Sector disrupted by the pandemic it helped fight

The Southern Institute of Technology had 13,290 students on its books last year. PHOTO: PETER...
The Southern Institute of Technology had 13,290 students on its books last year. PHOTO: PETER MCINTOSH
Between them, the University of Otago, Southern Institute of Technology and Otago Polytechnic have more more than 40,000 students and more than 5000 staff. Together, they add well above $1billion to the regional economy, supporting thousands of jobs. What difference might Covid-19 make to the way the influential institutions face the future? Grant Miller reports.


In late May, University of Otago vice-chancellor Harlene Hayne received a letter from the director-general of health, Ashley Bloomfield.

Dr Bloomfield acknowledged the work of health sciences staff in helping to head off the Covid-19 pandemic in New Zealand.

In recent months, New Zealanders have become used to seeing university staff on their television screens, hearing these experts on the radio or reading their names in print.

They may have seen epidemiologist Sir David Skegg express concern about lack of rigour at New Zealand’s border. They may have read about public health physician Michael Baker expressing his relief when New Zealand went into lockdown. They may have heard infectious diseases expert Ayesha Verrall call for an urgent boost to the system of tracing people most at risk of getting the disease.

Dr Bloomfield singled out for special mention another epidemiologist, Tristram Ingham.

Dr Ingham, a Wellington-based advocate for healthier homes and people with disabilities or asthma, came up with the "bubble" concept so synonymous with New Zealand’s lockdown.

Though the university has had a high profile in recent months — as it did last year while celebrating 150 years since its establishment — it is not immune from Covid-19 fallout.

In the 2019 annual report, chief financial officer Sharon van Turnhout comments that Covid-19 has been hugely disruptive and the financial impact will be significant in 2020 and, potentially, beyond.

The lack of international students resulting from border closures presents an ongoing problem — not just for the university, but Otago Polytechnic and Southern Institute of Technology (SIT) as well.

SIT had 808 international full-time students last year and Otago Polytechnic had 1158. The university had more than 3000 students from overseas.

In each year from 2015 to 2019, a student at the university was more likely to come from overseas than Dunedin. Up to the end of April, $3million of income tied to international students was lost and the university has assumed New Zealand’s border will remain closed for the rest of 2020.

But the institution is large, it is not weighed down by debt, its reputation for teaching and research remains top-notch, students continue to flock from the North Island and the impact on Dunedin’s economy is considerable. It is one of New Zealand’s biggest employers.

A 2019 economic impact report by Strategy, Analytics and Reporting provides some perspective.

The university had 18,840 equivalent full-time students (EFTS) last year and 3996 equivalent full-time staff at various campuses. Its overall direct expenditure was estimated at $1.173billion. The total value added to the Dunedin economy was put at $1.069billion.

When an estimate of flow-on effects, or indirect spending, is included in calculations, the national impact is $2.060billion.

That translates into jobs, and not just for graduates. The Dunedin economy had 11,193 jobs supported by direct expenditure from the university in 2019. Add indirect expenditure and the total employment impact is estimated at 16,583 jobs.

The South’s tertiary institutions, including Otago Polytechnic (foreground) and the University of...
The South’s tertiary institutions, including Otago Polytechnic (foreground) and the University of Otago (at rear) are significant players in the regional economy. PHOTO: SUPPLIED

What about the lingering impact of Covid-19?

University vice-chancellor Harlene Hayne was in lockdown when she penned her piece for the annual report. In it, she points to the past.

"Our founders established this university at a time of change and uncertainty. Inspired by their foresight, we are taking a long-term view to our future.

"I am fully confident in the resilience of the University of Otago."

Otago Polytechnic, too, has grown into an employer of significant size for the region and its worth to the Dunedin economy is estimated to have increased by more than $100million in the past five years. The total Dunedin spend, including indirect expenditure, went from $241.8 million in 2015 to $350.41million in 2019.

The polytechnic had 8552 students overall in 2019, or 5370 EFTS. It had 662 full-time equivalent staff.

Otago Polytechnic had an economic assessment prepared by special projects manager Rebecca Hamid.

The value added to Dunedin’s economy in 2019 was estimated at $193.97million. The Cromwell campus added $4.9million to the Cromwell and Central Otago District economies. Dunedin’s economy had 3093 jobs supported by direct polytechnic spending and, when indirect spending is added, the total is 4172.

Otago Polytechnic chief executive Megan Gibbons describes 2020 as a year of adjustment.

"As this recent economic report shows, Otago Polytechnic’s value to Otago is massive. We will continue to adapt and innovate in an effort to stimulate economic recovery post-Covid."

2019 was a year of distraction as the polytechnic grappled with the Government’s reform of vocational education. Institutes, including SIT, and polytechnics, including Otago, merged this year and uncertainty remains about the implications.

On the Covid-19 front, the ongoing border closure is a significant problem for the polytechnic’s Auckland campus.

A note in the polytechnic’s annual report indicates its Covid-19 response plan includes "reducing operating costs where possible, maintaining cashflow by issuing credits rather than cash refunds, working closely with the bank and negotiating with landlords".

Government moves to scrap apprenticeship fees to encourage people into trades training will help, overall.

"Otago Polytechnic understands the transformative power education provides, particularly in a recession," Dr Gibbons says.

Otago Polytechnic will help stimulate the post-Covid-19 economic recovery, chief executive Megan...
Otago Polytechnic will help stimulate the post-Covid-19 economic recovery, chief executive Megan Gibbons says. PHOTO: CHRISTINE O’CONNOR

Dunedin has shown itself to be a destination for learning. More than half of the polytechnic’s students were attracted to the city — 56% came from outside Dunedin and 54% were from outside Otago. The proportion of students from outside Dunedin at the University of Otago was 86% last year and the proportion from outside Otago and Southland was 77%.

SIT had 13,290 students on its books in 2019 (4895 EFTS) and 433 equivalent full-time staff. Its annual report mentions the possibility of redundancies. The comment was written during the shutdown, when uncertainty was high. SIT had no borrowings and good cash reserves.

All three tertiary education providers had healthy surpluses in 2019.

Prof Hayne says the university’s contribution to the national fight against Covid-19 is "a cogent reminder of our proud and permanent place in society".

"When the Government needed expertise to guide their decision-making, they turned to experts at Otago."

Some are part of the effort to develop a vaccine.

“As we move to recovery, additional experts in humanities and commerce are helping us to understand the political and economic consequences of the pandemic.”

University of Otago academics have helped lead the national battle against Covid-19 
University of Otago academics have helped lead the national battle against Covid-19 and the organisation is resilient, vice-chancellor Harlene Hayne says. PHOTO: PETER MCINTOSH

Prof Hayne says the university will be guided by its motto: Dare to be wise.

"We anticipate that students will continue to flock to Otago for the high-quality education and collegiate experience that we offer. We will continue to assist where we can in the fight against Covid-19 and we look forward to contributing to New Zealand’s recovery."

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