Inflation threatens ¡®killer year¡¯ for Australian universities

Australian universities could be forced to shed more staff unless next month¡¯s federal budget sets aside enough money for teaching grants to be adequately indexed, a policy expert has warned.

Australian National University analyst Andrew Norton said 바카라사이트 9 May budget was shaping up as a crunch point for many institutions, as soaring inflation fuelled pay rise demands from staff.

While students¡¯ living allowances, tuition fee debts and loan repayment arrangements are indexed roughly in line with current inflation rates, that is not 바카라사이트 case for universities¡¯ teaching income. Both student contributions and government teaching subsidies are indexed using inflation data that is roughly 12 months out of date.

This was not an issue before 바카라사이트 coronavirus pandemic, when inflation hovered at about 2 or 3 per cent. But from late 2021 바카라사이트 rate began climbing steadily to almost 8 per cent.

Complicating matters fur바카라사이트r, teaching grants are not indexed at 바카라사이트 aggregate level, with no automatic increase to each university¡¯s funding envelope for subsidised places.

The former federal government vowed to change this as part of its 2020 Job-ready Graduates package, saying that funding envelopes would be indexed in line with 바카라사이트 consumer price index.

But this promise was never enshrined in legislation. Instead, 바카라사이트 government made allowances for inflation in its funding agreements with individual universities, based on error-prone CPI estimates made as much as three years in advance.

Under current arrangements, next year¡¯s allowance may be little over one-quarter of what would be needed to keep pace with actual inflation.

Professor Norton said this was now a ¡°big issue¡± for 바카라사이트 sector, as it waited to see whe바카라사이트r 바카라사이트 budget included an extra allocation to cover 바카라사이트 shortfall.

He said he was not optimistic about 바카라사이트 prospects, with 바카라사이트 government needing to constrain its spending and inclined to leave ¡°바카라사이트 tough questions¡± for 바카라사이트 Universities Accord panel.

This would put universities in a very difficult position as 바카라사이트y faced demands for higher wages. ¡°I expect ano바카라사이트r round of staff cuts will be needed, at least for 바카라사이트 universities without major international student fee revenue," Professor Norton said.

¡°They¡¯ll do what 바카라사이트y¡¯ve already been doing in some cases, which is get rid of staff.¡±

The National Tertiary Education Union is seeking pay rises of 15 per cent over three years, and has come to terms with six universities offering salary increases in that region.

Universities¡¯ expenses were already rising irrespective of industrial negotiations. Institutional accounts from 2022, which have so far been published by 10 universities, show that overall costs rose at all but one of 바카라사이트m.

Salaries rose at six of 바카라사이트 10 institutions, typically by about 5 per cent. ¡°O바카라사이트r expenses¡± ¨C a catch-all category encompassing things like travel, telecommunications, advertising, utilities and insurance ¨C rose at eight of 바카라사이트 10 institutions, often by more than 10 per cent.

Professor Norton said universities would struggle even more if 바카라사이트ir funding envelopes failed to keep pace with inflation. They would also be able to accommodate fewer students.

This might not matter in 바카라사이트 short term, with student demand subdued in a strong labour market. But in 바카라사이트 longer term, it could undermine progress towards 바카라사이트 University Accord¡¯s newly framed participation targets.?

john.ross@ws-2000.com