Posted tagged ‘New Zealand’

Considering New Zealand

October 18, 2010

There are many similarities between New Zealand and Ireland (and perhaps Scotland). Ireland’s population is 4.2 million, as is New Zealand’s (Scotland has 5.2 million inhabitants). New Zealand, like Ireland, formerly had a high dependence on agriculture, and indeed like Ireland sold most of its key agricultural products to Britain (which negotiated a special arrangement for NZ produce when entering the EU). New Zealand’s GDP, at US$116.5 billion, is lower than Ireland’s US$ 190 billion or so, but like Ireland it has over recent years experienced a highly damaging recession, with the economy contracting very substantially over five quarters – indeed New Zealand’s recession began earlier than that of most industrialised countries.

New Zealand has eight universities, Ireland has seven. Again as in Ireland, there have been gradual cutbacks in higher education funding over the past few years, so that funding per student was in decline. But unlike Ireland, as New Zealand seeks to come out of recession it is increasing rather than cutting higher education funding.  A joint report was commissioned by the government and Universities New Zealand, and this recommended that an additional $40 million should be invested in university teaching and research. According to the study, this investment will produce an increase in GDP of 0.12 per cent. This might not seem much, but when growth is on a knife edge it can make a crucial difference. In any case, I suspect that the indirect effect would produce a much larger GDP increase.

There are certain realities we now need to face. However much every sector in Ireland needs to be re-assessed with a view to finding savings, cutting higher education will have a knock-on effect on economic performance, as well as creating social problems. Ireland still needs to compete globally – in fact, it needs to more than ever – and this is not the time for reductions in resourcing. If the exchequer cannot produce the necessary funding (as may well be the case) we have to face up to the imperative to find the money elsewhere. This is a game with very high stakes, and the penalties for getting it wrong may be severe, and will not be amenable to easy or short term correction.

The New Zealand comparison should be instructive.