Labour: Stop Pretending and Actually Fund Tertiary Education!

Aotearoa’s universities are under threat. In October 2022, Auckland University of Technology (AUT) vice-chancellor Damon Salesa announced an intent to cut 170 Full Time Equivalent (FTE) staff across a range of academic areas (Morton, 2022). 90 staff accepted voluntary redundancy before AUT was knocked back by the Employment Relations Authority, forcing the university to commence a more formal process before cutting the remaining 80 staff Salesa wanted to make unemployed (New Zealand Herald, 2022). Massey University has been restructuring itself for years now, and the workers within its ranks have experienced disruption after disruption (Heagney, 2021). Recently, Massey vice-chancellor Jan Thomas announced a decision to cut more than 200 staff, calling for staff to take voluntary redundancy (Ellingham, 2023). This followed Otago University acting vice-chancellor Helen Nicholson’s announcement that: “Several hundred University of Otago staff may be made redundant and further job cuts are likely” (Radio New Zealand, 2023a); and Victoria University of Wellington (VUW) vice-chancellor Nic Smith’s estimate that he will cut 100 academic jobs and up to 150 professional staff (Molyneux, 2023). Otago and VUW have also followed a process of offering voluntary redundancy ahead of forcing people into unemployment. That said, when you know your employer wants to take your job away, and you know they’re building a case to label you “surplus” to their requirements, there’s an obvious pressure exerted on staff to accept the so-called “offer” which somewhat stretches the definition of “voluntary”.

All of the above-mentioned vice-chancellors cite decreased student enrollment due to Covid-19 as the cause of financial difficulty at the universities they manage. Government funding is in part determined by the number of bums on lecture-hall seats, so decreased domestic enrolment has resulted in decreased government funding (Roper, 2023). For some time now, the universities have supplemented government funding by charging exorbitant fees to international students. For example, Otago University states in 2024 it will charge each international student just under $40,000 for the first year of Health Sciences study (University of Otago, n.d.). With limited travel over the past few years, this stream of university income has also reduced. Total student numbers are down at some universities – for example at Otago by 0.9% (Radio New Zealand, 2023a); or at VUW by 12.1% (Schwanecke, 2023). And the universities are claiming deficits of: AUT $21 million (New Zealand Herald, 2022); Otago $62 million (Radio New Zealand, 2023c); VUW $33 million (Molyneux, 2023); and Massey: $14 million (Ellingham, 2023). Is that the full story though? Is it true that a global pandemic, beyond the control of each individual university, is the sole cause of a financial situation from which the only solution is restructure and disestablishment of selected “course offerings”? Most certainly not.

First: Students’ ability to enrol in university is affected by numerous factors. The need to meet increasing rent and other living costs is a significant external burden on anyone undertaking tertiary study, especially in places like Wellington which Victoria University of Wellington Students’ Association president Jessica Ye​ has pointed out is “known for being unaffordable” (Schwanecke, 2023). In 2019, a study found 81% of domestic university students and 37% of international university students were also in employment (Te Pōkai Tara Universities New Zealand, 2019) to pay their costs of living while studying. A large part of the cost of living is housing cost, and yet successive governments have failed to implement, or worse have promised not to implement, measures which would go some way towards addressing what is now a housing cost crisis. For example, Chris Hipkins in July 2023 “reassured” voters: “under a Government I lead there will be no wealth or capital gains tax after the election” (Ensor, 2023). The more students have to work to survive, the less attractive it becomes to try to study at the same time.

Second: The universities have never seemed to lack money to put into grandiose projects. Examples abound, such as: VUW’s $98 million “Gateway” (Harris, 2016) and $45 million Living Pā (O’Dwyer, 2021) projects; VUW’s $0.5 million rebrand (Te, 2020); Otago’s $44 million food science building redevelopment (Otago Daily Times, 2023); and Otago’s $1.3 million rebrand (Radio New Zealand, 2023b). Of course we applaud the incorporation of Te Reo Māori in university identity (contingent on the universities actually upholding principles of Te Tiriri in practice) and on considerations of sustainability in design. But in the context of other financial decisions, these projects look suspiciously like empire- and legacy-building rather than genuine efforts to improve the universities for all. Even if we take the universities’ word for the value of the construction and rebranding, financial caution seems to have been thrown to the wind when pursuing construction projects. The enthusiasm with which money was thrown into these projects is particularly galling when compared against the same universities’ decisions to “save” money by firing staff.

