Universities

Why IDP Saved Universities in 2021 and…Why It Won’t Happen Again

“A collective deficit of $190 million in 2020 has been transformed into a surplus of $2.1 billion in 2021,” he wrote.

The University of Sydney alone accounted for half of the combined $2.1 billion surplus of the state’s 10 universities.

Universities have faced substantial criticism in recent months after many posted record surpluses amid 27,000 layoffs in the two years of the pandemic.

In 2020, after being omitted from the government’s JobKeeper scheme, university leaders argued that the scale of the financial crisis resulting from border closures preventing international students from entering was catastrophic and would be felt for years.

“The devastation could be significant,” said former Vice-Chancellor Glyn Davis, who is now Prime Minister and Chief Cabinet Officer. “It’s going to be a slow burn. And the slow burns are the hardest because it’s really hard to get anyone’s attention.

However, with the pandemic still in play, several universities posted record surpluses in 2021, including $1 billion at the University of Sydney.

Professor Larkins said Sydney was not only able to maintain international student enrollments but increased fees and charges revenue by $260 million.

The university also received $95 million from the federal government’s $1 billion bailout for research activities and an $83.4 million dividend from IDP Education following the sale of Education Australia Ltd. .

“The university also reported a fair value of $211.7 million on IDP shares obtained through the liquidation of Education Australia,” Prof Larkins said.

In total, the University of Sydney recorded an increase of $833 million – or 33% – over 2020. However, the university’s surplus would have been reduced by around $390 million if it were not there were no one-off elements.

Professor Larkins described the turnaround from 2020, when six of the state’s 10 universities posted deficits, to 2021, when nine of them posted surpluses, as “exceptional”.

“The magnitude of the improvement was significant, with six universities registering growth of more than 10%,” he said.

Sydney saw the greatest improvement (33%), followed by the University of New England (24.6%), Newcastle (19%) and Charles Sturt (13.2%).

“In general, the benefits received [were] IDP shares and the special research funding allocation. The findings apparently highlight how effectively universities handled the pandemic crisis in 2021,” Prof Larkins said.

While the results have been exceptional, and for the most part likely to be ad hoc, it will do little to dampen criticism of the high salaries of university vice-chancellors.

As The Australian Financial Review reported that 11 of Australia’s university bosses received salaries over $1 million in 2021.

“Salaries over $1 million are a public relations issue with government and the general public. When a vice-chancellor is paid twice the prime minister’s salary, it looks like something is wrong,” said Andrew Norton of the Australian National University at the time.