NZUSA Budget

Some of you will no doubt have heard that the levy from each student to NZUSA has gone up from $2 this year to $3 for 1979. There is also a special levy of 20c per student being called to pay for this year's deficit (projected at over $7,000). Although some will no doubt complain that this levy is excessive, it represented the minimum amount that August Council felt NZUSA needed if it was to continue as a viable national organisation.

The Cause of the Deficit

As early as May Council it was apparent that NZUSA was in financial difficulty. Barely a third of the way through the year and the financial whizz-kids had to expend great ingenuity to produce a budget that allowed for the possibility of matching expenditure to income. History however has shown that Council was unduly optimistic and did not account fully for all the extra costs that might, and therefore did (Murphy's Law) occur.

The other half of the deficit arose from the [unclear: Tils] and Telex spending. Had expenses continued at the level they were running at before Council, the total bill for the year was estimated at $10,250. The total budget allocation was $4,900.

[unclear: The] bulk of the overspending came from two items; the toll and telex bill; and the James Movick Campaign.

The James Movick Campaign expenditure was $3,000 over budget. This $3,000 is the bill from the lawyers for legal expenses arising from the appeal in the Supreme Court.

These expenses simply were not budgetted for at May Council, although it was hoped that the James Movick Appeal would be more successful, and would cover more of these costs.

Council took a very serious view of this overspending and instituted several measures to curtail it. The most dramatic of these is a ban on all toll calls from the National Officers unless specially authorised by the President (or of course made collect). Another measure, of a more permanent nature was to stop use of the telex. As Phil Chronican (President OUSA) put it, "telex should be regarded as a cheap form of toll call, but they are being used as an expensive form of letter", of letter." Another concern of Council in this area was the number of toll calls which were difficult to trace back to National Officers (some 40% of the total bill). Most of these were in the form of transfer charge calls. Accordingly NZUSA is investigating the possibility of not accepting transfer charge calls.

Financing the Deficit

Although it was originally the intention of many delegates (most eloquent of whom was Nigel Petrie from Canterbury), that the deficit for 1978 would be financed, out of the 1978 budget, a much better idea was to call up a special levy of 20c. This was put to Council, and a special Special General Meeting will be held to discuss this proposal, meaning a retrospective levy increase. This had the advantage, as our own Steve Underwood put it, "Of not artificially increasing NZUSA's finances." The argument continued that, if we included a levy to pay for the deficit in the 1979 levy, then in 1980, when hopefully there would be no deficit to recover, there would be an extra $7,000 in the budget, This would of course be spent, so we would be committing NZUSA to an increased level of expenditure in a rather backhanded way.

Another argument proposed concerned the dire situation we would be placed in if we should run another deficit budget in 1979. The Special Levy seemed the safest way of ensuring that none of these things could happen.

The 1979 Budget

If we accept that the James Movick campaign was a "oncer", then the budget for 1979 should have been set around a levy of something like $2.10. Why then the $3.00 levy?

To answer this question it will be easiest if we consider it in two parts. Firstly the increase necessary to keep NZUSA running at its present level, and secondly the increase required to increase the scope of NZUSA's operations.

The STB Bombshell

It was John Judge (Chairman of the Board of Directors of STB) who dropped the bombshell that forced NZUSA to increase the levy merely to keep activities at the same level. This year NZUSA recieved $12,000 from STB from the sale of ISIC cards, and a further $13,737 as re-payment for services of NZUSA that are used by STB (eg. typists, xerox facilities etc.). Judge announced that it would not be possible for STB to continue to pay NZUSA any of the $12,000 from the sale of the ISIC's. He said that "in my opinion NZUSA has never been entitled to this money", further commenting that he thought the members of the Board would be liable to legal action against them if they continued to authorise the payment in view of the dire financial situation of STB.

Of the $13,737 paid for the use of NZUSA services, Judge said that he thought the amount charged was excessive and would have to be re-negotiated. His estimate of the bill was in the region of $7,500. Thus in five short minutes, Judge managed to cut NZUSA's budget by over $18,000. If NZUSA is going to maintain its activities into 1979 it is apparent that this income must be aquired elsewhere, and the only elsewhere is through levies. Assuming that there will be the same number of fee paying students next year as this (about 38,000), this means a levy increase of 47c per student.

Increased Costs

It is a fact of life that few students will have missed, that costs are skyrocketing at an alarming rate. NZUSA recognised, through increased budgetary allocations, that costs in printing, air travel, phone costs and salaries will increase. Some of these increases are anticipated to be considerable (12½% increase in fares by Air New Zealand, and increase in toll charges of up to 50%, salaries increased because of the general wage order, by about 7%).

Another significant budgetary allocation was the creation of a Contingency Fund of $1,000. The reasoning behind this was that once NZUSA sells its building, it will be far more difficult for it to raise overdrafts (having in the words of Vincent Burke from NZSAC, "only a couple of typewriters, desks and filing cabinets" as assets). For this reason Phil Chronican proposed setting up the fund which could be used to cover most small cases of overspending.

Increased Expenditure

While people seem happy to accept that Administration costs are increasing, they seem not to appreciate that the costs of campaigns are also increasing. For this reason, for the first time since the 1976 budget was set in 1975, it was agreed that there should be a general increase in the Campaigns Budgets.

The budgets for National campaigns and International campaigns were each increased by about $500. The budget for Education campaigns was decreased by about $50, but as there will not be any highly expensive bursaries campaigns next year (unless, of course, there is evidence that students will support such a campaign), this represents a major increase in allocation for campaigns on such issues as Assessment, Teacher Training and Welfare. With a Campaigns budget of around $2,300 Education is still the largest Campaigns budget by about $1,300.

WRAC recieved an extra $200 odd, mainly as an allocation for the co-ordinator to travel around all the campuses once. The total NOSAC budget was little changed, but within the overall allocation there are some changes. Travel is increased by about $399, the final allocation of $1,182 being the cost of air-fares for the various representatives for three meetings (excluding Councils). The Campaigns budget suffers a $50 cut, which NOSAC volunteered, and publications were cut by $300.

The reason behind this controversial decision are quite simple. NOSAC stated that it was their intention to do six newsletters in 1979. According to the [unclear: estimate-ates] given to Council ($84 for 3,000 newsletters of 2 pages each) allowing for a 4 pages newsletter, this gave a total projected expenditure of about $600, and the corresponding budgetary allocation was made. The reason for the "on paper" reduction was that NOSAC had included, in their projected costs the charges for freight and technical supplies, which are in fact paid for by NZUSA under its general Administration budget.

In conclusion, the increased levy does not imply that there are vast extra funds available, nor that the budget is padded, because much of the increase in the levy is taken up with meeting increased costs and decreased income. However this August Council the first steps were taken to put NZUSA's financing back onto a rational basis, and as such it is a move that should be welcomed.

Peter Beach