The biggest factor in this situation, though, is identified by Otago University Associate Professor Brian Roper: “By far the most important cause is the cumulative underfunding of New Zealand universities since 2011” (Roper, 2023). As an example, Roper cites a Tertiary Education Union (TEU) estimation that the cumulative underfunding of universities by the Key/English National Government amounted to $3.7 billion from 2009 to 2018.

An examination of Budget 2023

On 18 May 2023, the Hipkins Labour government announced: “Budget 2023 […] provides the biggest boost to tertiary subsidies in 20 years” (LabourVoices, 2023). If this were true it might provide some reassurance the government was committed to well-resourced tertiary education in Aotearoa, so their claim is worthy of examination. Figure 1 collates tertiary education funding data from Treasury budgets (The Treasury NZ, 2008, 2013 & 2018; Te Tai Ōhanga The Treasury NZ, 2023). Each government budget at least as far back as 2008 (which reports budget figures back to 2003) has reported total “Tertiary education funding”, and also broken that total into four subcategories: “Tuition”, “Other tertiary funding”, “Student allowances”, and “Student loans”. Each of those subcategories is included in Figure 1.

Figure 1

Because inflation decreases the spending power of each dollar, inflation over time will decrease the real value of an absolute dollar amount. Therefore, it’s also important to consider reported dollar amounts in the context of inflation (Consumer Price index, or CPI) – i.e. to examine CPI-adjusted figures. Figure 2 presents the same data from Figure 1, but adjusted for historical inflation data for 2003 through 2023 (Te Pūtea Matua Reserve Bank of New Zealand, 2023), and expected inflation for 2024 through 2027 (Te Pūtea Matua Reserve Bank of New Zealand, 2023).

Figure 2

Now using the data displayed in Figures 1 and 2, and returning to Labour’s claim: I am unable to find a way in which Labour’s statement could hold true. Here’s the ways in which I tested their statement:

  • The 2023 Budget increased the total funding the government calls “tertiary education expenses” by $487 million compared with 2022. Leaving out the financial turbulence due to Covid-19 from 2020 to 2022, the total increase in the 2023 Budget is overshadowed by the increases in total funding provided in 2006, 2009, and 2013. On all of those occasions, the biggest increase in the total has been from increased funding of the student loan scheme, and this is also the case for the 2023 budget. The 2023 budget is, however, notable for being the first time in 20 years that funding for the coming year has been simultaneously decreased in all three of the ‘tuition’, ‘other tertiary funding’, and ‘student allowances’ categories.
  • After accounting for inflation (CPI), the 2023 Budget increases total funding by $204 million (in 2022 dollars). Again leaving out the financial turbulence due to Covid-19 from 2020 to 2022, that total increase is overshadowed by the CPI-adjusted increases in total funding provided in 2006, 2009, 2013, and 2015.
  • The 2023 Budget forecasts an increase in total “tertiary education funding” of $962 million from 2022 to 2026, or $487 million from 2023 to 2027. Not counting the period ending 2020, that total increase is still overshadowed by the increase over the 4-year period 2005 to 2009. The 2023 Budget forecasts an increase in total “tertiary education funding” of $974 million from 2022 to 2027. Not counting the period ending 2020, that total increase is still overshadowed by the increase calculated over any of the 5-year periods 2004 to 2009, 2005 to 2010, or 2007 to 2013. Similarly, the forecast increases in each subcategory have all been overshadowed on at least one occasion in the past 20 years whether calculated over 4-year or 5-year periods.
  • Similarly, after accounting for expected inflation, the forecast increases in total funding and funding in each subcategory have all been overshadowed on at least one occasion in the past 20 years whether calculated over 4-year or 5-year periods.

