Deputy PM Carmel Sepuloni dismisses criticism government isn't funding universities properly

Acting Prime Minister Carmel Sepuloni, looks set to front foot a rescue package of sorts for the country's struggling universities, which are facing hundreds of job cuts and the axing of some programmes amid falling enrolments.

The loss-making universities have blamed underfunding for their problems. Most are in deficit and some - including Otago and Victoria - are planning hundreds of redundancies to try to save tens of millions of dollars.

The expected announcement follows an open letter, supported by the vice chancellors of Otago and Victoria, pleading with Education Minister Jan Tinetti for short-term relief.

RNZ understands the extra money will be aimed at tiding universities over as they recover from falling enrolments due to high employment and Covid.

The Tertiary Education Union branch president at Victoria University of Wellington, Dougal McNeill, hoped the extra funding would put a halt to imminent staff cuts. He told a meeting at Victoria earlier this week extra funding was a "clear alternative" to the cuts, and that without funding for academic roles in universities, "academic freedom is impossible".

While universities get their funding from a range of sources, the overall figure is heavily dependent on 'bums on seats' - getting students to enrol.

But despite initiatives like first-year fees-free study, enrolments decreased 5.1 percent last year - international fee-paying students down 13.7 percent, and a drop of 4.1 percent for domestic students. Victoria reported a 12 percent drop overall in 2023.

Five of the country's eight universities reported a deficit in 2022, while the government expects them to return about a 3 percent surplus each year.

Sepuloni (acting Prime Minister while Chris Hipkins was in China) told Morning Report on Tuesday we would have to wait until later on Tuesday to find out what Education Minister Jan Tinetti had to offer the tertiary sector.

"But what I can say is that we do recognise the challenges that our universities are facing. At the most recent Budget, there was $521 million that was dedicated to the tertiary sector, and much of that was in recognition of the challenges that they face.

"Minister Tinetti will speak more to that when she makes the actual announcement."

She said it was not a "bailout", but a "responsibility to support a strong tertiary sector".

"It's integral to our future as a nation and we want to make sure that the provision of it is healthy and secure and it's responding to the needs of students."

Host Corin Dann put it to Sepuloni that Labour criticised National, when it led the government, for not funding universities to keep up with inflation - and now her government was doing the same.

"Well, our investment is significantly more than what the previous government put in," she replied. "There are other challenges... So I mean, of course, as you said, inflation is a challenge but also when you have high rates of employment and the labour market is going gangbusters, then people often make the decision to go into the workforce instead of taking up tertiary study options.

"That's happened before. And we're seeing a bit of that now. Also with the cost of living pressures, that's the reason sometimes that students or people take up the opportunity to work rather than study.

"So there's a range of challenges here. And I don't really accept that the government is responsible for all of those challenges."

Asked if the 'bums on seats' funding model needed reviewing, Sepuloni said she did not think "it's just the government's responsibility to make decisions here".

"Certainly we take the tertiary sector seriously and so we want to work with our universities and others to ensure that they are working and that, you know, that they are in place and they are able to provide the opportunities for New Zealanders that we need them to provide…

"And I mean, there's been two or three universities who have been very cognizant of the reality and, and forecasting forward, and have already made changes for themselves as well."

Asked specifically about teacher training, with the country struggling to keep those it already had, Sepuloni hinted there might be some direct assistance. Last week Victoria proposed axing secondary school teacher training altogether.

"Well, we need teachers and so obviously, we want to make sure that the provision of courses to support people who become teachers are in place.

"There's conversations that also need to be had across universities about the provision of courses, what they offer training and not all need to offer everything but they need to be having conversations and discussions about who is best placed to provide those opportunities."