Budget 2026: Future tradies, students struggling at school may be Budget Day winners

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The Government has officially scrapped the fees-free tertiary scheme, redirecting part of the savings into a major expansion of trade training opportunities for secondary school students.

Budget 2026 will lead to the number of Trades Academy places doubling from 10,000 to 20,000 over the next four years, alongside extra funding for industry-focused school subjects and free study costs for those with no qualifications to attend trade schools.

Trades training providers said the investment could be life-changing for young people, helping steer students away from gangs and into apprenticeships and employment.

The fees-free scheme was introduced under the previous Dame Jacinda Ardern-led Labour Government and then adjusted by the coalition to cover students’ final year of tertiary study.

Education Minister Erica Stanford, Regional Development Minister Shane Jones and Tertiary Education Minister Penny Simmonds said the Government would be freezing the scheme and using some of the savings to inject $69 million into the Trades Academies programme instead.

The Trades Academies programme allows students to earn an NCEA (or equivalent) qualification through work-based training organisations, often learning on the job.

Simmonds said Trades Academies had a proven track record of improving apprenticeship participation and boosting education and employment outcomes.

Some $15m is also being injected into the industry skills boards to develop at least eight new industry-led secondary subjects, each focused on a specific industry such as construction or primary industries.

“Industry skills boards are leading curriculum development to ensure the new vocational education pathways in school align closely with real-world labour market demands, reducing skills mismatches and building the workforce of the future,” Stanford said.

Additionally, the Government will use savings from the cancellation of fees-free to fund an additional 1000 Youth Guarantee places for school leavers with low or no qualifications.

“These additional Youth Guarantee places provide wrap-around support to young people who need help to re-engage with learning, and offer a pathway to jobs, apprenticeships and further study,” Simmonds said.

Youth Guarantee programmes are aimed at 16 to 24-year-olds with low or no qualifications, helping them access free vocational training through polytechnics, private training establishments and other tertiary providers.

The scheme is designed to support young people into further study, apprenticeships or employment by offering fees-free courses and additional pastoral support.

There are currently 4500 places, which will rise to 5500.

Although the Eastern Bays Trades Academy is not directly linked to the Trade Academy or Youth Guarantee programme, managing director Woody Gilmour said investing in trades schools was important.

“We’ve seen huge improvements in attendance and achievement through these courses.

“So, for example, one of the kids that we’ve got on at the moment was attending school 31% last year; he’s now at 78% this year.”

He said those at his academy have a 100% pass rate and tell him things like, “I was going to join the gangs, but now I just want to be a scaffolder”.

Skills Group chief executive officer Rosanne Graham said the funding boost would “create valuable opportunities for young people to gain practical skills and explore future career pathways”.

“Expanding these programmes will help more secondary students access industry-connected learning and strengthen vocational pathways into further training, apprenticeships, and employment,” Graham said.

“Naturally, as Minister Stanford’s proposed new pathways at secondary schools continue to develop, we would hope to see more widespread opportunities for all Year 12 and 13 students.”

Jones said almost $2 billion had been spent on fees-free over the past eight years, “with no real impact”.

“While university degrees are useful, we need more skilled trades as well. We want our young people to see trades as a viable, valued and rewarding career path,” he said.

The additional Trades Academy funding will be phased in from the start of the 2027 school year, while funding for the extra Youth Guarantee places will begin on July 1, 2026.

Do you have questions about the Budget? Ask our experts – business editor at large Liam Dann, senior political correspondent Audrey Young and Wellington business editor Jenée Tibshraeny – in a Herald Premium online Q&A here at nzherald.co.nz at 9.30am, Friday, May 29.

Rachel Maher is an investigative reporter covering Auckland issues and education. She started at the Herald as a breaking news journalist in 2022, before joining the Auckland team this year.