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OPINIONOpinionApril 28, 2023

The government’s ‘she’ll be right’ attitude to universities is failing a generation

Guest writer

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Tertiary education in New Zealand is facing a crisis, and without immediate government action, its future is in jeopardy, writes Otago students’ association president Quintin Jane.

Sustained underfunding of universities is failing students across the country, and without significant government investment and a refreshed approach to how we view tertiary education in Aotearoa, the sector will remain in crisis.

Last week, the University of Otago announced a reduction in enrolments resulting in a $60 million hole in its budget. This in turn has led to a voluntary redundancy scheme, which will eventually become involuntary, and will see several hundred academic and professional staff across the university lose their jobs. The University of Otago cites sustained below-inflation funding increases and a strong job market as primary drivers behind the revenue shortfall.

The university has assured that any student currently enrolled at the University of Otago will be able to complete their course, but otherwise leaves a lot of questions that we simply have no answer to at this stage. What are the implications for students who take a year off their studies? What about those who study part time? Or for those who study a double degree such as law, extending the length of their degree beyond the standard term?

The University of Otago (Photo: Supplied)

This then leads to questions about education quality. There is no doubt that these redundancies will have serious impacts on the quality of education for students, both current and future. Lower staff-student ratios will reduce the amount of time each student can interact with faculty and cut into activities such as office hours, labs and tutorials, which currently provide invaluable direct support.

Staff in the tertiary sector, academic and professional alike, have faced increasing challenges in recent years. Last year we saw staff across the country taking up pickets in support of better wages and working conditions, in recognition of challenges faced throughout the pandemic. Overwork, stress and burnout are rife in every university department, and only worsened with the challenges Covid-19 brought. Adapting to online learning, hybrid learning and social distancing created undue pressure on the sector.

Staff have gone above and beyond over the last few years to provide for students and ensure that impacts on academic quality were kept to a minimum. With many of these staff now facing redundancy, workloads for those who remain will only increase. The result of all this? Diminishing education outcomes for students.

We have a prime minister who is a former students’ association president and also former minister of education. This government needs to step up and accept that the current models of funding are simply unsustainable to safeguard tertiary education in Aotearoa for future generations. Over the last three years, we have seen redundancies at the University of Auckland, Victoria, Otago, AUT, Lincoln, Canterbury, Massey, and even a few at Waikato. Every single university in the country has faced undue financial pressure throughout Covid and the resulting period of high inflation, yet the funding model remains the same.

While the University of Otago’s downturn in enrolments is concerning, it comes as little surprise to anyone familiar with the sector. Put yourself in the shoes of a current school leaver: you have the choice between a minimum of three years living in what is essentially material hardship and taking on tens of thousands of dollars in debt, or leaving school and entering a government-supported trade or apprenticeship with no debt and a guaranteed salary. Being a student is just not enticing in the current climate.

Aotearoa has a system for funding tertiary education that cannot deal with shocks, upsets, or even slight downturns in enrolments. The Education and Training Act requires universities to function, budget and plan like a business. The reality is, however, education is not a commodity and certainly isn’t funded like one. This means that, when students make the choice not to come to university, we see university jobs in peril. Why should those who choose to study, or those who have made their careers in academia, be punished because some potential students made the very rational decision not to study?

Multiple steps need to be taken to address the crisis facing tertiary education. The government needs to make being a student enticing again. This means improving the material conditions of students without further entrenching the student debt epidemic. Methods such as extending the winter energy payment to students (who are currently the only beneficiary group not entitled to the support) would markedly improve the material conditions of hundreds of thousands of students across the country.

Education funding models also need to be looked at, so that universities aren’t competing for students in order to balance their books. The core funding pool needs to be increased to ensure that if universities have a bad year, if school leavers decide not to come to university, or if international student flows are restricted, staff and students aren’t placed in immediate jeopardy. At the very least, funding increases need to match inflation so that students and staff aren’t footing the bill.

Without any action from the government, the crisis facing the tertiary sector will continue to worsen. Immediate measures need to be taken to better support students and universities in Aotearoa. The government needs to seriously reconsider how and why we fund students and universities to ensure the long-term sustainability of tertiary education in Aotearoa.

