Over on Personal Reflections I will be running a Monday Forum session on the Federal Government's school funding changes. This includes a cut to university funding. Here I just want to record the UNE response circulated in a staff email at 4:26 this afternoon.
Analysis will follow later. I do not know at this stage the Southern Cross or University of Newcastle responses.
On the weekend the University sector was blindsided by substantial funding cuts by the Federal Government.
The so called “efficiency dividends” on Universities over the next two years are to fund school reforms.
Our initial estimate is that the direct cost of these measures will be a cut in funding to UNE of $2.1 million next year, rising to $3.6 million in 2015.
However the indirect costs, such as a reduction in student demand given the removal of start-up scholarships and the removal of the upfront HECS payment, will make that figure even higher.
I find this a very difficult announcement to accept. Last year we were encouraged to take in much larger numbers of students and, after doing just that, are now told that we must also accept a reduced price.
It is like Australia selling coal to China at one price and when it arrives, China decides it won’t honour the price. This is not something any commercial business would tolerate, but it is the situation in which Universities now find themselves.
UNE is in a more fortunate position than most universities because we have fought ourselves into a relatively healthy financial position. This will allow us to absorb some of the funding cuts, but in the face of a 7% annual pay increase claim from the National Tertiary Education Union and with CPI running at a little under 3%, eventually UNE would go into deficit.
I have asked the Chief Financial Officer to model the effects of the weekend announcement and to re-evaluate the major capital works program , including the college redevelopment, which we were about to undertake.
Also I cannot entirely rule out that the prospect of staffing and program cuts, but we will do everything we can to avoid this.
When UNE formulated its Strategic Plan in 2011, we recognized that we were too reliant on Federal Government funding and began making moves to diversify our business model.
If ever we needed confirmation that this is an urgent priority, then this latest government announcement must be it.