A year back UTS predicted losses of between $80 and $250 million, and warned up to 500 jobs might have to be shed in 2021  (CMM August 6) 2020). Voluntary redundancies, hiring freezes, non-renewal employment contracts, and cutting back on casuals eventuated.

What the university’s 2020 Annual Report reveals: In 2020 UTS held its revenue and income from continuing operations, which was down just 3.6 per cent on 2019 (2020: $1,058,767,000; 2019: $1,097,766. This was affected slightly by a reduction in overseas student fees (2020: $366.8m; 2019 $405m – represents a 9.4 per cent decrease of $38m).

That means the overall loss of revenue was up to $200m less than was expected.

There are two critical points on the UTS business model

an excessive reliance on onshore international students for income

Carnegie and Guthrie calculate that for 2019 UTS was second in Australia for dependence of fees from on-shore international students and third for internationals in Australia and overseas  In an analysis of university annual reports (CMM August 13 2020.

The recent WA Auditor General’s report on universities (2020) contained a performance indicator called “diversity of revenue”. This was interpreted by universities to mean that they should diversify their revenue sources by encouraging overseas students to study their courses. However, the general view is that universities should not be overly dependent on this source of income.

In its 2020 benchmarking, the Department of Education, Skills and Employment considered universities with 15 per cent or less operating revenue from fee-paying overseas students as low risk and between 15 per cent and 25 per cent as medium risk. Based on these criteria, UTS is in the very high-risk rating for 2019 (40.4 per cent) and 2018 (38.5 per cent).

In particular, UTS is highly reliant on students from China. The NSW Auditor General’s universities report for 2020 does not name China, but does state that of all UTS’ international students, just shy of 60 per cent are from “the top country.” Universities focusing on less budgeted revenue in the future does not go to the heart of the matter – that is their using a failed business model of using international students as cash cows to fund operations and capital works.

land and buildings

UTS reported revalued land, buildings and infrastructure assets had a closing balance of $2.1 billion.

If we go back a decade, we can see that in 2010 there were no costs for these as they had been gifted or been part of capital grants by governments. The value then was $850 million.

The significance of the change is that the university has invested considerably in buildings in the last decade and taken out financial instruments; bonds of $300 million and a debt facility of $250 million. The 2020 annual report states, “the opening of UTS Central, our striking 17-storey glass-encased building on Broadway, marked the completion of the ten-year UTS Campus Master Plan.”

But investing in building infrastructure involves additional expenditures arise. One is the cost of servicing the debt, and the other is the depreciation charge. Both expenses are set against operating profit and have the effect of reducing it in any given year.

Looking at the financial statements for 2020 and 2019, we note the following changes.


Operating result 2019 2020 +/-
Net cash and equivalents (EFY) $27.599m -$70.674 -256%
Payments for plant, property, equipment $105.341m $223.379m -112.1%
Consultancy, contracts $36.18m $34.09m 6.1%

Investment income decreased by 26 per cent between 2019 and 2020, from $9.9m in 2019 to $7.3m in 2020. UTS has few cash, stock or bond investments because it has put many of its golden eggs into its new infrastructure basket.

Jobs gone – but how many?

UTS’s annual report notes the workforce decreased during 2020 by 7.5 per cent FTE for continuing and fixed-term staff.  However, this does not include casuals. The annual report also notes a voluntary separation programme, which supported 357 staff to leave UTS, most of whom did so in December 2020.

As we have found at other Australian universities, the disclosed data in the UTS report to the Charities Commission and the university’s annual report are not compatible.

Charities Commission report 2019: 3243 EFT (FT 3218, PT 650, Casual 6167)

UTS annual report 2019 :  3447 FTE, headcount  3708 (not including casuals).

Charities Commission report 2020: EFT 4242 (FT2863, PT 556, Casuals5971)

UTS annual report 2020: FTE 3189, headcount 3417

Which creates a question, what is the actual number of employees who are no longer employed, based on the total headcount of forced and voluntary redundancies.

The most accurate way to assess this would be to compare employee numbers at the end of the calendar year in 2019 and 2020 by classes: Headcount, FT, PT, Casuals, FTE.

The NSW AG report on universities disclosed that the cost of redundancy programmes in NSW public universities increased employee-related expenses in 2020 by 4.4 per cent to $6.5bn ($6.2bn in 2019). The cost of redundancies offered in 2020 across the universities totalled $293.9 million. However, UTS does not disclose its actual number of redundancies or the costs. We can assume that UTS went into an operating loss of $70 million because of increased depreciation, investment losses, and redundancy payouts.

What all of this means

UTS’s COVID response programme includes reducing employment.

It’s business model over the last decade was premised on increased revenues flowing from an ever-larger cohort of students from China on-shore while simultaneously embarking on ambitious own-funded capital infrastructure developments.

It is now cutting recruitment to preserve cash amid the coronavirus pandemic.

At the same time, it has had to increase investment in processes and technology that can bring teaching in line with social distancing.


Distinguished Professor James Guthrie AM, Macquarie U Business School

NSW Auditor General Report on universities, 2020

UTS Annual Report 2019 volume one  and volume two

UTS Annual Report 2020 volume one and volume two

Garry Carnegie and James Guthrie, “Financial risks of key universities in international student markets,” Campus Morning Mail August 13 2020 “20

Carnegie, G.D., Guthrie, J. and Martin-Sardesai, A. (2021), “Public universities and impacts of COVID-19 in Australia: risk disclosures and organisational change”, Accounting, Auditing and Accountability Journal   (ahead of print).



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