Decade Financial Performances of Five Multi-billion Dollar Australian Universities: 2009 to 2018

By Frank Larkins, Professor Emeritus in the School of Chemistry and a former Deputy Vice Chancellor of the University of Melbourne

Summary: This study reviews the financial performances over the decade 2009 to 2018 of five of the 39 Australian universities. Each one of these five now has annual operating revenues of more than two billion dollars. Their strong financial performance is central to the health of the Australian higher education sector. The University Five (U5), Sydney, Melbourne, New South Wales, Queensland and Monash, collectively had revenue of $11.8 billion in 2018, sourced from a total asset base of $28.8 billion. In 2018 this U5 group accounted for 34.7% of total university system revenues, highlighting their financial dominance. After correction for wages and professional service growth costs over the decade U5 group revenues grew by a remarkable 40.3% in real terms compared with 32.8% growth for the whole university sector. The U5 group and the university sector overall experienced similar decadal total assets growth at 38.6% and 40.0% respectively. The U5 group had more on-going financial liabilities so their total equity grew by 23.4%, while the growth for the whole sector was 30.8%.

Melbourne and Sydney are the dominant universities for revenue with each deploying total assets exceeding $7.5 billion; however, UNSW has reported the highest proportional growth in revenue (46%) and total assets (75%) in real terms since 2009. This improvement is reflected in its recent international ranking. Queensland had the lowest growth in revenue over the decade (25%) and was the only member of the U5 to decrease its equity base in real terms (by 7%). On a per FTE staff basis all the U5 group substantially increased their revenues from 2009 to 2018, but only two universities, Sydney and UNSW increased revenue on a per EFTSL student basis. The strategies adopted by the U5 group have placed them in an exceptionally strong financial position. The impressive financial growth has in part resulted from significant changes in student and staff profiles. Some potential adverse outcomes related to staff and students recruitment practices are analysed in a forthcoming article.

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Professor Emeritus Frank Larkins