Market Herald logo

Subscribe

Be the first with the news that moves the market
  • New data from Universities Australia has revealed that at least 17,300 jobs and $1.8 billion in revenue across Australian universities have been lost due to COVID-19
  • The institute’s Chief Executive, Catriona Jackson, says the higher education sector is expected to lose another $2 billion in 2021 as universities continue to struggle
  • A major catalyst for the falling revenue is the lack of international students arriving in Australia
  • Universities typically rely on fees from international students to stay healthy, but closed borders mean students are no longer able to travel to study
  • A single year of fewer international students could cause multi-year impacts to universities given students would typically study for three to four years
  • As such, Australian universities are predicting ongoing struggles despite a $1 billion cash injection from the government announced in October 2020

New data from Universities Australia has revealed that at least 17,300 jobs and $1.8 billion in revenue across Australian universities have been lost due to COVID-19.

Now, the institute is predicting that these figures will get even worse in coming months, with 2021 not looking to bring any respite to the struggling sector.

Universities Australia Chief Executive Catriona Jackson said combined universities’ operating revenue fell by 4.9 per cent in 2020 compared to the year before. In 2021, this loss is expected to deepen by 5.5 per cent, or $2 billion.

“When compared with universities’ pre-pandemic budgeted revenue for 2020, this loss is more than $3 billion — which is in line with the sector’s estimates made in April last year,” Catriona said.

“The brutal reality of COVID-19 has made 2021 even more challenging.”

While the Universities Australia Chief said it was always expected that universities would be dealt major blows to their revenue from the pandemic, she said this trend will continue for as long as international borders remain closed.

Fewer international students

Typically, universities rely heavily on fees from international students to keep their balance sheets healthy.

As such, a lack of international travel to Australia means a key revenue stream for universities has dried up. What’s more, even a single year without international students could have multi-year impacts on university revenues.

“If an international student didn’t enrol in 2020, the loss would be felt for what would have been their entire three or four years at university,” Catriona said.

“Continuing border closures mean universities face the double whammy of fewer returning students in 2020 and reduced numbers in 2021. The cumulative impact won’t be felt just in 2020 and 2021, but for years to come.”

She said universities have worked hard to limit job losses in any ways they can, including halting infrastructure projects, making “tough decisions” about courses, and saving money where they could.

Nevertheless, COVID-19 has come at a “real cost” to higher eductation.

“Unfortunately, it is probable we will see further reductions this year. The loss of any — and every — one of those staff is personally devastating, bad for the university community, and Australia’s knowledge reservoir,” she said.

This dire near-term outlook is despite a $1 billion cash injection from the Federal Government announced in October 2020 to help the higher education sector stay afloat.

More From The Market Herald

" Inflation hits 3.5 per cent, pressure grows on RBA

The Consumer Price Index (CPI) climbed 1.3 per cent in the December 2021 quarter and 3.5…

" Deloitte: Australian business leaders “more concerned than ever before” about climate change

Almost three-quarters of Australian executives see the world at a tipping point for responding to climate…

" Australian investors funnelled pandemic savings into managed funds over 2021: Calastone

Australian investors funnelled record amounts of cash into managed funds over 2021 as pandemic savings worked…

" Tasmania continues to be the best-performing economy: CommSec

Tasmania continues to lead the rankings as the best-performing state economy in Australia, according to the…