JobKeeper and other stimulus is clearly making an important difference for private providers – public universities should also be eligible
by CLAIRE FIELD
With the extension of the Job Keeper scheme and signals the government is preparing for the return of international students, it is timely to consider the impact of government stimulus on independent education providers.
Prior to JobKeeper and other COVID-19 stimulus being announced, I worried most smaller private international education providers would close and I was concerned about fee-for-service domestic providers. I did expect additional funding for government-funded providers and hence was confident most of them would manage through the pandemic.
Four months on from the closure of Australia’s borders – only three CRICOS providers have so far exited the industry. We will not know the impact on domestic fee-for-service providers for some time because of a lack of data but some will bounce back, in part due to ASQA’s decision to allow providers to ‘hibernate’ their registration.
A recent ASX announcement makes clear the important role that government stimulus (combined with government-funding) is playing in the sector.
Very few education providers are ASX-listed. To my knowledge only one currently has to provide quarterly cash flow updates under Listing Rule 4.7B. Pre-pandemic this provider generated 51 per cent of its revenues from international students and 49 percent from government-funded VET students.
The provider’s most recent ASX-update shows that in the quarter ended 30 June 2020, 15 per cent of its income came from government stimulus (including payroll tax refunds, ATO cashflow boost, JobKeeper and a state government loan).
That still left earnings down 15 per cent on the previous quarter.
Despite this, their cash and cash equivalents are up on the previous quarter through a combination of continuing to teach their international students on-line, reducing expenditure, and continuing their government-funded domestic VET delivery.
JobKeeper and other stimulus is clearly making an important difference, and equally clearly public universities should also be eligible.
Claire Field is an adviser to the tertiary education sector