The Australian National University (ANU) is facing a $225 million financial shortfall this year, with vice-chancellor Professor Brian Schmidt calling the figure a “sensible prediction”.
- The ANU will earn $150m less than anticipated this year
- The university will also spend $75m more than planned, due to 2020’s crises
- It is unclear whether cost-cutting will affect courses, but senior staff will take a pay cut
Professor Schmidt announced this morning that the university would earn about $150 million less than expected in 2020.
Additionally, he said the ANU would “spend about $75 million more than we planned due to the crises we have endured this year”.
“The $225 million gap that creates is what we now need to address,” he said.
The significant financial losses are largely due to coronavirus — the closure of Australia’s borders and subsequent loss of international students due to COVID-19 travel restrictions has hit university finances hard.
However, the hail storm in January, which damaged dozens of buildings and destroyed years of academic and scientific research, has also had an impact, as has the summer bushfires.
“The fires, smoke, hail and coronavirus we’ve endured together have all increased the cost of running ANU,” Professor Schmidt said.
“I don’t think any of us were expecting something like the COVID-19 crisis to come in quite so hard.”
Cost-cutting ‘will involve sacrifice, but every saving will help’
Professor Schmidt said the ANU would borrow money initially, and outlined ways the university was looking to cut costs in order to keep running through 2020 and 2021, and even into 2022.
He said he had asked each faculty to look at the savings it could make, rather than “running a chainsaw through everyone evenly”.
“The areas that we’re looking at cutting are things like travel, but also restricting new expenditure,” he said.
“I need everyone to think carefully about every ANU expense and ask, ‘Is this essential to our mission?’
“If it isn’t, we need to save the money. This will involve sacrifice, but every saving will help.”
Professor Schmidt also announced that he will take a 20 per cent pay cut; the ANU’s senior management will take a 10 per cent pay cut; and a staff pay rise scheduled for July could be put on hold.
He said the university was “very keen” to avoid compulsory redundancies, and said “that would be a last resort”.
“We are really going to not be leaving any stone unturned and, from my perspective, keeping as many staff as part of the university as possible, is right at the forefront,” Professor Schmidt said.
However, it is still unclear how, or whether, the budget cuts will affect courses.
“We haven’t made any decisions yet,” Professor Schmidt said.
“We teach a huge number of courses each semester, and some have very small numbers of attendance … I’m talking about one, two or three students.
“We are really trying to focus on our students and the education they get and not compromising that if we possibly can.”
‘Warm, fuzzy feelings don’t pay the bills’
National Tertiary Education Union ACT division secretary Cathy Day expressed concern about the ANU’s cost-cutting plan, saying there was no indication what staff would gain from giving up some of their salaries.
“All he is saying is that ‘we’re all in this together, you get a warm fuzzy feeling if you give up your pay’,” Ms Day said.
“The thing is, warm, fuzzy feelings don’t pay the bills and we would want to see some concrete proof that by giving up the pay rise, that would actually help to preserve the jobs of other people, and we’ve seen no evidence of that.”
Ms Day said the university needed to offer a more “sustainable solution”, adding the measures would negatively impact the quality of students’ education.
“ANU is the richest university in Australia — every year it gets $200 million in from national institution grants from the federal government,” she said.
And while she credited the institution for guaranteeing casual jobs throughout term one, she said there was now a lack of transparency that needed to be rectified.
“Their plan is to cut things like casuals and that means bigger class sizes, it means people working harder,” she said.
“The people who are already there on site with ongoing contracts are going to have to have bigger class sizes and that means a worse student experience.”
Universities across Australia are suffering
While universities across Australia have different exposures to the coronavirus-induced downturn, revenue is estimated to drop by $3 billion this year collectively.
That could cause the loss of up to 21,000 jobs, with 7,000 estimated to be research-related academic positions.
The head of Universities Australia, Catriona Jackson, said the revenue hit would be felt for years.
“If you lose international students for this year, then you don’t have a second year … third year, the year after,” she said.
“Those international student markets may never recover.”
And, a research paper published earlier this month warned that the disruption’s impacts would be disproportionately felt by junior researchers, recent graduates, early-career and mid-career researchers and women.