The university council approved its 2022 budget at a meeting this week.
The executive summary notes the university’s 2022 budgeted deficit is $4.7million, an improvement of $8.3million when compared with the $13million deficit budgeted in 2021.
The ongoing challenges of Covid-19, particularly around restrictions on international students, continue to affect the university’s coffers.
International student numbers are budgeted to be 52.7% of what they were in 2019, representing a decline in tuition income of $16.4million since then.
Domestic enrolments are expected to rise 2.1%, from 18,579 to 18,969, leading to a predicted 1.3% enrolment increase overall.
One of the biggest issues flagged in the budget was the rising cost of construction, as the university eyes a significant capital development agenda.
"While the campus development strategy remains consistent, the ability to afford and deliver the capital programme in the post-Covid-19 and new Dunedin Hospital project era is increasingly challenging and it is likely that more frequent reviews of the capital plan, its assumptions and sequencing will be required," the budget notes.
Covid-19 was have a big impact on the cost of construction, including increasing building material costs, supply chain issues and project timeframes blowing out, the budget noted.
"The market is considerably volatile with conditions not seen before."
Costs in Dunedin were expected to increase 5.5% next year.
The budget also noted about 65% of the university’s buildings were more than 40 years old.
"Of note in terms of challenges for the current era is that the university went through considerable expansion in the 1960s and ’70s due to a sector-wide period of expansion in response to the ‘baby boom’.
"As a result, these buildings are now around 50 years old and are generally due for major preventative maintenance and functionality improvements, creating a large block of work and cost."
Another big projected cost was staffing.
Total salary and salary-related costs are budgeted to increase $18million compared with the 2021 budget.
"The increase relates to salary costs transferred from the foundation year and language programmes, estimates for salary settlements and related superannuation costs, retirement gratuities and conference attendance costs."
In September the university called for voluntary redundancies.
Expressions of interest opened on October 4 and close on Monday.
Information technology costs were also increasing.
The university was moving towards cloud-based services rather than IT assets owned and managed internally.
That added about $6million of expenditure to the 2022 budget.
