11/04/2014 - 14:21

Universities face revenue hit

11/04/2014 - 14:21

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The state’s public universities are bracing for a likely fall in revenue next year, with the number of eligible domestic school leavers set to fall as a result of a change to the school starting age a decade ago.

Universities face revenue hit

The state’s public universities are bracing for a likely fall in revenue next year, with the number of eligible domestic school leavers set to fall as a result of a change to the school starting age a decade ago.

Annual reports tabled in parliament this month revealed Western Australia’s public universities posted modest increases in operating revenue in the 2013 calendar year, with a strong Australian dollar and increased competition from commercial education providers contributing to generally softer international student enrolments.

Curtin University posted the strongest net operating result of the universities with a $62 million surplus, despite a 22.5 per cent fall compared with 2012.

It narrowly edged out the University of Western Australia, whose operating surplus – which does not take into consideration about $65 million in mark-to-market investment gains – fell slightly to $60 million.

Murdoch University’s operating surplus grew by 9 per cent to $36 million, while Edith Cowan University grew its surplus by 27 per cent to $33 million.

Student growth was generally mixed, with Murdoch and UWA lifting their equivalent full-time student load, while Curtin and ECU reported lower numbers.

Fear that a smaller domestic student base in 2015 will lead to a decline in revenues was a common theme among the universities, who have been preparing for the change for several years.

The school starting age was lifted in 2001 to bring WA closer to other states and territories, effectively halving the number of students who would normally have progressed through the school system in that year.

That group is set to graduate from high school this year, which means the state’s universities will be forced to select from a smaller pool of eligible domestic school leavers in 2015.

According to Murdoch’s annual report, this is expected to have a financial impact in the order of $62 million on WA universities that year, with continuing losses through to 2018.

While acknowledging that the smaller student cohort will likely lead to a reduction in revenue, the universities are hopeful a comparatively softer Australian dollar and higher unemployment rate will encourage growth in international and postgraduate student enrolments to make up for the loss.

Another cause for concern was the Abbott government’s plans to proceed with about $2.3 billion in cuts to higher education funding, with the universities highlighting that they continued to face a challenging and uncertain environment.

However the government’s plans to develop stronger two-way education links with Asia were met with cautious optimism.

Vice-chancellor salaries appear to have remained strong, with Murdoch’s Richard Higgott earning a 13 per cent increase in remuneration to about $785,000 in his second full year at the university.

A 6.3 per cent increase took UWA vice-chancellor Paul Johnson’s remuneration to about $1.01 million, while Edith Cowan’s Kerry Cox earned about $745,000.

Jeanette Hacket stepped down as vice-chancellor at Curtin in August last year and was replaced by Deborah Terry, who took over at the start of this year. Professor Hacket’s remuneration in her final year at Curtin was about $835,000.

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