Should the number of tertiary students who get a government subsidy be limited to save taxpayer money?

Just because someone wants to go to university, does that mean they're entitled to a massive taxpayer subsidy?

The Productivity Commission doesn't think so and neither does National MP Maurice Williamson.

As for Tertiary Minister Paul Goldsmith - he's certainly not ruling out looking at changing the way subsidies are handed out.

PHIL WALTER/FAIRFAX NZ National MP Maurice Williamson wants to subsidise students who want to do tertiary study based on how many are needed in the workforce.

The debate is centred around whether New Zealand should shift to a "variable subsidies" model for tertiary education so taxpayers only end up paying for the number of students actually needed for jobs.

As Williamson explains, it could look something like this: The top students (who qualify by way of scholarships, bursary or something else) are given a "good subsidy" - potentially about 90 per cent.

READ MORE:

* Editorial: The life-changing decisions that teenagers must make

* Students gaining University Entrance without necessary literacy, numeracy skills

SUPPLIED Labour's education spokesman Chris Hipkins isn't in favour of being selective about which students get a subsidy to study tertiary education.

The next block (perhaps the next 50 per cent of students) get the standard subsidy currently provided - roughly 75 per cent - and then anyone else wanting to study a particular course pays their own way, suggests Williamson.

The Commission looked at exactly that idea when it was picking fault with the country's tertiary system after it was asked to look at barriers to new models of education.

Graham Scott, one of the commissioners tasked with fronting MPs about the report at select committee on Wednesday, said the approach Williamson was suggesting was one they'd recommended in their report.

But how would it work?

Put simply, the government would decide, for example, how many lawyers, vets, accountants or teachers it needed each year and subsidise accordingly.

Anyone falling outside of the "need" category would still have access to courses but would need to cough up the cash themselves.

Williamson broke down his argument by taking a look at art history.

His data suggests about 10,000 students took the subject at Auckland University, which he says he has no issue with but the question was whether taxpayers should fund it.

"Maybe we want 500 art historian graduates that we fund well, the next cohort moderately maybe and the last cohort is anyone who wants to can but they fund it themselves."

Scott agreed. "We're saying if you want to pay for it, it's your money, go for it."

While Goldsmith isn't ruling it out, it doesn't appear he's in a hurry to implement it either.

"In general there's not a great track record of governments being able to predict the exact numbers of people that we need for particular industries. So we've tended to go with the demand for students."

"I'm not closed to the idea but I'm not in a position yet to say we'd pick it up," Goldsmith said.

STICKING A PRICE ON EDUCATION

The Commission says the government should be moving away from controlling the volume of students and sticking a price on it instead.

"We shouldn't necessarily constrain people's choices but we can as a purchaser be interested in value for money for the country."

The model has been tested overseas - Williamson raised the Finland experience - and pointed to the argument from the "purists" that the government is seen to be "picking winners".

"Their view was it was better than nobody having a view on what should be coming out of it."

"You're still not preventing anyone from participation but saying this is where we want to put our subsidies for better outcomes over time and...probably about every two or three years have a review of whether we've got enough lawyers or whatever coming through," Williamson said.

THE ALTERNATIVE VIEW

But that argument doesn't wash with everyone - take Labour's education spokesman Chris Hipkins who questioned how many people go into a job directly connected to their field of study once they finish university.

"My pick is the art history graduates aren't going off to be art historians, but they've all got jobs where they're getting well paid and the stats would back that up.

"Same with lawyers, yes, we're training too many lawyers but they're going off and doing other stuff, they're getting well paid and paying their taxes so what's the problem?"

The fact the chair called an end to the debate was reflective of how strongly both sides felt about their respective arguments.

The question is whether taxpayers want to have more say over who gets lumped with a student loan, and just how big it is.