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John MacDonald: Propping-up the ivory towers is not the answer

John MacDonald,
Publish Date
Wed, 28 Jun 2023, 12:44pm
Photo / Getty Images
Photo / Getty Images

John MacDonald: Propping-up the ivory towers is not the answer

John MacDonald,
Publish Date
Wed, 28 Jun 2023, 12:44pm

For a long time now, I’ve thought that we have way too many universities in New Zealand.

And the current situation with the Government coming out with this $128 million dollar funding package only reinforces my view.

The money is going to mean universities getting more subsidies for degree and post-graduate enrolments over the next two years.

It’s another one of these one-size-fits-all band aids that the Government’s becoming very good at. When I say it’s become very good at this sort of thing, it’s not a compliment by the way. It’s just the easy option.

Like the cost-of-living payment debacle last year. Not everyone who got that needed it. But it was just easier to do it that way.

And the Government’s done the same with its tertiary rescue package.

Which is crazy. Because not every university is in the same dire situation that Otago and Victoria are in right now, planning major job cuts.

In fact, the University of Canterbury has finally reached the point after years of pain following the earthquakes where students are lining up at the door. UC is the place to be, apparently.

And going through some of its recent annual reports, there have been more surpluses than deficits in the last two-or-three years. Not that a simple surplus versus deficit argument tells the whole story. But you get the gist of what I’m saying. Not every university is struggling the same way that Otago and Victoria are.

I thought it was interesting that the Finance Minister was saying this morning that he wants universities to have a think about how they’re spending their money. But, at the same time, he’s throwing them $128 million. If only you and I could enjoy the same level of wishy washiness if we were needing help from the Government.

But, either way, by dishing out this rescue package the Government is continuing to ignore the elephant in the room.

Instead of giving universities more, with some sort of gentle expectation that they have a think about how their running things, the Government should be open and honest and just tell the universities that not all of them are needed.

Five million people and eight universities.

Two of them in Christchurch, two of them in Auckland. All eight universities are competing against each other. And some of them even operate in multiple cities.

Not that the current government is completely to blame. These problems date back to the late 80s and early 90s when both Labour and then National set-up the competitive model, which makes government funding dependent on how many students a university has.

It’s become known as the “bums on seats” model - the more students you get, the more funding you get. Which is why the University of Canterbury was in such strife after the earthquakes.

A truckload of students left, and others didn't want to come, so it got less funding from the government. And, at one point, it was chewing through its cash reserves at a rate of $100,000 every working day. $2 million a month.

Back then, the government of the day said it wouldn’t provide operational funding to pay for staff and all the other operating expenses, but it would consider funding for new facilities.

Which meant the university went through a two-year process of putting business cases together and, at the end of all that, got about $250 million to build a new science centre and upgrade the facilities at the Engineering college.

Which was great. But it didn’t fix the other problem we have - the much bigger problem we have - and that’s the fact that we have way too many universities in New Zealand.

What the Government came out with yesterday was just a one-size-fits-all band aid. A a temporary, two-year fix. And I know that, in two years' time, the problem won’t have resolved itself. Yes, we might have a few more international students coming here by then. But we’ll still have more universities than we need.

Or, more to the point, we’ll still have more universities than we can afford.

I’m not alone in my thinking. I saw a researcher the other week admitting that we could do with, at least, one less university.

But I think we also need to tell these universities to stick to their patch. Otago, for example, operates in Dunedin, Christchurch and Wellington. Massey is in Palmerston North, Auckland and Wellington.

All of them desperate for bums-on-seats. All of them competing against eachother. All of them desperately justifying their existence.

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