Steven Joyce: Govt selling our future short by starving universities

About 400 protesters marched through the University of Otago campus recently to demonstrate against cuts. Photo / Otago Daily Times

OPINION

David Lange used to call the university vice-chancellors bikies in suits.

He was Minister of Education as well as Prime Minister in the latter half of the 1980s, so he saw them up close. I did too, and there were plenty of times during my nearly seven years as Tertiary Education Minister that I had cause to recall that description.

The vice-chancellors were pretty demanding types in both his period and mine. I was often criticised by them both publicly and privately for my ostensibly parsimonious funding decisions. Most of them have moved on since, and one of their number, Stuart McCutcheon, has recently and sadly passed away, but a number have told me that in hindsight, I was a far better Tertiary Minister.

That’s because our universities have inexplicably been on hunger rations for the entire term of this Labour Government. And quite brutal rations. In contrast to the Key Government increasing university funding significantly in excess of inflation, the current Government has done the reverse. They have ignored the impacts of both Covid-19 and inflation on these institutions in their funding decisions, and that can only weaken the quality of our universities over time.

Take international revenue. According to published figures from the Tertiary Education Commission, fees paid to universities by international students dropped by 22 per cent from 2019 to 2021, a loss of $110 million in annual income across the sector. The 2022 figures haven’t been collated yet, but they are likely to include a further drop, especially given what is known as the pipeline effect. Each year the borders were closed, there were fewer international students returning.

The universities have not received any compensation for that revenue loss. It must have been galling to see all the money ladled out to the likes of bungee jumping operations in Queenstown while they were ignored.

And the international situation is only slowly improving. Delays in visa processing from Immigration New Zealand, an overly suspicious attitude to any foreigner coming into the country, and the lingering stench of our callous attitude to international students during the pandemic haven’t exactly created the recipe for a strong bounceback.

There are those who say that our educational institutions should not be reliant on international students to survive. And they aren’t, but they can only be smaller and less diverse without those students. We are seeing that with the waves of redundancies being flagged around the sector. Anyway, inflation means the domestic funding story isn’t any better.

The Government’s only new funding for universities in its first term was the first year fees-free money, which from the university perspective only replaced one form of funding (student fees) with taxpayers’ money. Their nominal income remained unchanged. In 2021, ministers increased tuition subsidies by a miserly 1.2 per cent against inflation that year of 5.9 per cent, while in 2022 it was a 2.75 per cent increase, well behind inflation of 7.2 per cent. In this year’s Budget, the Government tried to trumpet a 5 per cent increase in tuition subsidies, but that too is likely to be behind this year’s inflation figure, so in real terms university incomes per student have been going backwards for six years.

There is only one dental training school in New Zealand. Photo / Brett Phibbs

All this must be quite discombobulating for the Tertiary Education Union. They are the most loyal of the teacher unions to the Labour Party, and in return expect to be looked after. What they have been given by this Government amounts to a cold shoulder. They are left railing at university leaders for all the redundancy plans, and yet still can’t bring themselves to criticise their political soulmates as the root cause of the problem.

The Government’s shrinking of our universities is storing up trouble for the future. While not everyone can or should go to Uni, young engineers, scientists, computing scholars and entrepreneurs are crucial to our future prosperity.

There are also immediate skills problems for the country which are going begging for lack of funding and a lack of government ambition. The big problem in the health sector is a lack of health professionals and especially doctors, yet we refuse to invest any money to train more. We have just two medical schools while a proposal for a third is left to wither on the vine. Australia has 21 medical schools for a population just five times our size. If we were serious, we would be adding two medical schools, not just one.

We also complain about the cost of dental care, but the base problem there can be traced to a shortage of dentists training and graduating. In New Zealand, we have just one dental school; in Australia they have nine. Our number of dentists per head of population is declining, and on the laws of supply and demand, that will only put the price up further.

We need a drastic increase in the pipeline of new medical professionals to have any chance of sorting our health crisis, but this Government is not even properly funding the current activities of universities, let alone expanding them.

You might think all this is a bit rich coming from someone who rails against the excesses of too much government spending. But it is also about what you choose to spend money on, and in this case you don’t have to look far to find pots of money being wasted.

In the tertiary sector alone, Chris Hipkins’ baby, the Te Pūkenga polytech merger, leads a charmed life, despite something like a 20 per cent decline in domestic enrolments over the last two years. $200m has been wasted on that merger so far, and another $220m was advanced in the Budget this year. To try to help Te Pūkenga look better, the Government has hiked up subsidy rates for its courses excessively, in sharp contrast to the universities. On top of that, there is the $65m-a-year make-work scheme that is the Workforce Development Councils. Outside education, there’s the money spent on the aborted bike bridge, light rail to nowhere, the hospital mergers and so on. There is plenty of money around if ministers just looked for it.

It’s perplexing that a Government of ex-student politicians is so hard on our universities, and also perplexing how supine Universities New Zealand has been in the face of this funding decline. It should speak up more. This Government is selling our future short.

- Steven Joyce is a former National Minister of Finance and Minister of Tertiary Education, Skills and Employment. He is the director at Joyce Advisory, which works with clients in the tertiary sector. These views are his own.