A new report has suggested staff and school cuts wouldn’t have been needed if universities had reined in discretionary spending. Photo: Facebook/No Cuts at ANU.
A new report has claimed cuts to advertising, travel and consultants at three Australian universities could have repaired “budget deficits of their own creation”.
An Australian Institute discussion paper, using the Australian National University (ANU), Australian Catholic University (ACU) and University of Wollongong (UOW) as case studies, stated curbing this type of elective spending could cover the proposed cuts at all three institutions.
“These same universities have assets worth hundreds of millions of dollars and spend liberally on things like advertising, consultants and executive travel, the educational value of which are highly questionable,” it stated.
“When university leaders spend too much on advertising, consultants or indeed their own travel, the consequence is not just a budget deficit, but rather a campus where research output, teaching quality, work satisfaction and the student experience are all poorer.
“There is money to be saved in their discretionary spending … in the case of ACU, ANU and UOW, livelihoods would have been saved if there were greater scrutiny and transparency around these [discretionary spends].”
The research looked at spending across all public Australian universities, but used ANU, ACU and UOW as case studies as each had embarked on a “major program of cuts to courses and jobs for the sake of a future budget surplus”.
The ANU has a revised budget deficit for 2024 of $140 million, with the National Tertiary Education Union ACT estimating 600 jobs will be axed to cover the shortfall.
UOW could cut up to 185 more positions – after already making more than 90 positions redundant – as it looks to save more than $39 million, while the ACU embarked on two rounds of “change management plans” involving staff cuts after reporting an operational net deficit of $27.7 million for 2023.
The Australia Institute report calculated the ANU spent more than $71.6 million on travel, more than $11 million on advertising and more than $107 million on consultants across 2022 and 2023.
“That $190 million, if saved, would have negated entirely the $100 million cuts to jobs and 60 per cent of the earmarked cuts to non-salary expenses ($150 million) that the ANU subsequently announced,” the report stated.
“The ANU’s consultancy spending for [its] restructure alone, around $1.2 million, is almost as large as a small Victorian university’s annual consultancy expenses.”
A 2024 Senate estimates hearing was informed a quarter of ANU’s $42 million travel spend in 2023 was spent on executive travel.
The chief operating officer also confirmed about 24 per cent of travel expenses for 2024 were for executives flying business class.
Advertising, while the report noted its spend of $5.2 million for 2023 was “modest by the sector’s standards”, was equivalent to 48 entry-level lecturer positions.
“These examples show money spent on consultants, executive travel and advertising in just a few years could have instead paid the salaries of the jobs the ANU now wants to cut, with tens of millions left over,” the report stated.
“An institution that reports $1.85 billion in financial assets alone should not need to make roughly 600 staff redundant in order to pay its way.”
UOW staff have held strikes over job cuts due to the university’s deficit. Photo: Facebook/South Coast Labour Council.
According to the report, UOW spent $11.6 million on consultants’ fees in 2023 – including to help with cost-cutting initiatives and wage underpayment remediation programs – and nearly $10.8 million on travel.
Along with staff redundancies, the disciplines of cultural studies, Japanese, Mandarin and science and technology studies (STS) were deemed “unviable”.
“Most staff and students had little to do with these choices but are now being asked to bear the costs,” the report stated.
“If UOW had cut $5 million from its annual travel costs and another $5 million from its consulting expenditure in the years before the pandemic, it would have covered the costs of all its urgent saving measures now.”
As for ACU, it was calculated the university spent more than $26 million on advertising and marketing and $33 million on consultants’ fees between 2021 and 2023.
At least 80 positions have been cut in order to save money, with more expected.
“Were it not for the large sums executives spent on travel, consultants and advertising, these cuts may not have been necessary,” the report stated.
“ACU is not the sector’s biggest spender … [but] like other universities, it has sat on substantial wealth (its net assets are valued at nearly $765 million) while making staff redundant.”
The Australian Institute suggested universities could take up measures to improve the quality and transparency of their financial decisions so the public, staff and students could see what was being paid for “in their name”.
“Australians can and should expect their state and federal governments to invest more substantively in higher education and research, but university managers need to support the quality higher education that students demand and the public expect,” it stated.
“The budgetary decisions made by university boards might seem economic, but in practice they often allow rank-and-file staff and students to bear the costs of expensive executive decisions.”
