by FRANK LARKINS and IAN MARSHMAN 

 The impact of the COVID-19 pandemic on Australian universities 2020 finances has been highly differentiated. As expected, many universities with high exposure to the international student market have been most impacted. South Australian universities and several smaller universities which have been able to expand domestic student programs appear to have been least impacted. The severity of the decline in investment income was unexpected.

The 2020 annual reports of 37 Australian universities have been used in a comprehensive study to analyse the responses of individual universities to the pandemic. (The detailed findings are set out in a soon-to-be-published article on the Melbourne Centre for the Study of Higher Education Fellows Voices website.) Universities were ranked according to several financial performance indicators based on changes from 2019 to 2020 including total income, student fees and charges and net financial position.

Comparison of the financial performance of each university from 2019 to 2020 indicates that 30 of 37 universities had lower total incomes, 33 received less international student fee income, 29 decreased their net financial position and 34 were more dependent on grants from governments and student HECS for a higher proportion of their total income in 2020. All Australian universities have experienced some adverse effects from the pandemic with a wide variation in the level of severity experienced.

The following three criteria were applied to compare changes in university finances between 2019 and 2020:

* magnitude of the percentage change in the total income.

* magnitude of the percentage change in student fees and charges receipts.

* net change in financial position determined by aggregating percentage changes in total income and total expenditures.

The effects of the pandemic are assessed to have had high impact on ten universities, a medium impact on another 10 universities and a low impact on 17 universities. They are listed in rank order in the following table:

Ranking of Universities by the Severity of the Pandemic on Financial Operations
	High		Medium		Low		Low
1	ANU	11	Newcastle	21	Macquarie	31	ACU
2	La Trobe	12	UTS	22	Victoria	32	Canberra
3	Federation	13	UNSW	23	Sunshine Coast	33	USA
4	CQU	14	Melbourne	24	West Sydney	34	Adelaide
5	Swinburne	15	Curtin	25	JCU	35	Flinders
6	Southern Cross	16	Charles Sturt	26	New England	36	Southern Qld
7	UWA	17	RMIT	27	Sydney	37	C Darwin
8	Wollongong	18	Tasmania	28	Queensland
9	Deakin	19	Murdoch	29	Edith Cowan
10	QUT	20	Griffith	30	Monash

The ten universities ranked as the most highly impacted reported significant financial vulnerability on all three criteria. They appear to face the greatest challenges to restore their financial position to pre-pandemic levels. Four universities are in Victoria, two in New South Wales, two in Queensland, one in Western Australia and one in the Australian Capital Territory. Only two Group of Eight universities are in this segment.

Some universities are experiencing high impact because of high exposure to particular segments of the international student market most affected by the pandemic and closure of boarders. For some, the impact seems attributable to a relatively weak financial position prior to the onset of the pandemic. For others, the high impact may be short-term as 2020 financial expenditure appears to include provision for staff redundancy costs as part of cost containment measures already in train.

ANU is the standout university in terms of severity being ranked as the one with the highest percentage change on all three criteria. Some special circumstances may apply in relation to ANU.

The pandemic was assessed to have had medium impact on another ten universities because they were most financially vulnerable on two of the three criteria. There is no discernible pattern within this group, although several have high exposure to the international student market. Four of these universities are in New South Wales, two in Victoria, two in Western Australia and one in Queensland and Tasmania. Two Group of Eight universities are in this set, principally because of the size of the decrease in total income and student fee reductions.

Six of the eight Victorian universities have been highly or moderately impacted by the pandemic (the exceptions are Monash U and Victoria University). Six of the ten New South Wales universities are also in these categories along with three of the four Western Australia universities. Hence, 15 of the 20 universities (75 per cent) most impacted are from these three states. For the eastern states, the outcome highlights the importance of international student fee revenue to these universities, while for WA universities it is the deterioration of their overall net financial position that has led to their vulnerability.

Seventeen universities are assessed as experiencing low impact. Notably, all three South Australian and four of the six Queensland universities are in this group. They all finished 2020 in a comparatively strong financial position. Interestingly, several small institutions less exposed to the international student market appear to have been able to respond nimbly to the challenges posed by the pandemic principally because most have been able to increase 2020 total income through increasing domestic enrolments.

Four Go8 universities – Sydney, Queensland, Monash and Adelaide – were included in the low impact group because of their relative financial strength and the lower impact of any changes in student fees and charges. Within this group, Monash U stands out in reporting increased international fee-paying revenue in 2020.

University leadership, institutional strategies, and risk management responsiveness all appear to have influenced individual university financial outcomes in the first year of the pandemic. These capacities will be tested further in 2021 given the further sector-wide decline in international student enrolments. On the other hand, universities with significant investment portfolios might anticipate a significant turnaround in investment returns for 2021.

Frank Larkins and Ian Marshman, Melbourne Centre for the Study of Higher Education, University of Melbourne