UTAS needs ‘continued scrutiny’ through ongoing tough times, parliamentary committee says

UTAS faces significant operational headwinds as its plots a return to post-Covid profitability, with inflation, declining international student enrolments, and rising costs identified as key challenges.

UTAS Vice Chancellor Rufus Black gives evidence in parliament. Picture: Nikki Davis-Jones

The University of Tasmania faces significant operational headwinds as its plots a return to post-Covid profitability, a parliamentary inquiry has found, with inflation, declining international student enrolments, and rising capital costs all identified as ongoing challenges for the tertiary provider.

In a report into UTAS’s financial position tabled in parliament on Tuesday, the Public Accounts Committee warned that the university’s reliance on international student revenue to cross-subsidise research and capital expenditure may eventually become unsustainable due to Australian policy reforms on student visas and enrolment caps.

Announcing the completion of the targeted inquiry which included hearings attended by senior UTAS staff, the joint standing committee also recommended ongoing parliamentary scrutiny of the university’s financial performance, and for the Tasmanian government “to promote the financial sustainability of UTAS” in Canberra.

University of Tasmania building and signage, Sandy Bay Campus. Picture: Richard Jupe File

“UTAS has implemented financial adjustments and strategic projects to ensure long-term stability but remains highly reliant on external funding and government policy reforms,” the report summary read.

“International student revenue, previously a key growth driver (2014–2019), has declined post-2019 due to the COVID-19 pandemic and migration policy changes in Australia and China, resulting in an estimated $189 million negative impact on UTAS’ operations.

“UTAS is targeting a return to profitability through cost reductions and financial restructuring.

“The University relies on international student revenue to cross-subsidise research and capital investment, a model that may become unsustainable due to Australian government policy reforms on student visas and enrolment caps.”

The committee found that while UTAS required up to $500 million to build a new STEM facility on its Sandy Bay campus, it lacked the internal funding capacity to support such an investment, and would require financial contributions from both federal and state governments to achieve.

Sustained parliamentary oversight was required as the university continued to navigate “a challenging financial landscape” characterised by external economic pressures, government decisions, and shifting student demographics, the committee said.

“UTAS’ ability to navigate policy uncertainty, manage capital investments, and secure diversified funding sources will determine its long-term financial sustainability,” the report read.

“Continued scrutiny is required on government policy impacts, debt management strategies, and capital investment priorities.”

Professor Kristyn Harman chair of Academic Senate, Professor Rufus Black Vice Chancellor, Professor Nicholas Farrelly Pro Vice Chancellor (southern Tasmania) at the UTAS Sandy Bay campus. Picture: Nikki Davis-Jones

During an appearance before the committee last August, UTAS Vice-Chancellor Professor Rufus Black said that while STEM-related jobs in sectors such as agriculture, renewable energy, and advanced manufacturing had the potential to underpin the state’s future economic prosperity, the university could not afford to develop a new STEM Centre on its own.

“Wherever you put it, it would cost you about $500m and right now we could make no contribution to that – we would need government to make a very large part of that contribution,” Professor Black told the committee.

During the hearing, Professor Black said there was an opportunity for the university to raise money for the STEM Centre by developing housing on UTAS-owned land above Churchill Ave.

In its report, the committee noted that while the Tasmanian parliament was still considering a Bill that would require the approval of both houses for the sale of any part of the Sandy Bay campus, the legislation would only apply to land below Churchill Ave.

Originally published as UTAS needs ‘continued scrutiny’ through ongoing tough times, parliamentary committee says