NEW ZEALAND: Universities prepare for bleak budget

Universities are increasingly concerned New Zealand's new government will sideline them in its first budget later this month.

After years in which they received extra funding for staff pay and research, they now have a government that is not only restrained by the economic recession but also talking a lot about trade training and skill needs and not a lot about universities.

An indication of the depth of vice-chancellor concerns came last week when they chastised Minister of Education Anne Tolley. Her transgression? She mentioned universities only once in a speech on tertiary education.

New Zealand Vice-Chancellors Committee chair Roger Field said Tolley had preferred to emphasise "improvements" in tertiary education administration and vocational education in her speech, even though a new economic study showed investing in universities had an unusually large payoff in terms of annual GDP growth.

"Universities do appreciate the government is facing financial constraints and that the Finance Minister is planning economic recovery over the medium term by investing in productivity," Field said.

"Our plea is not to overlook the universities' role in that recovery. As New Zealand climbs out of the recession, we will need a skilled workforce, particularly the skilled professionals that universities educate."

But universities are not alone in their expectation the budget will have little in it for them. Funding for the entire education sector is likely to be tight. Just last week, the government announced it had withdrawn a NZ$12.5 million (US$7.4 million) grant to Otago Polytechnic and it is generally expected the $85 million-a-year capital fund from which the money was drawn will be axed entirely.

Tolley has also signalled the government is unlikely to increase tertiary funding to pay for the increased enrolments most tertiary education providers are experiencing because of the recession. Though she could not tell providers exactly how the government would deal with the issue in the budget, she made it clear that increases were very unlikely.

"While we do appreciate the issue, right now is a time when our imperative has to be to constrain overall government costs," she said. "So money will be tight - money is tight. We have to look twice at every dollar we spend, and we have to work smarter to find ways of making what we do have go further."

* John Gerritsen is Editor of NZ Education Review.