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Universities boast record operating surpluses

Australia’s 39 universities reported record operating surpluses in 2010, the government has announced.

According to a finance report published on 13 November, the total surplus for 2010 stood at AU$1.95 billion, an increase of 8.1 per cent since 2009.

The report, “Finance 2010: Financial reports of Higher Education Providers”, shows that revenue for the sector increased from AU$19.9bn in 2009 to AU$21.5bn in 2010—an 8.2 per cent increase.

Government funding for universities, including student loans, also increased by 8.9 per cent over the same period to AU$12.4bn.

A total of 18 Australian universities returned surpluses of more than AU$50 million in 2010.

However, two institutions recorded deficits: the Batchelor Institute of Indigenous Tertiary Education (-AU$0.5m) and Central Queensland University (-AU$6.3m).

“Today’s report shows universities are well placed for the start of the demand driven funding system in 2012,” said Chris Evans, the tertiary education minister.

But according to the National Tertiary Education Union, the surplus figures do not provide an accurate picture since they do not reflect the full extent of universities’ capital expenditure, such spending on property and equipment.

“The data released yesterday shows that universities spent approximately AU$2.7bn on capital expenditure, the vast bulk of which, for accounting reasons, is not included in the calculation of their operating surplus,” said Matthew McGowan, NTEU national assistant secretary. “The public needs to be careful as to how it interprets university financial data, because the data also shows that in 2010, 23 universities experienced negative cash flows, that is, they spent more than they earned, with the sector as a whole reducing its cash holding by approximately AU$100m,” he added.