Funding fails to keep pace with university costs

MEDIA RELEASE 28 September 2010

Government funding fails to keep pace with university costs

Figures released by the Tertiary Education Commission (TEC) today comparing the financial information of tertiary institutions between 2007 and 2009 are a testament to the sound financial management shown by our nation’s eight universities.

However, the increase in student numbers at our universities combined with the increase in university costs during this period means that the TEC figures for total government funding actually represent a decrease in real terms since 2007.

“TEC guidelines require universities to return a surplus of 3% and this is what we’ve delivered, despite the decrease in total government funding during this period,” says Derek McCormack, Chair of Universities New Zealand–Te Pōkai Tara (formerly known as the New Zealand Vice-Chancellors’ Committee) and Vice-Chancellor of Auckland University of Technology.

“While we appreciate that the government’s budget is limited, annual increases in funding for our universities need to keep pace with the real increases in costs that we face.” A large portion of university costs are spent on salaries in an internationally competitive market, meaning total costs rise at a higher rate than inflation.

Continued underfunding puts increased financial strain on our institutions, already under pressure from unprecedented student demand.

University teaching and research are central to New Zealand’s future growth. Graduates enter the workforce highly skilled and prepared to take on the increasingly complex problems we face. They earn higher salaries and contribute disproportionately to government revenues.

Universities are key contributors to New Zealand’s research, science and technology sector. They employ over half the country’s research staff, have the bulk of its fundamental research capability and train nearly all its postgraduate students - the researchers and professionals of the future that the country will rely upon to drive innovation and productivity.

Beyond the significant economic returns that taxpayers get from their investment in universities, universities provide equally important social and cultural returns to the country.

“Universities are uniquely placed to contribute to a better future for New Zealand. We are committed to continuing to work in partnership with the government to achieve these goals,” concludes McCormack.

ENDS

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