Tertiary education leaders are predicting that New Zealand students will go to Australia after reports that most of our universities are not performing as well as they were.

Of the six New Zealand universities which appeared in the QS World University Rankings this week, Otago was the only one to have improved on last year, and Auckland was the only one to make the top 100.

But there was plenty of good news in Australia where nine out of 22 universities improved. The top one reached the 26th position and five appearing in the top 50.

Some critics say the New Zealand results are at odds with other recently released rankings which show us doing well, but others in the sector say it's time for the Government to step in and do something about increasing funding before our students flee overseas.

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University of Auckland vice-chancellor Professor Stuart McCutcheon said that although Auckland continued to be the best in the country, the trends were of real concern.

"New Zealand universities are continuing to lose ground internationally due to the relatively low level of investment in the sector."

He said our system had the lowest tuition fees in the Western world and the lowest investment per student.

"It cannot be coincidental that five of the six New Zealand universities in the system have seen their rankings decline while the other has essentially remained steady."

Professor McCutcheon said Auckland - which was placed 82nd, down from 68th last year - had about 30,000 students and a budget of about $900 million.

The University of Queensland - which is similar in size - had a budget of about A$1.4 billion ($1.8 billion) and was ranked at 48.

"It won't surprise you at all that there is a quite strong relationship between the amount of money you can spend on each student and the rankings," Professor McCutcheon said.

International students used the rankings to determine the quality of a university, he said, and if New Zealand's continued to fall, they would go to Australia instead.

There was also concern New Zealand students are starting to look at Australia for their undergraduate education. "If the rankings go down in New Zealand and that encourages parents to send their kids to Australia to higher ranked universities, then we will essentially be promoting the brain drain."

QS vice-president John Molony said New Zealand institutions had traditionally preformed well.

But this year's result continued a pattern that appeared last year in which the system appeared to be losing ground as global competition in higher education increased.

He said the top institutions continued to perform credibly, but did not do so well in faculty student ratio, citations per faculty, and international student ratio - three out of four quantitative indicators used in the ranking system.

"The QS World University Rankings last year raised questions over the investment in teaching resources in New Zealand as faculty to student ratios slipped across the sector," Mr Molony said.

"This year you can add a question mark over investment, or perhaps management of research as citations per faculty have dropped at all six ranked institutions."

He said Australia's result was setting its higher education among the leading systems in the world and was "just the type of message the sector will want to project worldwide".

New Zealand Tertiary Education Union national president Sandra Grey said universities needed to invest in staff if they wanted to improve.

"While it is hard for New Zealand universities to have much control over some of the other criteria which are so closely linked to global reputation, the one we have instant control over is our staff-student ratios.

"In New Zealand those ratios have climbed steadily in recent years, and the result is our universities' global rankings are sliding."

Tertiary Minister Steven Joyce said the rankings contradicted other recent findings which showed improvements in three New Zealand universities and a fourth, Auckland, staying the same as last year.

He didn't believe the results from this ranking could be attributed to money, saying the Government had increased university funding by 16 per cent since 2008.

Mr Joyce said he was keen to see universities do better in a number of areas, including international education, but he didn't believe the latest rankings would deter students from studying here.

QS World University Rankings
Australia
Australian National University
2011: 26
2010: 20

The University of Melbourne
2011: 31
2010: 38

The University of Sydney
2011: 38
2010: 37

The University of Queensland
2011: 48
2010: 43

The University of New South Wales
2011: 49
2010: 46

Monash University
2011: 60
2010: 61

New Zealand
University of Auckland

2011: 82
2010: 68

University of Otago
2011: 130
2010: 135

University of Canterbury
2011: 212
2010: 189

Victoria University of Wellington
2011: 237
2010: 225

Massey University
2011: 329=
2010: 302

University of Waikato
2011: 357
2010: 316=