Melbourne losses ‘not as bad as predicted’

Australian university to proceed with disputed staff cuts but introduce element of choice

September 25, 2020
Melbourne skyline
Source: iStock

Australia’s top-ranked university will ease back on plans to force staff out of work, as a second semester enrolment bounce alleviates its financial losses from the pandemic.

The University of Melbourne said it would introduce a voluntary component to its scheme to make 450 staff redundant, after its revenue projections improved by some A$132 million (£73 million) this year.

Vice-chancellor Duncan Maskell said the university now anticipated a 2020 shortfall of A$177 million, down from the earlier forecast of A$309 million. The new figure reflected data from the September student census, which showed higher than expected enrolments in semester two.

The university’s research income is also up from last year, although this revenue stream is geared towards specific projects and will not directly offset the university’s operating loss. But the enrolment boost – a combination of more students, fewer deferrals and heavier average study loads – will directly counter the losses.

Universities elsewhere are also reporting enrolment spikes, as people rendered jobless or trapped in lockdown seek productive uses of their time. The University of Sydney recently revised its forecasted losses this year from A$470 million to A$184 million, citing higher than expected enrolments from both domestic and international students.

But Professor Maskell said Melbourne would still need to downsize. “The pandemic crisis is far from over,” he said. “There is still a long way to go and we have some very tough years ahead.

“The improved outlook for 2020 is obviously helpful but the university will still run an operating loss this year of approximately A$60 million, and the outlook for 2021 remains very uncertain. The need to continue to make significant savings over the next two years does not change. We must still reduce our annual operating costs and ultimately resize our operations.”

While the university plans to persist with its savings plans, it has announced two concessions. One involves making its redundancy arrangements voluntary, so long as the scheme is endorsed by the Fair Work Commission. The university also plans to introduce measures to improve the financial circumstances of senior academics who retire, subject to Australian Taxation Office approval.

The concessions are unlikely to appease staff members who oppose the “needless, cruel and damaging” redundancies. “This is one of the largest planned job cuts at an Australian university, even though Melbourne is the wealthiest in both revenue and assets,” says a motion from the Melbourne branch committee of the National Tertiary Education Union.

“These sweeping cuts will have a lasting effect on the educational quality and experience for students. They will throw hundreds of dedicated, qualified and necessary staff into the worst job market since the Great Depression.”

Professor Maskell said future plans would hinge on 2021 enrolments. “We will continue to monitor the situation the university is facing as a result of Covid-19,” he said. “If the situation changes – for better or worse – we will adjust our plans accordingly.”

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