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Government announces extra $128m for cash-strapped universities

Jun 27, 2023

Education Minister Jan Tinetti and Finance Minister Grant Robertson have announced extra funding for universities and tertiary institutions.

An additional $128 million will be invested into the tertiary sector to increase tuition subsidies at degree-level and above by a further four percent in 2024 and 2025, the government says.

This is in addition to the five percent increase provided at Budget 2023 - which the government said was the most significant funding increase in 20 years.

"The government has heard the concerns of the sector. When we began our Budget process universities and other degree providers were forecasting enrolment increases. The opposite has occurred, and it is clear that there is a need for additional support," Tinetti said.

She said universities were facing a significant decline in domestic enrolment, higher costs and fewer international students since the pandemic. It was a worldwide problem, the minister said.

The new funding would help maintain the quality and variety of higher education subjects as well as research capability.

It was vital for students, the tertiary workforce, the research system, and for the country's economic and social wellbeing.

"It will not resolve all the issues that universities are facing, but it should make a positive difference."

She said the new funding would go to all degree-granting institutions including Wānanga and Te Pūkenga.

While the focus recently has been on staff and subject cuts at Victoria and Otago Universities, "other institutions have previously managed declines in student numbers", Tinetti said.

"We did not want to disadvantage those institutions which in some cases had already made difficult decisions."

Grant Robertson said the new funding would be drawn from a transfer of underspends in Vote Tertiary Education, including from the fees free scheme caused by lower than expected enrolments.

"This funding increase will help universities and other institutions deliver their strategic plans as agreed by their councils. The government expects the subsidy increase will be considered by when universities make final decisions on their offerings for 2024 and 2025," Robertson said.

Cabinet also wanted a report by the end of July on whether recently announced changes represented a threat to capability or provision of programmes nationwide.

The government will also review higher education funding, including the Performance Based Research Fund.

"The current financial situation of some tertiary institutions points to the need to take this broader look into the way our higher education system is funded and financed. Decisions on the scope and approach to the review will be taken before the end of 2023."

It comes as universities across Aotearoa are proposing staff and programme cuts.

Just last week, The Tertiary Education Union held a rally at Victoria University after vice-chancellor Nic Smith briefed staff on the university's latest proposals on cost-saving to address a forecast $33 million deficit.

The union's branch president, Dougal McNeill, said the potential cuts would eliminate 229 full-time equivalent roles and entire subjects including secondary teaching, German, Italian, Latin, tourism management, design technology, and geophysics.

In April, it was reported that several hundred University of Otago staff may be made redundant and further job cuts were likely as it grappled with a drop in enrolments.

Acting vice-chancellor Professor Helen Nicholson told students in an email the university was considering a number of hard decisions to ensure it was sustainable into the future.

"This includes the possible redundancies of several hundred academic and professional staff positions. Applications for voluntary redundancy will open next week, and more job cuts are likely later in the year," she said.

Main image (RNZ/Angus Dreaver): Education Minister Jan Tinetti. 

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