Government Invests in Diversity and Choice in Education

The current funding model for independent schools has remained unchanged since 2010, despite significant changes in inflation and student enrolments.

New Zealand’s Government is reaffirming its commitment to educational diversity and parental choice through a significant funding boost for the country’s independent (private) schools. As part of Budget 2025, Associate Education Minister David Seymour has announced a $15.7 million investment over four years to increase subsidies for independent schools—an 11 percent rise from the previous annual funding of $41.6 million to a new total of $46.2 million.

This funding increase marks a crucial shift in how New Zealand supports non-state schools, which play a growing role in the national education system. As Minister Seymour stated, “Independent schools are an important part of New Zealand’s education landscape, offering diversity and choice to parents. If parents want to send their children to independent schools, they should be able to.”

Addressing Longstanding Funding Stagnation

The current funding model for independent schools has remained unchanged since 2010, despite significant changes in inflation and student enrolments. In 2010, independent schools served around 27,600 students; by 2024, enrolment figures had climbed to over 33,000 students.

“This means the per-student funding has been slowly eroded by inflation,” Seymour explained. “Families who choose independent schools often make considerable financial sacrifices. They pay the same taxes as everyone else, but for years, the funding allocated for their children’s education has not kept pace.”

The stagnation in funding has had real consequences for independent schools, many of which have struggled with rising operational costs. Unlike state and integrated schools, independent schools pay GST without any exemptions, meaning their tax contributions often exceed the government funding they receive. The increase in subsidies is a recognition of this imbalance and a move toward greater parity across school types.

Structural Changes to Ensure Future Growth

In addition to the funding increase, the Government is implementing a policy change that will align the subsidy mechanism for independent schools with that of state schools. Beginning with this budget, the funding allocated for private school subsidies will now be reviewed annually to account for roll growth.

“This adjustment ensures independent schools are no longer stuck in a funding freeze,” said Seymour. “It establishes a fairer, more responsive system that recognizes the sector's growth and evolving needs.”

The change is expected to give independent schools more stability in planning and delivering education services, supporting the sector's long-term sustainability. It also responds to calls from school administrators and stakeholders who have consistently raised concerns about the financial pressures on the independent sector.

Recognition of Independent Schools’ Role

Independent schools, which include a diverse range of institutions from religious to alternative pedagogy schools, are seen as a critical component of New Zealand’s educational ecosystem. They cater to varied learning styles, values, and pedagogical preferences that may not be fully addressed by public institutions.

“Independent schools are a crucial part of the education system,” Seymour emphasized. “This funding addresses key issues they have raised and gives them the support that is long overdue.”

Sector Reactions and Broader Implications

The funding announcement has been welcomed by many school leaders and parent groups. Advocates argue that the increased investment and policy changes will enhance educational equity and provide parents with genuine choices that are not limited by funding disparities.

However, the move has also drawn criticism from some quarters, particularly those concerned about the use of public funds for private education. Opponents argue that the government should focus more on bolstering the public school system, which serves the majority of the nation’s students.

Despite the differing opinions, the government remains firm in its position that all families, regardless of school preference, deserve fair and adequate support.

Looking Ahead

The Budget 2025 allocation for independent schools signifies a turning point in how New Zealand acknowledges and supports educational pluralism. With more families opting for private education each year, the enhanced funding and policy reforms are set to shape the future of independent schooling in the country.

By investing in a more inclusive and responsive funding structure, the government is signaling a broader vision for education—one that embraces choice, fairness, and the diverse needs of New Zealand families.