In conclusion: Budget 2023 does provide an increase in total tertiary funding in 2023, but perhaps not as unprecedented an increase as the government is claiming. Beyond 2023, total funding flattens out (Figure 1), and when adjusted for CPI the expected funding actually decreases in real terms (Figure 2).

Let’s not buy into using total “tertiary education funding” anyway

Roper makes an excellent point that the “student loans” subcategory of funding is simply a mechanism “to help students borrow more and get deeper in debt” (Roper, 2023). As socialists we should support the provision of education for the sake of learning – for the sake of improving our collective knowledge, for our collective capability to solve problems, and for the joy of understanding a little more about the world we inhabit and the possibilities that could be. People shouldn’t become indebted, to their potential long term detriment, simply for seeking to learn. Roper suggests scrapping the student loans scheme altogether and introducing the Universal Education Income advocated by the New Zealand Union of Students’ Associations. In support of these proposals, therefore, analysis from this point forward will focus on the combination of funding towards the “Tuition”, “Other tertiary funding”, and “Student allowances” subcategories, and will not include budgeted “Student loans”.

So Labour is letting the universities fail now. What came before?

In theory, Labour should be the party of the working class. In practice, we know it to be a party that occasionally makes concessions but that is deeply committed to capitalism and that historically introduced sweeping neoliberal reforms which undermine our working and living conditions to this day. We know National to be committed to right-wing politics and exploitation of the working class, but skilled at appealing to the working class sufficiently to periodically gain power and undermine living conditions. How have these two parties historically funded our universities? Figure 3 illustrates the change in government non-student-loan university funding over the same time period as discussed above.

Figure 3

There are a number of conclusions that can be drawn from this analysis. The Clark Labour government significantly increased tertiary funding during its term. The Key/English National government actually continued that trend for two budgets, but then let that funding dwindle for the remainder of their time in power. Funding under the Ardern/Hipkins Labour government increased modestly for two budgets before becoming volatile due to the response associated with Covid-19. Overall funding is now back at about where it was in 2019. Adjusted for CPI, funding has actually decreased from 2022 to 2023. The reason Figure 3 shows a decrease in 2023, whereas Figure 2 shows an increase, is that all Budget 2023 did for tertiary education was pump money into the student loan scheme, while actually taking money away from all three other areas of funding. The government’s stated intention for tertiary funding (forecasts in the budget) exhibits a further downward trend, although this prediction is error-prone so should be read with caution (because expected CPI may or not become reality). The recent downturn and projected downward trend is damning for the current Labour government, but also it is clear that Roper is correct in noting several successive governments have prevented any real growth in university funding for one and a half decades (Roper, 2023). Importantly, National was certainly no better, and given that history we should be highly suspicious if National were to raise any positive-sounding election promises around tertiary education funding.

An examination of the additional funding announced in June 2023

On 27 June 2023, the government announced what on first glance seemed like a rescue package for the universities: “The Government is providing an additional $128 million to tertiary education providers, for degree level and above courses, over the next two years – $64 million in 2024 and the same in 2025” (Tertiary Education Commission, 2023). On further analysis, however, it is apparent this additional funding is merely a drop in the bucket. The promised $64 million for 2024 is a mere 1.2% increase in Budget 2023’s forecast funding for that year. Figure 4 illustrates the difference between Budget 2023 figures (i.e., the values shown in Figure 3) and the adjusted figures which result from the June 2023 promise of additional funding.

Figure 4

The difference is hardly noticeable. Essentially, the government has made themselves look good while in reality continuing to fail universities. With or without the additional funding, university funding is expected to fall below the insufficient funding levels seen during the National Key/English era, and certainly fail to compensate for falling student enrolments or historical fiscal incompetency. So what’s needed? We need a committed financial response from our government to sufficiently fund our tertiary education institutions to completely stop the threatened cuts. Government funding needs to undo years of underfunding. Government funding needs to outpace inflation. Government funding needs to ensure the survival of tertiary education in Aotearoa. Government funding needs to be massively increased from that promised by Minister of Education Jan Tinetti in May’s Budget 2023 and in June’s tokenistic funding announcement.

