The current restructuring of the University of New England (UNE) was a long time coming according to two suspended Armidale councillors.
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Last month Vice-chancellor Brigid Heywood announced that the university would start a redundancy program to reduce its annual costs by $20 million.
Debra O'Brien said government funding cuts hit rural areas hard and the need to restructure the UNE was an excellent example of that.
"The funding cuts to the universities have been happening over a long period," Ms O'Brien said.
"Over the last couple of decades when you see how much the UNE has decreased its services, it is really sad.
"Unless we fund our universities, all across Australia - but particularly here, then it is going to leave us vulnerable because we are a university town.
"We see funding shortages in all sorts of areas: TAFE, the health industry and primary industry - right across the field there are government cuts everywhere, and government cuts hit regional areas much more than big cities because we actually rely on government services much more.
"If we have properly funded services such as the university, health care and primary industries, then there are people with money that can support small business.
"The government should be supporting small business and services, particularly in the education sector."
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John Galletly thinks the restructure of UNE is needed.
"It's a bit of a dicey one, but I do think there is a bit of deadwood, and while it's not going to do the town much good, maybe, in the long run, it will be the best thing for the university," Mr Galletly said.
"We can't really stick our noses into how they run their business.
"Six or eight year's ago they reduced the number of semester terms from four to three times per year, and that knocked our economy around big time.
"A lot of shops and pubs lost about 10 per cent of their business."
But the impact of the current restructure on the towns' population may not be as bad as we think Mr Galletly said.
"I'm presuming it will only be a percentage of staff that are Armidale residents because there is a lot of higher up ones that are fly in and fly out (FIFO)," he said.
"I don't know what the percentage is, but it might be a lot of them that take up the voluntary redundancies - and they're usually the high scale ones so if it is a lot of them, it won't take much to achieve the $20 million in saving."
A spokesperson for the UNE said the number of FIFO staff was small and 82 per cent of current employees had Armidale residential postcodes while 12 per cent resided outside the town.