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Uni surpluses don’t reflect “underlying position”

The Australian | 16 April 2015

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  Victoria’s vice-chancellors have warned that their universities’ surpluses are artificially “inflated” and may bear little relation to reality.

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Uni financesAmong other pressures, the end of the Education Infrastructure Fund means need to generate healthy surpluses to fund future investments.

Victorian Vice Chancellor’s Committee chair and La Trobe vice-chancellor John Dewar says:

This is the only way a university can fund a capital program given that there are no longer any sources of government funds for capital projects. By and large, universities operate with very low margins and with very little leeway for such large-scale organisations.

Dewar’s statement came after university annual reports for 2014 were tabled in state Parliament on 15 April.

Melbourne and Monash universities both reported increases in accounting surpluses to $182m and $213 respectively, but warned that “underlying” results were down after taking out investment gains and one-off items like capital-grants.  Monash said its underlying result was $49m, down from $54m, while Melbourne said its underlying result was just $6m, down from $7m.

La Trobe paid out more than $35m last year in staff termination payments as part of its restructuring, reducing its operating surplus to $18m, down from $45m. Excluding such one-off items its surplus was up at $54m from $42m.

Victoria University reported a $10m deficit, as it undergoes restructuring to adapt to increased competition for university and TAFE students. While vice-chancellor Peter Dawkins said the result was ahead of target, he forecast another deficit this year.

Federation University’s surplus contracted to just $2.8m on revenue of $278m, down from a $4.2m surplus in 2013.

Swinburne reported a steep fall in underlying surplus to $13m from $33m, largely driven by the cost of implementing a new student management system.

Deakin’s underlying surplus rose slightly to $54m from $50m.

RMIT reported rise in surplus to $75m from $67m. In underlying terms RMIT posted a $51m surplus.

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