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campusreview.com.au
$470 million hole
University of Sydney reveals budget
shortfall more than doubled.
By Wade Zaglas
T
he vice-chancellor of the University
of Sydney provided colleagues
with a grim update recently on the
university’s financial position following
plunging student enrolments due to the
COVID-19 pandemic.
After referring to an earlier letter that
projected a budget shortfall of $200 million
for 2020, Dr Michael Spence said the
impact of COVID-19 on student numbers
in both semesters one and two would
result in a much bigger budget hole of
$470 million.
“Dealing with a shortfall of this magnitude
will not be easy, so we are planning to find
the necessary savings across the budgets
for 2020 and 2021,” he said.
“In finding these savings, let me
reassure you that our guiding principle is
to minimise the impact on jobs as much
as possible. We know our talented staff
will be critical to the university’s recovery
effort, and our ability to contribute to the
Australian economy.”
Spence said the university is still
committed to a 2.1 per cent annual
salary rise for employees covered by the
university’s enterprise agreement, but
members of the university executive agreed
to “suspend the annual review of their
salaries in July and their salaries will be held
at current levels”.
However, the head of the National
Tertiary Education Union, Dr Alison Barnes,
told The Australian that Spence’s decision
to keep his and his executive team’s current
salary levels “showed incredible disregard
for staff who the university has depended
on over the last few weeks”.
The Australian article also noted that
Spence had not followed the actions of his
counterparts at other universities (including
the VCs of the University of Melbourne,
Monash and UNSW), who each took a
20 per cent pay cut.
To address the budget shortfall while
trying to maintain jobs, Spence said the
university would suspend capital works
such as building improvements, facility
upgrades and purchasing new technology.
“Only core maintenance programs to
keep our campuses safe will continue. We
anticipate that in 2020 this could save us
$127 million,” the vice-chancellor said.
“Further savings in projects, consultants
and contractors include a further reduction
of allocated project budgets, deferral of
some project investments to next year, and
extended delivery timeframes for projects.
“In doing this, we expect to achieve at
least $52 million in savings overall.
“The hiring pause will continue, with
tightened controls over any proposed new
hires for continuing or fixed-term staff.
Casual staffing budgets will be reviewed by
each faculty and school to reflect expected
student load. We believe that this should
save $93 million.”
Spence said another $23 million could be
saved by paying less than the university had
budgeted for in international agent fees, and
by awarding fewer scholarships in 2020.
The vice-chancellor added that the
university’s financial health would depend
heavily on its ability to meet its savings
targets as well as the student revenue it can
generate in the second semester of this
year and semester one of 2021.
“In recent days we have seen welcome
indications that we are flattening the curve
of COVID-19 in Australia. While this is
encouraging, we know there is still a way to
go,” Spence said.
“As we begin to look ahead and consider
what a staged return to ‘new normal’
operations might look like, so too are we
considering the kind of institution we want
to be as we emerge from this crisis.
“This will be an important conversation
for all in our community over the coming
weeks and months.” ■
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