Universities deny investment and salary claims

Universities New Zealand has rejected a report alleging university leaders do not properly invest in staff and that salaries at the University of Otago have fallen 10% in real terms since 2008.

The Tertiary Education Union report released earlier this week found personnel expenses grew by 7% across the country's eight universities between 2008 and 2020, adjusted for inflation, while total operating expenses grew by 18% and total operating revenue by 25% .

Business and Economic Research Ltd (Berl) provided data for the report, while commentary was largely from the union.

"The Berl research shows that operating expenses have increased since 2008 but the slowest growth in expenditure has been on staff costs, even though staff numbers have continued to grow during this period," the report said.

"[The] TEU is deeply concerned by the overall drop in expenditure on staff."

Salaries had not kept pace with inflation, it said.

"For example, at the University of Otago, in real terms, average salaries have fallen by 10% in the 13 years that the Berl data looked at.

"For the University of Auckland, that figure is 17%."

Under-investment in staff was contrasted with a rise in spending on assets, the report said.

The University of Otago did not comment on the report, but provided a response from Universities New Zealand chief executive Chris Whelan

"We don't agree with the analysis or conclusions reached by Berl or New Zealand's Tertiary Education Union," Mr Whelan said.

The report seemed to assume that salaries should be linked in some way to overall expenses.

"This just isn’t how salaries work in any organisation including universities."

However the suggestion that university costs have risen faster than salaries was incorrect, and these had remained very similar, he said.

"In 2008 personnel costs made up 59.7% of university sector expenditure. By 2020 it was a comparable 57.8%."

New Zealand universities had kept pace with earnings across the rest of New Zealand's labour force, he said.

"Over the 2008-2020 period covered by the Berl report the expenditure on personnel across the New Zealand university sector went up by 49%.

"Over the same period median weekly earnings for all wage and salary earners in New Zealand went up by 50%."