New Zealand’s Vocational Education System: New Zealand’s Tertiary Education Strategy 2025-2030

On 2 December 2025, Ministers Shane Reti and Penny Simmonds released New Zealand’s new Tertiary Education Strategy for 2025-2030. In this fourth article in my series, I examine what this strategy means for the sector and how it intersects with the vocational education reforms I’ve previously discussed.

Economic Growth Above All Else

The strategy’s opening sets the tone clearly: “This Strategy’s focus on economic growth is intentional and unapologetic.“

This is a significant shift from the previous TES (2020-2025), which emphasised equity groups and learner wellbeing. The new strategy explicitly positions tertiary education as a driver of productivity, innovation, and economic competitiveness. While acknowledging broader social and cultural purposes, the framing is consistent: a stronger economy enables everything else.

The overarching objective: “A tertiary education system that enables people to succeed with knowledge and skills that advance an innovative, high-productivity economy, and improve quality of life.“

The Five Priorities

The strategy establishes five priority areas that will guide Tertiary Education Commission investment decisions.

Priority 1: Achievement focuses on skills leading to good careers and economic security. It acknowledges persistent challenges: uneven completion rates, with Māori, Pacific peoples, and disabled students less likely to complete qualifications. Importantly, it introduces “distance travelled” or “value added” measures, recognising that traditional metrics can mask progress from disadvantaged students.

Priority 2: Economic Impact and Innovation calls for increased economic impact through relevant skills and research driving productivity. The strategy explicitly identifies a “skills mismatch”: employers consistently reporting graduates lack job-ready capabilities, and weak research commercialisation compared internationally. As a side note, the three companies that have been most responsible for vocational education research in New Zealand, the two Centres of Vocational Excellence and Ako Aotearoa are all closing due to funding changes by the end of 2025.

Priority 3: Access and Participation emphasises enabling access for people from all backgrounds and regions. It acknowledges the declining participation amongst school leavers and the persistent barriers faced by disadvantaged groups.

Priority 4: Integration and Collaboration focuses on deepening collaboration between providers, employers, iwi, research institutions, and communities, identifying fragmentation and variable engagement as current weaknesses.

Priority 5: International Education aligns with the Going for Growth Plan, targeting doubled export revenue from $3.6 billion (2024) to $7.2 billion by 2034.

What Gets Measured

The TES includes key success measures for each priority: from completion rates and employment outcomes to graduate earnings, skills relevance, research uptake, and international education revenue. The TEC will develop guidance by March 2026 explaining how the strategy will govern funding decisions from 2027.

Providers seeking 2027 funding will need to demonstrate alignment with labour market needs, improved outcomes for disadvantaged students, and strengthened research and industry partnerships. This is where the rhetoric meets reality: funding mechanisms will reveal whether equity commitments survive when resources are constrained.

The Providers and Their Roles

The strategy sets expectations for each provider type. Universities must integrate teaching and research while strengthening commercialisation functions. Wānanga continue advancing mātauranga Māori. Polytechnics will be regionally focused, delivering continuing education, meeting local needs. Private Training Establishments must demonstrate contributions to priority outcomes.

The most pointed attention goes to universities. While acknowledging they “produce high-quality research in many areas,” the strategy identifies gaps in “research commercialisation, industry collaboration, and overall research and development intensity.” Universities must adopt national IP management policies, increase user-funded research, and demonstrate “research uptake by industry.“

As some commentators have noted, entrepreneurship and innovation rarely look like tidy metrics, they involve risk-taking and long-term value creation that may not align with short-term performance measures. Measuring research impact through commercial metrics risks undervaluing fundamental research, humanities scholarship, and social science work, generating different kinds of value.

Critical Questions

There’s much to welcome in the strategy, acknowledging completion metrics alone is overdue. Emphasis on employer engagement responds to longstanding criticisms. Attention to flexible delivery recognises changing work and study patterns.

However, questions remain. How will the tension between economic focus and equity commitments be managed when resources are constrained? Will funding decisions prioritise programmes with strong employment outcomes over those serving harder-to-reach learners?

Political Context

This strategy arrives months before a scheduled general election (September/October 2026). The Government will want to demonstrate its reforms are delivering results. Whether a five-year strategy survives a change of government is uncertain.

As I noted in earlier articles, New Zealand’s three-year electoral cycles contribute to destabilising churn in education policy. The previous TES lasted five years; whether this one will depends on political outcomes beyond the sector’s control.

The Tertiary Education Strategy 2025-2030 provides a framework. Its practical impact will depend on how the TEC implements it, how providers respond, and whether the broader economic and political environment supports its ambitious goals.

In my next article, I will examine what this strategy means specifically for vocational education and where the new Industry Skills Boards fit in this grand vision.

By Stuart G A Martin, Founder of George Angus Consulting.