Welcome back to the new academic year and my best wishes for a productive and happy 2018. I trust you all had a pleasant break over the festive season and are ready to embrace the future with energy.
As many of you know, the Government released the Mid-Year Economic and Fiscal Outlook (MYEFO) a few days before Christmas, outlining a number of changes to the higher education funding arrangements that will have significant ramifications for UC and the broader sector. An article published in The Conversation provides a good summary and analysis of these changes.
The most significant change for UC is the implementation of a freeze at 2017 level on the Commonwealth Grant Scheme (CGS) funding for Bachelor level courses in 2018 and 2019. Effectively, this means that our revenue from the Commonwealth is capped at the level we received in 2017, regardless of our EFTSL mix or predicted growth. This change is effective from 1 January 2018—it does not require legislative change or Senate approval.
Assuming the University achieved its projected enrolments of fee-paying students in 2018, and bearing in mind we had issued 70 per cent of our offers to students prior to or on the day of this announcement, the University would be set to receive $1.8m less in revenue than it had already factored into its 2018 budget, anticipating some form of funding policy changes. The impact for 2019, if no change is made, is even greater; potentially doubling the shortfall that is projected for 2018.
The University will have to make a number of decisions over the coming weeks to address the impact of the changes in the immediate term, as well as establish more sustainable revenue sources over the longer term in the absence of growth in domestic Commonwealth supported place Bachelor revenue. We are committed to having balanced or slightly positive books for 2018, so whilst we will need to consider the strategies around our income streams, the management of our expenses, and judicious deployment of our resources is more important than ever.
While we—alone or as part of the sectoral effort—do our best to influence government’s actions, to be frank, we must proceed with the assumption that the probability of successfully altering the environment in which we operate is very low. But what we can control is how we react to the changing environment and even more importantly, how we anticipate the future and proactively prepare the University to thrive.
Our new strategic plan Distinctive by Design outlines bold approaches to achieving this outcome, and if anything, the government’s latest MYEFO has served to underscore the urgent need for us to earnestly begin implementing these initiatives. In such uncertain times, it is critical to commit to the strategies outlined in the Plan, so we take charge to emerge the University we wish to be, rather than drift at the mercy of unpredictable political winds and circumstances.
I look forward to soon discussing this subject more fully with you all in the next Town Hall where I’ll seek your participation in positioning the University to deal with the challenges and make the best of the potential opportunities that lie ahead.