Wellington Scoop

The cashflow problems at Whitireia and Weltec


There were two different ways of describing yesterday’s $15m payout to Whitireia polytechnic. Whitireia welcomed it as a “cash injection.” But RNZ described it as a “bailout” after extreme financial difficulties, and Education Minister Chris Hipkins said Whitireia had cashflow problems which were “exacerbated by a major building project.”

RNZ reports that a change of administration for Whitireia is being considered:

A financial advisor to Whitireia has been appointed. The government is considering dismissing the board Whitireia shares with the Wellington Institute of Technology (Weltec) and replacing it with a commissioner.

Annual report figures showed Whitireia lost $8.4m last year after full-time student enrolments fell by 540, with 200 fewer international students.

Quoting Chris Hipkins, it seems the issues are wider than student enrolments, and concern not only Whitireia:

“Whitireia and Weltec jointly have also invested a significant amount of money in the new Wellington campus that they have recently opened and the result of that is they have ended up seriously short of cashflow.” Weltec’s financial position was not as serious as Whitireia’s, but the government was watching it closely, he said. “Weltec’s financial viability in the medium-term is also a very serious question.”

Whitireia chooses different words to describe its problems, and even to allocate blame:

Whitireia has experienced significant financial challenges in the last two years largely due to a reduction in international students, driven by a tightening of government immigration policy. Income from international students has provided financial support to Whitireia which has enabled investment into its Porirua campus and Wellington campus providing modern learning facilities for students in a very competitive tertiary education environment…Whitireia has not received government capital funding since soon after it opened more than thirty years ago.

It strongly defends its achievements:

Whitireia is one of the top performing ITPs in New Zealand for course and qualification completions and has the highest category rating for External Evaluation and Review from NZQA.

And on the subject of new buildings:

• Whitireia and WelTec have invested in high quality learning facilities in recent years from their own financial reserves. Whitireia, as a relatively new polytechnic, has not benefited from a strong asset base as per other ITPs.
• International students have always been an important part of the Whitireia operating model to support domestic provision. Revenue from international students has enabled the development of top-class facilities. A substantial decline in international student numbers since 2015 has seen a fall in revenue which has resulted in financial deficits in 2017 and 2018 and a depletion in cash reserves.
• The Council of Whitireia and WelTec has been working on a change programme to reverse the worsening financial trend.

Concern and support has been stated by the Porirua Chamber of Commerce, whose chair Nick Leggett said it’s been known that Whitireia is struggling financially:

“…Whitireia plays a big part in the life of the city. The Chamber welcomes the fact that the Minister is assuring current students that they can complete their courses and that future students should have the confidence to enrol.”

More decisions can be expected from the government, which is designing a new system for vocational education and training that would put the institutes on a much more stable footing. “That is likely to require some quite significant change,” says Chris Hipkins. But he also said “we’re absolutely committed to dealing with these problems and revitalizing vocational education.”

August 31: Staff write to Minister with concerns about financial difficulties


  1. City Lad, 25. August 2018, 18:58

    Willis Bond’s flash new building on Dixon Street and leased by Whitireia without having sufficient students is a recipe for failure. A lesson for landlord and tenant.

  2. Alana, 26. August 2018, 5:25

    Where is the evidence linking government policy around foreign students to this financial disaster that surely predates those policies which only came into effect less than a year ago?