University of Otago vice-chancellor Prof David Skegg says he and the heads of other New Zealand universities would like to see the Government adopt the Australian model and provide additional funding for university building programmes.
Otago's 2009 budget presented to the university council meeting yesterday showed the institution was expecting a budget surplus of $19.6 million next year, down $6.1 million on the anticipated 2008 surplus of $25.7 million.
Prof Skegg called the surpluses "satisfactory, given the very difficult financial environment in which we are operating".
However, the university planned to spend $91 million on capital items next year, including $51.5 million on building projects and infrastructure upgrades, and had to fund capital expenditure from operating surpluses, investments, savings or borrowings.
Otago needed to achieve significantly larger operating surpluses in order to fund necessary capital expenditure, Prof Skegg said.
"As New Zealand's most research-intensive university, Otago has an urgent need for more buildings and equipment. It has become extremely difficult to achieve adequate surpluses in the current financial environment in which university are not fully compensated for inflation, and [tuition] fees are capped."
Australian universities were not expected to fund capital works from surpluses and Prof Skegg said he and other vice-chancellors wanted the New Zealand Government to do the same.
Discussions had already been held with the new Government but it was too early to say what the response might be.
Prof Skegg warned there would be "more difficulties" for universities if government assistance was not forthcoming.
Among major capital works already under way or proposed for 2009 are construction of a multistoreyed psychology building, and improvements and additions to several computer science, health sciences, and science buildings.
The university is also committed to expenditure of about $50 million sometime in the next few years for sports, student health, child care and possible research spaces at the Otago Stadium site near Logan Park.
It also wants to double the size of the dental school.
The cost of that project has not been released yet.
It will be many millions of dollars, but the university hopes for some government funding.
Otago had government approval to borrow up to $30 million for capital works, Prof Skegg said.
However, he said he was confident capital works in the next couple of years could be met from existing funds.
It was "almost inevitable" the university would have to borrow "to provide the campus . . . we would like it to be going into the future", chancellor Lindsay Brown said.
