Economic Reform Plan Has Mixed Message For Universities

The 2025 Taskforce report aimed at increasing the country’s productivity contains recommendations that could potentially assist universities in maximising their contribution to closing the income gap with Australia.

Professor Roger Field, chair of the New Zealand Vice-Chancellors’ Committee which represents the country’s eight universities, says the proposal to cut tax rates may make it easier for the institutions to attract top quality academic staff from overseas.  On the other hand, the recommendation to reduce government operating spending would almost certainly have a negative impact on universities.

“Universities recruit staff in an international marketplace.  Around half of the academic staff in our universities are either foreign born and educated or New Zealanders with overseas postgraduate qualifications.  To be able to compete for the best staff, universities need to be able to offer competitive salaries.  Cutting tax rates would assist them in that regard,” Professor Field says.

Other recommendations in the taskforce report that were viewed as positive by the NZVCC were the abolition of government-imposed caps on university fees and the establishment of universities as independent foundations.  If the review of government education agencies proposed by the report went ahead, it could result in reduced compliance costs for universities.

Professor Field noted that while the report recommended wiping interest-free student loans and offering them at market rates instead, the Prime Minister had reiterated his party’s election policy which opposed such a move.  In any event, universities would only have benefited if loan scheme savings were redirected to investment in university education and research.

The NZVCC used its submission to the taskforce to point out the role universities could play in bridging the economic gulf between New Zealand and Australia.  The submissions suggested addressing issues around academic salaries, postgraduate scholarships and research infrastructure.