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Government funding guarantee not enough to plug ‘big hole’ in university budgets

Professor Terry said the package was an “important first step” and the guarantee of government funding had prevented “even higher” job losses.

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“Individual universities are already cutting costs across the board through very substantial reductions in operational spending, deferral of vital capital works, and reductions in senior staff salaries,” she said, adding the measures would be “nowhere near enough” to cover estimated losses of $3 billion to $4.6 billion or more.

International education has become a major revenue source for Australian universities over the last decade. The Group of Eight elite universities now rely on it for a third of their funding. A third of the students are Chinese and enrolments have crashed since the outbreak of COVID-19 in Hubei province.

Conor King, executive director of the Innovative Research Universities network, said the government’s announcement was a “major step” towards protecting the viability of university education.

“But the government package is only a partial answer. It still leaves universities facing a big hole in international student fee income, research funding and other commercial income,” he said.

Mr King said more needed to be done to support international students through the crisis. The current university system is based on both domestic and international students and, without the latter, there will be fewer courses and fewer staff, he warned.

Mr Tehan said the funding guarantee had been the “number one priority” for universities during negotiations. Asked if there would be any further immediate relief, he said: “This is the package to get the sector through the pandemic.”

Universities are also seeking low-interest loans from banks and state governments. Education ministers are discussing support options for international students.

The discounted online qualifications to be provided by universities and private colleges will start in May and are intended for people to use the economic shutdown to develop skills in priority areas, including healthcare, counselling, teaching maths, languages and engineering.

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Mr Tehan said there could be capacity for 20,000 enrolments in the courses and they would “enable people, rather than bingeing on Netflix, to binge on studying” during the pandemic.

Universities are struggling to access the government’s JobKeeper wage subsidy program. To be eligible, they must demonstrate a 30 per cent revenue decline or 50 per cent if their turnover is over $1 billion. They were last week excluded from more generous eligibility conditions for registered charities.

Alison Barnes, national president of the National Tertiary Education Union, said the funding provided by the government was already factored into university budgets and was not new money.

“This will not plug the gaping hole in university finances left by the drop in international student income,” Dr Barnes said.

“We’re extremely disappointed that the government will not enable universities to access the JobKeeper subsidy. Without it, tens of thousands of jobs in the sector are still threatened.”

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