NEW ZEALAND: Invest in universities to fight recession

Vice-chancellors have urged New Zealand's new government to invest in universities as an anti-recession measure. And, if the government will not come up with the money, it should relax controls on student fees so universities can increase their fee income, they say.

A centre-right government took office last month with a key policy of investing in infrastructure in order to kick-start the country's flagging economy. The New Zealand Vice-Chancellors' Committee responded by arguing that universities were an essential part of the country's infrastructure. They launched a nine-point action plan that included calls for increased funding for the eight universities, more spending on research and fewer compliance costs.

Central to the vice-chancellors' case is their calculation that the NZ$1.15 billion (US$631 million) in government funding that universities currently receive is about $230 million less than they received in real terms in 1991. They want that funding restored.

University of Auckland Vice-chancellor Professor Hugh Fletcher said investment in universities was "dollars for doughnuts", the best counter-cyclical investment the government could make in terms of long-term payback. Fletcher said every job in a university created another job in the wider economy while universities also trained future workers and conducted research that was commercialised, providing a return to the economy.

"It is an extremely high payback investment," he said.

Victoria University of Wellington Vice-chancellor Professor Pat Walsh said if the government would not increase university funding, it should relax its system of limiting the maximum fees that could be charged for each broad subject area. Walsh said New Zealand spent an unusually high proportion of tertiary education funding, about 48%, on student support.

"We believe that the current distribution has got out of balance and it needs to be redressed. The situation that universities face at the moment is critical," he said.

New Zealand universities are not in poor financial health - they generally make surpluses each year - but they have long complained they are not competitive with foreign institutions, notably those in Australia and Europe.

Fletcher warned the need for increased funding was evident in salary levels that were not internationally competitive, increased student to staff ratios and problems with deferred maintenance.

* John Gerritsen is editor of NZ Education Review

john.gerritsen@uw-news.com