Budget 2025: Diversified revenue key for uni

Otago Daily Times

20-05-2025

The University of Otago still has to find an extra $23.5 million in savings and its situation could be made worse if the government does not come to the party on Budget day.
It comes after a turbulent couple of years for the university after it reported significant deficits due to lower than projected enrollments and revenue.
Vice-chancellor Grant Robertson's commentary in the university's annual report, released this week, said there had been significant work done to find savings in the budget — in order to address permanent savings of $61.5m and return to the surplus required by the Tertiary Education Commission.
"We have made significant savings since 2023, achieving $38m of the $61.5m target set by the University Council."
Its deficit of $21.8m last year was $6.3m better than budget, but Mr Robertson acknowledged "finding the final $23.5m of savings will be challenging".
Rather than trying to find those savings all at once, the university had agreed to spread out its efforts.
"We have worked with the University Council on a plan to spread it over two years, giving us time to find savings and develop new revenue sources."
In 2023, the government propped up universities by an extra $64m per year after several institutions, including Otago, had undergone waves of restructuring and change management processes.
However, it is not known whether this funding increase will be continued for another year in tomorrow's Budget.
Mr Robertson told the Otago Daily Times he preferred not to comment ahead of the Budget.
"But clearly government funding is a significant factor in our financial approach."
Increasing student numbers was "one key way we can increase our revenue, and we are pleased with our progress this year".
"We will also seek to maximise our income from other sources — including research, commercial activities and other partnerships.
"This includes the work that we are doing in Queenstown to support the development of its technology and innovation aspirations."
The total number of equivalent fulltime students for the year-ending 2024 was 18,690; the university's strategic document Pae Tata aspires for this to increase to 24,000 by 2030.
In the international rankings, Otago ranked 214th globally and second nationally (behind University of Auckland) in the Quacquarelli Symonds (QS) World University rankings.
The year 2024 saw records broken for the number of Pacific enrolments at Otago, which now comprise a record 7.2% of total domestic enrolments, while Māori now account for a record 14% of Otago's domestic enrolments.
Tertiary Education Union co-president Craig Marshall, of Otago University, said many were still coming to terms with the "brutal" cuts in 2022 and 2023 — which led to hundreds of job losses — but there had been a feeling of "resigned optimism" of late.
"But it's not all bread and roses; the effects of the cuts still linger.
"I think perhaps there is the sense of a few green shoots. Certainly, there hasn't been the same tempo of redundancies and job losses. There have been some reorganisations.
"There are some signs that there's more consultation occurring between decision makers and the staff."
Mr Marshall said he did not expect the government to come to the party for universities in the Budget — he expected any increase not to be in line with inflation or increased student numbers.
Mr Robertson said work was continuing on many initiatives to find efficiencies, savings and new sources of revenue.
"Each division of the university has identified potential areas for this to happen and these are being worked through.
"These include reviewing programmes and papers, looking for efficiencies in our support functions and working closely with other tertiary institutions.
"There are also new papers and courses under development where we see an opportunity to enhance our academic offering."
[e-mail]