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.”
ENDS