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Student Numbers Increase, University Funding Falls

Media Release 16 May 2008

Student Numbers Increase, University Funding Falls

Universities have hit back at assertions by Tertiary Education Minister Pete Hodgson that university funding has increased by 87 per cent in the 15 years to 2006.

“The minister is taking a superficial approach that glosses over both the increase in university student numbers and the effect of inflation,” Professor Roger Field, chair of the New Zealand Vice-Chancellors’ Committee, says.

“Universities face annual cost increases well in excess of official inflation measures because of the need to boost academic salaries. They have calculated that they face annual cost increases 1.6 times the rate of inflation as measured by the Consumer Price Index, largely as a result of the need to keep academic salaries at least marginally competitive on an international basis.

“Those salary increases are in the order of five to six per cent per annum. While there is general consensus around the need to remain competitive with academic salaries paid by Australian universities, the fact is New Zealand continues to fall behind in that regard.

“Government policy restricts university revenue growth to around three per cent per year through controls on tuition fee increases and through adjustments to per student funding at levels around the rate of inflation.

“Between 1991 and 2006, university student numbers virtually doubled – from around 88,000 to nearly 170,000. During those 15 years, funding increased at a much slower rate, meaning that funding per student declined when adjusted for inflation and measured in constant dollars.

“On a per full-time equivalent student basis, measured in 2006 constant dollars, funding has actually dropped from $10,932 in 1991 to $9,089 in 2006.

“Universities therefore stand by their claim made yesterday that they are now losing $230 million a year in real terms compared to their position 15 years ago.”


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