Why Australian HE is particularly vulnerable to the COVID-19 pandemic

Professor Anthony Welch, University of Sydney, Australia

Long before the COVID-19 had begun to spread across the globe, a number of senior Australian academics had warned about the vulnerability of the country’s higher education institutions to external shocks. One of those academics, Professor Anthony Welch of the University of Sydney, presented the second seminar in Lingnan University’s Global Higher Education Webinar Series. In his webinar, Professor Welch examined the impact the pandemic was having on higher education in Australia, and how the severity of this impact was dramatically increased due to the nature of the nation’s funding model.

Even though Australia has a federal system of government, university funding comes from the national government, he explained. While the average financial support given to higher education rose strongly across the OECD between 1994-2004, in Australia the proportion of institutional income from government fell from 60% to 40%. In recent years, 62% of total expenditure on tertiary institutions in Australia has come from the private sector, compared to around half that proportion across the OECD. This funding gap has driven Australian universities to seek to diversify their income. Growing numbers of international students have not only increased cultural and linguistic diversity on campus, they have also provided a growing share of total revenue, rising from 16% in 2013 to 26% in 2018.

"This meant the Australian system was more vulnerable than many others when the pandemic hit," Professor Welch noted. Thousands of international students have been stranded overseas, unable to return to Australia, because of travel restrictions, and the growing month-to-month decline in international enrolments in 2020, compared to 2019, has been dramatic.

The predicted loss of A$2.2 billion in 2020, and greater in 2021, will result in thousands of job losses and imperil research projects. "But it's very clear the impact will be felt not just this year, not just next year, but for some time," he said.

A recent study predicted losses of international student fee revenue of A$18 billion (HK$93 billion), nationally, by 2024.

For the Group of Eight (Go8, Australia’s top-tier universities), the temptation to recruit more and more international students, who pay significantly higher fees, has proved irresistible. Based on one method of counting, the proportion of international students at the University of Sydney rose to 50%.

The income generated has been used to subsidise the cost of university operations, especially research. Again this was particularly the case for the Go8 institutions, who undertook most of the research. One estimate was that more than A$3 billion of the A$12 billion Australian universities spent on research in 2018 came from profits on international students fees.

Mainland Chinese students, alone, made up 40% of the onshore international cohort in Australia, numbering 150,000 in 2019. So the sharply worsening political relationship with China is only likely to exacerbate the effects of COVID-19 pandemic on enrolments.

Uncertainty around the date when the pandemic will be brought sufficiently under control to allow travel and education to return to some sort of normal is having ongoing effects on higher education in Australia. Domestic students are also feeling these effects, as their courses have moved online and their job prospects look more challenging, for the next few years at least.

Professor Welch concluded his presentation by stating his belief that the nation’s system will survive, while pondering the question of what the cost will be.