What will Australia look like when we emerge from the crisis in the spring, or later?
It’s not too extreme to say the recovery will be more challenging than the Global Financial Crisis. It may be equal to, or even worse than, the challenges Australia faced after World War II. After all, never have countless industries shut down overnight.
The task will be to get our economy moving again. To reinstate jobs for the hundreds of thousands, if not millions, of those stood down. To imagine and create new industries that will guarantee a bright future. To do all we can to repair the damage to our communities. Australia’s universities stand ready to play a central role in the nation’s post-coronavirus economic recovery.
In normal times, universities drive growth in productivity and prosperity – through their research and innovation, and the skilled graduates they supply to the labour market.
Universities contributed $41 billion to the Australian economy and supported a total of 259,100 full-time jobs in 2018.
The return on investment is compelling. For every dollar invested by the Government in university teaching, $3 is generated in additional tax revenue.
Every $1 invested in higher education research and development, $5 comes back into the economy.
These are not normal times. And it may be sometime before we return to normal.
We have seen unprecedented, but entirely necessary, levels of government stimulus to support Australia through this crisis. But the stimulus can’t last for ever.
Australia will need even more new ideas, new skills and new jobs to power the economic and social recovery. Universities are the engine rooms of prosperity. During such a traumatic time for the whole community, the engine is slowing, but we want to be there to fire it up as quickly as possible once the pandemic has passed.
As a vital component in national recovery, it is crucial universities remain viable today so they are able to maximise their contribution to Australia’s economic recovery tomorrow.
Universities are where the race to develop faster and more accurate tests for COVID-19 are occurring. Researchers need the lights to stay on while they work tirelessly to create new anti-viral treatments and hopefully develop the vaccine that will stop this virus in its tracks.
Like every other sector of the economy, universities and the communities we support are suffering financially from the coronavirus pandemic. Very difficult choices are being made to cope with the fallout and to put the education of future generations of young Australians first.
But it won’t be enough.
The 130,000 staff who work in universities to keep students studying through this crisis, moving to deliver whole courses online, teaching via screen from their lounge rooms and garages. Government has worked side by side with us cutting red tape, giving universities room to focus on the important task of keeping students in university, and off the job queues.
But we don’t just teach students from home, we teach students from all corners of the globe, 144 countries in total. Many of those students are here and adapting just like their Australian friends to studying online. Just like our kids, they will wait out the pandemic, studying from a dorm, or rented flat, eager to get back on campus as soon as it is safe. But many overseas students start mid–year, and, no matter what we do, large numbers of them will not be able to get here and will not enrol.
This poses a huge challenge to universities, not only operationally but financially.
International education is Australia’s fourth largest export industry, contributing $39 billion in export income each year to the national economy.
The university sector, with the Government, has over the past five decades pursued a deliberate strategy of globalisation, attracting students from more than 140 countries.
Now the globe has temporarily shut down, we, like everyone else, need help to wait out the virus.
We, too, have felt huge hits to revenue – and there are more to come, as soon as the second semester this year. We estimate a decline of $3 billion to $4.6 billion in university revenue, at a minimum, in 2020. And that is a very conservative estimate. At stake is the $39 billion international education market.
Because salary and other employee costs make up an average of 53 per cent of university outgoings, we estimate this may place at risk more than 21,000 full–time jobs. That is over the next six months, but because there will be a significant pipeline effect, that will not be the end of the job losses, with perhaps as many again, after this first hit.
We have been working closely with the Government since the beginning of the COVID-19 outbreak and appreciate the collaborative approach. But some support is required now to try and reduce those losses. Not eliminate, just reduce.
As not–for–profit charities, we welcomed the Treasurer’s announcement about amendments to JobKeeper that would have seen most universities included. It would have backed our ability to reduce job losses. We are disappointed to have been excluded. We will continue to discuss support for universities with Government.
We need to engage as many people as possible during this period of social isolation in order to ensure we have a pool of skilled graduates ready to play their critical role in getting Australia’s economy back on its feet as soon as possible post-COVID 19.
We want to work with the Government to support the more than 335,000 international students in this country, many of whom have seen their part time jobs disappear, just like their Australian counterparts. Universities have already offered welfare funds, but more support will be required.
Universities have launched hardship funds and are being swamped with thousands of applications. We ask the Government to join us in supporting these students.
How we treat them now will affect how well we retain, as well as recruit new, international students who contribute to the success and sustainability of Australia’s higher education industry.
We have not asked for a bailout. Rather, we have asked federal, state and territory governments to provide universities with a short-term, zero or low-interest loan facility. Anyone who has used a bridging loan between the sale and purchase of a house would be familiar with this mechanism.
Just as it would be a shame to lose out on the purchase of a home for the sake of a few weeks, it would be a tragedy to do irreparable damage to our world-renowned higher education sector because of six months.
The coronavirus threat will abate. We are more than ready to share the pain the whole community is bearing, we don’t want to be left only with options that might compromise national recovery.
We need to be equipped to get our talented teachers and researchers back on the tools as soon as we can; students back to class, so we can help Australia emerge from this crisis as strongly as we can.
Professor Deborah Terry AO is the Chair, and Catriona Jackson the Chief Executive, of Universities Australia.
As published in The Australian on Tuesday 7 April 2020.