New Zealand’s universities say they face a massive financial hit from coronavirus, with more than 6500 Chinese students who are enrolled to study here this year still stuck at home.
Sector group Universities New Zealand said just over half of the 12,700 Chinese students which were due to study at one of its eight members had been unable to come to New Zealand due to the travel ban.
Universities New Zealand’s chief executive Chris Whelan said the potential lost fees would be enough to almost wipe out the combined surplus of the entire sector.
Education Minister Chris Hipkins described the comments as “alarmist” but said the situation was being monitored closely and steps were being taken to lessen the impact.
New Zealand is one of a number of countries which has put a ban on travellers from mainland China in an attempt to prevent the spread of coronavirus.
While the ban is being reviewed every 48 hours, it is not clear when it will come to an end.
Whelan said the situation was a “perfect storm scenario” for the university sector because it struck just as the academic year was about to begin.
“It’s at probably the worst possible time of year because it’s when students are due to be travelling to arrive at campuses”, for study this year.
“Even if the travel ban was lifted, let’s say this weekend, there’s still a ton of flights that have been disrupted and a ton of students that will have a challenge making their way to New Zealand.”
Students were putting their lives on hold while they waited to learn when they could study.
In direct fees alone, Universities New Zealand said institutions could face the loss of $170 million in expected revenue, while the students would be expected to spend an additional $340m while living here.
Whelan said the $170m in fees was similar to the $175m in combined surpluses across the eight universities in 2019, which were relied on to help cover rising operational costs.
While he described the figures as “a worst-case scenario”, if the fees were lost “it means a certain amount of belt tightening and some serious conversations with government”.
“International students contribute significantly to the overall quality of teaching and learning that we’re able to offer all students, international as well as domestic.
“If the travel ban extends for a long period of time, and the costs mount up, there will have to be conversations about how do we maintain the quality of the university system when it recovers.”
In a statement, Hipkins said the Government was monitoring the situation closely “and while the university year doesn’t start for a few weeks, we’re already supporting them in a number of ways”.
Steps were being taken to enable students in China to have their courses delivered online, shifting the start dates of study programme and defer enrolments to the second semester.
Meanwhile Immigration New Zealand was “looking at being more flexible about entry dates and refunds” for student visas.
“The health of people in New Zealand has to be the top priority,” Hipkins said. “Alarmist comments are not helpful.”
Whelan said providing distance learning online was simple in the very short term, but beyond one or two weeks, universities needed to offer more complex services such as tutorial support and access to laboratories.
“The thing we need to understand is how long that period of time might be, because that’ll determine how much time and effort we need to put in to support these students.”
The impact was likely to be lasting, with the average student spending more than four years studying in New Zealand.
While the impact of the restrictions caused by coronavirus on New Zealand’s economy is unknown, there have already been immediate hits for the tourism, seafood and logging industries.
Trade experts have warned that China plays such a significant part in global supply chains that the extent of the disruption may take time to become clear and could last for some time.
“We don’t yet know the wider supply chain risks, but I think this does again underscore the importance of a diversified trade profile for New Zealand and our exporters,” Prime Minister Jacinda Ardern told reporters at her post-Cabinet press conference.