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An Open Letter to the Vice-Chancellor

Mr Chris Hipkins
VUWSA Executive
Victoria University of Wellington
PO Box 600

Dear Mr Hipkins

An Open Letter to the Vice-Chancellor

I refer to your letter of Friday 5 November 1999. As agreed in our e-mail correspondence I will also release my response as an “open letter”.

I would like to comment on the contribution of student fees to the operations of Victoria University of Wellington before addressing your questions. As previously noted, government funding per student has declined by over 30% during the last ten years. This means that at this University, Government Grants do not pay all the salaries of the staff who are employed by the University. Other sources of income are student fees, income from research and consultancy and income from bequests. Victoria’s income from research, consultancy and bequests is the second lowest of all New Zealand Universities. Thus when government grants decline this University is forced to seek additional income from other sources, primarily student fees.

In this environment, income derived from student fees in the Year 2000 will contribute to staff salaries, all library purchases, computing and information technology, all equipment, operating expenses and depreciation. It is for these reasons that I and my fellow Vice-Chancellor's have argued that the Crown does not “own” the Universities.

This University has had a policy of cross-subsidising teaching and research, particularly in the Faculty of Science. As a result of the plateauing of student demand and the decreased funding for taught post-graduate courses, the ability of some Faculties to “cross-subsidise” other Faculties can no longer occur. Consequently all Faculties must adjust their operations so as not to have operational deficits. Deans are examining all aspects of their operations including reduction of expenditure on staff. As the staff/EFTS ratios vary considerably within Faculties, it is not possible to comment at this stage whether the quality of teaching and research will be compromised by possible staff reductions. In the past, this University has not adequately provisioned for the replacement and upgrading of its information technology. Information technology infrastructure remains one of the high risk areas for the University. Consequently the University has had, in the last year, to replace the PABX, Payroll system, replace Y2K non-compliant technologies, upgrade the student information system (which will have to be replaced by 2001) and upgrade the backbone and basic computing support.

Upgrade of all these “business as usual” systems will cost over ten million dollars. It has been a major frustration for me that funds had not been provisioned for improving and enhancing student computing suites. It was for this reason that I dedicated the majority of my contingency funds in 1998 and 1999 to improving access by students to computing.

Our library is pivotal for enhancement of the quality of education at this University. Our library collection has been under stress because of the declining value of New Zealand currency and previous policies for allocating “occupancy” charges. In the rolling triennial budget, it is proposed to increase funds allocated for library collection purposes by 10%. Altered policy on occupancy charges will also ease operational pressures on the library.

“Occupancy charges” refer to charges allocated to Faculties and Administrative Units for the use of space that they occupy. Previous policy allocated any increase in charges, say for the use of a new building, on an averaged basis across the University. Thus the Library and the Science Faculty, which are the largest “users” of space were allocated, disproportionately, additional occupancy costs even if they were not beneficiaries of additional space. Policy being introduced into the triennial budget will allocate “occupancy costs” to users on the basis of the quantity and quality of space utilised. This will significantly increase the operating costs of the Faculty of Commerce and Administration and the Faculty of Law, and this is reflected in the fees paid by student in those Faculties.

This prefatory comment summarises some of the factors impinging on areas where student fees to a greater or lesser extent fund key functions of the University viz salaries, equipment, operating expenses and occupancy. I will now address your specific questions. 1. As noted above, increased student fees will go to funding the increased differential in staff salaries not funded by government grants which is predicted to increase in the year 2000 from IT information upgrades, increased marketing and recruitment initiatives, salary reviews and promotion, and substantial restructuring costs in the Faculty of Humanities and Social Sciences and the Faculty of Science. Additional increases in library expenditure, technology infrastructure, operating expenses, depreciation and occupancy charges will account for increased income from student fees.

2. The Finance Committee requested that any funds from the Sale of Netlink not be incorporated into the triennial budget so that the University can evaluate the true operational performance of the University. It is anticipated that some funds from the Sale of Netlink will be used to fund infrastructure projects not listed in the triennial budget. This is a decision for Council.

3. The press statement you refer to omitted the words “Senior Management” of Victoria University of Wellington which would have accurately reflected these recommendations.

4. Senior Management of this University indicated that it wished to make salary offers to staff for the 2000 2002 triennium, but the magnitude of any offer could not be determined until after the first census date of 31 March 2000. You will appreciate from the preceding comments, and my paper to the University Council that student enrolments are the highest risk factor for our financial operations. We also wish to discuss remuneration based on competitive salary scales and performance. It was for these reasons that we requested a “roll-over” of the collective employment contract to April 2000 with salary increases backdated to 1 January 2000. Union members have rejected what we perceive to be an equitable and responsible approach to industrial negotiations.

5. Senior management of the University is aware of its responsibility to ensure that University employees do fulfil their obligations, particularly with respect to the education of students. We will take action against those staff who elect not to honour their obligations.

6. This question has been addressed in the introductory comments. Although it is difficulty to accurately benchmark staff/EFTS ratios, which are only one aspect of a quality learning environment, our staff/EFTS ratios are comparable with published performance indicators of Australian Universities. It should also be noted that this University has no significant financial resources which could “cushion” it against significant changes in the enrolment patterns that occurred this year. It is for these reasons that we seek to have an operational surplus of between 3-6%. It is not clear from current budget drafts when this will be occur.

7. Increase in fees for students in the Faculty of Commerce and Administration largely reflect allocation of occupancy costs as noted above.

8. The 1999 Budget imposed a 7% decrease in the operating budgets of non-Faculty units in the University. There has been an increase in consultants fees, primarily associated with building projects and reorganisation of administrative units. Despite this increase in consultancy fees, operating costs are being contained in 1999 at a level of 7% less than 1998.

9. As noted above, improvements in student computing facilities are a high priority as is enhancing the library collection. Enhancement of the library collection also includes enhancement of access to the library by electronic means for students on-campus and off-campus. For example we are assisting Halls of Residence to cable all rooms for on-line access to the University. I have recommended to the Finance Committee that the University assist Everton Hall in constructing another 45 beds for student accommodation, and we are negotiating additional student accommodation. As part of the triennial budget we are recommending redevelopment of the Rankine Brown Quad to make it a “wind free” piazza for students has been recommended. Student services will continue to be subsidised from the operating grant to maintain the high standard of these services.

In conclusion I welcome your comments and I trust that your appreciate my “open” response and the willingness by Senior Management of the University to be accountable to its students. In recommending these fee levels we were concerned about a number of factors which have already been detailed. The refusal of some students to pay their 1999 tuition fees (estimated to be $450,000) is an added cost that has to be factored into year 2000 student fees. It is our hope that the fees recommended, which are still amongst the lowest of New Zealand Universities, can be maintained over the triennium, whilst we further improve the learning environment at this University.

Yours sincerely

Professor Michael Irving Vice-Chancellor and Chief Executive


Chris Hipkins
Education Vice-President
Victoria University of Wellington Students' Association (Inc.)
Te Ropu Tauira o te Kura Wananga o te Upoko o te Ika a Maui

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