EXPLAINER

Which Australian universities are most at-risk due to coronavirus?

Australian National University is cutting jobs. Picture: Elesa Kurtz
Australian National University is cutting jobs. Picture: Elesa Kurtz

The Australian National University in Canberra and the University of NSW plan to cut staff and spending as their revenues drop because of the crash in income from overseas students.

Around 250 ANU staff have already taken voluntary redundancy but the university was set to cut another 215 posts in the next nine months in order to cut spending by $100 million a year.

And the UNSW said it would cut 256 jobs.

Universities Australia, which represents the country's 39 universities, reckoned 21,000 full-time positions would go this year.

Why?

There are 1.4 million students in Australia's universities.

Of those, 412,435 are - or were - international students, just under a third of the total.

But the market for selling education to people from abroad has collapsed.

Since March when the coronavirus lockdowns started, around 50 students have arrived on foreign student visas each month. That's the figure for the whole country.

In contrast, around 9000 have left each month, taking with them the fees which filled university coffers.

"As a result of border closures, around 87,000 (or 22 per cent) of university students remain outside Australia," Catriona Jackson, the chief executive of Universities Australia, said.

Universities have several sources of money - like the Australian taxpayer and the generosity of philanthropists.

But they depend on overseas students who provide a quarter of their revenue.

The sector estimated its revenue would drop by at least $3 billion this year but it could be up to $4.6 billion.

In effect, international students have been subsiding Australian students, according to Dr Peter Hurley of the Mitchell Institute, Victoria University.

Which universities are vulnerable?

Two academics from the University of Melbourne studied the cash reserves of universities and their dependence on foreign students.

"We found seven universities are most at risk of having their international student revenue losses exceed available cash and investment reserves," Ian Marshman and professor Frank Larkins concluded.

"These are: Monash University, RMIT, University of Technology Sydney, La Trobe, Central Queensland and Southern Cross University, and The University of Canberra."

They pinpointed two in particular: "In absolute terms, two of seven universities at most risk - Southern Cross and Canberra - have very low levels of available cash and investment reserves.

"This adds to their financial vulnerability."

Does the crisis matter beyond universities?

Dr Hurley of Victoria University reckoned universities would lose about $2 billion in tuition fees every six months.

"Such losses are not just a university problem," he said. He reckoned for every dollar lost to a university a further $1.15 was lost to the broader economy because international students were not spending.

"This means the Australian economy could lose more than $40 billion by 2023 because of reduced numbers of higher education international students," he said.

To put it into perspective: "We estimate each six-monthly intake missed due to closed borders will deliver an annual economic blow comparable to when Australia's auto manufacturing industry shut down (worth around $5 billion), or the loss of Australia's $4.1 billion annual vegetable crop."

Is that all?

It is not.

The absence of international students is likely to change the feel of universities. The experience of education has changed.

"The campus is not as vibrant," Dr Hurley said.

Campuses were already deserted as students did more and more learning online. Part of the experience of university was interaction. It's the way ideas could take off and people developing intellectually. It's easier to argue face-to-face than it is screen-to-screen.

And campuses have obviously become less cosmopolitan. The students lose that variety of background. They even look different in that the skin colour of students becomes whiter.

This would be exacerbated if Australian students chose university when they previously would have postponed it to do a gap year abroad.

Is there any other issue?

Just before the coronavirus struck, the federal government had announced a change of funding, increasing spending on subjects deemed more useful to the economy (and where job prospects were better) and a cut for other subjects.

There is some negotiation between the government, on the one hand, and Universities Australia and the Group of Eight (which represents the elite universities).

But the important point is that there was now uncertainty about future funding on two scores, the collapse of foreign demand and the change of government funding.

"What's most destructive is the uncertainty," Dr Hurley said.

Long-term consequences?

Universities were not like factories where production could be ramped up and scaled back easily according to demand. Skills lost were not easy to recover.

Dr Hurley was not as pessimistic as some. He thought Australia's reputation for education was so strong that once the crisis was over and international movement resumed, demand for places would rise again.

"It's just that it will take some time," he said.

This story Which Australian universities are most at-risk due to coronavirus? first appeared on The Canberra Times.

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