Aus­tralia’s re­gional cam­puses hit by do­mes­tic cap and in­tense com­pe­ti­tion. John Ross writes

THE (Times Higher Education) - - NEWS - John.ross@timeshigh­ere­d­u­ca­

The num­ber of Aus­tralian uni­ver­si­ties in deficit dou­bled last year, as fal­ter­ing de­mand pushed strug­gling in­sti­tu­tions into more dif­fi­culty.

An­nual re­ports show that ex­penses ex­ceeded rev­enue at six uni­ver­si­ties in 2017, up from three the pre­vi­ous year. Five of the six were re­gion­ally based, with Mel­bourne’s Vic­to­ria Univer­sity also record­ing a neg­a­tive re­sult.

Five of the six also ex­pe­ri­enced fall­ing en­rol­ments, sug­gest­ing that – as in the UK – the de­mand-driven sys­tem has ex­posed some uni­ver­si­ties to harm­ful com­pe­ti­tion for lo­cal stu­dents.

Aus­tralian uni­ver­si­ties are also locked in hot com­pe­ti­tion for for­eign en­rol­ments. The six loss-mak­ing in­sti­tu­tions are well down the list of in­ter­na­tional stu­dent re­cruiters, col­lec­tively host­ing just two-thirds as many as the Univer­sity of Syd­ney which – along with other big Syd­ney and Mel­bourne in­sti­tu­tions – has prof­ited since 2014 by mas­sively in­creas­ing its over­seas stu­dent in­take.

Three of the six loss-mak­ing in­sti­tu­tions had de­clin­ing in­ter­na­tional en­rol­ments last year, ac­cord­ing to ed­u­ca­tion depart­ment data seen by Times Higher Ed­u­ca­tion. Four also sur­ren­dered do­mes­tic en­rol­ments.

Sec­tor- wide ad­mis­sions data re­leased on 28 Oc­to­ber showed that do­mes­tic ap­pli­ca­tions fell this year for the first time this decade, by 3.3 per cent. Ac­cep­tances were down by the same rate.

Grattan In­sti­tute higher ed­u­ca­tion pro­gramme di­rec­tor An­drew Nor­ton said that the num­ber of fee-pay­ing post­grad­u­ate stu­dents at re­gional uni­ver­si­ties was “flat or de­clin­ing”, and that their rel­a­tively few in­ter­na­tional stu­dents paid lower fees than those at large ur­ban in­sti­tu­tions.

He said that the gov­ern­ment’s cap­ping of teach­ing grants last De­cem­ber would in­flict more dam­age, mainly be­cause of the loss of in­dex­a­tion.

“On all fronts, the over­all po­si­tion is not ter­ri­bly favourable to them. It def­i­nitely does not mean they’re about to go broke, but sus­tained deficits would be a prob­lem,” Mr Nor­ton said.

The largest deficit of A$29.2 mil­lion (£16.1 mil­lion) was at Vic­to­ria Univer­sity. Charles Dar­win Univer­sity recorded a A$19.5 mil­lion loss.

In 2017, the av­er­age sur­plus across the coun­try’s 38 pub­lic uni­ver­si­ties de­clined to 4.7 per cent of rev­enue, down from 5.2 per cent in 2016. Six­teen uni­ver­si­ties recorded op­er­at­ing mar­gins be­low 5 per cent, long con­sid­ered a thresh­old buf­fer to fi­nance the main­te­nance and im­prove­ment of univer­sity in­fra­struc­ture.

The av­er­age op­er­at­ing mar­gin at the 11 re­gion­ally based uni­ver­si­ties was just 2.4 per cent. The Re­gional Uni­ver­si­ties Net­work said that the over­all fund­ing set­tings, rather than com­pe­ti­tion among uni­ver­si­ties, were putting stress on in­sti­tu­tional fi­nances.

Ex­ec­u­tive di­rec­tor Caro­line Perkins said that re­gional uni­ver­si­ties helped make their com­mu­ni­ties vi­able. “It comes down to the de­ci­sion: do you want to en­cour­age peo­ple to live in the re­gions? If so, it’s in the na­tion’s in­ter­ests to keep re­gional uni­ver­si­ties go­ing,” she said.

Charles Dar­win vice-chan­cel­lor Si­mon Mad­docks said that gov­ern­ments should recog­nise the sec­tor’s di­ver­sity “rather than ex­pect us to op­er­ate un­der a one­size-fits-all pol­icy”.

“Aus­tralia’s re­gional uni­ver­si­ties typ­i­cally carry a higher load of low so­cioe­co­nomic sta­tus stu­dents and op­er­ate over great dis­tances, all of which place par­tic­u­lar stresses on our in­sti­tu­tions,” he said.

Vic­to­ria Univer­sity blamed its deficit on “ma­jor re­struc­ture costs” and pre­dicted a sur­plus this year.

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