Property and equity investments accounted for a small proportion of the total income of New Zealand universities, and such returns were projected to drop by about half this year, The New Zealand Herald reported.
The universities have budgeted to lose millions of dollars overall, but university officials said that, because backup funds could be used as buffers, the funding shortfall should not impact greatly on students, who return for semester one lectures this month.
Asked whether Otago University expected to make "huge losses" this year, John Patrick, the university chief operating officer, said that investment income earned from the university's working capital was budgeted to be just 1.3% of total income this year.
"While some reduction in this income seems likely, given the drop in deposit rates, it is not a significant risk to the university's operations," Mr Patrick replied.
The university had working capital of up to $110 million invested at certain times of the year, and the Otago University trusts had investments amounting to $118 million.
Investment income from the trust funds would also fall this year.
"However, some reserves are available to partly cover this shortfall, and some of the activities funded from this income can adjust their spending if necessary," Mr Patrick said.
The University of Canterbury corporate affairs manager, John MacDonald, said the institution invested in equity markets and used revenue reserves to cover lean years.
This would be called on this year and possibly next year, he said.
Waikato University had budgeted to lose about half of the $3.5 million it was to have received from property and investment income this year.
Waikato had budgeted for a 1.6% return on revenue, rather than the minimum 3% return it had received in previous years, because of inflation, foreign exchange movements and the university's fixed funding regime, Waikato University officials said.
University of Auckland officials said that interest amounted to less than 1% of the university's total income of $800 million, but expected the earnings to drop almost 50%.
Auckland University of Technology has been growing its capital over the past few years, with the aim of developing campus buildings and facilities.
As the developments were funded through bank loans, the university had benefited from lowered interest rates, spokeswoman Tiffany White said.
