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June 2, 2009 | by  | in Opinion |
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President’s Column

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Announcement of the Government’s Budget last Thursday brought little for students in the way of the “Brighter Future” National promised voters during the last election.

While the current recession environment means the Government needs to make some tough choices, effective cuts to core tertiary education funding is not the answer.

The announcement of the Budget confirmed rumours that the main funding categories in tertiary education will not be guaranteed to increase in real terms during the next few years.

The amount the Government has increased spending in the tertiary education budget for 2010 – a mere 1.95% – won’t even cover predicted inflation. Tertiary funding beyond 2010 remains ambiguous.

These announcements are particularly concerning in the context of the economic climate, with unemployment forecast to rise to 8 percent or 179 000 by mid 2010.

Investment in tertiary education would help address skill gaps in the New Zealand workforce, and increase opportunities for individuals and communities.  

As I pointed out last week, the recession has led to a noted rise in student enrolments. With projections of significant increases to the unemployment rate, tertiary institutions are likely to see an influx in enrollments with higher numbers of school leavers, along with those wishing to retrain as a way of getting back into the workforce – and even to retain existing jobs in a tight market.

One likely outcome of the Budget will be increased cost cutting at institutions like Victoria University. 2009 has already brought significant reductions to the Sub Lecturer Pool (SLP), which has dramatically reduced tutorials in some disciplines. The Budget will likely force more cut backs in course delivery.

As yet no announcement has been made concerning the current fee maxima scheme, which restricts domestic student fee increases to 5% per year. In the short term tertiary institutions are likely to make up the funding shortfall by reducing staff numbers, holding down salaries and reduced investment in important educational resources such as library collections.

Academic staff will also feel the Budget pinch, following cuts to funding supporting academic salaries in universities. This will have significant implications for research, teaching and learning: the core business of universities which will be made more difficult under these cut backs. The reason that this funding was introduced was to assist New Zealand to retain our best academics and researchers, and to help recruit new staff from overseas. The New Zealand Government’s announcement is in contrast to that across the ditch: Australia recently responded to the recession by investing more than AU$5 billion in tertiary education. Similarly, the United States has invested over US$30 billion.
While students now know what’s on the cards for tertiary spending in the short term, funding beyond 2010 remains ambiguous.

What we do know is that during their 9 years in opposition National regularly opposed even modest spending in the tertiary sector by the Labour administration. There seems little reason to be optimistic about the future for students and the tertiary sector under the current National Government.

The Budget could have been used as an opportunity to increase investment in industry training. Last time National were in power they cut industry training and New Zealand paid the price with the skills shortages of the last ten years. It appears that unfortunately National have not learnt from the mistakes of the 1990s.

It was also announced that the promised 2010 and 2011 tax cuts have now been axed, despite National claiming as recently as February that they would still go ahead. The justification for this turnaround is the global recession, even though prior to the November 2008 election it was widely predicted that there would be a serious economic downturn. At the time National argued that these tax cuts would stimulate the struggling economy. But as is so often the way in politics, once the campaign is over the election bribes disappear.

The Budget demonstrates an irresponsible attitude toward education. The decision to deliberately under fund tertiary education sets the country up for a difficult future.

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