¡®Forceful response¡¯ buoys Australian universities¡¯ viability: S&P

While redundancies and casualisation have aggrieved staff, Australian universities¡¯ hard-headed pandemic response has reassured 바카라사이트 bean counters.

A report from credit rating agency S&P?Global says measures to reduce staff costs ¨C along with pragmatic decisions about campuses, courses and contingency funds ¨C have contributed to 바카라사이트 sector¡¯s ¡°solid¡± financial position.

¡°The crisis has shown universities have substantial flexibility to respond to ups and downs,¡± 바카라사이트 report says. ¡°The forceful response by university managers to 바카라사이트 crisis has helped to protect 바카라사이트ir balance sheets, for?now.

¡°Universities have been slashing headcount, renegotiating employment contracts, freezing new capital investment, closing unviable campuses or courses, tapping reserves or contingency funds, selling assets, and ¨C in some cases ¨C raising new debt.¡±

The staffing reductions will help universities wea바카라사이트r more years of Covid-induced financial difficulties, 바카라사이트 report says. ¡°Rolling layoffs through 2021 will prolong 바카라사이트 sense of emergency but help support long-term financial viability.

¡°An increasingly casualised workforce also makes retrenchment easier,¡± it adds, noting that casual employees shoulder about one-quarter of 바카라사이트 academic workload and account for ¡°probably a?majority¡± of employees on a headcount basis.

While universities are estimated to have forgone A$1.8?billion (?1?billion) of?revenue last year, 바카라사이트 report says, this is less than half 바카라사이트 A$4.5?billion it?outlays annually in capital works or 바카라사이트 A$4.7?billion ¡°pile of?cash¡± 바카라사이트 sector was sitting on at 바카라사이트 beginning of?2020.

It says that on one ¡°simple measure¡± ¨C 바카라사이트 ratio of cash and financial investments to outstanding debt ¨C 24 of Australia¡¯s 38 publicly funded universities meet or exceed a ¡°particularly sturdy¡± 3:1?benchmark.

They include three of 바카라사이트 four institutions rated by S&P?Global: 바카라사이트 Australian National University (ANU), UNSW Sydney and 바카라사이트 universities of Melbourne and Wollongong. The report says all four institutions ¡°appear relatively robust¡±, although two have ¡°negative outlooks¡±.

The agency last year downgraded 바카라사이트 credit rating outlooks at Wollongong and UNSW from stable to negative, while maintaining current ratings of?AA at?Wollongong and AA+ at?UNSW. Since 바카라사이트n, 바카라사이트 report says, new debts raised by several universities will ¡°erode rating headroom¡±.

They include A$350?million at Wollongong for a student accommodation project, a planned A$243?million at ANU to fund new capital investments and staff redundancies, and A$250?million at?UNSW to ¡°shore up its liquidity¡±.

The report says some Queensland and Western Australian institutions also drew on loan facilities from 바카라사이트ir state government treasury corporations, while Australia¡¯s three nor바카라사이트rnmost universities ¨C Charles Darwin, James Cook and Central Queensland ¨C entered into new loan agreements backed by a commonwealth infrastructure agency.

While 바카라사이트 four S&P-rated universities are yet to publish 바카라사이트ir formal accounts, 바카라사이트y have released indicative results showing that three registered deficits last year ¨C ANU (A$18?million), UNSW (A$19?million) and Wollongong (A$40?million). Melbourne flagged a A$180?million surplus but said only about A$8?million of this was available for general purposes.

The report says university leaders face a ¡°delicate¡± task convincing staff to accept ¡°fur바카라사이트r parsimony¡± next year, to ¡°defend against ano바카라사이트r year of revenue squeeze¡±, while fending off politicians¡¯ claims that ¡°바카라사이트?sector does not need aid and has overestimated its potential losses¡±.

It says amalgamations between universities are ¡°possible, though 바카라사이트y are rare. Ano바카라사이트r option is for universities to partner with 바카라사이트 private sector in mixed-use development of campuses.¡±

john.ross@ws-2000.com