New Zealand's National-led government has removed the fees-free first year of tertiary education introduced by Labour in 2018, a move that has divided opinion even among progressive voters.
The policy cost approximately $319 million annually and provided first-year tertiary students with free tuition regardless of their family income or field of study. Labour framed it as removing barriers to education and investing in the country's future.
But studies showed the policy had "little or no impact" on enrolments from low-income or first-in-family students, raising uncomfortable questions about whether universal benefits actually help those who need them most.
Mate, this is a rare case where scrapping a progressive policy might be defensible. The fees-free year cost a third of a billion dollars annually, but research showed it didn't increase access for poor students. It just gave middle-class graduates an $8,000 head start on paying off loans.
How It Worked
Under the fees-free policy, any New Zealand citizen or resident enrolling in their first year of tertiary education received government-funded tuition up to a maximum amount. This covered most university courses, polytechnic programs, and some private training providers.
Students still needed to cover living costs, textbooks, and other expenses, which is why most continued to take out student loans. But the first year of tuition fees, typically $6,000 to $8,000, was covered by the government rather than added to student loan balances.
The policy was universal: a student from a wealthy family attending university to study law received the same benefit as a student from a low-income family training to be an electrician. Labour argued this simplicity was a feature, not a bug, avoiding means testing and ensuring everyone benefited.
What The Research Showed
Multiple evaluations examined the policy's impact on education access. The consistent finding: fees-free first year didn't meaningfully increase tertiary enrolment rates among the demographics it was supposedly designed to help.
Low-income students and first-in-family students weren't significantly more likely to enroll because of the policy. The main barrier to university for these groups wasn't first-year tuition fees, which could be covered by student loans. It was upfront costs like accommodation bonds, moving expenses, and the opportunity cost of not earning income while studying.
For students who were already planning to attend university—mostly from middle-class families with educational backgrounds—the policy was a windfall. They would have enrolled anyway, taken out student loans anyway, and now they started their working lives with $6,000 to $8,000 less debt.
The policy effectively transferred $319 million annually to people who were already going to get tertiary education, without substantially increasing access for people who weren't.
The Progressive Case for Scrapping It
Even some Labour and Green voters have argued the policy should be scrapped, which is unusual in contemporary politics where admitting a progressive policy failed is rare.
Their argument goes like this: $319 million is real money. If the goal is increasing tertiary access for low-income students, that money could be spent far more effectively. Targeted grants for accommodation costs, living expenses during study, or bonding schemes that forgive loans for graduates who work in New Zealand would all do more to address actual barriers.
Universal policies sound progressive, but they often deliver most benefits to people who need them least. A wealthy family's child gets the same $8,000 benefit as a poor family's child, even though the wealthy family could easily afford the fees and the poor family faces barriers the policy doesn't address.
This is particularly relevant in New Zealand's current fiscal environment. The government is running structural deficits, health spending is below OECD averages, infrastructure is crumbling, and superannuation costs are rising relentlessly. Spending $319 million annually on a policy that doesn't achieve its stated goal is hard to justify.
The Progressive Case for Keeping It
Defenders of the policy argue the research misses the point. Fees-free first year was about more than enrolment numbers. It was a statement of values: that education is a right, not a privilege, and that the government should invest in making it accessible.
They note that student loan debt in New Zealand had grown to unsustainable levels, creating a generation that started working life with five-figure debts. Fees-free first year was a step toward reducing that burden, even if it didn't immediately transform enrolment patterns.
Some argue the policy needed more time to work. Cultural attitudes about university access don't change overnight. A student from a family with no university background might not enroll immediately because first-year is free, but over time, the reduced barrier might shift perceptions about whether tertiary education is "for people like us."
And there's a political economy argument: universal benefits create broad constituencies that protect them. Means-tested benefits, which only go to the poor, often get cut because the poor have limited political power. If fees-free first year had remained and expanded, it might have eventually evolved into broader free tertiary education, similar to systems in some European countries.
What Replaces It
The National government hasn't announced what, if anything, will replace the fees-free policy. The $319 million in savings will likely go toward deficit reduction or other spending priorities.
Some education advocates are calling for that money to be redirected into targeted support for students who actually need it: accommodation grants, pastoral care for first-in-family students, support for students with disabilities, or bonding schemes that encourage graduates to work in New Zealand rather than immediately leaving for Australia.
Whether any of that happens depends on political choices the government hasn't yet made. The risk is that fees-free first year gets scrapped, the money disappears into general revenue, and no alternative support for low-income students materializes.
The Broader Lesson
The fees-free first year debate exposes a tension in progressive politics: the difference between policies that sound good and policies that work.
Universal free education is an appealing slogan. The reality is more complex. If money is limited, as it always is, universal benefits might not be the most effective way to achieve progressive goals. Sometimes targeted programs, despite being less ideologically pure, deliver better outcomes for the people who need help most.
New Zealand's progressive parties will need to grapple with this lesson. In an environment of fiscal constraints and rising costs for essential services, defending every progressive policy regardless of effectiveness isn't sustainable. Making hard choices about which programs to prioritize, based on evidence of what actually works, might be necessary.
Mate, the debate exposes the difference between policies that sound progressive and policies that actually work. Sometimes, evidence should matter more than ideology.
