Safeguarding against the financial impact of COVID-19
Vice Chancellor Dr Michael Spence said current estimates predict that the University is facing a shortfall of more than $200 million as part of our $2.8 billion budget and is introducing the temporary savings measures effective immediately.
鈥淲e鈥檝e always made responsible financial planning a priority and have a range of strategies in place to allow us to respond to a number of different financial scenarios, including this current one,鈥� the Vice Chancellor said.
鈥淥ur focus remains on the health and welfare of all our students and staff, both on campus and overseas, and in ensuring our world leading research and teaching can continue.
鈥淲e know these measures will create some challenges, but they are aimed at ensuring we can continue to contain the financial impact of this ongoing global health crisis.鈥�
The Vice Chancellor said the temporary measures, which are drawn from the University鈥檚 longstanding financial risk mitigation plan, include a pause on:
- All capital spending: we will limit all capital expenditure in the short term on both equipment and infrastructure. Our large building projects already contracted and underway will continue however most capital expenditure other than those fully funded by external grants or philanthropy will be paused
- Project spending: non-essential projects will be deferred
- Recruitment: only roles funded by external research grants, or roles currently at written offer stage, will be allowed to continue at this time
- International travel: only travel that is considered essential or funded by external research grants or partners will be exempt
- Contractors and consultants: all current and new contractor and consultant roles will be reviewed.
The implementation of these measures on top of our already prudent budgeting means that as an institution we are as prepared as we can be to protect our operations from any ongoing risks.
鈥淲e will continue to support our students in China and facilitate their ongoing study with us until they are able to join us on campus.鈥�
The Vice Chancellor said the support to those students was especially important in light of modelling previously commissioned by the University which showed the impact of COVID-19 would be felt far beyond the higher education sector and could cause a significant shock to the economy and to jobs throughout the state.
Two scenarios were modelled based on whether 8700 affected international students would have to defer one semester (Scenario 1) or 15,000 affected international students deferred the whole year (Scenario 2):
- Under Scenario 1 we would see a reduction of approximately聽$1.4 billion聽to the NSW Gross State Product (GSP) with approximately 10,700 full time jobs impacted
- Under Scenario 2 we would see a reduction of approximately聽$2.2 billion聽to the NSW Gross State Product (GSP) with over 15,000 full time jobs impacted.
The top four聽affected sectors would be:
- Retail trade
- Accommodation and food services
- Professional, scientific and technical services and
- Administrative and support services.
Under both scenarios, most of this impact would occur in 2020 with flow-on impacts through to 2026. It鈥檚 important to note that these estimates only cover international students from China studying at the University of Sydney and do not include students from other NSW education providers.
鈥淭his modelling makes clear that the benefits international students bring when they choose to study in Sydney go far beyond the university sector. For the state more broadly, for retailers, hospitality workers and tradespeople, international students are helping to keep the NSW economy turning,鈥� the Vice Chancellor said.
鈥淔or decades, Australian universities have experienced significant reductions in the value of Commonwealth funding for research and teaching under both Labor and Coalition Governments. Despite this well-known financial predicament, our universities have continued to achieve ground-breaking research, provide world leading education and created a major export industry with many ongoing social and economic benefits for the nation.
鈥淭hat鈥檚 why it鈥檚 so important that we have a whole of Government approach to ensure Sydney continues to remain a destination of choice for those seeking a world leading international education, especially once this crisis is over.
鈥淎s always, the health and safety of our staff and students, whether here on campus or overseas, remains our highest priority and we will continue to follow NSW Health advice. As part of that we鈥檝e stepped up the frequency of cleaning across campus; put up signage regarding hygiene practices and installed a large number of hand sanitiser units.鈥