Never waste a crisis: will COVID-19 be a catalyst for change at Australia's universities?

3/05/2020 12:08:00 PM

Universities are looking at losses of $4.6 billion or more in the next six months, with 21,000 jobs on the line

Universities are looking at losses of $4.6 billion or more in the next six months, with 21,000 jobs on the line

The multibillion-dollar coronavirus shock to the sector has prompted a rethink of the international education business model.

Very large text size Ten years ago, Australia's international education sector was in crisis mode.Tas Premier lifts restrictions after shutting down a localised COVID-19 outbreak 02/05/2020 | 2min Extra lockdown restrictions imposed on Tasmania's north-west are being lifted after localised outbreak was brought under control.More Aussies adopting greyhounds amid COVID-19 pandemic 02/05/2020 | 4min As Australians spend more time isolating many are using the time to settle in a new family member.Morrison's media messaging on COVID-19 must address 'genuine behaviour change' 01/05/2020 | 6min Founder and Executive Creative Director at DPR & Co Richard Ralphsmith has assessed the government's media strategy during the coronavirus pandemic saying thus far "simple, basic messaging about hygiene" has proven to be "pretty solid".

Economic headwinds, scandals in vocational educational and a series of well-publicised attacks on students had seen the number of Indians seeking Australian qualifications crater.Universities are looking at losses of $4.127 people were infected and 11 people died as a result of the outbreak.6 billion or more in the next six months, with 21,000 jobs on the line.Favourite.Credit: Louise Kennerley Between 2009 and 2011, Indian student numbers dropped from 26,000 to 10,000, quickly wiping $225 million from university budgets.Image: Getty Favourite.Longer term, the downturn deprived them of an estimated $1.

3 billion.The contraction was viewed by some as a painful lesson in risk but the impact was mitigated by the unstoppable rise of one market: China.A decade on, after consistent annual growth in international education of around 14 per cent, it is over-exposure to the Chinese market in particular that is the source of the sector's woes.And the shock from the COVID-19 pandemic makes the previous Indian student downturn look trivial.Advertisement 'It’s an extraordinary impact.

Profound and far-reaching." Western Sydney University vice-chancellor Barney Glover Universities are looking at losses of $4.6 billion or more in the next six months, with 21,000 jobs on the chopping block, according to peak body Universities Australia.Modelling by Victoria University's Mitchell Institute projects the blow could be up to $19 billion over three years."It’s an extraordinary impact.

Profound and far-reaching," says Western Sydney University vice-chancellor Barney Glover."I don't think we have faced anything like this in higher education at any time, certainly in the last 30 years." The pain started early for universities, as soon as the government's initial ban on non-citizens travelling from China was imposed in early February, stranding over 100,000 students offshore.Large numbers of Indians, Vietnamese, South Koreans, Brazilians and others have also been locked out.The number of onshore international students in higher education is now sitting at 330,000, down about 30 per cent on last year.

Institutions have since put major capital works on hold, frozen non-essential spending and started negotiating with the union to minimise job losses.The federal government has guaranteed $18 billion in funding for domestic education and unveiled new online short courses but the package does not address the shortfall in international education revenue.Universities are also struggling to meet the revenue downturn thresholds required to qualify for JobKeeper wage subsidy payments.The extent of the impact will depend on what happens with the government's travel restrictions and the pace of global recovery from the pandemic.International student numbers will still be significantly depressed in semester two.

"My sense is that most universities will take a big hit in 2020 but it will not be terminal because they are taking strong finance measures...but the impact will vary from university to university," says University of Queensland chancellor Peter Varghese, a former secretary of the Department of Foreign Affairs and Trade.University of Queensland chancellor Peter Varghese says the impact will vary from university to university.

Credit: Cameron Laird "I think if we find ourselves in 2021 with international students unable to enrol in Australian universities then we are in a completely different ballgame and completely different world of pain." Education Minister Dan Tehan won't be drawn on when travel restrictions might be eased for international students.He says reopening campuses for domestic students and international students already in Australia is the priority.Loading "My hope is that we will hear sooner rather than later about a move back to campuses being reopened, with adherence to the Australian Health Protection Principal Committee guidelines around social distancing.But campuses will be looking to reopen for semester two," he says.

