Tanya Plibersek has called on the Morrison government to provide low-cost loans and guarantee universities’ funding, warning some are at risk of collapse due to falls in international enrolments during the Covid-19 crisis.
Ahead of the education minister, Dan Tehan, taking a support package to cabinet to be announced as early as next week, Plibersek told Guardian Australia that there are “now serious concerns that without federal government action some leading institutions could collapse”.
Universities, many of which rely on international students for more than a third of their revenue, are currently engaged in cost-cutting including asking staff to use up leave and instituting hiring freezes.
But representatives of the sector have played down the risk, with Universities Australia chief executive, Catriona Jackson, insisting they are “not asking for a bailout” from government, only “support to help us weather the period ahead”.
Labor wants the government to provide universities with certainty by guaranteeing “proper funding for Australian students”, including paying at least the commonwealth grant scheme funding for the next three years based on projected student numbers before the 2019 budget.
Plibersek also proposes “low or no-cost loans to provide stability in coming months”.
“Australian universities are under immense pressure,” she said. “For years, universities have used income from international education to help fund their world-leading research.
“The Covid-19 pandemic, and global travel restrictions, have led to a crisis in this funding model, with income from international students plummeting over recent months.
“Australia cannot afford to let our universities fall off a cliff. The federal government must act now to shore up our universities.”
In addition to employing almost 260,000 people, Plibersek cited universities’ role in developing new treatments, cures and equipment and educating doctors, nurses and health experts, as reasons to support them.
“They are absolutely critical to dealing with this urgent health crisis – and will be just as critical to our recovery in the years to come,” she said.
“If the federal government fails to act now, some universities could collapse, which would see vital research cut, thousands of jobs lost, and leave students hanging in the middle of degrees.”
Group of Eight universities tend to derive the most revenue from international students, although are considered very unlikely to fail due to their large asset bases. The greater concern is smaller regional universities that also derive a large proportion of revenue from international sources, such as Federation and Central Queensland universities.
Jackson said that Universities Australia has “been talking with government since the beginning of the Covid-19 pandemic about ways to best support university students and staff, research and teaching, and have greatly appreciated the collaborative approach”.
“Universities are not asking for a bailout,” she told Guardian Australia. “Rather we are seeking government support to help us weather the period ahead, and come out the other side able to play our part in economic and community recovery.”
Luke Sheehy, executive director of the Australian Technology Network group of universities, said he “anticipates the government will consider additional funding for [the sector], and that would be welcome”.
“We hope that it will allow us to look after students and staff, and continue to conduct vital research including to combat Covid-19.”
Sheehy noted universities would feel the greatest impact in the second semester, when international students from the northern hemisphere begin studies in Australia.
Guardian Australia contacted the Group of Eight universities and Regional Universities Networkfor comment.