The Effect of Covid-19 on the Revenue of Australian Universities

COVID-19 pandemic has not only taken many lives but also impacted the global economy negatively. Australian universities have not remained untouched. Their operating revenue fell by 4.9% in 2020 (compared to 2019). It is estimated that they are set to lose 5.5% of their revenue again in 2021 – a loss of about $3 billion.

It is not surprising that universities have cut down on at least 17,300 jobs in 2020! 2021 is expected to be even more challenging. The sharp downfall in the number of international students enrolling in Australian universities in 2020 will continue to hit the university revenue for the next three or four years at least.

“It is going to be extremely difficult for the Australian universities even with some recovery in their operating revenue from 2022 onwards,” said an industry analyst, who also predicted that it could take as long as 2025 before the negative impact on university enrolment starts to fade away.

The decline in revenue is being reflected in staff losses in universities, halting of infrastructure projects, and making tough decisions on expenditure cuts. 

Education Minister is optimistic though

Alan Tudge, the Education Minister of the Morrison government, tries to downplay the situation and deems it temporary. In his first major speech, he said that he believes that ‘small pilot programs’ will soon attract international students back to Australia.

The minister also recommended Australian universities to focus on face-to-face learning and domestic students. 

He also said, “The impact on international student enrolments in Australian universities, at least on aggregate, has not been as great as what we might have initially expected. There’s only 11% of downfall in international student enrolments compared to 2019 – which translates to about 3% of fall in university revenue since 2019.”

But Tudge acknowledged that some universities have suffered more than others. He also said that lower enrolments this year will have a tumbling effect over multiple years. The figures have almost halved since 2019. It includes a drop of 43,000 in numbers of new international students in Australia between 2020 and 2021.

What is happening in the Australian higher education sector right now?

International students spend on retail and accommodation. Mitchell Institute of Victoria University has released a report which states that with fewer international students, the Australian economy will suffer a loss of 20 billion dollars by 2022. 

We are seeing a trend where international students are enrolling in Australian universities and studying online – while the borders remain closed. 

South Australia and New South Wales have started two small pilot programs to attract international students once again. SA proposes to quarantine students in buildings at Parafield airport whereas NSW has proposed to quarantine international students in an empty student hostel with 600 beds.

The Australian government plans to see 10 million international students pursuing studies in the country within 10 years. These include on-campus as well as online study programs.

The government also plans to diversify the international student demographic and include students of more nationalities – reducing the reliance of universities on Chinese and Indian students. It also wants universities to prioritize domestic students and return to face-to-face learning as soon as possible.

Meanwhile, the government of Australia is also urging universities to sign up for the French model code on free speech. Developed by the Chief Justice of the High Court Robert French, it sets out principles that can help universities to protect academic freedom and freedom of speech on campuses.

Measures to help Australian Universities during these tough times

To reduce the administrative burden of institutions offering higher education, the Department of Education, Skills, and Employment (DESE) delayed certain activities, such as submission of reports and data:

• Annual higher education data reconciliation (2019 data),
• 2021 National Research Infrastructure Roadmap,
• Research Block Grants – consultation on changes to the Higher Education Research Data Collection (HERDC) cycle, and
• Research Training Implementation Plan final update report.

The government also announced a Higher Education Relief Package on April 12, 2020, to help reduce the regulatory and cost burden of education and training providers in Australia. It was also said that the registration fee paid to the following will be waived off or refunded for 2020 and mid-2021:

• Australian Skills Quality Authority (ASQA), 
• Tertiary Education Quality and Standards Agency (TEQSA), and
• Commonwealth Register of Institutions for Overseas Students (CRICOS).

Many universities and higher education institutions in Australia are also offering short online courses to students now.

Students of clinical education programs, who are waiting for student placements, are being placed where and when it is safe and possible – while following the necessary guidelines.

If you are interested in studying in Australia, contact our experts to learn about the best options for you now.