Coronavirus: Not helping Australian universities undermines exports and diplomatic relations

Nicky Zhang, 23, left, and Yiling Wang, 23, were postgraduate students from Shanghai studying at Sydney University in 2018. Picture: James Croucher

Australia has five great export industries: iron ore, gas, agriculture, tourism and education. Iron ore and agriculture will be fine. Gas will struggle but will recover while tourism and hospitality are the biggest single beneficiaries of the JobKeeper rescue package and are in “hibernation”.

But universities have been ignored and will therefore be greatly damaged. Some, particularly smaller ones, will be forced to close next year or in 2022. One of our great regional export initiatives, where we successfully competed with the rest of the world, will be setback a decade and may never recover.

Education Minister Dan Tehan comes from the rural areas of Western Victoria and is based in Hamilton. He may not be aware of what is taking place in the university sector. Tehan is a Liberal (not National) member and he will carry ministerial responsibility for what is about to happen to this great export industry and centre of Australian employment.

In explaining what is happening to the sector I am going to start with the human story of many Asian students, many of whom are from China. A large number are not the children of rich parents. But in order to give them a better life, the parents somehow raised the money to pay the fees and send their child to Australia.

The understanding was that the student would be able to find work in Australia usually on a casual basis, in hospitality. And for decades the system worked well. But now there is no work and they are trapped in Australia. We have a major humanitarian problem that will scar our relations with middle-ranking Chinese citizens, increase the widespread belief in Asia that we are racist and further intensify the bad relations we have at the top echelons of Chinese government.

Helping overseas students in genuine distress will be a minor expense item but it’s an investment that will generate considerable regional goodwill. Some universities like Swinburne have set up funds but Tehan and the universities need to work on a plan, administered by the universities, to help overseas students who are struggling.

Unis were unprepared

Most of the universities were not prepared for this crisis. Their costs for 2020 were set before they had any idea that COVID-19 was set to greatly reduce their student numbers. The enrolment impact varies from university to university but from what I can tell a reduction of 20 per cent in enrolments is fairly widespread. All the major the major universities have turnovers that exceed $1 billion so they must experience a 50 per cent fall in revenue to gain JobKeeper help. For a brief time, the fact that they are classified as charities looked as though the allowed revenue reduction point would be 15 per cent, but it was quickly restored to the standard requirement for most universities of a 50 per cent reduction in revenue to receive JobKeeper.

That level was set so that large companies would not participate unless they were decimated. But universities are non-profit organisations which, remarkably, have found a way to generate regional revenue and be world-competitive. Setting the revenue reduction trigger rate 50 our cent was in reality saying that the government will not help.

Many in the Coalition dislike universities because they are dominated by left wing views and ideologues that are different from the government. Accordingly, some members of the government are secretly pleased that universities are now suffering. “They have had it too good for too long” seems to be the view.

But that view will come at a huge community and national export revenue cost, and will inflict great damage on our position in the region. Indeed, one could argue that Foreign Minister Marise Payne should be involved in the decision to let the universities decay.

Most universities will get through 2020 by, (where possible) slashing building programs, reducing casuals and using reserves or borrowing.

But next year if enrolments stay down or fall the education they provide will have to be reduced and their cash will be slashed by the required staff reduction payouts. The word will spread around the region that Australian standards have been reduced and if we are not very careful a vicious circle will develop.

Locals will suffer too

At the moment local students are subsidised by the foreign students who pay substantially greater fees. As the universities cut back so the education they are able to offer the locals will change dramatically.

Many will argue that universities need a good clean-out and that the basis of their operations need to change. Executing that sort of change by slashing university staff, closing campuses and some actual universities is the wrong way to go.

Although we have some excellent regional universities the major employment areas are in our capital cities; a long way from Hamilton. The major reduction in university staff set for 2021 and 2022 will be an enormous election issue.

Why the government decided that this major export industry was expendable will be a major topic in the community.

I am not going to prescribe what must be done. The universities themselves need to get on the front foot and be much more vocal about what is ahead even though they realise that their remarks may damage 2021 enrolments.