by FRANK LARKINS

Western Australian universities have continued the 2021 strong financial recovery trend established by eastern state universities. A detailed analysis of the financial performances of Curtin, Edith Cowan, UWA and Murdoch universities reported elsewhere has established that three of the four increased their 2021 total income by more than 10 per cent from 2020.

Incomes were also more than for 2019, even though overseas student fee revenues were lower. All four universities reported a surplus of net revenue (income-expenditure) for 2021. Collectively, the universities had net assets of $5.8 bn an increase of $0.53bn (9 per cent) from 2020.

The 2021 turnaround was aided by government assistance increasing by $147m, including $80m in special research funding. Reported investment income gains of $199m would have been even larger if all universities had accounted for the substantial windfall funding from the winding up of Education Australia Limited (EAL) as 2021 income.

Lower overseas student enrolments resulted in all WA universities having reduced student fees and charges income in both 2020 and 2021. Collectively, universities received $159m (24 per cent) less fee income over this two-year period compared with the 2019 result. The percentage fee reduction is similar to the results for universities in other states. The net outcome was that a collective reduction of $184m (6.2 per cent) in total income from 2019 to 2020 was transformed to an increase of $332m (12 per cent) from 2020 to 2021. Total income receipts for 2021 were also $149m (5 per cent) more than for the pre-pandemic 2019 year.

Collectively, the WA universities increased their total expenditures for 2020 by a modest $27m (1 per cent) and then reduced them again by a similar amount for 2021. Hence, the 2021 outlays were comparable to 2019. The WA expenditure changes were less than for eastern state universities as were the expenditure outlays on employee benefits. The results indicate that WA universities experienced less staff rationalisation than many other Australian universities. Overall, the collective WA surplus of $410m for 2021 (13 per cent of 2021 income) was near eight times the 2020 surplus and twice the 2019 surplus, underlining the strength of the sectors 2021 financial recovery.

A comparison of net 2021 revenue (income-expenditure) with some other mainland universities is shown in the table. Only three of 29 Australian universities profiled reported a cashflow deficit for 2021. As noted elsewhere, the NSW universities numbers are inflated more than some other universities by the EAL-IDP revenue gains. Nevertheless, the data supports the conclusion that most universities have gained considerable financial strength in 2021 on a journey to full recovery from the pandemic.

2021 Net Revenue (Surplus or Deficit) as a Percentage of 2021 Total Income

Western Australia		Queensland		Victoria		New South Wales
Curtin	11.4%	Queensland	14.0%	Melbourne	18.5%	Macquarie	5.2%
Edith Cowan	14.8%	Southern Queensland	18.7%	Monash	13.1%	Southern Cross	3.9%
UWA	17.3%	James Cook	4.6%	La Trobe	-2.6%	Sydney	29.7%
Murdoch	3.7%	Sunshine Coast	13.4%	Federation	10.2%	UNSW	12.2%
		Central Qld	-5.4%	Deakin	6.2%	Wollongong	-0.4%
		Griffith	11.8%	Swinburne	5.4%	Western. Sydney	14.9%
		QUT	11.9%	Victoria	0.3%	UTS	9.1%
				RMIT	7.9%	Newcastle	19.3%
						New England	22.3%
						Charles Sturt	22.1%
All WA	13.2%	All Qld	11.5%	All Vic	11.0%	All NSW	16.8%

Some interesting findings for Curtin, Edith Cowan, UWA and Murdoch U are:

* Curtin U received $66m less income in 2020 compared with 2019, but recovered strongly in 2021, with a total income that was $93m (10.3 per cent) more than for 2020 and $27m more than for 2019. The reduction in student fee income over two years was $47m (23 per cent) less than the 2019 result. Significant growth in investment income, including accounting for some of the EAL dividend, contributed to the total income outcome. The 2021 net asset position was $1.54bn, some $114m more than in 2020.

* Edith Cowan U also managed an impressive turnaround in its 2021 financials with total income $53m (11 per cent) more than for 2020. A state capital grant of $40.5m represented the main contribution to the income growth. Student fee income was reduced by $20m (14 per cent) over two years compared with the 2019 result. Edith Cowan did not account for its EAL windful in its comprehensive income statement. It did however report an increase in net assets of $155m, including the EAL benefits, from 2020 to 2021, such that 2021 net assets were $1.13bn.

* UWA reported the strongest 2021 financial recovery of the four WA universities. Total 2021 income grew by $187m (18.9 per cent) even though it did not report the EAL revenue as comprehensive income. Unlike other WA universities it did not experience any further reduction in student fee income in 2021 compared with 2020; nevertheless, the two-year reduction was still $49m (25 per cent). The 2021 total income was $88m (8 per cent) more than the 2019 total income. Net 2021 assets increased by $203m to $2.24 bn.

* Murdoch University also experienced a significant reduction in overseas student fee income in 2020 and 2021, so over the two years the $43m reduction was equal to 34 per cent of the 2019 fee income, more for any other WA university. It was the only WA university not to increase its total income from 2020 to 2021 as other income components did not compensate for the fee reduction. The 2021 total income figure was $16m less than the 2019 result. The university did however increase its 2021 net assets by $61m to $924m.

Overall, WA universities have performed as well financially in 2021 as their east coast counterparts. The special research funding and some Education Australia contributions have been important one-off income sources. These revenue streams will not be available for 2022; however, some significant improvements in onshore overseas student fee incomes are expected.

Professor Emeritus Frank Larkins, Honorary Professorial Fellow, University of Melbourne

Melbourne Centre for the Study of Higher Education and School of Chemistry