Media Release 22 May 2008

A Meagre Budget For Universities

The Budget contains meagre amounts for the New Zealand university system already suffering from significant under investment over a sustained period, according to the peak body for the country’s eight universities.

“Relatively modest amounts for operating, capital and research requirements will not stop the continual decline which has left our universities well behind their Australian counterparts in terms of the resources available to them,” the chair of the New Zealand Vice-Chancellors’ Committee, Professor Roger Field, says.

“The gap between New Zealand and Australian academic salaries is widening at a time when the Government’s contribution towards salaries paid to academics working in universities here is falling. While universities are pleased to receive any funding that will boost academic salaries the amount in the Budget is small in relation to the size of the issue. The amount involved is down on what Government has contributed in the previous two years. That contribution should be going up, not down.

“The further increase in financial support for students through the allowance and loan systems – while benefiting some individuals - does nothing to address the investment imbalance which sees the New Zealand Government spending more than twice as much on student financial support than the OECD average. That imbalance means the infrastructure of our university system is being progressively run down.

“Universities are faced with Government policy which restricts their revenue growth through controls on tuition fees and per student funding adjustments around the rate of inflation. Cost increases faced by universities on an annual basis actually run well ahead of that rate because of the need to offer academic salaries that are at least marginally competitive on an international basis.

“Even then universities which are responsible for training virtually the entire professional workforce are struggling to fill positions in disciplines where there is a worldwide shortage of suitably qualified teaching and research staff.

“Since 1991, the number of students attending universities in this country has doubled while the funding available to deliver research-informed teaching to each and every one of them has fallen. If the eight institutions were to get back to the financial situation they enjoyed 15 years ago, they would required an investment that increased their revenue by $230 million a year,” Professor Field says.

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