New Zealand¡¯s academic union is sceptical that?this week¡¯s budget will deliver funding relief for tertiary institutions, despite prime minister Chris Hipkins¡¯ pledge to prioritise skills and science.

Mr Hipkins, who was elevated from the education portfolio in January, told a that skills, science and infrastructure would receive extra support in the budget that will be revealed on 18 May. ¡°As a former education minister it will be no surprise that skills is top of that list for me,¡± he said.

¡°Education is the single biggest way that people can change their lives and outcomes. If we¡¯ve got the investment in science, strong and resilient infrastructure ¨C and a skilled workforce to carry all this out ¨C then that supports every area of the economy.¡±

However, Mr Hipkins also promised a ¡°no-frills¡± budget, saying his government¡¯s previous habit of ¡°doing too much too fast¡± had diverted resources from needy areas. ¡°Living within our means is an important economic goal for me, professionally and personally. It¡¯s not right for households to be tightening their belts if the government doesn¡¯t too.¡±

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The Tertiary Education Union said these comments boded ill for the sector. ¡°What we¡¯ve seen over the past five years is largely a continuation of successive previous governments¡¯ focus on austerity,¡± said national secretary Sandra Grey. ¡°Investment has continued to lag behind inflation, the ¡®bums-on-seats¡¯ funding model remains and, as a result, institutions have continued to cut staff whenever enrolment numbers dip.¡±

Lucy Stewart, co-president of the New Zealand Association of Scientists, said the university sector was ¡°at a crossroads¡±, with its financial model ¡°clearly not working¡±.

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¡°We¡¯ve seen major cuts to staff numbers at Waikato, Massey and AUT [Auckland University of Technology] in the last three years. We can¡¯t afford to gut our science capability and reputation [but] if we continue down the current path of university funding and operation this seems inevitable.¡±

While New Zealand¡¯s eight public universities all ended 2021 in surplus, recent financial accounts tell a different story. Annual reports have been released so far by five institutions, with four registering deficits. A combined NZ$168 million (?84 million), or 5 per cent, has been stripped from the five universities¡¯ earnings.

Expenses mounted at all five, rising by a combined NZ$159 million, largely because of surging personnel costs, which grew by NZ$65 million.

Auckland and Massey universities each incurred NZ$20 million-plus increases in operating expenses such as consumables, maintenance, computing, contracted services, travel and scholarship provision. The University of Otago blamed the ¡°challenging financial market conditions¡± for some NZ$48 million of investment losses, mostly in its foundation trust.

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In April, Otago¡¯s acting vice-chancellor, Helen Nicholson, flagged hundreds of redundancies, saying her institution needed to trim about NZ$60 million from its annual operating budget.

Professor Nicholson said Otago had suffered ¡°years of below-inflation funding rate increases¡±. She said the government was unlikely to rectify the problem in this year¡¯s budget?after February¡¯s disastrous cyclone and floods.

In a February to incoming education minister Jan Tinetti, Universities New Zealand said 57 per cent of its members¡¯ spending was on personnel expenses. It said staff ¡°pay expectations¡± lay at the level of inflation, currently almost 7 per cent, but the government had limited tuition fee increases to . ¡°We¡­need financial support in budget 2023 to ensure our universities can continue to retain people,¡± the brief said.

john.ross@timeshighereducation.com