Institutions are also anxious to make sure international students currently in Australia, having lost work and facing barriers to returning home, are looked after.If they aren't, many won't be in a position to pay fees and there could be a long-term hit to Australia's reputation, especially as countries like Canada, Britain and New Zealand offer more generous support.Prime Minister Scott Morrison also shocked the sector by saying recently that it was "time to go home" for temporary visa holders, including students, if they couldn't support themselves."I think it's the messaging and signalling that we need to make sure the government is getting right," says University of Sydney vice-chancellor Michael Spence.One senior academic figure sees an "overt hostility" towards universities in the government's restrained support for the sector so far.

Tehan says Coalition politicians just want to ensure funding is "spent well, taxpayers are getting value for money and institutions are delivering on their core objectives".The government has also emphasised that no sector is immune from the economic ramifications of the pandemic.Universities are hoping the crisis will convince people of the importance of research – with academics around the country part of critical efforts to tackle COVID-19.And the institutions are billing themselves as key to Australia's economic recovery as people seek to upskill or retrain.They are expecting a spike in demand because of a weak jobs market and Tehan has acknowledged that will need to be funded somehow.

La Trobe University vice-chancellor John Dewar says the sector is ready to participate in preparing the nation's future workforce.Education Minister Dan Tehan says the sector’s reliance on international education must be assessed.Credit: Alex Ellinghausen "But it would be nice if government were to reciprocate and to understand just how important universities can be in that process," Dewar says.The high-stakes crisis has triggered a reappraisal of the business model that has prevailed in universities over recent decades.The growth of international education has been a shared endeavour with Labor and Coalition governments, who encouraged universities to diversify their revenue streams, taking the pressure off the public purse.

The government accounted for around 85 per cent of university funding in 1990; today, it is 30 per cent."I think the business model was already being assessed in the lead up to COVID-19 although there is no doubt that the pandemic has led to more urgent thinking about the sector’s reliance on international education," says Tehan.While noting the efforts to diversify source countries of students, he wants to see international education "rebounding strongly" after the crisis and argues Australia's success in dealing with COVID-19 will make it an attractive destination.The relentless growth of international education has seen it become Australia's third-largest export earner, behind only iron ore and coal.It has become a pillar of budgets – worth $39 billion last year.

Among the elite Group of Eight universities, fee-paying overseas students account for 27 per cent of revenue, up from 6 per cent 20 years ago.Universities are quick to add this is not just about the money.They have talked up the infusion of multicultural talent on campuses and the goodwill towards Australia generated among hundreds of thousands alumni spread throughout Asia.Labor education spokeswoman Tanya Plibersek says the university funding model needs to be scrutinised after the crisis.She thinks there is a "middle ground" to be found where governments provide more funding for education and research.

"Putting international education on a stronger and more sustainable footing will be part of that.Making sure there is adequate funding for education and research is a really important part of that.There must be a greater role for public funding," she says."I think universities have been pretty conscious of the risks of over-dependence on one market," says Varghese."Every university has been aware for some time of that and has strategies for diversifying their sources of international students.

But the reality is that while Chinese demand remained very high, those diversification strategies didn’t advance as easily as people might have hoped." Previously, the tumultuous political relationship between Beijing and Canberra was the more apparent risk in over-reliance on Chinese students.The political risk was underscored last week when Chinese ambassador Cheng Jingye, criticising the Morrison government's pursuit of an independent inquiry into the origins of COVID-19, warned of a potential boycott by Chinese parents who might reconsider "whether this is the best place to send their kids".People's thoughts on what should happen with international student numbers are one thing.But the inevitable reality is that enrolments, from China and elsewhere, could be suppressed long-term because of the COVID-19 shock.

Up to now, international education revenue has cross-subsidised research, allowing Australian institutions to climb in global rankings, and allowed them to invest significantly in their campuses."The real issue here is if we lose the revenue from international students, what takes its place?" wonders Varghese.Is there any appetite whatsoever inside government for an increase in funding for universities? "I don’t think that has been tested because while international student revenue has been flowing in, the government really hasn’t had to face up to that question," he says.Dewar thinks international student revenue may take two to five years to recover and "that will sharpen the focus on what government can and will do for the sector"."I'm sure it will be the catalyst for some changes," he says.

