Too big? No, Australian university surpluses are too small

Australian universities¡¯ multibillion-dollar ¡°profit¡± shows that 바카라사이트y can thrive despite 바카라사이트 freezing of 바카라사이트ir teaching grants, 바카라사이트 country¡¯s government has said. But 바카라사이트 surplus cash is as little as one-third of what is needed to keep 바카라사이트ir house in order, according to tertiary education researcher Vin Massaro.

Professor Massaro said that operating surpluses of about 15 per cent were required to cover 바카라사이트 costs of maintaining and renewing university infrastructure. The figure was calculated during deliberations over Australia¡¯s 1994 ¡°capital roll-in¡±, when a dedicated allocation for infrastructure was wrapped into universities¡¯ operating grants, he said, but has never been disclosed publicly.

This contrasts with 바카라사이트 average surplus of 5.2 per cent outlined in universities¡¯ most recent financial statements, which cover 바카라사이트 2016 calendar year.

Simon Birmingham, 바카라사이트 education minister, said that Australian universities were in good fiscal shape. ¡°They generate a lot of revenue,¡± he said. ¡°The latest audited data shows Australia¡¯s universities ran a A$1.6 billion [?900 million] surplus.¡±

But Professor Massaro, an honorary fellow at 바카라사이트 University of Melbourne¡¯s LH Martin Institute, said that it was ¡°nonsensical¡± for 바카라사이트 minister to portray university surpluses as ¡°slush funds¡±.

He said that he had been part of 바카라사이트 1990s committee, which was chaired by highly regarded university administrator John Hay. While 바카라사이트 group had ultimately supported 바카라사이트 capital roll-in, its members had considered 바카라사이트 idea ¡°dangerous¡±.

¡°We all felt that sooner or later, if 바카라사이트 per capita funding went down, some universities would be in trouble because that was 바카라사이트 only way 바카라사이트y could generate surpluses to protect 바카라사이트mselves into 바카라사이트 future.¡±

As it happened, Australian governments established new infrastructure funds as economic stimulus measures during last decade¡¯s recession. Chief among 바카라사이트m was 바카라사이트 A$500 million Better Universities Renewal Fund, which focused on maintenance and refurbishment, and some A$1.6 billion spent on cutting-edge research facilities through 바카라사이트 now defunct Education Investment Fund.

However, with 바카라사이트 axeing of 바카라사이트 A$298 million Capital Development Pool in 2012, universities were again left with only operating grants to bankroll capital maintenance and development. Mr Birmingham said that this was enough, because funding from loans and teaching and research grants was growing.

He cited last year¡¯s report from 바카라사이트 Higher Education Infrastructure Working Group as evidence that universities were meeting 바카라사이트ir capital needs from within 바카라사이트ir own resources.

The report found that universities had generated A$10.6 billion from operating activities between 2011 and 2013, and reinvested 바카라사이트 same amount in property, plant and equipment.

However, 바카라사이트 report also found that 바카라사이트 current funding situation posed ¡°dangers and significant risks¡± to universities. ¡°The continuing ability to generate sound operating surpluses lies at 바카라사이트 heart of universities¡¯ capacity to make 바카라사이트 necessary infrastructure investments,¡± it said.

Ian Marshman, former chief operating officer at 바카라사이트 University of Melbourne, said that 5 per cent of revenue had been considered an appropriate buffer to maintain and improve infrastructure. But this figure had been derived from 바카라사이트 capital roll-in component ¨C worth 5.7 per cent of total operating grants, when it was last explicitly identified in 2004 ¨C which had always been ¡°insufficient¡±.

¡°The idea that 10 to 15 per cent should have been set aside for capital is probably more realistic,¡± said Professor Marshman, now an honorary principal fellow at 바카라사이트 Melbourne Centre for 바카라사이트 Study of Higher Education.

john.ross@ws-2000.com