Universities - essential NZ infrastructure

NZVCC Electronic News Bulletin Special Issue 27 November 2008

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Universities - an essential part of New Zealand’s infrastructure

A nine-point plan for government and university action was made public by the NZVCC at a media briefing conducted at its Wellington secretariat yesterday. The plan was presented to journalists by University of Auckland Chancellor Hugh Fletcher, Auckland University of Technology Vice-Chancellor Derek McCormack (the NZVCC deputy chair), Victoria University of Wellington Vice-Chancellor Professor Pat Walsh and NZVCC Research Committee member Professor Jane Harding.

A background paper supplied to those attending the briefing described universities as part of the nation’s infrastructure that built economic and social prosperity. It went on to state that universities invited the new government to work with them on a programme that would ensure New Zealand fully benefits from its universities. “Australia and Canada have recognised that their university systems are a key element of national infrastructure and have boosted their investment in them accordingly. New Zealand’s eight universities seek support from the new government for a nine-point programme which, taken overall, will significantly advance their ability to contribute to national development.”

The nine-points are outlined in the background paper as follows:

1) Increased public investment in universities

In recent years the NZVCC has consistently evidenced the fact that the country under-invests in its universities. While New Zealand’s overall level of public investment in tertiary education compares well internationally, successive governments have boosted student financial support ahead of institutional funding. The average pattern in the OECD is for 82 per cent of government funding to be devoted to institutions and 18 per cent to student financial support. In New Zealand, only 58 per cent of government expenditure goes to institutions, while 42 per cent goes to student support. There is no point in reducing the cost of university study to students if the quality of university education declines through under-investment.

2) Indexation of government investment

The universities seek appropriate annual indexation for both government investment in university teaching and any limit government imposes on student tuition fee increases. The decline in the value of the per-student subsidy from government is the result of years of CPI-based adjustments which were inadequate in terms of meeting the real increases in university costs. The aggregate loss of revenue to the universities since 1991 now stands at $230 million. Universities want to negotiate an indexation policy with government which recognises and reflects their real cost drivers.

3) Greater flexibility around student fees policy

The universities’ preference is for increased public investment in universities. However, if this does not occur at the level needed to maintain international comparability, universities will have to look to increased revenue from student fees. The Education Act precludes full-cost fees for domestic students and the universities do not propose any change to that. However, universities do want a reconsideration of the current fees maxima policy to provide greater flexibility around fee setting so fees can be further differentiated according to the cost of delivering the programmes involved. While salary levels for the New Zealand workforce are below the median for OECD countries, student tuition fees in New Zealand are considerably lower than fees in key comparable countries. The annual average tuition fee for New Zealand universities is US$2671, compared to US$3464 for Canada, US$3855 for Australia and US$5027 for the United States.

4) Reduced compliance costs

The current tertiary education reforms programme is complex and has generated increased compliance costs associated with the new investment system. Numerous “envelopes” of funding have to be separately negotiated and reported. Increased compliance costs are exacerbated by the confusion and overlap of responsibilities among central education agencies, particularly between the Tertiary Education Commission and Ministry of Education. Universities, therefore, seek clarification of these two agencies’ respective responsibilities with regard to tertiary education. More effective data sharing among government agencies would also improve the situation. Universities accept they are accountable for achieving the outcomes sought through the investment process but want streamlined reporting requirements for those outcomes.

5) Differentiated government investment

Universities seek a differentiated investment system which recognises and supports their distinctive contributions. The introduction of the Performance-Based Research Fund was a small step in the right direction but not enough in itself. Universities also need an investment system which recognises the investment level required to sustain their research-led teaching. Universities support increased emphasis on the distinctive contributions of the different types of tertiary education institution, but consider it is time to adopt a simpler way of achieving this.

6) Increased and accessible research funding

Universities want policy change to restore their access to contestable research funding. The current “stable funding” policy, under which 40 per cent of funding is removed from the contestable pool and dedicated to long-term negotiated funding, has favoured Crown Research Institutes at the expense of universities. Despite the universities’ role as the country’s most significant research institutions, employing more than half of the New Zealand’s research workforce, only one university was deemed to be eligible for support in the first round of negotiated funding.

Increased access to research funding would enable universities to support greater numbers of research students, particularly at doctoral level, to the benefit of New Zealand. Universities seek a commitment from government to increase constestable funds managed by the Foundation for Research, Science and Technology and Health Research Council. An important part of the innovation process is basic research and universities are pivotal to that. Consequently the NZVCC wants the Marsden Fund doubled over the three-year term of the new government. Market capitalisation of spin-out companies created from commercialisation of basic research carried out in the universities now amounts to more than $1 billion.

7) Improved relationships with other research bodies

Universities support closer relationships with other research organisations. Policy changes for research funding and research institution governance which facilitate that end would be welcomed providing they did not further disadvantage universities. The roles of universities and CRIs could be more complementary, with opportunities for increased collaboration through joint staff appointments, more CRI involvement in postgraduate student supervision and increased co-operation around Centres of Research Excellence and contestably-funded research programmes.

8) A step change for Mâori and Pasifika

All universities have strategies in place to strengthen the engagement of Mâori and Pasifika communities with university education. These strategies include memoranda of agreement with iwi, the establishment of Mâori leadership positions and Pasifika advisory groups to university councils and senior management. For students, strategies include bridging programmes for secondary school pupils along with mentoring and other forms of support once students are enrolled at a university. Mâori and Pacifika students’ access to, and success at, university will be enhanced by increasing their achievement at secondary school and the secondary-tertiary interface. Particularly important is universities’ engagement with lower decile schools, promoting interventions which encourage students to achieve at secondary school.

9) Commitment to universities’ distinctive contribution

Underpinning this nine-point programme is the need for government support for universities’ distinctive contribution to New Zealand through research and research-led teaching. The eight institutions which constitute the New Zealand university system are diverse in size, academic strengths, student profile and funding sources, yet they have unified and consistent quality assurance for teaching and research. Universities want the new government to accept its obligation to safeguard university autonomy and academic freedom and recognise universities’ unique ownership position.

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