The university funding problem
The Government announced:
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. This is in addition to the five percent increase provided at Budget 2023 – the most significant funding increase in 20 years.
The extra funding may cushion the impact slightly for some universities, but won’t make a huge impact. Despite the Govt spin, they are basically just keeping pace with inflation.
There are several factors which has led to likely mass redundancies at the universities. They are:
- Covid-19 restrictions saw fees from international students drop 22%
- Universities were not eligible for Covid-19 wage subsidies, unlike most employers
- Tuition subsidies from the Govt only decreased in real terms in 2021 and 2022 as the nominal increase were well below inflation
- A huge drop in domestic enrolments in 2023 – around 14% at VUW
Labour introduced fees free study for first years in 2018, and claimed this would see more students undertake tertiary study. Instead we saw EFTS at tertiary providers drop for five of the last six years!
It is inevitable that funding will drop if enrolments drop, but it does seem to me that a better funding method would be over say a three year time-frame. So if enrolments drop one year, you don’t have to suddenly lay off lots off staff within months.