Monash University records $78.3m deficit in 2022 after Covid surpluses

Monash University crashed into deficit last year and expects another deficit in 2023 after healthy surpluses during the pandemic.

Monash University was in deficit in 2022. Picture: Andrew Henshaw

Monash University crashed into deficit last year and expects another deficit in 2023 after recording healthy surpluses in the first two years of the Covid pandemic.

In a message to staff last Friday vice-chancellor Margaret Gardner said the university’s 2022 annual report, to be released in May, will show that the university’s consolidated operations, including its wholly-owned entities, lost $78.3m last year.

This compares to the massive $410.6m surplus recorded in 2021, which was boosted by a $170m rise in value of the university’s investment portfolio, and a $150m windfall in federal government assistance – most of it Monash’s share of a $1bn one-off Canberra handout for research.

The Monash deficit suggests other research-intensive universities – such as Sydney, Melbourne, UNSW, Queensland and ANU – will also endure poorer 2022 budget outcomes because they will also be hit by the impact of unrealised investment losses and the withdrawal of one-off Covid research funding.

Margaret Gardner, vice-chancellor of Monash University

However Monash and other top universities will benefit from the resilience of Chinese student demand. Latest figures show that students rushed back to Australia in February after Beijing decreed that Chinese students enrolled at foreign universities needed to return to campus instead of studying online from China. The Home Affairs Department has told the education industry that 42,000 Chinese students returned to Australia in February following the edict, reducing the number of Chinese students offshore from 63,000 to 21,000.

The quick response from Chinese students is more evidence that demand for Australian education in China remains strong and universities can continue to rely on Chinese fee revenue.

In her message to staff Professor Gardner said “in 2023 we have seen increasing numbers of international students from many countries come to Monash”.

She also said in the staff message that the university had “not underestimated the difficulty” of recovering from the 2022 and 2023 deficits.

“However, we must be able to move from deficit to surplus by the end of this year or the future quality of the university will suffer,” she said.

Professor Gardner said the surpluses in 2020 and 2021 were “planned to be the buffer” against the 2022 and 2023 deficits. She said a factor causing the deficits was lower numbers of students due to Covid.

“Our total student numbers in 2022 were below 2019 numbers and they have not yet fully recovered,” she said.

Monash University’s “underlying consolidated result” – after taking out net investment revenue, unspent research funds and other items such as donations and bequests – showed a smaller 2022 deficit of $17.6m.

Professor Gardner reassured university staff that the deficit announcement was “not the precursor to the university undertaking planned reduction in staff numbers”.

She said the university had shown resilience and “we are well placed to see improved outcomes in the years ahead”.