The advice, from a proactively released cabinet paper, has painted Otago Polytechnic’s progress in a poor light, and provides justification for the decision to place it in a federation with the Open Polytechnic and the Universal College of Learning (Ucol).
The cabinet paper said Otago’s staffing of about 600 workers for its 4700 fulltime equivalent students was too high.
"There is an urgent need for Otago to adjust its staffing numbers to the current level of enrolments to save costs."
The recommendations come after the polytechnic staff experienced significant redundancies and course restructures last year, leading to a drop in morale.
The paper was brought to Cabinet by Vocational Education Minister Penny Simmonds.
While the paper acknowledged the polytechnic had prepared a path to stability by the middle of last year, it also said Otago’s domestic and international student growth projections of 8% were "too optimistic", which meant that "Otago needed to implement more cost-savings".
It also pointed to likely deficits for 2025 to 2027.
The paper acknowledged Otago Polytechnic had already gone through "considerable" change in the past couple of years, and said there could be more risks in the future because of its financial state.
The Otago Daily Times revealed last month that the government had ordered the Otago Polytechnic to make $10 million in annual savings.
An inability to find these savings would keep them in the federation, it has been implied.
Green MP Francisco Hernandez said the advice and findings of the paper were hugely chilling.
"Equally concerning is the minister’s decision to bulldoze ahead with reforms, ignoring explicit advice that doing so would deepen access and equity issues, particularly for disabled learners."
Tertiary Education Union general secretary Daniel Benson-Guiu said there had been clear political interference from a minister of the Crown.
"The minister should rely on advice and not past grudges to inform her decision-making."
Otago Polytechnic executive director Dr Megan Pōtiki criticised much of the Cabinet papers’ findings as either inaccurate or out of date.
The polytechnic had two major change processes in consultation or in transition, and she was confident of completing the remaining change processes by the end of 2025, she told the ODT.
"We have continued to share our road map to viability plan and financial updates throughout the year with the Tertiary Education Commission and Te Pūkenga, and are confident these show that we will have achieved our targeted annual savings by the end of this financial year.
"However, it appears some of the messaging reaching the minister and others involved in the decision-making has sometimes been out of date or missing important information."
Asked whether their projections for new students were overly optimistic, Dr Pōtiki said projections for the 2025 academic year were made using the best available data at the time.
"Unfortunately, the trend back towards training-based education has been slower than we expected.
"Despite this, we were still able to hold our domestic enrolments steady at a similar level to 2024, and we have exceeded our international student number target this year."
