The Warning from an Outgoing Leader

As she steps down from her role as Vice-Chancellor of the University of Auckland after six years, Professor Dawn Freshwater has delivered a stark message to the higher education sector in New Zealand and beyond. In a candid reflection, she argued that universities are losing public respect precisely because of the extensive autonomy they enjoy. 'There's something about the level of autonomy [we have] that also brings with it a degree of scepticism,' she stated, pointing to how institutions in Anglophone countries like New Zealand, Australia, and the UK are viewed less favourably than those in emerging economies where oversight is tighter.

Freshwater's comments highlight a growing tension in New Zealand's university landscape. With record enrolments and financial surpluses at some institutions, including her own, the sector is thriving in many metrics. Yet, persistent complaints about funding shortfalls amid high self-governance have eroded public trust. This debate comes at a pivotal time, as government reforms seek to balance institutional independence with national priorities.

Dawn Freshwater's Tenure at the Helm

Professor Dawn Freshwater's leadership at Waipapa Taumata Rau, University of Auckland, spanned a turbulent period marked by the COVID-19 pandemic, faculty merger controversies, and debates over academic freedom. Appointed in 2019 as the university's first female vice-chancellor, she navigated the institution through lockdowns, providing key advice on infection control and vaccine uptake. Despite challenges like staff backlash over proposed law and business faculty mergers—ultimately rejected by the senate in 2025—and earlier scrutiny over a $5 million vice-chancellor's residence purchase, Freshwater left the university in strong standing.

Under her watch, the University of Auckland achieved operating surpluses, record student numbers, and improved global rankings. She emphasized long-term strategic planning over reactive rewrites, crediting a stable leadership team for these gains. Her departure in late 2025, following an extended notice period, allows her to pursue advisory roles, research in youth mental health, and honorary positions at Auckland, Leeds, and Western Australia.

Understanding University Autonomy in New Zealand

University autonomy in New Zealand is enshrined in section 269 of the Education and Training Act 2020. It grants institutions the freedom to govern themselves, determine academic programs, allocate resources, and pursue research independently, while upholding academic freedom—the right of staff and students to question and test knowledge without interference. This framework, dating back to the 1980s reforms that dissolved the federal University of New Zealand, positions the country's eight universities as Crown entities with significant self-determination.

This autonomy enables innovation, such as specialized AI programs or transdisciplinary research clusters. However, it also means universities bear full responsibility for financial sustainability, quality assurance, and public accountability. Freshwater noted that New Zealand universities possess 'a degree of self-determination beyond the dreams of most institutions,' underscoring both privilege and peril.

The Funding Crunch Amid Enrollment Growth

New Zealand universities are grappling with a funding model strained by rising costs and static subsidies. The Tertiary Education Commission (TEC) provides tuition subsidies based on equivalent full-time students (EFTS), but real-terms funding per EFTS has declined. For 2026, rates see net decreases in some areas, like a 3.65% drop for certain programs after temporary increases expire. Universities report 3-7% unfunded domestic EFTS, with institutions like Auckland University of Technology exceeding targets by 7% in 2025, forgoing millions in subsidies.

Despite enrollment surges—driven by demographic shifts and international students recovering post-COVID—government funding constitutes 37-48% of revenue, with the rest from fees, research grants, and philanthropy. Operating costs have outpaced inflation due to compliance, student support, and infrastructure needs exceeding $8 billion over the decade. Projections indicate widening shortfalls, prompting calls for multi-year grants and performance-linked adjustments.

Public Perceptions and the 'Crying Poor' Critique

Freshwater's observation resonates with surveys showing declining public confidence in universities. While 77% of university income is government-influenced, complaints about underfunding persist despite surpluses at top institutions. Critics argue this 'crying poor' undermines credibility, especially when contrasted with universities in Indonesia or Vietnam, where limited autonomy fosters greater societal deference to expertise.

In New Zealand, issues like grade inflation, staff underpayment allegations, and executive pay scrutiny fuel scepticism. Freshwater urged soul-searching: 'We need to work with our communities... to understand what it is that has been lost.' This loss of 'social licence' risks political interventions, as seen in recent reforms.

Academic Freedom: A Core Pillar Under Scrutiny

Autonomy intertwines with academic freedom, protected alongside institutional independence. Yet, 2025 controversies—such as cancellations of speakers on sensitive topics like mātauranga Māori versus Western science—prompted the Education and Training Amendment Act. It mandates freedom of expression (FoE) statements, complaints processes, and annual reporting from 2026.

All eight universities complied by early 2026, with the University of Auckland approving its statement after community consultation. Cases like microbiologist Siouxsie Wiles' harassment suit and debates over compulsory Te Ao Māori courses highlight tensions. Proponents see safeguards against 'risk-aversion'; critics fear politicization.The Ministry of Education outlines these protections, aiming to foster robust debate.

Government Reforms and the UAG Report

The 2025 University Advisory Group (UAG) final report addressed these issues, recommending a New Zealand Universities Council (NZUC) for strategic oversight, funding allocation, and performance monitoring without eroding autonomy. Key proposals include three-year investment plans, reformed Performance-Based Research Fund (PBRF) as Research Intensity Component (RICU) using completions, income, and citations, and enhanced Centres of Research Excellence (CoREs).

Universities New Zealand (UNZ) welcomed the focus on funding stability but stressed 'university autonomy is fundamental,' rejecting overreach. The government response established an interim advisory committee, signaling incremental changes amid fiscal constraints.Times Higher Education covers UNZ's stance.

• National University Strategy integrated into Tertiary Education Strategy.
• Codes for governance, quality, and qualifications with self-audit.
• Equity focus: Māori/Pacific cohorts projected at 40% by 2040.

Stakeholder Perspectives: Unity and Division

UNZ advocates collaboration over competition, promoting differentiation (e.g., Auckland's research intensity, Lincoln's agriculture). The Tertiary Education Union (TEU) warns against managerialism eroding collegiality, pushing for stronger senate roles. Government, via Minister Shane Reti, emphasizes national priorities like AI and skills amid declining birth rates.

Other vice-chancellors echo Freshwater: Victoria University's Nic Smith highlights funding gaps; Otago's Louise Nicholson stresses research investment. Students, via NZUSA, prioritize affordability and welfare amid mental health pressures.

Case Studies: Successes and Strains Across NZ Universities

The University of Auckland exemplifies autonomy's upsides: strategic stability yielded rankings gains (QS top 100 Asia-Pacific). Conversely, Lincoln University faces deficits from enrollment drops; Waikato navigates merger pressures from Te Pūkenga reforms.

International students (20-30% revenue) buffer shortfalls but expose vulnerabilities to visa policies. Collaborative initiatives, like joint AI roadmaps, show autonomy enabling partnerships.

Photo by Pascal Habermann on Unsplash

Future Outlook: Restoring Balance

Freshwater's call for responsibility—enhancing governance, aligning with communities—offers a path forward. Potential solutions include indexed EFTS funding, philanthropic boosts, and AI efficiencies. Reforms like NZUC could stabilize the system if autonomy-respecting.

By demonstrating value through excellence and relevance, New Zealand universities can reclaim respect. As Freshwater reflected, leadership demands 'moral courage' in crises, ensuring higher education clears paths for underserved Kiwis.

For those eyeing careers in this dynamic sector, opportunities abound in research, administration, and teaching amid reforms.