University funding: yawning chasm of credibility?

Remember the Knowledge Wave? The Government’s Growth and Innovation Strategy? We’re all agreed that, in the face of intensifying global competition, NZ needs to up its productivity and its innovation. This imperative underlies the “trans-Tasman income gap” and “OECD league table” debates.

The Labour-led governments of the last 8 1/2 years grasped this early on and made concerted efforts to improve our performance in these areas. That the results have been modest can be put down to a number of factors, including bureaucracy. Too many bureaucrats producing too many glossy reports, e.g. here. Last week’s Budget shows that the Government itself must take some share of the blame.

Take the fate of the universities. There’s plenty of evidence supporting the importance of the tertiary sector to growth and innovation.

The federal Labor Government in Australia understands this. Its 13 May Budget promotes an “educational revolution”. It included a new Education Investment Fund of $AU11 billion and the Better Universities Renewal Fund of $AU500 million, with the extra funding starting this year. Hell, Australian universities already enjoyed vastly more resources than NZ universities before this Budget.

Not surprisingly, the extra funding was applauded by the Australian universities. On this side of the Tasman the NZ Vice-Chancellors’ Committee warned that “the gap [between Australian and NZ universities] which has existed for some time is rapidly turning into a chasm… At present, academics working in Australian universities receive salaries which are 44% higher than salaries paid to their counterparts here, on an across-the-board basis.”

The Government’s response was lame. Tertiary Education Minister Hodgson argued that university funding has increased by 87% in the 15 years to 2006. On the salary gap he noted that, “In recent times that gap has actually narrowed, though only slightly.”

The VCs quickly hit back, pointing out Hodgson’s figures didn’t take into account inflation or increased student numbers, and the cap on fee increases at well below the rate of cost increases in the sector. “On a per full-time equivalent student basis, measured in 2006 constant dollars, funding has actually dropped from $10,932 in 1991 to $9,089 in 2006.”

This is not news to anyone involved in the tertiary education sector except, perhaps, Hodgson and/or his advisers. Note, that’s a 44% salary gap that he’s trying to belittle.

So to last week’s Budget. The students fared best, not that they were happy. The VCs were disappointed. Government’s response to the yawning salary gap has been to provide another $15m for this purpose. That’s $5m less than last year, and $10m less than the year before, and the dedicated funding in those years only made a “slight” difference.

This Saturday a friend is having a going away party. He’s awarded himself a massive pay increase (and decent superannuation) and is taking up a position at a uni in Melbourne. Much easier access to vastly better research funding, too (no FRST nonsense). If I could, I’d be joining him.

The stark contrast between the responses to the budgets in Australia and New Zealand say it all. If NZers should decide that the National Party is better able to secure NZ’s future they’d be wrong, but you couldn’t blame them.

[Footnote: Research & development is another matter, and is for another blog. Also, a report into academic salaries in NZ and selected countries has been released.]


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10 Responses to “University funding: yawning chasm of credibility?”

  1. Sconehead Says:


    You’re assuming there’s a relationship between what universities do and national productivity.

    If there is one, and I doubt it, I’d suggest it’s inversely proportional.

  2. jafapete Says:

    Yup, could be wrong, but then I wouldn’t be the only one.

    Everyone seems to be investing in tertiary education except us. If you’re right, we’ll be zooming up the OECD league tables in no time.

  3. Sconehead Says:

    The less our universities concern themselves with productivity and the like, the better off we’ll all be.

  4. jafapete Says:

    Scone, I think that the linkages go something like this: Higher and further education leads to improved human capital leads to more productive, innovative and creative workforce.

  5. Sconehead Says:

    I don’t.

  6. Sconehead Says:

    And another thing…The only league table worth discussing is, of course, the original one, now known as the Premiership. We’re fifth.

  7. jafapete Says:

    Toffee, eh? All the best for the UEFA Cup then.

  8. Using our brains, for a change « Jafapete’s Weblog Says:

    […] The current government has made some moves to improve things. It devoted a modest amount of extra funding over recent years to try to partially close the yawning gap with academic salaries overseas. But this year it dropped the ball. […]

  9. Levels of health funding a sick joke « Jafapete’s Weblog Says:

    […] discussed the dire state of university funding in an earlier post. So the problem to which the deputy deans have drawn attention is not unique to one part of the […]

  10. Not so Savant « Jafapete’s Weblog Says:

    […] First off, anybody who has been a regular reader of my blog would have seen posts critical of current research funding (”Frankly, Hodgson is a disappointment”), university funding […]

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