NewsBite

Universities warned over foreign students and cyber threats

A ‘concentration risk’ from Chinese students, along with eye-popping expenditure on redundancy payouts, have been exposed in state government audits of the nation’s universities.

State auditors-general have outlined their concerns over university finances.
State auditors-general have outlined their concerns over university finances.

Australia’s universities remain over-reliant on Chinese students and are failing to safeguard against cyber attacks, government auditors have warned.

A raft of financial and security risks is revealed in fresh audits of all public universities in NSW, Victoria, Queensland and Western Australia.

Collectively, the 29 universities delivered a $2.2bn surplus, underpinned by rising revenue from foreign student fees and investment income.

But NSW Auditor-General Bola Oyetunji warned that six NSW universities reported net deficits in 2024, with only the sandstone University of Sydney and University of NSW achieving significant surpluses.

Six universities had less than three months of cash reserves to fund operating and financing activities, which Mr Oyetunji warned “may signal financial sustainability risk’’.

They were Charles Sturt, Macquarie, Southern Cross, Newcastle, Western Sydney and UTS.

The 10 universities in NSW spent $44.2m on redundancy payments to sacked staff last year – a 58 per cent increase on 2023.

The NSW Audit Office has warned that universities are relying too heavily on students from China. Picture: iStock
The NSW Audit Office has warned that universities are relying too heavily on students from China. Picture: iStock

The NSW Audit Office found that revenues from international students rose 25 per cent last year, but this was “unlikely to continue’’ given geopolitical risks and the federal government’s restrictions on student visas. Averaged across all universities in NSW, students from China, India and Vietnam generated 43 per cent of revenue from fees and charges – posing a “concentration risk’’.

“China is the leading source of overseas student revenue for six universities,’’ the NSW Audit Office report states.

“A high level of reliance on student revenue from a limited number of key source countries of origin poses a concentration risk for NSW universities.

“Unexpected shifts in demand arising from changes in the geopolitical or geo-economic landscape, or changes to visa approval rates or travel restrictions, can impact revenue, operating results and cash flow.’’

The audit report reveals that NSW universities earned nearly twice as much from overseas students than domestic students.

“Students from the top three countries of origin contributed $3.1bn in fees, which slightly exceeds the universities’ total revenue from domestic students in 2024,’’ it states.

The NSW Audit Office called on universities to provide cyber security training to students and staff to prevent cyber attacks.

“Cyber security incidents are highly prevalent and have impacted seven out of 10 universities,’’ its report states. Universities do not consistently follow their own procedures for recording cyber incidents, data breaches and privacy breaches.

“One university advised that identifying the source of their cyber security incidents was difficult and almost impossible.’’

Queensland Auditor-General Rachel Vagg revealed that her state’s universities face “increased competition’’ to enrol domestic students, and warned they risked a use-it-or-lose-it approach to public funding.

“There is a risk that Commonwealth Grants Scheme payments, which are linked to student enrolments, will reduce if universities do not have enough domestic students enrolled to use the full funding available,’’ she states in her report. “Universities are still facing challenges in the domestic student market.

“The low unemployment rate and cost-of-living pressures continue to impact demand for university places as students defer study, take smaller study loads, or enrol in free vocational training.

“Universities face increased competition for domestic students from both their peers and vocational education providers, and must manage their strategies to attract and retain them effectively.’’

Queensland Auditor General Rachel Vagg has warned universities risk losing public funding unless they enrol more domestic students.
Queensland Auditor General Rachel Vagg has warned universities risk losing public funding unless they enrol more domestic students.

Queensland’s seven public universities made a $477.4m surplus last year, with only the University of Southern Queensland recording a $28m deficit due to the loss of international students and redundancy costs.

But the audit report found the collective profit would have collapsed to just $4.4m without income from investments.

“Without the gain (from investments), Griffith University and Queensland University of Technology would have incurred a loss in 2024,’’ the report states.

“The University of Queensland would have reported a much lower profit this year, and a loss in 2023.’’

Victorian Auditor-General Andrew Greaves found the state’s eight public universities generated a net profit of $597m last year – but calculated the surplus would have plunged to $129m without revenue from investments.

The University of Melbourne, Deakin University, Federation University and La Trobe University all recorded a net loss before accounting for investment income. RMIT University relied on international students for 42 per cent of its revenue, while the University of Melbourne and Monash University reaped more than a third of their revenue from foreign students.

Western Australia’s Auditor-General, Caroline Spencer, also pointed to universities’ growing reliance on revenue from international students, who made up 60 per cent of all enrolments at Murdoch University.

“While these fees bolster the financial viability of universities, this revenue source is vulnerable to external factors, such as visa restrictions or, from past experiences, the impact of closed borders,’’ she states in her report.

“These universities and their governing boards need to monitor and manage the associated risks to ensure their ongoing financial health.’’

The four public universities in WA recorded a $552m surplus last year, underpinned by $960m in fees from foreign students.

Add your comment to this story

To join the conversation, please Don't have an account? Register

Join the conversation, you are commenting as Logout

Original URL: https://www.theaustralian.com.au/education/universities-warned-over-foreign-students-and-cyber-threats/news-story/5531578fd43ddfae631c3363653db47c