Fund us to do our job, New Zealand sector tells Wellington

New Zealand’s universities have told their government to put its money where its mouth is in next week’s budget, saying the sector has the expertise to tackle the country’s “megachallenges” – but underfunding and compliance obligations are making the job impossible.

Representative body Universities New Zealand (UNZ) said the government was imposing a “brake” on the sector’s ability to address acknowledged national challenges such as climate change and economic uncertainty. It said teaching grants have increased by only about 50 per cent over a decade and a half while universities’ operating costs have risen by 80 per cent.

The pandemic-induced border closure has exposed the flaws of a system that forces universities to rely on international students to offset the underfunding of domestic students, according to UNZ chief executive Chris Whelan. Meanwhile, national research spending as a proportion of gross domestic product stands at just three-fifths of the Organisation for Economic Cooperation and Development (OECD) average.

Mr Whelan said universities had “progressively exhausted” their cost-reduction and revenue-raising options in the face of “continued” underfunding and the imposition of new compliance costs. The government had banned institutions from increasing tuition fees by more than 1.7 per cent while obliging them to maintain operational surpluses of between 2 per cent and 3 per cent.

“Universities made all the savings they could to navigate the financial impacts of Covid-19,” Mr Whelan said. “Now, inflation is at a three-decade high and salary expectations are correspondingly higher. Universities have no room left to manoeuvre.”

In a terse statement ahead of the 19 May budget, UNZ demanded the “necessary funding” to propel the country’s higher degree attainment into the upper echelons of OECD rankings. Just 7 per cent of adult New Zealanders currently have postgraduate qualifications, compared with an OECD average of 15 per cent, it said.

Citing 2019 figures from an unpublished report on the economic impact of universities, UNZ said some 10 per cent of GDP could be attributed to the generation and adoption of university knowledge. That contribution could be boosted by a further 2 per cent if universities were bankrolled to spend 10 per cent more on research. “Another NZ$120 million [£61 million] annually would generate another NZ$6 billion in economic activity over the following decade.”

Universities also needed funding to achieve more equitable participation rates and a diverse research workforce, and to deepen connections between researchers and organisations addressing challenges such as climate change, well-being and Covid recovery.

“A lot of it comes down to how we get more academics in the room with the people trying to grapple with these problems,” Mr Whelan told Times Higher Education.

“We would love to see some of the models that are used, say, in the UK, where government departments publish portfolios of their particular research needs, so we can get more PhD research being done in areas where there’s a crying need. It’s being more deliberate around finding those solutions.”

He said the government had acknowledged the “productivity problem” caused by shortages of professionals such as nurses, teachers, doctors and veterinarians. It should see universities as “critical infrastructure” for tackling such issues. “We want government to take us out of the cost column and see us as a good investment.”

john.ross@timeshighereducation.com