Tight times for Deakin

Uni forecasts years of deficits as health crisis slashes revenue

DEAKIN University has forecast years of deficits due to the coronavirus crisis after recording an almost $60 million surplus last year.

Vice-chancellor Iain Martin yesterday provided little detail on the scope of job cuts he foreshadowed last month.

He wrote that the university entered 2020 with about $135 million cash in the bank, but even with the cost cuts introduced and those being considered, the funds would be largely exhausted by the end of this year.

Prof Martin told staff the university was presented on Sunday with a draft agreement for a national framework for adjustments to enterprise agreements following negotiations between the National Tertiary Education Union (NTEU) and the university sector.

He said the draft was being considered by the NTEU nationally and locally this week.

Prof Martin told staff Deakin would need to carefully consider the framework and its implications for the university.

“The framework proposes a series of interim measures that would require changes to our EA and that would require a vote by all employees,” he said.

“The national framework will not remove the need for us to strategically look at the shape and capabilities of Deakin as we emerge from the shadow of COVID-19.”

The union says it is seeking to keep as many people as possible employed amid the pandemic.

Prof Martin said Deakin was continuing to plan for a gradual transition to more activities on campus from the beginning of July.

He outlined long-term financial impacts the coronavirus crisis could wreak on the institution, and said Deakin’s 2019 total revenue was about $1.35 billion with an underlying surplus of about $58 million.

“We anticipate that our teaching revenue will be reduced by some $80-100 million in 2020, alongside other operating revenue falls of between $15-25 million,” Prof Martin wrote to staff.

“For 2021, our estimates are that our operating revenue could fall by between $250 and $300 million.

“Even with staffing reductions, we will be running deficits for the next several years, spending more than we earn, while we bring expenditure and income into alignment.” Prof Martin noted international student flows would be down for the rest of this year, with the impact continuing into 2022.

“As a university, we spend 55 per cent of our total revenue on our staff, and while we want to minimise staff impacts, it is not possible to adjust to where we need to be for the next few years without looking at our employment costs as well as curtailing expenditure,” he said.