NEW ZEALAND: Poor budget for universities

New Zealand's universities are counting the costs of last week's government budget, which took with one hand and gave just a little with the other. The budget, the first by the new conservative National Party-led government, was aimed at dealing with the economic recession and securing New Zealand's international credit rating against a possible downgrade.

The New Zealand Vice-Chancellors Committee had lobbied hard in the past year for funding increases as the government seemed to focus on skill development at an industry and polytechnic level. But the budget showed the lobbying had fallen on deaf ears, or at least empty pockets.

The government rescinded much of the previous administration's forecast increases, arguing they had not in fact been funded. This resulted in savings valued at more than NZ$500 million (US$310 million) over four years and included reductions to inflation-linked increases in future years.

More surprisingly, the budget also cut more than $20 million a year in so-called 'tripartite funding' that was previously allocated specifically to help universities increase staff salaries. Just how universities will now cover the cost of those pay rises remains to be seen but it indicates this year's pay bargaining round could be tough.

Also gone was $10 million in funding for special projects at universities and a range of scholarships, including those aimed at high-achieving doctoral students. Among the few new initiatives aimed at the sector was a one-off $4 million fund to provide employment and research for students during the summer break.

The budget stood in stark contrast to Australia's recent federal budget which included billions of dollars in new spending on higher education and research. The New Zealand Vice-Chancellors Committee was quick to highlight the difference, noting with concern that New Zealand had not followed the Australian example.

"Universities have signalled their commitment to working in partnership with the government to maximise the institutions' contribution to economic recovery and that commitment still stands," committee chair Professor Roger Field said. "However, with this budget, universities are struggling to identify the nature of that partnership."

Tertiary Education Union National Secretary Sharn Riggs said cutting the funding supporting academic salaries would have major ramifications for the future of research and learning in New Zealand. Riggs said the money was introduced to help New Zealand retain its best university academics and staff as well as to compete internationally for the best staff.

"The decision to cut the tripartite funding combined with other countries' investment programmes in tertiary education means that New Zealand universities may not be able to address the pay disparities internationally. If we don't want our brightest academics and researchers here in New Zealand then other countries will queue up for them."

* John Gerritsen is editor of NZ Education Review.