Vice-Chancellor Professor Alex Zelinsky is defending management’s financial practices, after it was revealed earlier this week, the University of Newcastle reported a $185 million surplus in its 2021 budget.
The National Tertiary Education Union has slammed the findings, arguing it’s proof the University’s financial situation wasn’t as poor as made out to be through the pandemic.
The University cited concern over salaries and operating costs as a major trigger for a restructure, which saw 150 staff members lose their jobs and numerous courses slashed or merged.
But Prof Zelinsky has countered the claims, saying most of the cash is derived from the valuation of shares from an investment in IDP Education made 20 years ago, or other unrealised investments.
He says the union’s claims are incorrect, and under the surface, the surplus is much smaller.
“These gains and losses and surpluses only matter when you actually sell your assets or liquidate the assets,” he said.
“We keep our assets there for the long-term purposes of the University, which is paying for refurbishment of buildings and creating teaching and learning spaces for our students.”
It’s understood, the University will sell those shares at a best possible time, on the advice of experts.
Prof Zelinsky says the money is set aside for infrastructure costs, such as when the asbestos-ridden Hunter Building was closed down.
“To replace that building, it would cost the University $150 million,” he said.
“We can’t afford that, so what we’ve done is we’ve refurbished other spaces and we’ll have to demolish the Hunter Building.
“No one pays for that – that’s what surpluses pay for. Surpluses are not there to pay for salaries, because they’re only one-offs. Salary rise goes year on year.”
But the union maintains, however, the University needs to invest in its teaching body ahead of infrastructure, with concern there won’t be appropriate staff to fill new or existing classrooms.
The union is currently engaged in enterprise bargaining, with some hope the budget figures will swing the discussion in its favour.
Prof Zelinsky says he’s always in favour of a pay rise for staff, but the University needs to think about its bottom line.
“It’s been a very hard time for the University to attract international students because of COVID,” Prof Zelinsky said.
“It’s now starting to come back, and if it does come back and our revenue starts to grow, of course we could afford pay rises.
“But they have to be sustainable – the University cannot go forward budgeting on losses and using its balance sheet to pay for them.”