| Business/Education: SHOWDOWN AT USP? |
Looming pay cut brings uncertainty
Elenoa Baselala
Winds of change are blowing at the University of the South Pacific—bringing in a breath of fresh air and an air of uncertainty amongst staff members.
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Professor Rajesh Chandra... move to cut salary may backfire.
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With Professor Rajesh Chandra taking over as vice-chancellor with an order to rescue it from its financially disastrous state, a number of changes have been announced.
Two major changes are the:
• Reduction in the number of faculties from four to three.
• A five percent pay cut for staff members.
Although this has yet to be finalised, the salary cut is a contentious issue for the staff union—the Association of USP Staff—which has moved quickly to meet with Chandra and his management team with the hope that the salary cut could be avoided.
AUSPS vice-president Dr Morgan Tuimalealiifano told this magazine that the association wanted to know whether the pay cut would make a significant saving to the university.
It is understood that should the pay cut be implemented, it will save some $5 million for the university.
However, sources say the university needs to save between F$10 to F$11 million to get the university back to where it was.
The general feeling is that the pay cut is unfair as it was not the staff’s fault that the university is in a financial crisis.
For background purposes, the financial mess in which USP is in is partly attributed to the high salaries its senior management has been receiving in the last three years, which was not known to the funders of the institution (the taxpayers of the region) nor the USP Council, until it was leaked.
Of the total salary bill, $10 million was spent on paying the previous vice-chancellor, deans and other senior management staff.
The beneficiaries of the hefty pay packets have been defensive and are said to be still receiving their “normal” salary as they are still “under contract”.
If this is so, the union, feels its members should not have a pay cut.
“Why should the rest of the staff members have a pay cut if the senior management team is not taking one?
“After all, they had failed to justify their pay as the university is being forced to restructure because of its financial problems brought on by poor management practices.
“It’s like a ship sinking and those that caused it to sink are just standing by and allowing it to sink further.
“Unfortunately, they have legal rights to receive that pay but it is morally wrong,” a staff member said.
Staff leaving: Tuimalealiifano admits there was a risk of those facing pay cuts leaving the university for greener pastures and better pay.
“Yes, some of the lecturers may walk and look for better jobs if they have are forced to take a pay cut.”
When the previous vice-chancellor Professor Anthony Tarr commenced work with the university, one of his first moves was to upgrade salary levels to be at least compatible with other universities in Australia, New Zealand and the rest of the world.
His reasoning was that the university would be able to attract quality staff and also retain top scholars.
Apart from reducing the number of faculties, there will be some heads rolling.
The new faculties will be Business and Economics; Science and Technology; and the yet to be named but otherwise today known as Arts and Law. It is understood the third faculty will include some programmes from Islands and Oceans, the Oceania Centre and Pacific Studies.
The Pacific Institute of Applied Sciences, Development and Governance commonly known as PIAS-DG catering for post-graduate courses and the Development and Governance programmes will be part of the Business and Economics Faculty.
Tourism from Islands and Oceans faculty is likely to also move to Business and Economics as their programmes are more structured in the business of “selling our culture sustainably”.
The restructure of the programmes has been according to the disciplines and courses they offer.
However, some lecturers are against the restructure as some programmes would be absorbed by faculties that are “broke”.
This is in the case of Islands and Oceans, which as a faculty is financially strapped despite some of its programmes running well financially.
While Chandra was not available for an interview due to his very busy schedule, a long-time academic Professor Randy Thaman has come to the aid of the new VC.
He said, “he brings a breath of fresh air and should be supported as he was trying his best to turn things around”.
Compared with a surplus of about $3 million in 2004, the university went into a deficit of $5.1 million in 2006, $2.3 million in 2007 and a projected deficit of $1.4 million this year.
The university has exhausted its reserves financing these deficits and faces a likelihood of borrowing at the end of the year.
With islands countries who fund the university facing financial crisis of their own, Chandra has pleaded with academic staff to accept the salary cut, which would only be for a year.
“I appeal to our academic and comparable staff, those who benefitted from the salary increases in 2005 and 2007, to agree to a five percent cut from January 1, 2009,” he said in a statement last month.
“We will reinstitute the full salary on January 1, 2011, backdated to 1 January 2010. So the salary cut is effective for only on year. To recognise the sacrifice that staff will make, we will increase the annual leave for staff for 2009 by five extra working days.”
There has been a freeze on hiring new staff unless Chandra approves of it.
For all these troubles, Chandra is getting 40 percent less than his predecessor who was receiving a total package of $470,000 ($370,000 basic salary plus $100,000 allowance—both non taxable).
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