Between 5 and 10 percent of government funding for tertiary providers will be linked to student performance and dropout rates, Tertiary Education Minister Steven Joyce says.

In his first speech in the role, Mr Joyce told a business audience in Wellington this morning that the proportion would be kept low at the start but could increase over time.

He told journalists 90 to 95 percent of funding would still be based on enrolments. The success-related funding would motivate providers to give students better support and ensure they got value for fees paid, Mr Joyce said. The Government wanted students to complete courses, pass them and not drop out along the way. Officials were working on how to implement the measure.

The Government also wanted more input into new qualifications and would be linking student support to achievement.

Mr Joyce said the Government was also working on ensuring providers offered courses that met workforce needs.