ANU ‘must save A$100m by January’

Redundancies ‘a last resort’ as uniquely financed Australian university confronts A$225m black hole

May 27, 2020
ANU Brian Schmidt
ANU vice-chancellor Brian Schmidt briefs journalists on the university's financial situation

Another Australian university says it cannot rule out forced redundancies as it strives to alleviate a pandemic-induced “financial shock”.

The Australian National University (ANU) is the latest institution to quantify its coronavirus-related losses, estimating a A$225 million (£121 million) shortfall this year from a A$150 million revenue slump and A$75 million costs imposed by Covid-19, bushfires and a destructive hailstorm.

Briefing journalists from his kitchen, vice-chancellor Brian Schmidt said ANU had started 2020 in a strong financial position and had saved money by deferring capital projects, cancelling travel and pausing most staff recruitment. It was also borrowing money.

Despite this, the institution would need to cut spending by A$100 million over the remainder of the year. “I will be honest – [that] is a lot of money to save,” Professor Schmidt said.

“We will need to reduce our salaries, and we are asking for feedback on a voluntary separation scheme that would work both for our staff and our university. We are very keen to avoid compulsory redundancies. That would be a last resort.”

The revelations illustrate the scale of the problem confronting the sector. ANU, unlike other Australian universities, exists under federal legislation, and its financial arrangements are viewed with envy.

But Professor Schmidt said these circumstances provided less fiscal “insulation” than he would have liked. “Our relationship with the federal government’s unique, but it means the relationship with the state or territory government is also unique, [and] federal funding is not a huge fraction of the money that we get.”

He said his management team would take a 10 per cent pay cut for the second half of the year, and he would take a 20 per cent cut. The university had not set a target on overall salary savings or decided whether to ask staff to forgo a scheduled pay rise in July.

The University of Melbourne, which granted its staff a 2.2 per cent pay rise this month, is now asking them to relinquish the extra money from July. This would deliver A$30 million of the spending cuts the institution needs to make next year, which vice-chancellor Duncan Maskell estimated at between A$335 million and A$385 million.

“We’ve all been asked to do things we’ve never done before as a result of this pandemic,” he told staff, in an email seen by Times Higher Education. “In an environment where there will be job losses, it makes no sense for any of us to take a pay rise.”

In return for such concessions, Melbourne will commit not to stand down staff or implement forced redundancies before offering voluntary ones. “We will commit to working collaboratively with the National Tertiary Education Union,” Professor Maskell vowed.

His stance has infuriated the union, after Melbourne rejected a proposed national jobs protection framework that offered similar trade-offs.

Professor Schmidt said ANU was still considering whether to embrace the framework. He said the crisis was taking a personal as well as a professional toll, explaining that he had become a vice-chancellor because “we want to change the world”.

“We are still going to change the world, but it’s harder now,” he said. “I am not this ethereal vice-chancellor disconnected from the professoriate and students. It is great to be part of that community, but it does mean I get to suffer with them as well.”

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