High marks for tertiary finances

The Government says tertiary funds are fine; institutions say the cost is student places. Photo / Mark Mitchell

The Government says New Zealand's universities and polytechnics are financially strong - but universities say funding pressures mean they will be turning away record numbers of students next year.

The Tertiary Education Commission (TEC), which manages the Government's spending on the sector, yesterday released financial data which it said showed universities, polytechs and wananga had markedly improved their financial performance.

Institutions reported an overall surplus of 4.3 per cent from revenue of about $4.2 billion - $2.1 billion of which came from the Government.

Institutes of technology and polytechnics reported a surplus of 6.3 per cent, universities 3.4 per cent and wananga 7 per cent - all above the 3 per cent TEC guideline.

Tertiary Education Minister Steven Joyce said the figures showed tertiary institutions were "generally in strong financial positions and are well placed for future challenges and growth".

But AUT University vice-chancellor Derek McCormack - who is also , chairman of Universities NZ - said the figures were a testament to sound financial management by universities facing a reduction in real Government funding per student.

"The increase in student numbers at our universities, combined with the increase in university costs during this period, means that the TEC figures for total Government funding represent a decrease in real terms since 2007.

"Continued underfunding in real terms puts increased financial strain on our institutions, already under pressure from unprecedented student demand."

That demand had resulted in universities introducing caps on New Zealand student numbers for virtually all courses at the Government's direction.

It was encouraging that Mr Joyce saw institutions "poised for growth", he said. "We hope that that will result in some relief on the number of places we can offer students because there is huge demand. This year we turned away thousands ... next year will be worse."

Mr Joyce said he expected demand for university and polytech places next year would be partly met by 12,000 more places than two years earlier, and tempered by new policies such as two-year stand-down for student entitlements for permanent residents and Australians, and performance requirements for existing students.

Mr Joyce, who does not accept that real per-student funding from the Government has gone backwards, said he was not convinced more students would be turned away from tertiary institutions next year.

He ruled out any increase in funding.

HOW THEY SCORED

Universities' 2009 financial performance as measured by net surplus

AUT: 3.1 per cent
Lincoln: -3.1 per cent
Massey: 0.6 per cent
Auckland: 3.4 per cent
Canterbury: 3.2 per cent
Otago: 5.6 per cent
Waikato: 5.2 per cent
Victoria: 4.1 per cent