said.

"It's been really precarious we're really behind CPI. Obviously with the cost pressures that we're now experiencing and then put the fuel crisis on top of that, it's becoming extremely challenging."

Wolfe said without meaningful increases to government subsidies, services had to consider raising the fees they charged parents, but they were reluctant to do that.

"Parents are having the same challenges in terms of cost of living," she said.

Last week teacher union the Educational Institute said government funding had dropped 15 percent behind inflation since 2020.

Last year's Budget provided a 0.5 percent increase to early childhood service subsidies, following the 2024 Budget's two percent increase and total spending was about $3b a year.

The government has a review of ECE funding under way with recommendations due later this year.

Tertiary Education

Enrolments are soaring and many polytechnics are returning to stand-alone status but the financial health of the tertiary sector is not great.

Universities have been facing unprecedented challenges and a rebound in domestic and international enrolments is not happening evenly.

Complicating the picture is the fact the government has not provided enough money to cover all domestic enrolments for the third consecutive year, meaning some institutions are receiving student fees but no government subsidy for a small proportion of their students.

Those students are however paying more - last year's Budget allowed fee increases of up to six percent, as did the previous Budget and the government has announced the end of the free-fee scheme, which should save it about $300m a year.

Meanwhile government subsidies for some courses increased three percent, some by 4.75 percent and some by nothing at all this year, on top of the previous budget's 2.5 per cent increase.

University of Otago politics associate professor Brian Roper said the subsidy increases were nowhere near enough to keep up with rising costs and universities were struggling with long-term under-funding.

Roper said his own institution estimated its government funding had eroded 20 percent in real terms since 2016 and universities had collectively laid off hundreds of academic staff in recent years in order to make ends meet.

"On the one hand they're being expected to do everything that they did previously while on the other hand by successive Labour and National governments they're being given less and less money to do all of those activities ranging from research to teaching to community service," he said.

Roper said if the government was serious about economic growth it should increase funding for tertiary education including funding for students.

"There is an appalling lack of understanding of what some of the drivers of economic growth are," he said.

"Labour productivity and innovation are key drivers of economic growth and if you want labour market productivity you've got to invest in tertiary education and you've also go to invest in research and development."

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