What could yesterday’s spending cuts mean for tertiary education?

Posted By TEU on Jan 27, 2011 |

Tertiary Update Vol 14 No 1

Prime Minister John Key announced yesterday that he intends to reduce the government’s already diminished government operating allowance – the allowance for new spending in the 2011 Budget – from $1.1 billion to $800 million.

“Nonetheless, this year’s Budget will continue to prioritise new spending to health and education in particular, and to initiatives that promote economic growth,” stated Mr Key.

With Treasury already forecasting government spending to fall by over $200 million between now and 2014, even before Mr Key’s announcement, further reductions in new spending would likely translate into further cuts. Tertiary education represents about 6 percent of government spending.  It would need to receive a significance and disproportionate share of the only $800 million of new spending that the government is budgeting to avoid further cuts.    For individual tertiary education institutions this could mean hundreds of thousands of dollars difference to their forecast funding.

CTU policy director and economist Dr Bill Rosenberg says that saving about $300 million will have very little effect on reducing debt – it only equates to one week of debt payment.

“But it will hurt in the additional pressure it will place on government services like health and education,” says Dr Rosenberg.

Also in Tertiary Update this week:

  1. Polytechnic rolls grow to all time high
  2. Tertiary education will feel inflation pressures
  3. Commission faces more job cuts
  4. NZ academic salaries gaining on Australia
  5. Govt funds research trade show for businesses

Other news

Prospects for students have gone from bad to worse, with a three-yearly survey showing increased joblessness, debt and pessimism, student advocates say. The 2010 student income and expenditure survey, run by the New Zealand Union of Students’ Associations since 1994, shows average loan debt had increased by 31 per cent to $15,558 since 2001. In just three years, the number of students with a job plummeted by 25 per cent to 65 per cent – Dominion Post

University of Canterbury research has revealed that overall academic performance by undergraduate students at UC in semester two of 2010 was as good as that during the same period in 2009. “While we acknowledge that the earthquake and subsequent aftershocks may well have had a serious effect on some individual students, it appears that student performance in general was not negatively affected by the 4 September earthquake,” said a member of the UC research team, Psychology Professor Simon Kemp  – University of Canterbury

New Zealand has the best education system in the world according to Britain’s Legatum Institute, which has been attempting to produce different kinds of indices to mainstream economic scales.  The institute says New Zealand’s strong education system inspires high levels of public confidence.

President of the Dominican Republic Leonel Fernández has announced that a new university in Haiti will be completed by 12 January 2012 – the second anniversary of the devastating earthquake. It will be built in the northern city of Cap Haïtien at a cost of US$30 million. The institution will be a public university, in a country where private universities were proliferating before the earthquake –University World News

Victoria University is being accused of discriminating against mature students. Special admission students – those older than 20 who did not achieve university entrance at high school – are being asked to supply a CV and a one-page “personal statement” explaining study objectives, and may be required to complete English and maths assessments  – Dominion Post

Thanks to nznationalparty at Flickr for the photo

TEU Tertiary Update is published weekly on Thursdays and distributed freely to members of the Tertiary Education Union and others. You can subscribe to Tertiary Update by email or feed reader. Back issues are available on the TEU website. Direct inquiries should be made to Stephen Day, email: stephen.day@teu.ac.nz

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