A senior academic has warned that Fiji’s current tertiary education funding model, while well intentioned, risks inefficiency, double subsidisation and weak accountability if urgent reforms are not undertaken.
Dr Mahendra Reddy, a Senior Fellow at the Graduate School of Business at the University of the South Pacific, said Fiji’s level of public investment in tertiary education is commendable and unmatched by many small developing states, but cautioned that funding structures matter as much as funding levels.
“Education is not a luxury for Fiji — it is a necessity,” Dr Reddy said.
“In a small island economy with limited natural resources, human capital is the single most important driver of productivity, diversification and social mobility.”
However, he said Fiji’s existing approach — which includes operational grants to institutions, capital grants to public universities and tuition scholarships for students across both public and private providers — has created incentives that could undermine value for money.
“If these issues are not addressed promptly, Fiji risks spending large and growing sums of public money while its own universities remain underutilised and public funds quietly accumulate private assets,” he said.
Dr Reddy explained that while all recognised tertiary providers receive operational grants, students enrolled at both public and private institutions also benefit from government-funded tuition assistance. He questioned the efficiency of this arrangement.
“The fundamental question is this: if government is already paying a student’s tuition, what exactly is the operational grant paying for?” he said.
“From a public finance perspective, tuition paid by the State is already operating revenue.”
He noted that while such an arrangement can be justified for public universities — where tuition fees are deliberately kept below the true cost of delivery — the same logic does not necessarily apply to private institutions.
“When private providers receive both full tuition subsidies and operational grants, the grant risks becoming pure margin,” Dr Reddy said.
“That surplus is unregulated and discretionary.”
He also raised concern about public funds indirectly financing privately owned capital assets.
“Public operating funds can end up being converted into private buildings and land, over which the State retains no ownership, equity or enforceable public-interest claim,” he said.
“That raises serious accountability questions.”
Another inefficiency, Dr Reddy said, occurs when government-funded students enrol in private institutions for programs already offered by public universities with unused capacity.
“The government pays to build and maintain public capacity and then pays again for parallel delivery elsewhere,” he said.
“That is classic allocative inefficiency and drives up system-wide costs.”
Dr Reddy stressed that the debate should not be framed as public versus private education.
“Private providers play an important complementary role, particularly at lower qualification levels,” he said.
“The issue is about aligning funding instruments with public objectives and ensuring transparency, efficiency and accountability.”
He called for clearer funding rules, tighter controls on how operational grants are used and greater transparency around costs, utilisation rates and outcomes.
“A well-designed tertiary funding system should avoid paying twice for the same outcome, protect public infrastructure and ensure maximum educational value per dollar spent,” Dr Reddy said.
