Jobs, courses at risk as ANU seeks $40 million savings

Professor Young warned this afternoon of difficult decisions as he revealed a draft discussion paper, which indicated that some courses could be scrapped.

“It is proposed that cost reductions be strategic, with clear decisions made as to activities that the university can no longer support. Such decisions will be difficult, but will ultimately result in a stronger institution,” he said in a statement.

“I understand that change of this magnitude causes stress and upset for all, and we do not undertake it lightly. I would ask ANU staff to join with me to identify the best way to make these savings and ensure ANU can continue to live up to the expectations of our staff, students and the national and international communities we live in.”

It comes as the university posted record high student numbers this year, albeit with last-minute reductions in overseas students attributed to visa restrictions as well as student nervousness about the high Australian dollar.

Professor Young said he expected $25 million of the savings to come from staff expenses, and the other $15 million from improved business practices.

Half of these savings would go to the budget surplus, taking it to $35 million, while the other $20 million would be retained by the Colleges and Service Divisions for operations and re-investment.

The paper said making $25 million of savings in staff payments would bring the university’s salary expenses to the Group of Eight average of about 56 per cent of revenue, compared with about 59 per cent now.

This is expected to mean 100 to 150 jobs are at risk, and the National Tertiary Education Union is meeting staff in coming days.

The paper suggests several measures for reducing staff spending.

“Proposed salary savings are identified as a percentage of total budget for each College/Service Division,” it said.

“An attempt would be made to initially achieve such savings by strategic decisions on discipline/functional and related activities which could be dispensed with so that work is removed as resources are reduced.”

The university could look at things such as academic performance, financial viability, national role and importance, and importance to the institution when deciding which courses could go, the paper said.

“Should it not be possible to achieve all the desired savings by such strategic reductions, then a second phase of across-the-board reductions would be required,” it said.

The university will also pay consultants to identify changed business practices and find $15 million of savings.

There will be a month of consultation on the process on the paper, before up to another six weeks consultation on any proposals adopted. Changes are expected to be finalised within four or five months.

Professor Young said the university’s projected surplus of $14 million for 2012 was less than 1.5 per cent of total revenue and this was below the sector average of 4 per cent, “a figure which the Commonwealth monitors as a measure of financial health”.

The paper said the university was also facing substantial increases in wages (4.5 per cent) and services expenses ($26 million) this year.

The ANU also had a much larger investment portfolio than most other universities, with about $1.1 billion invested, and future returns were now expected to be lower than previously.

“National and international issues mean that investment returns have declined in recent years and the expectations are that markets may have now entered a period where investment returns may be below 5 per cent for an extended period. This decline in investment income will have a significant impact on the university budget,” the report said.

“The 2012 budget indicates investment returns will be $30 million less than in 2011. Within this, the total funds required to support [Commonwealth Superannuation Scheme] pensions will be $10 million more than the return on the CSS investment sum. This is a shortfall which must be met from other university funding sources.”

The ANU has recorded a 4 per cent increase in students this year, taking total enrolments to 17,766. While commencing domestic students this year have risen 15 per cent to 4379, up from 3822 last year, international commencements this year dropped by 4 per cent on last year - to 1540 from 1611.