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Budget does little to enhance universities

Budget does little to enhance universities’ contribution to economic growth

Yesterday’s budget does little to support our universities’ ability to contribute to the sustained economic growth that the government says will allow New Zealanders to realise their aspirations.

The budget makes room for a total of 765 new places across all universities next year, but it does this through no additional funding. Derek McCormack, Chair of the Vice-Chancellors’ Committee and Vice-Chancellor of Auckland University of Technology, warns “this will not ease the burden that universities are facing in demand for places and the universities will continue to turn thousands of students away.”

If there is one bright spot in the budget, it is in the priority that government is placing on science and innovation as drivers of growth. Universities are the most important research organisations in New Zealand. They have over half the country’s research staff, have the bulk of its fundamental research capability, train nearly all its postgraduate students – the researchers and professionals of the future – and are at the forefront of commercialising research results.

On the other hand, it is disappointing that government’s investment in research, science and technology hasn’t been matched by any new investment in university capability.

The Prime Minister has recently said that knowledge drives prosperity. Increased investment in universities and the knowledge they create would allow us to maximise the contribution we can make toward this goal of a more prosperous country. A thriving university sector is required to achieve economic growth, as well as increase social and cultural wealth, for New Zealand.

While government spending on our universities is around the OECD average, an unusually large portion of this spending, by OECD standards, is on student support. The countries that are emerging from the global recession at the top of the recently released world competitiveness rankings have realised the importance of increased investment in tertiary education, each spending more money on institutions as a percentage of GDP than New Zealand.

Australia, which has jumped two places to number 5 in these rankings, has significantly increased funding for tertiary education as it embarks on an ambitious goal of increasing the percentage of 25 to 34 year olds with a degree qualification from about 30% (similar to New Zealand) to 40% by 2025. “Australia is moving ahead and paying attention to the importance of mining its intellectual capability as well as its mineral deposits, while in New Zealand we are standing still,” says Derek McCormack.

“The initiatives announced in the budget are aimed at reducing costs around the margins and freeing up funds to recycle into the sector,” he adds. “None of them will alleviate the pressure universities are facing from over-enrolment and the high demand for places, nor will they increase the ability for universities to act as major drivers of economic growth as they do in more prosperous countries.”


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