The University of Otago has approved a domestic fee increase of 4% for next year as part of efforts to take on what it calls a "perfect storm" of financial pressures.
The increase follows a trend, after fee increases of 6.3% (including 2.3% to cover GST rising to 15%) last year and 4% for this year.
The university council yesterday voted to raise all domestic fees by the maximum allowable 4%, except for the master of business administration (MBA) course - not subject to the Government's maximum fee movement policy - which was raised by 4.35%.
The increases equated to between $184 and $1500 a year per course.
As happened last year, apart from student representatives, the only council member to vote against the increase was Associate Prof Liz Slooten. Jonathan Rowe and Logan Edgar are the student representatives this year.
Speaking at the meeting, chief operating officer John Patrick said the fee increase came amid a "perfect storm" of financial difficulty, as flat enrolments, declining income and increasing costs were all hitting the university at the same time.
This was outlined in the fee increase proposal by financial services director Grant McKenzie, which showed additional income next year - including $4.6 million from the fee increases - of $7.2 million would not meet known cost increases, of $12.2 million.
Mr Patrick said this shortfall meant there would need to be cuts.
The university would not be alone in raising fees and the "indication" was all universities would raise them by the maximum allowable 4%, he said.
Council member Prof Vicky Cameron asked why during an "economic downturn" the university was raising fees as opposed to cutting costs and keeping fees steady?
Vice-chancellor Prof Harlene Hayne replied, saying because the university had already made many cuts, future opportunities for cost-cutting were limited.
Any significant cuts made in future would affect the quality of the service the university provided, Prof Hayne said.
"Rather than doing that, we have opted for an increase in price."
There was "no guarantee" the situation would have improved by this time next year and global financial problems meant the university would probably have to "carefully manage" its finances for the next three to five years.
The council also voted for a slight reduction in its service fee, setting it at $671.67 for Dunedin-based students for next year ($672.14 this year). The portion of the fee allocated to third parties - which largely goes to the Otago University Students Association (OUSA) - dropped from $213.18 this year to $204.49.
Speaking before the meeting, Mr Edgar said that meant OUSA would need to continue to cut costs. "We are going to have to have a look again at how we can be more efficient, but I still think we are going to run a very similar level of services in 2013."
The university's operating surplus for the year to August stood at $13.323 million, which was $344,000 ahead of budget and $5.261 million less than at the corresponding time last year.
Mr Patrick said that was the lowest surplus for the first eight months of the year since 2003.
Despite the negative financial results, the university's balance sheet and lack of debt were a "comfort", he said.
"In my view, we are in a really good space for these times of financial stress."
