University of Adelaide is on a sound financial footing, says acting chief

The University of Adelaide’s acting head says the institution can deal with the budget shortfall caused by COVID-19.

University of Adelaide acting vice-chancellor Mike Brooks. Picture: Roy VanDerVegt

After days of unprecedented management turmoil the University of Adelaide’s acting head has told staff the institution expects a budget shortfall of $100 million dollars this year, mainly caused by the loss of international students due to the COVID-19 travel ban.

Acting vice-chancellor Mike Brooks, who took the job on Tuesday when vice-chancellor Peter Rathjen went on indefinite leave for undisclosed reasons, told staff said in an email that about $90m of the shortfall was attributable to lower than expected numbers of international students and about $10m was due to extra costs in dealing with the coronavirus.

But he said the university was on a sound financial footing and expected “a strong recovery after the pandemic has ended”.

Professor Brooks pointed out to staff that the $100m shortfall was far less than several east coast universities. UNSW predicts a budget hole of $600m this year and the University of Melbourne forecasts it will miss budgeted revenue by $500m.

The disclosure of this year’s budget position to staff followed the university’s statement earlier on Wednesday saying that the departure of the university’s two most senior officers earlier in the week was not related to the institution’s financial health or COVID-19.

On Monday the university’s chancellor, former South Australian governor Kevin Scarce, suddenly resigned with immediate effect, which was followed on Tuesday by the announcement that Professor Rathjen was on indefinite leave.

Professor Brooks said in the email that the university had frozen recruitment, paused new capital works and revised budgets to deal with the shortfall. He said the university could use short-term borrowing if it needed to.

“Our current borrowings sit at $50m which is very modest for a research-intensive institution,” he said in the email, sent to staff on Wednesday.

He said the university would also develop new revenue sources, including online short courses and micro-credentials.

Professor Brooks said that enrolments from domestic students had held steady this year and international student numbers were up 5 per cent in the first semester but down 16 per cent for the second semester.

“Given that we were budgeting for more significant growth this year (in international students), this equates to a downturn in budgeted revenue of circa $90m,” he said.

Because of the disruptive impact of COVID-19 the university would be reviewing its strategic priorities and the speed at which it implemented its strategic plan.