Unis expect highs, lows

14/05/2009 - 00:00

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WA’s public universities are taking up the post-boom challenge.

Unis expect highs, lows

THE counter-cyclical nature of universities has been highlighted by the financial results of the four public institutions based in Western Australia, which revealed robust operating performances as the boom bubble was pricked.

While the results for calendar 2008 largely occurred in boom-time conditions, increased enrolments from the beginning of 2007, which rose throughout the year as markets soured, have bolstered the tertiary education sector and are expected to generate a bumper year for 2009.

However, rising revenues - in the order of 10 per cent or more at three of the universities - were not entirely reflected in the bottom line as the institutions faced rising employee costs and most were hit by investment write-offs linked to the global financial crisis.

Federal government grants increased substantially at three of the four institutions but that was not a sign of greater largesse from the Rudd government.

Speaking ahead of this week's federal budget, Edith Cowan University vice-chancellor Kerry Cox said despite considerable rhetoric the sector had yet to see any change to the 2.5 per cent indexed annual funding growth, which meant it was always behind inflation.

Professor Cox said this was a Keating government policy put in place by John Howard's government and it must change if Australia was to invest in its soft infrastructure.

"We have had some one-off injections of funds," he said.

"The big issue for universities was the faithful implementation of Labor policy by Howard. That's a compounding issue; Rudd has not changed this.

"The infrastructure we need to build in this country is headpower; we need to invest in having more and more people capital by learning and building knowledge."

Most of the write-offs for calendar 2008 were paper losses as a result of mark-to-market accounting requirements, although investment revenue at the University of Western Australia slid to $33.9 million in the year ending December 31, from $45.3 million, a drop that will handicap its expansion plans.

The size of UWA's investment portfolio is unique among the four public institutions, especially the scale of its financial assets, which took a big hit this year, creating a loss of more than $100 million.

While investment income was steadier at Curtin University of Technology, up to $23.3 million from $22.5 million, it also recorded impaired assets of $21 million. It was a similar story at Murdoch University, where investment income rose to $7.4 million from $5.5 million. It recorded an investment loss of $4.5 million, while investment property gains reversed by more than $34 million.

Investment revenue at Edith Cowan University rose to $4 million from $2.7 million, against an investment loss of $10.6 million.

Importantly, most universities bucked the trend of falling property values due partly to the extensive building programs on their own campuses.

Curtin's property, plant and equipment assets rose to $647.4 million from $565.4 million, more than $66 million of that attributed to the capital cost of various works in progress, including its new indoor sport stadium.

Edith Cowan's property, plant and equipment rose to $799.6 million from $675.4 million, Murdoch's jumped to $526.1 million from $439.7 million and UWA's rose to $1.31 billion from $990.7 million.

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