Story: Tertiary education

Page 4. Tertiary sector reform from the 1980s

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From 1990 polytechnics and colleges of education were placed on an equal footing with universities. Reform began in the late 1980s as part of wider economic and social restructuring undertaken by the government. Major recommendations contained in a 1988 report on the sector commissioned by the government included:

  • that all tertiary institutions should become independent legal entities led by a chief executive and held accountable by individual charters
  • that competition between institutions should be encouraged
  • that universities lose their monopoly over degrees.

These recommendations were accepted and implemented from 1990, when the Education Amendment Act was passed.

New developments

The Education Amendment Act 1990 defined tertiary education institutions as universities, polytechnics, colleges of education, specialist colleges and wānanga (Māori educational institutions).

Under this act these institutions were bulk funded according to a common formula based on the number of equivalent full-time students enrolled. The University Grants Committee, which had distributed government funding to universities, was accordingly abolished. Each institution had to draw up a charter (which described the institution’s role and long-term plans) and was held accountable to the government through this document.

Student fees

From 1989 means-tested student allowances replaced bursaries, which had traditionally covered fees and living costs. Fees increased, and a student loan scheme, through which students could borrow money for fees and living costs, was introduced in 1992. At 30 June 2010, 894,000 people had taken out a student loan. The total amount owed by borrowers was $11.145 billion.


In the 1990s universities became more entrepreneurial as they sought funding from sources other than government. Academics undertook consultancy and research work in the public and private sectors to a greater extent, and many more international students were recruited. Universities dominated the contestable Performance Based Research Fund (PBRF), which linked research funding with research outputs, from its inception in 2004.

Thwarted aspirations

In 1994 Carrington Polytechnic changed its name to Unitec Institute of Technology. The previous year management announced that Carrington was going to apply for university status (degrees had been offered since 1992) and the name change reflected this aspiration. After much to-ing and fro-ing the application was declined by the government in 2005, and Unitec took legal action in response. The High Court said the government acted unlawfully in declining the application but the Court of Appeal upheld the government’s appeal against this decision.


After the passing of the Education Amendment Act 1990 polytechnics, which had been controlled by the Department of Education, gained significant managerial and financial autonomy previously experienced by universities alone. The most significant change for polytechnics was the ability to offer degree courses. By 1997 close to 15,000 polytechnic students were enrolled in almost 100 degree courses.

Polytechnics could also gain university status if certain criteria were met. By 2011 Auckland University of Technology (the Auckland Institute of Technology until 2000) was the only polytechnic to have made that transition.

The competitive environment encouraged mergers. Wellington Polytechnic merged with Massey University in 1999, and other polytechnics merged with each other. By 2011 there were 18 polytechnics, compared to 25 in 1990.

Colleges of education

Colleges of education gained the same autonomy as other tertiary institutions and could also offer degrees. Of all tertiary institutions, the colleges entered merger agreements to the greatest extent – in fact all had merged with universities by 2007.

Paying their way

In 2010, 99,880 international fee-paying students studied in New Zealand. Of them, 49% were at private training establishments (PTEs), which included English-language schools, 20% were at universities, 17% at primary or secondary schools, 12% at polytechnics and 3% at English-language establishments affiliated to universities and high schools. In 2010 universities earned $284 million in international enrolment income, PTEs earned $198 million and polytechnics $86 million.

International students

International students from Asian countries studied at New Zealand tertiary institutions under a special Commonwealth development aid scheme from 1951. International students’ fees were subsidised.

The government first considered charging international students full fees in the late 1970s, but this did not happen until the Education Amendment Act 1990 was passed. From then, international students became a source of revenue for the tertiary sector.


In the 1990s and 2000s university enrolments grew fairly consistently, reaching 168,186 in 2005. Small reductions occurred between 2005 and 2008. After this, growth reoccurred and enrolments reached 179,013 in 2010.

From the mid-1990s polytechnic enrolments followed a downward trend until the early 2000s. Enrolments were 150,181 in 1995 and dipped to 127,685 by 2000. A strong period of growth then occurred and polytechnic enrolments surpassed university enrolments in 2003. Polytechnic enrolments rose to 216,613 in 2007, and then declined to 187,339 in 2010.

College of education enrolments grew in the 1990s to reach 14,393 in 2000. Enrolments remained around this level until 2005, when they dropped by more than half to just under 7,000. All college of education students were absorbed into university rolls by 2007.

How to cite this page:

Kerryn Pollock, 'Tertiary education - Tertiary sector reform from the 1980s', Te Ara - the Encyclopedia of New Zealand, (accessed 30 May 2024)

Story by Kerryn Pollock, published 20 Jun 2012