Understanding the TEC Supplementary Plan Guidance for 2026 Investment
The Tertiary Education Commission (TEC) released its Supplementary Plan Guidance in early June 2025 to provide updated direction for tertiary education organisations submitting Investment Plans for funding from 1 January 2026. This document builds on the main Plan Guidance issued in March 2025 and incorporates decisions from Budget 2025. It emphasises a constrained funding environment where investment must prioritise high-performing and high-priority provision that supports New Zealand’s economic growth.
Providers, including universities, institutes of technology and polytechnics, wānanga, and private training establishments, are required to submit all Plan components by 4 July 2025 through the DXP Ngā Kete platform. The guidance stresses that demand for funding is expected to exceed available resources, requiring TEC to make considered decisions based on performance, learner outcomes, and alignment with government priorities.
Budget 2025 Allocations and Their Implications for Higher Education
Budget 2025 allocates $398.3 million to the tertiary sector over four years. This includes $111.4 million to support growth in the domestic student pipeline, enabling funding for 99 percent of forecast enrolments in 2025 and 2026, plus approximately 175 additional Youth Guarantee equivalent full-time students per year.
Targeted tuition subsidy increases form a core part of the package. A 3 percent subsidy rise applies to priority provision at Levels 1–10 on the New Zealand Qualifications and Credentials Framework (NZQCF), covering foundation education and areas such as trades, agriculture, engineering, and health sciences. An additional 1.75 percent increase targets specific Levels 7–10 qualifications including science and clinical psychology, medical imaging, veterinary science, mathematics, agriculture and horticulture, priority engineering, and initial teacher education.
These adjustments help providers manage cost pressures while directing resources toward fields that address national skills shortages. The Annual Maximum Fee Movement (AMFM) allows providers to increase fees by up to 6 percent in 2026, with the Minister for Universities consulting on the exact rate.
Prioritising High-Performing and High-Priority Provision
The Supplementary Plan Guidance makes clear that TEC will focus investment on provision that demonstrates strong performance and aligns with economic needs. Providers must show financial sustainability, as poor financial health will influence funding decisions, including Plan approvals and requests for additional funding.
Quality, relevance, and access remain central assessment criteria. Plans should reflect how proposed programmes respond to regional needs and gaps in the national network of education and training. For universities, expectations include maintaining international standards of teaching and research, focusing on advanced learning, and generating knowledge that benefits New Zealand and the wider world, including through commercialisation.
Higher education targeted priorities highlight STEM disciplines, health qualifications, and specific fields such as accounting accredited by Chartered Accountants Australia and New Zealand. Guidance is also provided for providers considering reprioritisation of delivery in response to these priorities.
Supporting Learner Success and Improved Educational Outcomes
Improving outcomes for all learners is presented as essential to lifting productivity and economic growth. The guidance reinforces the Learner Success Framework and encourages providers to embed this approach more deeply in future rounds.
Providers must submit or update Learner Success Plans and Disability Action Plans. These documents outline strategies to address educational performance, with particular attention to groups experiencing lower outcomes. TEC expects continued progress across all levels and learner cohorts, noting concerns about any declines or plateaus in performance indicators.
Educational Performance Indicator Commitments (EPICs) help measure progress, and providers are encouraged to use available resources such as the Secondary–Tertiary Transitions and Post-Study Outcomes apps on Ngā Kete to inform planning.
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Vocational Education and Training Transition
The guidance addresses the ongoing transition of the vocational education and training sector toward a stronger regional focus. It notes the establishment of new providers for work-based learning and the role of Workforce Development Councils until their disestablishment at the end of 2025.
Budget 2025 provides transitional funding, including up to $10 million per annum for strategically important VET provision at institutes of technology and polytechnics during the shift from Te Pūkenga to the new system. Additional support goes to Industry Skills Boards for standards-setting functions.
Providers involved in foundation education and adult and community education receive specific fund-level information, with opportunities for additional funding in certain areas but restrictions on others.
Over-Delivery Limits and Compliance Requirements
A key operational rule limits providers to no more than 105 percent over-delivery of approved funding allocations for DQ3–7 and DQ7–10 provision. Exceeding this threshold risks funding adjustments.
New providers must contact TEC before applying for funding. All submissions must be complete; incomplete Plans may delay approval and affect eligibility. Relationship managers are available to assist with queries via phone on 0800 601 301 or email at customerservice@tec.govt.nz.
Implications for Universities and Research-Intensive Institutions
Universities face particular expectations around research quality, international competitiveness, and contribution to national priorities. Plans should demonstrate how institutions will sustain research excellence while aligning teaching programmes with skills needs in STEM, health, and other priority areas.
The guidance encourages reflection on previous Plan achievements and clear articulation of future intentions, including commercialisation efforts and engagement with industry and public research organisations. Financial sustainability remains a critical lens, especially amid broader sector pressures.
Stakeholder Perspectives and Sector Responses
University administrators and academic leaders are navigating these requirements alongside ongoing discussions about the new Tertiary Education Strategy. The emphasis on performance and prioritisation has prompted many institutions to review their programme portfolios and learner support strategies.
Workforce Development Councils and industry bodies continue to provide advice on skills needs, feeding into the investment process. Providers are advised to engage early with TEC to ensure Plans reflect both institutional strengths and national priorities.
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Future Outlook and Preparation for Subsequent Rounds
While this guidance focuses on 2026 investment, planning for 2027 is already underway. TEC has signalled continued efforts to streamline processes and reduce compliance burdens. Providers should monitor updates on the new Tertiary Education Strategy and any further policy changes.
The overall message is one of strategic focus: investment will reward demonstrated excellence, relevance to economic needs, and commitment to learner success within a fiscally constrained environment.
Resources and Next Steps for Providers
Key supporting documents include the full Plan Guidance, templates for Strategic Intent and Learner Success Plans, and sector-specific resources on Ngā Kete. Providers can access the Supplementary Plan Guidance directly from the TEC website.
Early engagement with Relationship Managers and review of indicative allocations (available from 3 June 2025) will help institutions prepare robust submissions by the 4 July deadline.