Australian investment in higher education in 2021

A new report from Victoria University’s Mitchell Institute shows that Australian university profits plummeted by $1.6 billion to just $669 million in 2020.

Australian Investment in Higher Education 2021 (PDF, 1.77 MB) report shows 15 of the 38 universities included in the analysis reported a deficit in 2020. However, most struggled to break even with the majority of the sector surpluses held by just three institutions.

Report author Dr Peter Hurley from Victoria University’s Mitchell Institute said 2020 was not as bad as expected, but warns the worst is still to come.

“Our analysis suggests there are some very dark clouds on the horizon,” he said. “Special government support for the sector ends in 2021. Continuing border closures mean international student revenue is likely to continue to fall well into 2022 and 2023.”

Dr Hurley said international enrolments were falling by 20-25% per year.

“Every missed six-monthly intake of international students is costing universities about $1 billion to $1.25 billion.”

Most of the universities that didn’t post a deficit barely broke even. Almost all the sector’s surpluses were concentrated in Australia's three largest universities – Monash University (A$267 million), University of Melbourne (A$178 million) and University of Sydney (A$107 million).

“This suggests that it is the smaller and less prestigious universities that are finding the conditions the toughest,” Dr Hurley said.

Smaller universities are more likely to cater to the average Australian student.

“Without further support, parts of the university sector are likely to face very difficult choices that will mean further cuts to staffing, courses and research.”

Previous reports from the Mitchell Institute have highlighted that Australian students’ educational experience is likely subsidised by revenue from international students.

University revenue by type & change from 2019 ($ millions)

Table 1: New South Wales

Table 2: Victoria

Table 3: Queensland

Table 4: Western Australia

Table 5: South Australia

Table 6: Australian Capital Territory (ACT)

Table 7: Tasmania

Table 8: Northern Territory

Table 9: Australia-wide

Source: DESE and 2020 university annual reports
Note: All data converted to 2020 dollars using CPI.