Western Australia’s public universities saw their collective financial buffer eroded by almost half a billion dollars last year, in a sign that the enormous 2021 surpluses registered across the country were one-offs.
All four Perth institutions experienced sharp reversals of fiscal fortune last year, according to annual reports tabled in state parliament. Operating margins were slashed by more than half at Edith Cowan University (ECU) and 90 per cent at the University of Western Australia (UWA), while Curtin and Murdoch universities saw healthy 2021 surpluses converted into 2022 deficits.
The four institutions suffered revenue declines of about 10 per cent, mainly because of a downturn in investment earnings that totalled almost one-third of a billion dollars. Expenses rose by some 8 per cent at Murdoch and Curtin, increasing operating costs across the four universities to about A$2.8 billion (£1.5 billion).
The results in Western Australia, traditionally the first state to publish institutional accounts, accord with warnings that the sector’s extraordinary 2021 gains – led by a jaw-dropping A$1.05 billion at the University of Sydney – would not be repeated.
Five other institutions in New South Wales alone reported margins of more than A$100 million last year, while Victoria’s richest institutions – Melbourne and Monash – registered results of A$584 million and A$411 million respectively. But administrators said these figures had been inflated by rollercoaster investment earnings, an extra A$1 billion in research funding and the multibillion-dollar sale of universities’ shareholdings in education services business IDP.
In a National Press Club address last July, Universities Australia chair John Dewar warned that 2022 would be “the worst year for all of us” because of declining international student numbers. “What a lot of universities did was to prepare themselves for what they knew was going to be a very tough 2022, and potentially a very tough 2023. In doing so, they may have generated more surplus revenue over costs.”
Several weeks later, Monash vice-chancellor Margaret Gardner predicted that most universities would report “small deficits or very small surpluses” from 2022, because of investment reversals and “the lowest year ever” for international student revenue.
Last Friday, Professor Gardner told staff that Monash would report a A$78 million deficit when this year’s institutional accounts were published in May. She indicated that Monash’s revenue had fallen by more than A$300 million from its 2021 peak of over A$3 billion, while its expenses had risen by almost A$180 million.
“We have been spending the cash we built up in our operations over the preceding two years to bridge the gap in 2022,” she told staff. “We expect that we will continue to spend from Monash’s cash surplus in 2023.”
UWA has reported a surplus of A$20 million from last year’s operations, down from A$204 million in 2021. ECU’s surplus crashed from A$79 million to A$38 million, while Curtin and Murdoch reported deficits of roughly A$36 million each.
Net investment earnings fell by A$110 million at Curtin and A$184 million at UWA. UWA mitigated its losses somewhat by reducing its staff-related spending by around A$20 million, as did ECU.
Federal government support for UWA declined by A$51 million, as the previous year’s research funding windfall ran its course. But international education losses at all four universities were minimal, with earnings flat or down by a couple of million dollars.