What does all of this mean?

As at late August 2023, VUW’s planned cuts include:

  • Cutting 67% of the Workplace Health and Safety Programme, and allowing the contract of the remaining 33% to expire at the start of 2024.
  • Cutting 57% of the Theatre Programme.
  • Cutting 50% of the Linguistics Programme.
  • Cutting 50% of the Renewable Energy Programme.
  • Cutting 42% of Composition and Sonic Arts.
  • Cutting 40% of Classical Performance.
  • Cutting Early Childhood Education teaching programmes.
  • Scaling back student wellbeing support, including the provision of mental and physical health care to students.
  • Reducing the ability of the Research Office to support Ethics applications and Ethics Committee work, and reducing the ability to support grant applications.

That’s just a small selection of examples of the proposed devastation at just one of the several universities where cuts are being threatened. Universities are a meeting place for academics with specialised knowledge and desires to both expand human knowledge and teach that knowledge to future generations. Universities are places that develop our capability as a society to face the future, including our ability to manage water pollution, climate change, industrial safety, and health care needs. Universities are places where people develop arts skills that contribute to our collective social wellbeing by bringing joy but also by aiding reflection on our past and current situations and future potential. The planned staff and course cuts affect the livelihoods of staff, the ability of students to learn, and the capability and vibrancy of our collective social future. And the planned staff cuts are another lesson that we are disposable in the eyes of capitalist governments and managers.

We don’t have to accept these threats. We can fight back. Mass mobilisation has won against capital in the past, in Aotearoa and internationally. In Otago, a coalition of staff and students called Protect Otago Action Group (POAG) has led the fight. Inspired by POAG, fightback groups called Students Against Cuts (SAC) have formed at VUW and Massey. All these groups support the TEU and unionised staff at forums and rallies, and would certainly support the TEU if the membership chose to take wildcat strike action to stop the cuts. Even without a strike, in the lead up to an election, if sufficient media attention can be drawn to the Labour government’s failure to protect education in Aotearoa, we stand a chance of pressuring the government into increasing funding beyond the token gesture seen thus far. At present, it’s hard to distinguish the Labour Party’s stance from that taken historically by the explicitly right-wing National Party, and loudly pointing this out will be a useful threat to the party’s singular concern: pretending to be sufficiently on the side of workers to gain their vote.


This analysis has generally focussed on discussion of “full time equivalent” staff as a quantitative measure of the proposed and intended cuts. That term is wholly dispassionate. Every “full time equivalent” is at least one, sometimes several, human beings who are fathers, mothers, loved ones… who will be made unemployed and will likely face severe financial hardship as a result of the universities’ “cost savings”. This alone is sufficient reason to stand in solidarity with threatened staff against the cuts. But in addition these proposals will cut student support including mental and physical health on campus; they will reduce student education options; they will affect the training of much-needed industrial qualifications such as health and safety; and they will affect areas such as arts which affect our ability to appreciate and enjoy this world we live in. For all these reasons, we should wholeheartedly oppose all cuts. If you are a worker, it’s important you are a member of your union and you push your union leaders to stand against the threatened university cuts. If you are a student, it’s important you join the fight with POAG or SAC, or start a student group on a campus that doesn’t yet have one.

In addition to demanding a complete halt to all proposed cuts, we should demand university managers past and present be held accountable for financial irresponsibility which has helped to create the current university financial crisis. The managers’ focus on construction and rebranding over staff and student wellbeing was unacceptable during employment contract negotiations, and it is unacceptable now.

Finally, Labour: stop pretending and actually fund tertiary education! We need immediate sufficient funding to ensure stability for staff, for students, for research, and for the social good that universities and education generally provide. To reiterate the core demands of Students Against Cuts:

  1. Stop the cuts;
  2. Government foots the bill.

This fight isn’t over, and if we all join the fight we can win.


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