University of Melbourne posts $180m surplus

In spite of the loss of international students in the pandemic, the University of Melbourne will post a $180m surplus in 2020.

Vice-Chancellor of Melbourne University Duncan Maskell. Picture: Mark Stewart

The University of Melbourne has come through the COVID crisis in good financial shape and will report a 2020 surplus of about $180m after cutting $360m from its spending last year and losing hundreds of jobs.

Vice-chancellor Duncan Maskell said on Thursday that the result, in the face of a $335m revenue fall, was “slightly better than expected”.

“Most of that improvement is because we’ve taken serious measures,” he said.

With the improved outlook, Professor Maskell has now reversed the 20 per cent salary cut he and his executive team took for six months last year at the height of the crisis.

“In all honesty I didn’t feel I could make my incredibly hardworking senior executives continue to work for 20 per cent less,” he said.

Melbourne is the second Group of Eight university to surprise observers with a substantial 2020 surplus, overcoming the $1.8 billion revenue reduction suffered by the whole university sector last year due to falling numbers of international students.

Two weeks ago Monash University announced a $259m operating surplus for 2020, and vice-chancellor Margaret Gardner said this year’s budget anticipates a surplus of $55m. However Monash expects to run deficits in 2022 and 2023 as the impact of declining numbers of international students cascades into later years.

The University of Melbourne’s still-to-be-audited 2020 results show a small operating surplus of $8m plus about $180m in revenue from long term investments and endowments.

Professor Maskell said that, despite the 2020 surplus, the next two years were very uncertain. He expects the university will lose nearly $900m in revenue in the three years from 2020 to 2022, compared to pre-COVID estimates.

The university’s unaudited 2020 results show a $275m revenue drop, and $60m in extra costs to support students through COVID and to move courses online. In response to the crisis the university also reduced its capital expenditure by $300m, drew down $120m from financial reserves, and took on $300m in extra debt.

Nearly 200 university staff have lost jobs so far through a voluntary redundancy process.

National Tertiary Education Union national president Alison Barnes said the University of Melbourne had cut more jobs than needed. She said that, aside from the voluntary redundancies, a further 100 professional staff were being sacked and the union was aware of over 500 casual and fixed term staff who had lost their jobs.

“Further use of the university’s reserves and a bigger reduction in the capital works program might have saved many of these jobs,” she said.

One factor which improved last year’s result was an unexpected boost in student numbers in the second semester of 2020, plus as well as an increase in the average number of subjects each student enrolled in.

Professor Maskell paid tribute to the work of university staff in responding to the pandemic crisis.

“They have adjusted to a set of circumstances on a scale that we never could have imagined,” he said. “Repeatedly, they have overcome the challenges created by the pandemic to continue to deliver the world-class teaching and research that the University of Melbourne is renowned for.”