Budget implications for Waikato University

The Budget was positive for Waikato University - considering the negative talk from funders, says Chief Financial Officer Andrew McKinnon.

Mr McKinnon says the University had feared there would be no future CPI increases to Government funding, loss of equity funding, no funding for additional growth in EFTS in the university sector, no adjustment to the fee maxima regime for domestic students (the ability to increase fees) and no funding for new initiatives or capital projects.

“However the Budget has, to varying degrees, addressed these issues and we are anticipating a slight increase in Government funding in 2011 of $1.33 million after taking into account the loss of the tripartite funding adjustment for salaries of about $2 million,” Mr McKinnon says. This loss was announced in the 2009 Budget but comes into effect in 2011.

The key points in the Budget for universities are:

• 2.2% price increase in Student Achievement Component funding rates

• A new Annual Maximum Fee Movement (4% in 2011)

• Funding an additional 1735 full time places at universities, compared with what was previously budgeted

• 20 additional first-year medical student places

• Retention of $14.6 million Equity Funding across universities, ITPs, wananga, private training establishments and other tertiary education providers

• Removal of capability funding (Base Grant, Encouraging and Supporting Innovation) in order to fund increased SAC funding.

The impact of these points on the University of Waikato is:

• 2.2% price increase in Student Achievement Component funding rates should increase revenue by $1.4 million

• The ability to increase domestic tuition fees by up to 4% will allow the University to potentially increase revenue by $1.5 million (based on 2010 EFTS and tuition fees)

• The funding of an additional 1735 EFTS is based on an actual increase on what TEC had originally planned to fund in 2011. This is 970 less than what was funded in 2010. Therefore there are only 765 new positions and if the University of Waikato gets is natural share of these (ie 7%), it would expect to get funding for an additional 54 EFTS, or $680,000 (SAC funding plus tuition fees)

• Loss of the base grant of $246,000.

Mr McKinnon says there is no new funding available in the Budget to improve universities’ capability or to support their ability to contribute to the sustained economic growth of New Zealand. Nor is there any funding available for capital projects.