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a promo image for the tv show 24 but with chris hipkins face photoshopped onto jack bauer's body

Turns out Chris Hipkins was Jack Bauer all along. (Image: Archi Banal)

OPINIONPoliticsApril 27, 2023

Big Tax Energy extinguished in 24 short hours

Toby Manhire

Editor-at-large

Turns out Chris Hipkins was Jack Bauer all along. (Image: Archi Banal)

A full day was barely done before Chris Hipkins declared his ‘no-frills’ budget had no place for a wealth tax. But what about at the election?

The scene: Autumn in the South Pacific. David Parker as Jack Bauer, our dynamic, devilishly clever protagonist, bounding about the place in principled pursuit of “The 311”, a group of fantastically wealthy families and their hardworking assets. Think luxury cars. Speedboats. Helicopters. And one “truly groundbreaking” spreadsheet.

At the outset of the series, Agent Parker addresses a university lecture theatre, laying out the severity of the imbalance in effective tax rates. It is 12.30pm on Wednesday, and the clock is ticking. We remain on the edge of our seats through the night, as revenue nerds, political animals and puffed-up pundits exchange fire on the case for a wealth tax. Taxvangelist Parker bursts through smoke and debris, landing barefoot and undaunted on that most fearsome of armoured tanks: a think-tank.

And then, in the series finale, 24 hours and a few minutes later, the prime minister takes the stage. Parker watches from behind a shrubbery at the Employers and Manufacturers Association as Chris Hipkins fires salvo after salvo of wholesome chip butties from a bread and butter bazooka. The Big Tax Energy is shot clean out of the sky.

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“You will have seen that yesterday Minister Parker released work IRD have done on the tax that a small number of very high wealth individuals pay in New Zealand,” says the boss. “And while that work highlights gaps in the tax treatment of the income generated off their assets, I want to be crystal clear with you today,” he continues, surveying the room with homebrand solemnity. “The government will not introduce any major tax changes like a wealth tax or capital gains tax in this budget.”

“This will be a no-frills budget, as befits the times we are in. It’s about getting the basics right,” he says, picking a wholegrain from his teeth. “We’re not going to rock the boat by introducing major new taxes like a wealth tax or capital gains tax or a new cyclone levy in the budget.”

Parker slinks off into shadows, shaking his fist at The 311. As he fastens his harness and leaps from the EMA roof and the final credits begin to roll, Parker snarls: “Every political party will have access to that same information and they can formulate their tax policies and set them out before the next election.”

To be honest, almost no one was seriously imagining that the prime minister was going to signal a wealth tax, a “tax switch” or any other substantial fiscal reforms in his speech today, three weeks out from budget day. But that the prime minister decided to deploy the extinguisher just 24 hours on tells its own story.

A new wealth tax in Labour’s 2023 manifesto is not impossible. The internal debate may still be alive. But since he was propelled unopposed to the ninth floor in January, Hipkins has steadfastly stuck to a small-target script of refocus, back-to-basics, bread-and-butter and – a new variation launched today – a “no-frills budget”. Given that deeply cautious pragmatism, and the burnt fingers endured by Labour on CGT since the days of Phil Goff, it would take a truly Jack Baueresque plot twist to see Hipkins turn around in the months to come and pledge a bold new wealth tax after all.

That doesn’t mean Parker’s spotlight on The 311 will be entirely in vain, however. While National can say that as long as Hipkins keeps his rule-out commitment to the budget only, a sneaky CGT could be up his sleeve, Labour won’t hate the cyclorama of the IRD report flapping away. They won’t hate the backdrop to the 2023 election being an image of the wealthiest New Zealanders paying relatively low rates of tax compared with the rest of us.

Much likelier than a bold new approach to tax predicated on the gap identified 24 hours ago is something tactical. A tax policy that sees a further upwards tweak for the very highest earners in income tax, say. Such a manoeuvre would be less about addressing the “fundamental unfairness in our tax system” that David Parker divined in the IRD report, however, and more about getting the series renewed.