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Salient. Victoria University Student Newspaper. Volume 36, Number 1. 28th February 1973
Student Funds for Houses
Student Funds for Houses
The Executive of the Students' Association have finally come up with some progressive ideas about how best to use their accumulated funds. The following article, written by Treasurer Byron Cullen, explains where your fees go, what money the Students' Association has, and the best use for this money.
(1) Where your Fees Go
| (a) | Association General Account |
| (b) | NZUSA |
| (c) | Union Building Extension Trust |
| (d) | Publications Board |
| (e) | Union Building Fund |
| (f) | Union Maintenance Account |
The entire Association General Account (a) is spent every year. This $6 provides the revenue from which the following expenditures are made: Accountancy and Audit, Elections and New sheet, Executive Activities, Honoraria, Legal Fees, Levies, Office Expenses, Stationery, Wages, Sports and Cultural Grants, Orientation, Tournaments; and Capping Activities.
Obviously there must be a careful and planned allocation of money amongst these activities. This is done in the budget which is a vague document setting out the amounts we think will need to be spent in the coming year. As the money we receive is limited, an increase in the amount allocated to one area must accordingly result in some other area receiving less. Sectarian interests often mean that the budge is a focus for debate—the venue being the AGM held in March. Make sure you come and observe the fireworks this year!
| (b) | The $1 levy collected for NZUSA is absorbed into the bureaucratic machinery with seemingly few benefits (except travel) accruing to the average student. NZUSA had better be careful it doesn't become constipated (i.e. orders from the top which are never referred to the students themselves |
| (c) | The $1 levy for the Trust fund is forwarded to the two trustees of the Association who invest the money as they see fit. For some reason it has always been thought that the students cannot touch this fund This is incorrect. The Executive has a man date to spend this fund as it likes. Incidentally, the current balance in this fund is about $39,000. |
| (d) | Would you believe that the $1 for Publications is the very money that went toward the printing of the student newspaper you are now perusing (but probably not reading?!) The money is forwarded to the Publications Board who spend it where they think it will bring the greatest benefits (on editors etc). |
| (e) | The Union Building Fund is an elusive animal which no student has yet sighted. It reportedly lurks somewhere within the Stout Building. The money is collected by VUW and "looked after" until we find a new building to erect (eg. the Union Tower Block-to be erected in approx. 1976). The current balance in this fund is about $140,000. |
| (f) | The Union Maintenance levy is also administered by the University, and used to pay the wages of Union staff, the catering service, and the general running expenses of the Union. |
What Money we have
There are therefore 3 areas where large amounts of money have been accumulated. The first of these is the Development Fund. This has built up over a long period of time because Executives in past years have underspent their budgets. The money has been invested in loans to student organisations (eg. Rugby Club and Ski Club), interest bearing loans, and shares. The Executive has power to spend this money without any restriction. The total of this fund stands at about $29,000.
The second area of accumulated funds is the Union Building Extension Trust fund. The balance in this at the moment is about $39,000. The Exec, has power to spend this money as it wishes.
The third area of accumulated funds is the Union Building fund, held by the University. Unfortunately, the University is not allowed by law to even lend it to us.
In summary then, the Exec. can draw from the Development and Trust funds about $64,000 in cash. The other $4,000 is not immediately available, and the Exec. is unable to use the $140,000 in the Union Building Fund.
What we should Do With It
Is our money invested in such a way as to maximise the benefits accruing to students? I do not think so. One may well argue that the $3,000 which we get by way of dividends and interest is a valuable source of income for the Association and therefore for the students. I submit, however, that there is a much more beneficial way of investing our money. We are all aware of the accommodation crisis in Wellington, if the Students Assn were to buy its own houses there would be the following advantages:
| (1) | Rent would be charged so as to breakeven on running costs, and a low rent would result. |
| (2) | One of the running costs would be the "interest lost" factor. Thus, the Assn could still recoup the additional revenue it has been receiving through dividends. |
| (3) | The Assn would be able and entitled to join the "Landlords Assn" and stir where necessary. |
| (4) | The purchase of any land in Wellington is a worthwhile investment (as the land speculators know) and would ultimately provide a capital profit on our money far exceeding shares or interest bearing securities. |
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Photo by Hilary Watson
The Exec, is unanimous in their opinion that shares must be sold and houses bought. It only remains now to find the right properties.
What the University Could do
The $140,000 sitting in the Union Building Fund will be used in about 3-4 years on the proposed Tower Block. At present however it is only earning about 3% interest per annum. This money could be used to finance the purchase of houses around Kelburn for the purpose of student accommodation.
Because of the low interest rate which the money is currently earning, the rents charged on these houses would be very low as compared with buildings financed by a first mortgage (8%). I would like to see this idea brought up at Council and the idea actioned if possible.
As a closing note, if you're a reformed land speculator and you want to sell a few houses cheap to purge your conscience—we might be interested.