Overseas students paid $3.2bn in fees to NSW universities last year. The top three markets China, India and Nepal account for nearly as much income as total domestic fees

The Audit Office of NSW report on universities sets out the system’s overall dependence on internationals, who paid $3.2bn in fees, compared to $2.1bn from locals.

“The universities that are most dependent on revenue from students from those countries are at risk if demand shifts unexpectedly because of changes in political policy, economic conditions or visa requirements”, the report warns.

Which is pretty much what it warned last year; “universities should assess their student market concentration risk where they rely heavily on students from a single country of origin. This increases their sensitivity to economic or political changes in that country,” (CMM June12)

International student fees are the largest income source for both University of Sydney (nearly $900m) and UNSW (just over $800m). Both depend on the China market for over 70 per cent of international student fees.

The audit office also reports all-uni operating expenditure was up 9.8 per cent last year, while revenues increased 7.3 per cent. Operating margins notably declined at UNE (down by 7 per cent) Macquarie U (- 4.9 per cent) UNSW (-4.8 per cent) and Charles Sturt U ( -4.7 per cent). Staff costs “are a significant contributor” to operating expenditure, the AO states – up 8.1 per cent in 2017-18, across the system.  Western Sydney U defied the trend, with its operating margin improving 4.7 per cent to just under 13 per cent, only a little lower than UTS’s at 14 per cent.

The audit report attributes increased staff costs, in part, to universities recognising payroll tax obligation on superannuation liabilities incurred since 1996.  Discussions with state and federal governments on dealing with this continue.

Only Southern Cross U had a current ratio (current assets exceed current liabilities) less than one but it has an unused bank facility it can use for cash requirements.