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The Tertiary Education Union (TEU) has slammed the Government for making what it calls "drastic" cuts to polytechnic funding.
Figures reveal Aoraki Polytechnic was the worst hit, with its funding slashed by almost 20%.
Financials from the 12 polytechnics that have released 2011 annual reports showed government grants last year fell by an average of 4.4%, or $17 million, from 2010.
Six polytechnics are yet to release annual reports.
Nine of the 12 had their government funding cut, with Aoraki Polytechnic - which has campuses in Timaru, Ashburton, Oamaru, Christchurch and Dunedin - the worst hit.
Its funding dropped 19.31%, from $21.4 million in 2010 to $17.26 million last year.
Otago Polytechnic's funding was cut by 6.69%, from $33.44 million in 2010 to $31.2 million last year.
TEU national president Sandra Grey said the "drastic" cuts would deny people in regional communities the chance to train for jobs.
"Students in our regions should not see their polytechnics cut back and their learning opportunities diminished," Dr Grey said.
The drop in funding at Aoraki Polytechnic came as it cut 11 of its course programmes this year, resulting in 11 job losses - including four from its Dunedin campus and one in Oamaru.
Aoraki Polytechnic chief executive Kay Nelson said in the polytechnic's annual report the cut presented "a major challenge" for the institution and was a large reason why it recorded a $1.6 million loss last year, its first deficit in five years.
"This reduction in funding had serious consequences for our financial position, particularly during a time of ongoing change and consolidation of Aoraki Polytechnic operations," she said.
Otago Polytechnic recorded an operating surplus of $3.34 million last year - its largest - despite the drop in funding.
A spokeswoman for Minister for Tertiary Education Steven Joyce said the institutes of technology and polytechnics (ITP) sector was in the "best shape it has ever been in".
"Although funding has been shifted around the tertiary education system, the ITPs have responded well to the challenges, with improved educational, as well as financial performance," she said.
She said Dr Grey's comments were "blatantly incorrect" and polytechnics had shifted their offerings to higher-quality courses and qualifications better suited to labour needs.