University responds to report on finances
Wednesday's Otago Daily Times under the headline "New report says uni finances worse than forecast" distorted the actual situation.
The situation, misrepresented by the ODT, compared the actual 2023 final result for the university with the original 2023 budget, which was set back in late 2022. That budget has long since been superseded by the new financial forecast and targets that were worked towards last year. The university’s 2023 result is actually better than the forecast, so the headline is in fact incorrect.
More specifically:
- The article presents a financial situation that was known — and made public — almost a year ago and a forecast deficit we have been talking about since then, as if it is a dramatic development. It is not.
- Comparing the final result for 2023 to a budget, which the ODT knows has long been superseded as the target, we have been working towards, is misleading. The target the university has been working to for many months is the forecast parent result for 2023 of a $25.4 million deficit.
- Our actual result for 2023, a $21.6m deficit, is $3.8m (15%) better than the $25.4m deficit we had forecast. Fair and balanced coverage would have mentioned that fact.
- The $21.6m actual deficit is after the one-off cost of voluntary redundancies of approximately $7.1m. The "normalised" result of $14.5m is pleasingly close to our original budget, an outstanding achievement by our people in identifying and implementing savings in a challenging environment for the sector.
- The figures above are for the university "parent" only, not for the university "group" which includes our Foundation Trust. The full group result for 2023 is a deficit of $300,000 which is better than both the original group budget and the updated group forecast. Fair and balanced coverage would have mentioned that significant achievement too.
- Additionally, with regard to borrowing, the ODT continues to present the situation as one of continual and growing debt. This is despite having information to differentiate within debt at year-end, between long-term and short-term borrowing. Short-term borrowing, for a matter of a few weeks or months, is typically that which bridges the gap from late in the year until tuition income arrives in the early part of the following year.
- On 31 December 2023, the university had total debt of $105m but this sum has now been repaid and our tuition income has arrived. We are now carrying no debt — short or long-term — whatsoever.
- We will begin borrowing again in due course this year, mainly to fund necessary capital asset expenditure. The article refers to "worsening debt" as if all debt is bad. This debt has been long planned for, approved by the TEC, and willingly provided by our bankers on attractive terms.
Given the situation as outlined above, it was misleading of the ODT to link our borrowing long-planned as noted, with TEC concerns over liquidity, which are very specifically directed at other universities whose situations are significantly more challenging than our own. Our relationship and engagement with the TEC remain very open and constructive.
Is our financial situation challenging and in need of action? Of course, and that action is in progress. Our university community has taken significant steps and made material sacrifices to ensure that we reduce costs and increase income on a permanent basis to achieve financial sustainability and wider university success. That should be applauded and acknowledged.
The Otago Daily Times stands by its reporting. Editor.
So which is the highly unsafe road again?
In the ODT (13.1.24) there was an article on the Milford road and how dangerous it is and we should all be bused to Milford Sound.
There was also a reference to an accident and by all accounts it was a medical event, so in my mind that is not an accident involving cars, just an unfortunate happening.
I just wonder who else was interviewed as only two people were mentioned. One
would greatly benefit if the road was closed to independent travellers, so sure he is going to advocate the park-and-ride system.
The other made a valid point that the road was not all about tourism: some people go to Milford for recreational or commercial fishing, and others go for a day hike.
It is still a free country to do and go where you like. Not a great way to welcome people to Milford Sound.
But lo and behold, recently there have been three deaths on Otago roads, so the Milford road isn’t so bad after all. No deaths reported on it lately.
Today’s questions
The questions of the hour for we the people is do we allow the Otago Regional Council and all other councillors to impose completely unaffordable rate increases while they studiously avoid acknowledging the inability of so many to pay? Do we allow councillors who are ignorant of the impacts of their financial impost to continue to ignore the whispers of disbelief from their captive audience?
We need not be audacious in response though justified. We need to say no, we can no longer afford you. We understand consultation is a sham. We must tell councillors they are unelectable.
Come out from ivory tower and be boring
A big rates increase is on the way for Dunedin ratepayers, so the city council decide to buy an old racetrack. Hardly in the category of core services.
Boring as it is, that money could have been used to pay off some of the city’s massive debt. To use an old chestnut, the mudtanks/road drains are constantly blocked in my neighbourhood and locals have now resorted to clearing them during heavy rains. Maori Rd, a road I and many others use regularly, is in a terrible state.
Any chance our city councillors can come down from their ivory tower and have a look at things at ground level? Priorities please.
Bring back cats
Several years ago shop cats were banned. Possibly not the smartest decision ever. Reinstate working cats in shops, and where rats are a problem add terriers to the staff.
Accept the outcome
I refer to Ian Breeze’s letter (ODT 14.224) in which he expresses his Trump-like inability to accept the outcome of a democratic election. It is not the first time I have witnessed such an elitist, champagne socialist attitude that those who don’t share my ideology are morons and stupid people. By the way Ian, more than 50% of voters chose the coalition so statistically they can’t all be below median IQ.
Fairness please
I hope the National-led government is going to come down hard on the wealthy as well as he has promised to get tough on the poorest groups. The top 1% are known to pay the least amount of their considerable income in tax.
Address Letters to the Editor to: Otago Daily Times, PO Box 517, 52-56 Lower Stuart St, Dunedin. Email: editor@odt.co.nz
