The expectation among higher education analysts was that Australian universities would be severely challenged in the period 2020 to 2021, leading to adverse financial outcomes because of the impact of the COVID-19 pandemic, with resulting weaker global financial markets.

While there indeed have been major operational challenges, a review of the balance sheets of 37 universities from 2018 to 2021 demonstrates the resilience of universities to adapt as most have actually experienced strong financial growth over the four-year period as a result of the fiscal discipline imposed by university management and much better than predicted full fee overseas student incomes.

Total assets of 37 universities increased by 24 per cent ($19.7bn and net assets by 18 per cent ($10.6bn) from 2018 to 2021, well ahead of CPI increases. The university sector outperformed several other industry sectors. Property, plant and equipment holdings, cash (research and fee income) and investment returns were the main sources on increased wealth. My full analysis is HERE).

For 2021, 10 of 37 universities accounted for 56 per cent of the sector’s wealth ($57.2 bn of $102.2 billion total assets) with six Group of Eight universities with the most assets being – Melbourne, Sydney, Queensland, Monash, UNSW and ANU – followed by Macquarie, Western Sydney, RMIT and UTS.

Melbourne was the wealthiest Australian university in 2021 with $10.6bn in total assets, representing 10.4 per cent of the total sector’s assets, more than the total wealth of the ten least wealthy universities. The eight research-intensive Go8 universities had combined total assets of $47.5bn in 2021, some 46 per cent of the sector’s total assets.

Several universities performed very well in terms of asset growth with eleven universities increasing their total assets by more than 30 per cent from 2018 to 2021, while another eight universities increased their total assets by more than 20 per cent.

The sector average growth for 37 universities was 24 per cent. Interestingly, eight of the eleven universities with total asset growth of more than 30 per cent ranked below 20 in total 2021 wealth. Three of these universities ranked below 30 with Sunshine Coast (rank 34) increasing its total assets by a remarkable 58 per cent, Southern Cross (rank 37), 32 per cent increase in total assets and Southern Queensland (rank 33) with a 31 per cent increase in total assets all being strong performers. This is a promising sign for the overall financial health of the sector. Three of the eleven universities were Go8 universities with Monash (45 per cent growth), Melbourne (38  per cent growth) and Queensland (30 per cent) performing strongly.

The breadth and variability of financial performances of Australian universities highlights the diversity of the sector in terms of teaching and learning programmes, research intensity and partnerships. The sector has remained internationally competitive and maintained or strengthened its position in terms of international university rankings.

The financial position of most Australian universities should have improved in 2022 and will continue to improve in 2023, especially for universities with high international student enrolments. Property values may decline after major gains in 2022 moderating overall financial growth. Australians should celebrate more the important contribution Australian universities continue to make to the national economy and to society.

Frank P Larkins is an emeritus professor at University of Melbourne

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