How uni finances cope with travel ban
A investigation into university finances has found widely varying reliance on income from international students, with newer universities with lower asset bases more vulnerable to the effects of Covid-related travel bans.
The spread of the pandemic has triggered cost- cutting in the tertiary sector with fears a thousand jobs could be at risk.
While all universities flagged the new virus in their most recent annual reports — most were published midyear and Victoria flagged “potential for a significant multi- year material negative financial impact” — some are shown to be better- placed than others to cope with longer- term border closures.
Across the sector, institutions report 16.2 per cent of full- time equivalent students in 2019, or 22,528, were full fee payers from abroad, with the percentage varying from 11.5 per cent in Victoria to 44 per cent at Lincoln. AUT and Waikato also reported around 20 per cent of their student body were from abroad.
But student fee revenue is far from the only source of university income, with revenue breakdowns in annual reports showing a complete cessation of international students would shave between 6.8 per cent ( Otago) and 22 per cent ( AUT) off universities’ operating revenue.
Auckland University’s annual report was the only set of university accounts to fail to break out full- fee revenue, and a request for data to enable sector- wide comparison went unanswered by publication time.
Across the sector wealthier universities — particularly Otago and Canterbury — were both more financially secure prior to the pandemic and less reliant on international income compared to their relatively poorer counterparts such as Waikato, Lincoln and AUT.
This analysis was borne out by no university having claimed from the wage subsidy scheme, which required a 30 per cent drop in revenue.
“It i s bad, but not quite bad enough,” Chris Whelan, the chief executive of sector umbrella group Universities New Zealand, said of the qualification for the subsidy scheme.