Source: Radio New Zealand
Prime Minister Christopher Luxon. (File photo) RNZ / Samuel Rillstone
The fees-free university scheme did not achieve any of its goals, the Prime Minister says, and it is better to direct funding elsewhere.
The scheme had given university students their final year of study free, but Winston Peters [
last week revealed it would be scrapped in the Budget this month].
Christopher Luxon on Monday told Morning Report economic growth was key to making sure young people were successful in New Zealand.
He said the harsh reality was the scheme had been “quite a failure” and it was better to stop it and redirect some of that funding to trades training.
The government needed to make sure it was actually growing the economy.
“The fees programme is not working… it would be absolute insanity to support something that isn’t meeting its objectives,” he said.
Luxon said he wanted to put more support behind trades in New Zealand.
Several things were being done to make sure young people were work ready, Luxon said, and there were some programmes which were getting good outcomes.
“But again. what we have to do is get this economy growing.”
According to Stats NZ, the NEET (not in employment, education or training) rate for young people was 14.4 percent in the March 2026 quarter.
Luxon would not say things were tough for young people in New Zealand specifically, but did say it was “tough for New Zealand”.
“What I say to those young people is we’re building and rebuilding a country… you should have a great education for your kids and great healthcare for your parents and that’s the proposition that we are rebuilding in our government.”
The President of the Victoria University Students Association Aidan Donaghue, told Morning Report, scrapping the fee-free scheme was “disheartening” for all students.
“It’s disheartening to see… as usual students are the first on the chopping block if changes are made to the Budget. For us it’s just really, really gutting.”
In his own experience, Donaghue said the scheme had helped him make the decision to go to university.
He began studying in 2022, with his first year free and said he was the first in his family to go to university.
“Yeah it was a factor. I had to make the big move from Kirikiriroa (Hamilton) to Pōneke, so it’s helped, yeah.”
He said it was also hard for students or those who had just graduated to find jobs, resulting in many choosing to o to Australia.
“I love this country, been brought up here my whole life, I want to give back, but if I don’t have the opportunity to it’s only rational for me to go overseas and I doubt you’ll get many students back.”
Finance Minister Nicola Willis last week confirmed Peters’ comments.
“Ongoing coalition negotiations have led to good Budget policy decisions that further the immediate and long-term interests of New Zealanders,” she said.
“We will have more to say about this in due course”.
Willis also confirmed that students completing their tertiary studies this year remained eligible for fees-free.
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– Published by EveningReport.nz and AsiaPacificReport.nz, see: MIL OSI in partnership with Radio New Zealand