Photo: RNZ / Samuel Rillstone
Massey University expects to record a smaller loss than forecast for 2023 - but is still likely to make further deficits before it achieves financial stability.
Vice-chancellor Jan Thomas told RNZ Massey was likely to report a deficit of about $41 million for 2023, which included $19m in redundancy costs. It followed a deficit of $8.8m in 2022.
She said the expected 2023 loss was lower than previously budgeted, but it would be several years before the university made a surplus.
"We are expecting that we will return to a break-even in 2026 and then surplus from '27 onwards. So we've got a planned and agreed to with the Tertiary Education Commission three-year runway to surplus," she said.
The Tertiary Education Union said Massey's deficits were fine and the university should consider making larger losses in the next few years so it could retain more of its staff.
Professor Thomas said the university was at the tail-end of cuts to staffing begun last year, but further cuts were possible as part of a multi-year transformation plan aimed at making the university sustainable.
"You will see some areas that will be subject to proposals for change and potential change in the staff profile or reduction in the staff profile as part of that planned transformation," she said.
Thomas said the changes, including potential property sales, would make the university's operating costs smaller and more affordable.
She said selling or leasing some of Massey's properties would provide a capital injection but also reduce costs including depreciation and maintenance.
"We have fundamentally far too much space and it just costs money through depreciation, maintenance, modifications and so on, so it has a double positive impact on how we drive the university forward," she said.
Thomas said the university also aimed to increase its income such as through "transnational education".
A Tertiary Education Commission document from November last year classed Massey as "high risk".
Thomas said the rating probably related to the university's 2023 deficit, but its current situation was much improved.
"The TEC is monitoring us quite closely at the moment and will continue to do until we're financially in surplus again," she said.
She said the university had a financial recovery plan and had been in a period of change for some time.
"At the end of the three years, say end of 2026, we'll be financially sustainable and have a sustainable operating model."
Thomas said the university still have three campuses and both online and face-to-face course delivery.
"Where it will differ is you may not see duplication of face-to-face delivery across our three campuses which is not particularly sustainable. So what it will mean is that there will be some programmes that are not available at some campuses but are available face-to-face at some campuses."
Thomas said Massey was hit hard by the unexpected decline in domestic enrolments that followed 2021's spike in enrolments.
She said the university had a relatively high proportion of part-time and working students and many of them decided to study fewer courses so they could work more and make ends meet.
"That collective FTE loss certainly has affected Massey far more than the other universities who are primarily school-leaver market," she said.
Thomas said Massey's decision to stop face-to-face delivery of some courses at some campuses would cost enrolments, but not as many as might be imagined.
Tertiary Education Union national secretary Sandra Grey said Massey's deficits were not a big problem and the institution should try to retain more staff.
"It's perfectly fine for a very large organisation to run actually what is quite a small deficit at the moment. In fact I think Massey University leaders should be looking at whether they can actually wear a little bit more deficit and stop cutting staffing.
"That money spent on redundancy could be spent on more courses, more staff, it actually would increase the revenue, increase the size. So I think they've got the balance wrong just in terms of how much deficit they think they can wear," she said.
Dr Grey said Massey staff were despondent after a series of cuts and wanted stability.
She said staff understood universities were making cuts because of their poor financial situation, but the reason for that poor position was government under-funding.
"Universities have been pushed into a position and certainly Massey University has been pushed into a position where they're cutting things just because there is not enough government funding. That's something that we need to solve," she said.