The Government says there's no problem with university funding, despite what the universities themselves have to say.

Auckland University has used its annual report to tell the Government it can't have both great universities, and cheap ones.

But Tertiary Education Minister Steven Joyce says Auckland University already gets slightly more funding than the other universities.

"Because they are the largest and highest-ranked university, their Government funding's increased by 30 per cent over the last seven years, which is pretty good in the context of where the world's been," he said.

"Probably their biggest opportunity to grow revenue is in their internationals students where they are lower than the Australians in terms of numbers."