"It is arguable that the current model is not fit for the long term post-COVID recovery and we need new ideas recognising that higher education is crucial to a knowledge economy and community resilience," says Glover, including a "need to consider the level of commonwealth investment and the relative private versus public contribution to the costs".While philanthropy and commercialisation can yield valuable revenue for Australian universities, there are only two sources of funding that can realistically underpin their budgets: government grants and student fees.Six years ago, the Coalition government tried to uncap fees for domestic students, which would have allowed universities to charge significantly more.The measure faced major political hostility and was ultimately withdrawn.Spence says philanthropy and commercialisation help but are not the main game.

"It's student fees or government grants.So there has to be movement in one or the other," he warns.Plibersek is cold on the idea of revisiting deregulation of domestic fees."Australians students already pay a larger share of their university education than most comparable countries.If people earn a high income because of their university education, they should pay more tax in our progressive tax system," she says.

Tehan is not quite ready to engage with the difficult longer term questions about the sector and says the first priority is getting through the crisis."Let’s get the campuses open," he says.Sign up to our Coronavirus Update newsletter Get our Coronavirus Update newsletter for the day's crucial developments at a glance, the numbers you need to know and what our readers are saying.Sign up to The Sydney Morning Herald's.

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Right time to pop their bubles made by cash from overseas students. Universities have been behind the knowledge curve for years. Being forced online has woken up students who should have been aware of this. The flotsam left behind can continue to be trained as functionally illiterate teachers. They took so many years of raking in the revenue; did they not have contingency plans?

What about the students, isn’t it safe to open classes now...? It is imperative to add a lot more courses online, especially first year courses. This would mean increasing your capacity for students. Put money into the teaching staff not expanding buildings. Sad to see the jobs go but the university system is a business not a home of learning.

Their ridiculous reliance on Chinese students was always going to end in tears - time to face the music OMG, really? QUICK, open up the borders, let the overseas students flood in NOW. Nevermind the second wave and subsequent Coronavirus related fatalities, WON’T SOMEBODY PLEASE THINK OF THE UNIVERSITY MONEY!!!

In one year, a lecturer failed 50% of the class in a core unit. Next year, another lecturer passed them all. Standards dropped with no checks. In fact the lecturer who called them had to justify it. Students come from serving rate universities in India. Aim to get jobs in coz Is this what happens when the business model is principally based on cash-up-front foreign students as the preferred ‘client’, as they have been referred to for quite some time now. 🤔

I know a course that marketed to India five years ago- they have hundreds of Indian students who have a primary intention to get a visa. Local students suffer. The university loves the income. Staff are worked to bone with large numbers.

Tas Premier lifts restrictions after shutting down a localised COVID-19 outbreak | Sky News AustraliaExtra lockdown restrictions imposed on Tasmania's north-west are being lifted after localised outbreak was brought under control. \n\nSchools and non-essential businesses were forced to close when a cluster of cases were identified at Tasmania’s North West Regional Hospital. \n\n127 people were infected and 11 people died as a result of the outbreak. \n\nHowever, no new cases have been identified in Tasmania over the past 24 hours, causing the state’s Premier Peter Gutwein to relax the more severe lockdown measures.\n\nImage: Getty Meanwhile in Victoria we have virtually no cases, but kids don’t go to school. Stupid. The UK approach of 'herd immunity' did not work. The UK strategy was based on having 60-70% of the total population getting infected. Hospitals just can't cope. If the easing of restrictions causes further spikes here in Australia, we could end up in same predicament as UK Sky news, giving out false information once again.

Vice chancellor earn over $800,000 a year. Universities have hundreds of millions of dollars coming in from thousands of overseas students. Universities build hunters if millions of dollars of buildings every year. Standards are lowered so students get a pass and feed the machine Consider it a market correction.

Oh dear ... hope all those identity politic PC obsessed teachers who are opposed to free speech don’t lose their jobs. That would be tragic Universities need to focus on its domestic market and open opportunities for students here and stop being greedy. we have kept this system for the money & the greed of the UNIVERSITY sector, not Australians, the University sector Should ONLY be for Australians not the Chinese

If it leads to higher standards for research grants, that can only be a good thing. Too many academics touting questionable studies which end up in The Guardian. It’s a shame that they’re sacking people but their hierarchy wouldn’t dream of taking a pay cut off their million dollar salary! What happened to “We’re all in this together”? Seems not to include their salaries!!

