Leon Fourie (Leon de wet Fourie), chief executive of Toi Ohomai believes the institute is coming closer to a break even budget. Photo / File
Leon Fourie (Leon de wet Fourie), chief executive of Toi Ohomai believes the institute is coming closer to a break even budget. Photo / File
KEY POINTS:
The institute recorded a nearly $4m deficit for 2019, but what will 2020 have in store?
Toi Ohomai hopes to shave nearly $3m off its deficit in the next year, despite tough times ahead as the impact of Covid continues to bite.
This comes as the institute released its annualreport last week, , showing it had reduced both its net deficit - $4m down from 2018's $6m - and its operating loss - $3.3m in 2018 to $2.9m in 2019.
Advanced payments from international students helped the institute end the year with a higher than expected cash balance of $33.8m as well as reduced staffing levels in response to the drop in delivery, predominately during the academic management restructure.
Chief executive Dr Leon Fourie said the average annual fee for international students was about $20,000 per year.
"This year we had a strong pipeline of international students coming in from 2019 into 2020 and a big intake in February prior to Covid happening - to such an extent that we have met our international budget by the end of February of this year."
The institute reduced both its net deficit and its operating loss in 2019. Photo / File
However, a further 250 international students could not travel to New Zealand for semester two enrolments due to border restrictions.
Domestic students were now slightly behind last year's enrolments and as the pandemic struck, enrolments slowed down completely, he said.
The New Zealand tertiary education and industry training demand forecasts have indicated enrolments could rise by more than 20 per cent next year.
The institute is "running behind" the domestic student budget and although Fourie believed it could close the gap, he did not think it would get the full numbers budgeted.
"But with the international revenue, we believe we will reach our 2020 budget this year."
Toi Ohomai has budgeted a $1.2m net deficit for 2020.
"We believe it is highly achievable, and we think we will do better than that and get closer to a break-even budget for this year.
"We add the extra cost of the merger plus the declining revenue [from a decline in domestic and international enrollments] so we were always going to have to work through deficits for a number of years."
However, in 2021, Fourie said Toi Ohomai would feel the pressure and be in the same position as many institutes around New Zealand.
Chris Collins, the interim chief executive of New Zealand Institute of Skills and Technology. Photo / File
Chris Collins, the interim chief executive of New Zealand Institute of Skills and Technology, which cares for the 16 polytechnics across the country, said 2019 was obviously a very challenging time for some, and with the Covid-19 impact, 2020 was going to be an even more challenging year.
Collins said past experience had shown polytechnic enrolments increased significantly during recessions as people retrain to find work.
NZIST had also set up a Covid-19 recovery training and skills working group to develop a training and skills strategy that would contribute to the social and economic recovery of New Zealand.
"This is a key priority for NZIST and our polytechnic network. We have strong connections to industry and the regions and are well placed to contribute to the social and economic recovery."
