The new four-year modelling underlines the sustained effect of Covid-19 on university finances in the years to come, with UA updating previously estimated losses for 2020 of between $3 billion and $4.6 billion to between $3.1 bn and $4.8bn.
“We can’t pretend that won’t have a big impact”
The new estimates suggest the future is “bleaker than we first thought”, explained UA chief executive, Catriona Jackson.
“We can’t pretend that won’t have a big impact. Not only does that revenue support the staff and facilities to educate the next generation of skilled workers, but it also pays for much of the research and innovation that keeps Australia internationally competitive,” Jackson said.
“If there’s less research on campus we will be less equipped to deal with crises like Covid-19 and bushfires in future.”
According to separate research completed at Centre for the Study of Higher Education at The University of Melbourne, seven Australian universities are placed in a high financial management risk category: Monash, RMIT, University of Technology Sydney, La Trobe, Central Queensland, Southern Cross and Canberra universities.
Researchers suggested that a decade of booming international student enrolment from 2009-2018 – where revenue increased from $3.4bn to A$8.8bn (up 260%) – created “significant threats” for the sector, such as over-reliance.
The University of Melbourne modelling predicted losses of international student fee revenue amounting to A$18 billion by 2024.
The academics suggested institutions identify and build additional revenue streams, as well as introduce spending reduction strategies, including scaling back of uncommitted capital works and major projects, and review staff costs.
Jackson explained that the predicted $16bn losses by 2023 – based on international student revenue declines of 20% in 2020, 40% next year, 30% the year after that, and 20% in 2023 – meant a “substantial portion” of Australia’s research is in jeopardy.
Independent estimates that between $3.3 billion and $3.5 billion of university R&D activity annually could be at risk, UA highlighted.
“Great Australian researchers have been responsible for so many job-creating, life-saving innovations including A vaccine for cervical cancer, IVF, soft contact lenses, the bionic ear and spray on skin for burns victims. All the result of Australian university know-how,” Jackson said.
Jackson added that UA has called on the Federal government to directly invest in research to ensure “Australia emerges in a stronger position after this pandemic”.
However, the University of Melbourne’s Centre for the Study of Higher Education study indicated that significant increases in public funding remain “unlikely”.
“Until now universities have been increasing their investment in research and innovation. The danger is that if universities are unable to continue funding this activity, Australia’s ability to innovate its way out of the Covid-19 recession will be severely hampered,” Jackson continued.
“You can’t have an economic recovery without investing in research and development.”