University of Sydney to review casual staff budgets as part of tighter austerity measures

The University of Sydney is extending austerity measures by reviewing each faculty's casual staff budget and deferring all non-essential building works to manage a $470 million budget shortfall due to the COVID-19 pandemic.

Vice-chancellor Michael Spence in an email to staff on Tuesday said the university was on track to save $200 million through deferred building works, a hiring freeze and travel restrictions it implemented in early March.

But he said the university would "increase the rigour" with which those savings measures were applied, after it suffered a steeper than expected financial hit after enrolling almost 10 per cent fewer students than expected in semester one.

Only core maintenance programs needed to enhance campus safety will take place this year, and all building improvements, new technology and facility upgrades will be put on hold. Dr Spence said this could save the university $127 million.

Reducing project budgets and extending delivery time frames could reap $52 million, while $23 million will be saved by spending less on international agent fees and scholarships due to travel restrictions.

The university also hopes to recuperate $93 million by tightening its hiring freeze and reviewing casual staff budgets in each faculty to reflect a lower student load.

But Dr Spence said there would be no change to the 2.1 per cent annual salary increase guaranteed in July to those covered by the university's enterprise bargaining agreement. University executives have agreed to suspend an annual review of their pay, and their salaries will stay at current levels.

Dr Spence said the university's "guiding principle" was to minimise the impact on jobs.

He asked eligible staff last week to apply for the federal government's JobKeeper wage subsidy, which could deliver a further $100 million to $140 million. That potential additional funding was not factored into the university's savings calculations, a spokeswoman said.

"Sustaining the University through this period and into recovery will depend on our ability to meet our savings targets, and the student revenue we are able to generate in Semester 2 and in Semester 1 next year," Dr Spence said.

Modelling by Victoria University’s Mitchell Institute projects the university sector could lose between $10 billion and $19 billion between 2020 and 2023, depending on how quickly the nation’s borders are reopened to international students.

The country’s eight most prestigious universities face the largest loss of revenue from international students, but smaller and regional universities are also likely to suffer severe financial consequences.

The pandemic and associated travel bans have already caused international student enrolments at the University of Sydney to fall 16.8 per cent below 2020 targets.

Vice-chancellors at smaller institutions including Western Sydney University and the University of Wollongong have warned the coronavirus pandemic is not a "one-off hit", and fear compounding losses over the next few years.

The University of Technology Sydney, which faces a $100 million shortfall, implemented similar austerity measures while the University of NSW has asked staff to volunteer for a pay cut to offset a $600 million budget hole.