NEW ZEALAND's new coalition government offers little prospect of immediate funding relief for ÖйúAƬ despite the promise of an extra NZ$637 million (Pounds 1 million) over the next three years.

The National Party/New Zealand First coalition, which finally took shape last month following the October general election, is setting up a team of experts to review the sector.

It is committed to expanding the student allowance scheme. Students are promised a phased-in return to a universal allowance on a par with dole payments in 1998.

But it is not prepared to halt the progressive 1 per cent per student cut in government subsidy, introduced two years ago and scheduled to continue until 1999.

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Vice chancellors' committee chairman Leslie Holborow said: "I hoped there might be a commitment to putting the Todd taskforce recommendations (of progressive funding cuts) on hold."

Kit Carson, vice chancellor of the University of Auckland, said the review would provide an opportunity for the sector to show how much it was hurting.

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"The University of Auckland, over the past five years, has absorbed on average NZ$20 million a year in extra costs, or efficiency gains. It's difficult to see how it can continue . . . It would be nice to have a hold on the 1 per cent cuts," he said.

Dennis McGrath, Auckland College of Education principal and a member of the group which set up the tertiary bulk funding model in 1990, said the system was "creaking" and a review was timely, while Council for Teacher Education executive director Harvey McQueen said the reforms had been subject to ad hoc tinkering in the past seven years.

"It's time to look at first principles and the result of those tinkerings," he said.

But there is also nervousness about a review because of statements by New Zealand First politicians.

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Brian Donnelly, the party's education spokesman and now associate education minister, told an Association of University Staff conference that "much of the tertiary sector can continue to make efficiencies and reprioritise its expenditure".

Wyatt Creech of the National Party, who retained the education portfolio in the coalition government, said the review would be comprehensive and openminded. But he said that NZF, as coalition partner, wanted to ensure the system was an "effective and efficient way of providing tertiary education services to New Zealanders".

There was evidence that some institutions needed to manage their finances better and be more accountable for taxpayer funds, Mr Creech said.

Both the AUS and the New Zealand University Students' Association are pushing for a voice on the review team. The AUS complains that the previous government paid only lip-service to consultation with university staff.

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NZUSA outgoing co-president Alayna Ashby said students had done a great deal of work on the impact of the ÖйúAƬ education reforms and had a lot to contribute to a review.

Much of the burden of the funding squeeze has fallen on students through higher tuition costs. Fees have risen 15 per cent on average for next year. They vary according to institution and course, with an average fee of about NZ$2,500, plus about NZ$450 for course costs. Students can borrow from the government to cover the full cost of fees plus up to NZ$5,400 annually for living costs, but rising debt prompted big student protests last year, including sit-ins at a number of universities and polytechnics.

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The average student debt was NZ$7,941 in November 1996, making a total of NZ$1.7 billion.