The Australian National University will spend $25 million moving its medical school 500 metres across campus while imposing severe funding cuts across the institution, including axing 230 administrative staff positions.
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Plans are being drafted to refurbish the old heritage-listed John Curtin school of medical research, which was vacated in 2011, and to build a new $144 million state-of-the-art custom-built research centre next door.
ANU executive director of administration and planning Chris Grange confirmed the new medical school would be completed in 2015, but the $25 million came from the capital works budget and the decision to move the school had been approved by the council two years ago.
Mr Grange said the move was necessary because of massive growth in student numbers in the medical school, which was originally established to cater for 280 students but had now grown to 400.
He also noted the old John Curtin school was heritage listed and could not be left empty indefinitely.
''We are required to protect and maintain the buildings and had to do something with them. But by moving the medical students there, we are co-locating them with the new John Curtin school - putting teaching and research together,'' Mr Grange said.
In terms of the ANU's financial position, he said the capital works spending did not affect annual expenditure, which was at the heart of budget measures outlined by vice-chancellor Ian Young.
On Tuesday, Professor Young issued the university's preliminary budget for central administration and the colleges next year, showing funding would be reduced by $11.6 million on last year.
The cuts are part of measures designed to deal with a $51 million shortfall in federal government funding to the ANU.
But the National Tertiary Education Union said spending $25 million moving the medical school across Sullivan's Creek and a small oval was insulting to the entire ANU community.
The union's ACT division secretary, Stephen Darwin, said: ''This has not gone down well on campus as it is a clear indication of where management's priorities lie - with expensive capital works and buildings rather than the staff who make the university run and the services they provide to the ANU community.''
Mr Darwin said that the union had already appealed to management to defer any multimillion-dollar capital works spending.
''We suggested ways to grow ANU income through broadening programs and research opportunities, delaying high-cost renovations, selling unneeded assets, improved fund-raising and engagement with government. All of this has been largely ignored,'' Mr Darwin said.
He said the ANU's 2012 annual report showed a retained surplus of $870 million on top of the $1.02 billion in reserves, ''which means the so-called financial crisis is largely confected''.
An ANU spokeswoman said these figures were wrong, however, and the $870 million was part of $1 billion reserve.
Mr Darwin also said that the surplus included $100 million of non-cash depreciation, amortisation and write-downs that ''distort the overall outcome and ignored positive re-valuations''.
But Mr Grange said the investment in the new medical school would improve teaching and learning for medical undergraduates, capitalising on its success in drawing top students across the region.
While the federal government at present had a cap on the number of medical degree places Australian universities could offer, Mr Grange said the new school would allow numbers to grow over time if the cap was raised.
''This funding is for academic purposes, for teaching medical students, and part of our commitment to continue to support teaching and research and make savings in the non-academic areas of the university,'' he said.
But Mr Darwin said the college of medicine, biology and the environment was slated to lose $1.04 million in its operating budget under the draft budget released this week and any management claims it was investing in the quality of the student experience were undermined by this fact.