Universities need to focus on local courses that drive degrees that support a more focused local growth. No longer must they focus on huge building programs nor on Chinese culture integration. Future OS students need to come here to learn & integrate into the Australian democracy Teach a postgrad class in a major university Business School - the standards are appalling and most pass

Uni’s have sold out, selling worthless degrees that mean nothing. They act like any other business these days, profit focused. Ten world has lost its mind in neo liberalism economics, which basically means each person for themselves and fuck everyone else

More Aussies adopting greyhounds amid COVID-19 pandemic | Sky News AustraliaAs Australians spend more time isolating many are using the time to settle in a new family member. \n\nGreyhounds as Pets say adoption rates over the past six weeks during the coronavirus lockdown are on the rise.\n\nVet and general manager of Greyhounds as Pets Dr Alicia Fuller told Sky News “in the last six weeks they have had “close up to 300 applications to adopt our greyhounds and about 150 applications just to foster”.

It's time to take responsibility for ourselves and use our universities to educate Australian kids. We have the wherewithal to do it, because we've done it before. We've been lucky, then (not so) clever, for others, now it's time for local innovation for the sake of all our kids. Good! These universities are money grubbing international business' that favor international (chinese) students over Australians. Should be free for Australians to go to uni.

Great news. Less Annaliese Van Diemen’s in the world They are NOT a business. Money and universities like oil and water. They do not mix - corny cliche but to the point. The VCs need to be sacked. They mismanaged their business models by selling degrees to International Students No prize for guessing here!

Scout time the university sector took a hit After years of sucking the blood out of overseas students, lowering standards to pump thousands of cash cows thru the 451 VISA scams

Morrison's media messaging on COVID-19 must address 'genuine behaviour change' | Sky News AustraliaFounder and Executive Creative Director at DPR & Co Richard Ralphsmith has assessed the government's media strategy during the coronavirus pandemic saying thus far 'simple, basic messaging about hygiene' has proven to be 'pretty solid'. \n\n'In some sense, we need to think a bit more broadly about genuine behaviour change,' Mr Ralphsmith told Sky News host Gary Hardgrave.\n\n'And genuine behaviour change is a much more specialised and more difficult discipline in advertising than simply communicating basic messages'. \n\n'You've actually got to try to appeal to people in an emotional sense'. \n\nImage: AP

COVID-19 cluster identified at Victorian meat plant | Sky News AustraliaA coronavirus cluster has been identified at a meat packing plant in Victoria.\n\nEight cases have now been linked to the business, but further infections could emerge, after all employees have been tested. \n\nHealth authorities are refusing to name the virus-stricken business but have assured the public contact tracing and deep cleaning process have been undertaken and the Victorian health Minister said concerns over contamination and food safety were unfounded. \n\nImage: Associated Press\n\n Damn. May they all recover. i heard similar in the US , could be related to Bill Gates getting ready to push his synthetic meat crap upon an unsuspecting public ...

Spain's COVID-19 death toll passes 25,000 | Sky News AustraliaSpain has reached another grim milestone during the pandemic with the country's coronavirus death toll now above 25,000.\n\nThe Spanish health ministry delivered the news after 276 people died overnight and total positive cases rose above 216,000.\n\nDespite experiencing one of the worst outbreaks in the world, Spanish authorities are gradually easing lockdown restrictions as reports indicate the virus has moved past it's peak. \n\nImage: Associated Press How many really died from chronic illness that they already had 🤔 And yet so many Australians seem to think COVID19 is not something we need worry about and that the lockdown restrictions are just a violation of their rights. OccupyChineseEmbassy, ChinaMustPay ,ChinaMustExplain

Decline in rent searches since COVID-19 outbreak | Sky News AustraliaInternational property seekers are among buyers and renters taking a break from Australia's housing market since the COVID-19 outbreak. \n\nREA Group Chief Economist Nerida Conisbee told Sky News searches were down 67 per cent over the past 12 months. \n\n“They’re not gone entirely but they’re certainly far less active than they were 12 months ago,” she said. \n Good. Excellent news