Riley Chance questions whether AUT and Massey University really face financial challenges

By Riley Chance*

Gaslighting - a form of psychological abuse in which a person or group causes someone to question their own sanity, memories, or perception of reality.

MedicalNewsToday.

The book I’m currently writing, Justice, centres around domestic violence (DV). More specifically, how the justice system, through its cynical financial rules, denies women (91% applying for a Protection Order are women[1]) access to justice. When a friend sent through an email about ‘massive job’ cuts at AUT, I did some research and uncovered similarities with a common DV problem – gaslighting.

In a DV context, gaslighting is employed to confuse and isolate. Abusers constantly shift the truth, change their words so their victims question their own sanity, memories, or perception of reality[2]. In the university context, it appeared the narrative from senior managers concerning the financial position of their university was being used to create a crisis and justify the massive job cuts.

Comments from AUT management in the story stood out. Even though AUT’s financial position was sound (according to management) they had “indicated to staff for several months that there are financial challenges”[3]. I decided to do what journalist Ace Marks, my lead character, would do, I went digging.

Financial statements are mind-numbingly boring, accountants might love them, nobody else does. They are however, if you know where to look, easily deciphered. At the end of 2021, AUT had assets of $1.2B and in the last year had made a profit of $12M. In fact, over the previous years they have been raking in profits. In 2020 they made $11M, 2019 - $17M, 2018 - $17M, 2017 - $13M, 2016 - $18M . . . I lost interest after seeing healthy profits over the past decade (TEC financial performance[4]) 

What the figures demonstrated for AUT was a decade of profits and a strong balance sheet. It is no wonder Chris Hipkins made the comment during the recent university strikes – the universities were in “good financial shape”[5]. AUT’s messaging to its staff is an example of gaslighting.

I contacted people at Massey University, asking the innocent question, “Are you guys in financial difficulty?”

I hit a nerve.

I’ve paraphrased one reply – I’ve just endured a diatribe of financial vomit. No mention of education. No mention of students unless it’s a headcount in some nonsensical ratio.”

Massey, I discovered, was in a full-blown financial crisis – apparently. The VC had written about a $47M deficit – ouch! They too were running a proposal for change (disingenuous management speak for cost saving by axing staff) in response to the crisis.

Was Hipkins wrong? I went digging.

In Massey University’s 2019 annual report, before Covid struck, Chancellor Michael Ahie gleefully stated, “Our balance sheet continued to be very strong, which is reassuring given our challenging operating environment. We now have total assets valued at $1.5 billion against a total liability of only $0.3 billion”[6].

I dug through their equally tedious financial reports. At the end of 2021, Massey had assets of $1.5B and had made a profit of $25M. In 2020 they made $6M, 2019 - $9M, 2018 - $15M, 2017 - $38M, 2016 - $5M . . . I’d seen this pattern before. (TEC financial performance[7])   

It looks like Hipkins is right!

I don’t have space to cover the following related points, I note them to provide context. Universities are state owned. Education, like health, is a public good. The government, as a sovereign currency issuer, can invest as much as it wants in education, assuming it believes more education is better than less education. I certainly haven’t read many arguments that the solution to the wave of mis- and disinformation swamping New Zealand is less education.

Back to gaslighting. When people hear a message on repeat – in the universities case the ‘coming financial crisis’ or after the 2020 US election Trump said ad nauseum ‘rigged election’ (and he still is) – the message morphs into an unquestioned truth. More and more university staff talk about the financial crisis. Is this the right time to seek a pay rise? The message is fed back and reinforced. People who felt they knew the situation start doubting themselves. “We must be in a financial crisis because everyone says we are.”

In a DV context, victims of gaslighting are blameless. In the universities case, it is more difficult to comprehend how the messaging is not exposed for what it is – wrong. On the other hand, university staff aren’t all accountants (thank goodness) and should be able to rely on the information repeated from those with management titles.

The simple way to determine the current state of university finances is to ask those at the top of the pyramid, their respective chancellors. In Massey University's case, it is the previously quoted Michael Ahie. In AUT’s case Rob Campbell. Both appear respected in terms of business and governance accumen. Both have reputations worth protecting.

So, Michael/Rob, given Chris Hipkins statement – universities are in “good financial shape”[8] – please answer these two questions.

1. How would you describe the current state of your university’s finances?
2. Will your university experience a financial crisis this calendar year?

2a.   If you have answered yes to question 2, please explain how this has happened given the strength of the balance sheets and decades of strong, positive financial performance.

*Riley Chance, a nom de plume, is an author who also works in education and management.