Emma Macdonald March 27, 2012
Vice Chancellor of the ANU Professor Ian Young said the institution needs to find 40 million in savings. Photo: Melissa Adams
The Australian National University will shed up to 150 staff and is expected to cut some research activities altogether in a bid to save $40 million by the end of this year.
Vice-chancellor Ian Young announced yesterday that ''bold action'' was necessary after the global financial crisis had reduced income by $30 million from the university's $1.1 billion investment portfolio.
The budget was further strained by a recent staff wage increase of 4.5 per cent and a $26 million increase this year in service expenses.
This left the ANU with a surplus of just $14 million for 2012 ''which leaves us in quite a precarious position,'' Professor Young said.
The risk of slipping into a deficit would harm the ANU's ability to attract and maintain the best staff and students from around Australia and internationally, and would lead to a slow attrition of staff and courses.
The National Tertiary Education Union will begin an urgent round of consultation with 1560 academic and 2260 non-academic staff members this week to discuss which areas will be lost and will hold a general member's meeting next Tuesday.
The union's ACT division secretary, Stephen Darwin, said: ''ANU staff represent a major investment and an asset for the university's future performance. Selling off its key asset, its people, is the absolute last step an organisation should take when it needs to solve financial problems.''
He noted that ''the situation facing ANU is in part the same facing most Australian universities: persistent underfunding by the federal government. The recent base funding review of universities found that Commonwealth supported places are underfunded by at least 10 per cent and this announcement at a university like the ANU is a testament to this continued underfunding.''
The cost-cutting announcement comes against record high enrolment figures this year - although last-minute reductions in overseas students have further exacerbated university finances.
Professor Young - who has not ruled out forced redundancies - last week informed Tertiary Education Minister Chris Evans of the action. Senator Evans said yesterday: ''Universities are self-governing institutions … and are expected to manage their affairs, including their financial affairs.'' The Government welcomed ''the ANU's commitment to work with staff throughout the review process''.
Professor Young said he expected $25 million in 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. Saving $25 million 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, Professor Young said.
In a briefing paper distributed to staff yesterday, he said ''action needs to be taken to reposition the university in this new financial environment. To take no action would mean the university would slowly decline, in the face of continued spending constraints''.
Criteria for judging which research functions would be axed included academic performance, Commonwealth research income, performance in the Excellence in Research Australia assessment, student popularity, financial viability, national importance and institutional importance.
Professor Young, who took over as vice-chancellor from Australia's Chief Scientist Professor Ian Chubb at the start of last year, said he became concerned about university finances in August when it was clear that investment income was going to remain at 5 per cent compared with its pre-GFC high of 10 per cent. Last year investment income was down by $30 million. He warned that if structural efficiencies could not be reached, the ANU would consider across-the-board cuts such as those being instituted at Sydney University. He has outlined a timeframe which includes an initial four-week consultation with staff and students.
The ANU Students Association said students would be anxious at the prospect of fewer staff taking on an increased workload. Association president Dallas Proctor nominated the ANU's ''bloated bureaucracy'' as an area ripe for trimming.