Australian universities pulled in $10bn in fees from overseas students last year, according to new figures that point to the financial pressure the sector is now experiencing from international border closures.
Financial statements to be published by the Morrison government on Wednesday show universities made a combined $2.3bn in profit in 2019, before the pandemic, but this result was underpinned by heavy reliance on international student fees.
Universities have been shedding thousands of jobs since Covid-19 triggered border closures, and they are pressing governments to allow a staged return of international students.
The New South Wales premier, Gladys Berejiklian, raised fears last weekend of universities making further job cuts unless governments took steps to help international students come to Australia. She has proposed that a third of hotel quarantine spots go to students and skilled migrants.
To date, however, the federal government has said the priority needs to be helping Australians come home from abroad.
Releasing the new figures, the education minister, Dan Tehan, said Australian universities brought in operational revenue of $36.5bn last year, which represented “an increase of $2.8bn, or 8.2%, on 2018”.
That revenue was also more than the $34.2bn in operational expenses universities incurred in 2019, meaning they were $2.3bn in the black that year.
Without the international student fees, however, they would have collectively posted a loss of $7.7bn.
Universities’ revenue included $12bn in financial assistance from the federal government – such as grants and student loans – and $11.8bn in fees and charges.
But because most domestic students defer their fees through the Hecs-Help loan scheme, which they later repay to the federal government, almost all of the $11.8bn in direct fees and charges last year came from international students.
Employee costs make up more than half of the universities’ spending. Tehan said the $19.2bn in staff costs in 2019 included $9.1bn for non-academic staff, an increase of 6.1% on the previous year.
While most universities were in the black last year, a few were in the red even before the pandemic hit. Operating losses were reported by the University of New England in NSW, the Northern Territory’s Charles Darwin University and the Batchelor Institute of Indigenous Tertiary Education, and the University of Notre Dame Australia.
Labor’s education spokeswoman, Tanya Plibersek, will use a speech on Wednesday to call on the government to give greater funding certainty to universities, according to prepared remarks distributed to media in advance.
“We can support our university science and engineering departments – not reduce their teaching budgets like Scott Morrison did last month,” she will tell an innovative technologies conference being held virtually, according to her speech notes.
“We can guarantee long-term certainty to our researchers – not make them dependent on yearly deals in the budget.”
Plibersek will also call on the government to “actually back in science with consistency and credibility – not just when it’s convenient; not just when we need a vaccine”.
“When our leaders allow scepticism to fester – when they allow backbenchers to post conspiracy theories about hydroxychloroquine – they undermine public confidence in science. And that damages us all.”
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