Raewyn Dalziel: Minister needs rethink on university funding

COMMENT

In a Perspectives article, Steve Maharey, the Associate Minister of Education, defended the Government's fee-setting regime for tertiary education institutions and castigated the University of Auckland for its opposition.

Auckland has not been alone in opposing this regime. It has been part of a chorus of protest reflecting the inability of institutions to persuade the Government to place the funding of tertiary education on a sustainable and sensible basis.

All Government policy documents have emphasised the need for a differentiated tertiary education system, with distinct kinds of high-quality institutions. Universities have a particular contribution to make to this framework.

Around the world, research universities play a pivotal role in educating community leaders and highly skilled workers, in stimulating development based on knowledge, and in producing new insights and understandings that give competitive advantage and help to generate high-value economic activity.

Other developed countries - including Australia, Canada and Britain - are making huge investments in their research universities because they see major social and economic returns. New Zealand has begun to follow with an initial additional investment in research.

But there is also an urgent need to support and improve the underlying structures - the staff, facilities for students, libraries, buildings and equipment. It is this fundamental task of enhancing the quality of our universities that Auckland University is urging on the Government.

We are asking it to examine what it spends on tertiary education and how it spends this. Rational, focused investment in a well-designed system is the only way this country will be able to sustain universities that are internationally competitive.

Universities gain a significant part of their funding from student tuition fees and Government grants that meet the cost of teaching, research and scholarship related to teaching, and some building and equipment costs.

Tuition fee-setting became a major issue in the 1990s when legislation empowered university councils to set fees, and when the Government reduced the financial support it provided and moved more of this cost to students.

In 1999, the Labour Government pledged to hold or reduce student fees. It did this through fees-freeze deals with the universities, whereby they received a level of financial compensation in return for holding tuition fees. There have now been three years of fees freezes. As Mr Maharey said, this could not continue.

The freezes were most unsatisfactory to the universities. Because Government compensation did not cover rising costs, they were prevented from improving quality in the way that it, the students and the country wished.

In lifting the freeze, the Government has decided to set limits on the fees that institutions can charge - both a maximum dollar sum for each programme and a percentage limit on the increase that institutions can make over today's fees.

This means that institutions close to the maximum fees cannot use the full percentage increase and those that can, in most cases, must remain under the maximum.

Mr Maharey's comment that the new regime provides the flexibility to go to 5 per cent is not correct for institutions where fees are close to the maximum, as is the case with Auckland. It is, therefore, disadvantaged in relation to other institutions - which partly explains why it has expressed its opposition.

The universities are seriously concerned about the Government's proposal that in 2005 and 2006 the maximum fee they can charge, and the amount by which the Government will increase its funding, will be lifted by the amount of increase in the consumers price index. The index measures cost movements that affect households; it bears almost no relation to the costs of a university, which are driven by a competitive global market for academic staff and the international price of books, equipment and so on.

The universities, and not only Auckland, have urged the minister to rethink his policy. If he does not, their costs will rise much more rapidly than their income. The result will be a return to cost-cutting and the certainty not of long-term financial security, as claimed by Mr Maharey, but of a decline in quality and the ability to meet national aspirations.

New Zealand needs universities. It needs universities that ensure that young people receive the very best education this country can give them; that provide opportunities for intellectual growth and nurture independent, knowledgeable and thoughtful citizens; that carry out leading-edge research.

Auckland is deeply committed to being the kind of university this country needs. It has a clear idea of its direction. That is why it will continue to debate Government policy on funding and strive to obtain the resources that enable it to be such a university.

* Professor Raewyn Dalziel, the University of Auckland's deputy vice-chancellor (academic), is responding to Steve Maharey's view that the fee maxima system will benefit tertiary institutions and students alike.