Universities demand government reinvestment post-pandemic

Australia’s 37 public universities have urged the federal government to follow the example of a state government and invest millions more dollars in the country’s higher education system to counter the impacts of the coronavirus.

This follows a decision by the Victorian state government to allocate AU$350 million (US$230 million) to the state’s universities as part of efforts to boost economic recovery by creating more local jobs.

Universities Australia Chief Executive Catriona Jackson welcomed the decision, saying it would help with the state’s post-pandemic economic recovery.

“Universities are the engine rooms of growth, producing the skilled graduates and high-quality research that increases economic productivity,” Jackson said.

“Capital works have a multiplier effect by providing jobs during the construction phase as well as supporting local jobs during the operation.”

Jackson noted that universities also house the innovation and research laboratories that generate new jobs and new breakthroughs, including potential treatments for the COVID-19 virus.

“Universities perform around 90% of the fundamental research undertaken in Australia and 43% of all our nation’s applied research,” she said.

“They feed the entire research system, which in turn feeds national prosperity.

“With Australia’s post-pandemic economic recovery at stake, we’re asking the federal government to rethink, and to reinvest in research.”

But while the Victorian investment was good news for that state’s universities, Jackson said there were 39 comprehensive universities in Australia, and all had been affected by the coronavirus.

“Now is the time for the federal government to reconsider its approach so far and reinvest in universities at a national level,” she said.

Thousands of jobs threatened

Modelling prepared by Universities Australia shows the short-term economic impact on institution revenues as a result of the virus could be as high as AU$4.6 billion, thereby threatening 21,000 university jobs over the next six months.

“Australia will need even more new ideas, new skills and new jobs to power the economic and social recovery,” Jackson said.

“Universities are the engine rooms of prosperity. During such a traumatic time for the whole community, the engine is slowing, but we want to be there to fire it up as quickly as possible once the pandemic has passed.”

She said it was crucial that universities remained viable so that they would be able to maximise their contribution to Australia’s economic recovery tomorrow.

“Universities are where the race to develop faster and more accurate tests for COVID-19 is occurring. Researchers need the lights to stay on while they work tirelessly to create new anti-viral treatments – and hopefully develop the vaccine that will stop this virus in its tracks.”

University finances hit

As with every other sector of Australia’s economy, universities are also suffering financially from the pandemic. This has put difficult choices before university administrators to cope with the fallout while ensuring the education of future generations of young Australians comes first.

“The 130,000 staff who work in universities to keep students studying through this crisis are moving to deliver whole courses online, teaching via screens to the students’ lounge rooms,” Jackson said.

“Government has worked side by side with us cutting red tape, giving universities room to focus on the important task of keeping students in university, and off the job queues.”

As Jackson notes, Australian universities not only teach local students but also those from 144 other countries.

“Many of those students are here and adapting just like their Australian friends to studying online. Just like our kids, they will wait out the pandemic, studying from a dorm or rented flat, eager to get back on campus as soon as it is safe.”

Unable to enrol

But many overseas students start their courses mid-year in Australia and universities are preparing for large numbers not arriving and unable to enrol because of Australian entry bans.

This poses another huge challenge for the universities, not only operationally but financially: international education is Australia’s fourth largest export industry, contributing AU$39 billion (US$26 billion) in export income each year to the national economy.

“The university sector, with the government, has over the past five decades pursued a deliberate strategy of globalisation, attracting students from more than 140 countries,” Jackson said.

“Now the globe has temporarily shut down, we, like everyone else, need help to wait out the virus. We, too, have felt huge hits to revenue – and there are more to come, as soon as the second semester this year.”

Universities Australia has estimated that their institutions face revenue falls of up to AU$4.6 billion (US$3 billion) at a minimum in 2020, although Jackson described this as “a very conservative estimate”.

“At stake is the AU$39 billion international education market but, because salary and other employee costs make up an average of 53% of university outgoings, we estimate this may put at risk more than 21,000 full-time jobs.”

That figure, however, is only over the next six months and, because there will be a significant pipeline effect, job losses could become as much as that again.

“We have been working closely with the government since the beginning of the COVID-19 outbreak and we appreciate the collaborative approach. “But some support is required now to try and reduce those losses. Not eliminate, just reduce,” Jackson said.