Summarised by Centrist
Leaked briefings and Budget documents suggest several New Zealand universities could become financially unstable without urgent funding reform, raising fears of course cuts, fee hikes, and possible institutional collapse.
Treasury warned in Budget 2025 that current funding levels will not cover the number of students expected to enrol in coming years.
“Demand for tertiary education and training is currently forecast to exceed the volume able to be funded,” Treasury said. Officials added that “additional funding may be required to continue meeting learner demand.”
A second warning noted that “several universities” could become financially unstable due to infrastructure costs and enrolment pressures. “If universities are unable to adequately manage these risks, they may seek support from Government to ensure their financial stability and viability in the future,” the Treasury stated.
A 4% “lifeline” funding boost introduced under Labour in 2023 was declined under this year’s Budget. That temporary increase was meant to support universities until a broader funding review was completed, but the advisory group’s final report has yet to be published.
Students and staff have described the funding cuts as “catastrophic.”
Universities Minister Shane Reti defended the Budget, saying it included $398 million in new tertiary funding over four years, including $111 million for enrolment growth and $64 million targeted at STEM and healthcare. He also confirmed universities can raise fees by up to 6% in 2026, describing it as a necessary trade-off: “In a constrained fiscal environment, the Government has prioritised investments that deliver the greatest impact.”
