2020 Annual Report
The University of Newcastle 2020 Annual Report, tabled in NSW Parliament on 28 May 2021, reported a statutory surplus of $7.5m across its consolidated entities.
The University itself reported a statutory surplus of $5.8m, but with unspent restricted funds and unrealised investment gains excluded, the underlying result was a deficit of $18.7m.
The University’s Looking Ahead Strategic Plan was launched in early 2020, and despite the unprecedented challenges, good progress was made against the strategic goals. The University of Newcastle continues to lead the sector in Indigenous higher education with more Aboriginal and Torres Strait Islander students (full time equivalent) than any other University in Australia. The University is also leading the way on next-generation resources, with innovations in energy storage, hydrogen and solar power getting closer to commercial viability. Our other priorities were based around developing life ready graduates, reimagining our campuses and living our values.
Vice-Chancellor and President Professor Alex Zelinsky AO said that the University performed well in difficult circumstances, but that while the University was able to weather the immediate impacts of the pandemic, COVID-19 compounded pre-existing financial sustainability issues.
“Our underlying operating results have been at breakeven or in deficit for several years and this year, with COVID-19 that situation worsened,” Professor Zelinsky said.
In 2020, for every non-restricted operating dollar received, $1.05 was spent. This has increased since 2019, from $1.02 spent for every dollar earned.
Professor Zelinsky said the University can influence revenue by making good, informed decisions – but with external headwinds on international student numbers and pressures relating to the Job Ready Graduate funding scheme has limited opportunities to grow revenue at the current time. In 2020, otherwise robust commercial activities reported a loss of $3.7m, due in large part to COVID-19 impacts on occupancy of student accommodation.
The University is currently targeting savings of $35m, in salary and non-salary costs, across the institution.
“To ensure our financial sustainability, we have to control what we can control and that means resetting our cost base,” Professor Zelinsky said.
Professor Zelinsky said maintaining a sound investment portfolio is part of achieving financial sustainability. The University’s investments returned an unrealised gain of $13.2m in 2020, down from $42.2m in 2019.
“We rely on the strength of our investments to both meet our moral obligations to members of the community who have provided funds to the University as donations and bequests, to our staff to preserve their earned entitlements, and also to invest strategically in our future – for our students, our staff and the communities we serve,” he said.
Professor Zelinsky said further financial fluctuations are likely over the next few years.
“There is still uncertainty around the return of international students, which I believe will play out over a few years,” Professor Zelinsky said.
“Resetting our cost base is a medium term strategy as there are upfront costs that we will carry in 2021 and conversely, the Government’s Job Ready Graduates Scheme has transition funding built in until 2023-24, after which time it will switch to the base scheme level,” he said.
“There are still plenty of unknowns so a focus on cost management to achieve financial sustainability has never been more important.”
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The University of Newcastle acknowledges the traditional custodians of the lands within our footprint areas: Awabakal, Darkinjung, Biripai, Worimi, Wonnarua, and Eora Nations. We also pay respect to the wisdom of our Elders past and present.