Australian institutions respond to speculation that Covid-19 has left them facing high financial risks
Universities in Australia have criticised a report that claims seven institutions are facing high financial risks as a result of declining international student enrolments linked to the Covid-19 pandemic.
Their comments follow media coverage by The Age—a Melbourne-based former Fairfax news outlet that is now part of the Nine Entertainment network—of a data modelling study by University of Melbourne higher education researchers Ian Marshman and Frank Larkins.
The seven universities named by the Marshman and Larkins report are Central Queensland, La Trobe, Monash, Royal Melbourne Institute of Technology, Southern Cross, the University of Canberra and the University of Technology Sydney.
The Nine Entertainment news report claimed that La Trobe University, which has campuses in Melbourne and regional Victoria, was “at risk of going broke in a matter of weeks unless it secures a financial lifeline from the banks”.
“This is not correct. The university is not at risk of going broke,” vice-chancellor John Dewar said in a statement posted on social media and the university’s news website.
“The university is in productive and ongoing discussions with its three banks for increased facilities that we believe will meet our funding requirements in the short term.”
The Marshman and Larkins report did not claim that the seven universities it named were facing insolvency. It said that all Australian universities “face very serious challenges with varying degrees of financial management risk”.
“Another 13 universities are assessed to face medium financial management risk. The remaining 18 universities, just under half of the total sector institutions, have been categorised as facing management risks that are of lower severity,” it said.
“Universities are predicted to face either high, medium or low risks over the period from the present to 2024, because of the loss of overseas fee revenue. Other sources of potential revenue loss and other Covid-19 related expenses have not been modelled in the present study.”
However, a University of Technology Sydney statement says the report “vastly exaggerates” the university’s financial risk exposure and does not include recent savings measures.
The University of Canberra also claimed the report did not “properly assess” the university’s financial position.
In his statement about media coverage of the report, Dewar said that La Trobe had made “significant cost savings of $87 million in 2020, including initiating a voluntary redundancy program which is expected to deliver savings of $20m in 2020 and $40m in both 2021 and 2022”.
“In addition to this, the proposed Australian Universities Job Protection Framework—a temporary variation to La Trobe’s enterprise agreement negotiated with the National Tertiary Education Union—is one of a number of measures which, if adopted, will help the university save jobs.”