A new S&P Global Ratings report has ranked the University of Newcastle's (UON) pre-pandemic finances as the most "sturdy" in the country.
The report published last week, titled Australian University Finances Under COVID-19: Degrees Of Discomfort, included a chart that looked at institutions' cash and financial investments to outstanding debt ratio in 2019. It said a ratio of three times or greater was "particularly sturdy".
UON held the top spot on the chart, with a ratio of almost 50.
National Tertiary Education Union Newcastle branch president Dan Conway said the report reflected several comments UON Vice Chancellor Alex Zelinsky had made over the past two years about UON's strong financial position.
Mr Conway said Professor Zelinsky said as late as May 2020 that "strategic oversight and governance of the university have been outstanding and have helped to place our institution in a strong position to face this current crisis".
A year later, Professor Zelinsky told staff last week that expenditure was rising faster than revenue and "if we keep going the way we're going we'll no longer [be] financially sustainable".
He said UON's restructure that includes 120 job cuts would help it meet a savings target of $35 million next year.
Mr Conway said Professor Zelinsky's "two positions are inconsistent".
"It's not just staff, students and the entire community who are questioning management's attempts to cry poor," he said.
"It's experts in corporate finances too... UON is quite literally off the charts. That is, financially speaking, it is beyond healthy."
Mr Conway said if there were problems, Professor Zelinsky should speak publicly against the funding environment, "not attempt to be some corporate manager using knee-jerk and outdated slash and burn methodologies".
Professor Zelinsky said the report identified a "systemic financial issue across the sector".
"While I'm pleased the university is reflected well in this report relative to others who may be having a harder time, we are seeking change to improve our situation, and maintain a strong balance sheet, not accept that it should get worse before we take action," he said.
Professor Zelinsky told media this week while some universities had made large surpluses, others had seen large losses.
"We're in the middle, we've just broken even, we're in a good sound position, but if we don't take action we'll be in that sort of situation where losses will mount and then hundreds and hundreds of staff will have to go," he said.
"That's not where we are and that's not the actions we want to take, we're not in the business of drastic reductions, it's very transparent, moderate change."
Professor Zelinsky said UON needed a "small margin".
"When you talk about a surplus you're talking like $10 million on a revenue base of nearly $800 million, it's a wafer thin kind of profit when we don't keep cash reserves to return them to shareholders, it's all reinvested back in the business."
He said pay rises and increasing electricity prices contributed to a three or four per cent increase in expenditure every year.
"Traditionally universities have tried to get funding by taking more students and trying to get more government funding, but that's struggled to keep up with that inflationary push, so we've used international students to balance the books."
Professor Zelinsky said the current lack of international student enrolments represented a $20 million loss and international student enrolments were down 33 per cent this year compared to last year.
He said the federal government's funding model was "adequate for teaching only" and affected different universities in different ways.
