The 2020 financial outcomes of Australian universities within the COVID-19 pandemic environment
By Frank Larkins and Ian Marshman
Summary: The financial outcomes for 37 Australian Universities as reported in their annual reports for calendar year 2020 are analysed. The total incomes and expenditures from continuing operations for the consolidated entities provide the principal data set as a snapshot of university finances including operational activities.
Collectively, universities had total incomes of $35.7 billion in 2020, some $1.8 billion less than in 2019. Total expenditures were reduced only marginally, by $0.1 billion to $34.9 billion. Some 30 of 37 universities (81%) reported reduced income in 2020, while 18 universities (49%) managed to reduce their expenditure to mitigate some of the income losses. Consequently, the number of reported operating surpluses decreased from 34 institutions in 2019 to 23 in 2020.Eight universities (22%) were in a stronger financial position in 2020 with a higher surplus than in 2019.
In proportional percentage terms, ANU was the university most impacted, with its financial position deteriorating in 2020 by 23% relative to its 2019 financial performance. Swinburne at 11%, Wollongong, Curtin and Federation at near 9% were the other universities most adversely impacted.
Australian universities have been resourceful and resilient in confronting the financial challenges presented by the COVID-19 pandemic. Sector-wide income was only 4.8% lower in 2020 compared with 2019. COVID has had less impact on finances than predicted by most commentators. Western Australian universities reported the highest reduction in income at 6.6% along with Victoria at 5.2%, New South Wales at 4.7% and Queensland at 4.0%. South Australian universities collectively reported an increase of 0.3% in 2020 income. Expenditure changes were small with the sector reporting an overall decrease of 0.3% in 2020 compared with 2019.
The present analysis provides a reference benchmark to evaluate the responses of universities to the more severe challenges to on-going financial sustainability that lie ahead in 2021 and beyond.
Professor Emeritus Frank Larkins and Associate Professor Ian Marshman are Honorary Fellows from the Melbourne Centre for the Study of Higher Education at the University of Melbourne.