Q&A: 2020 Finances update
Q: Is there a reason why we are holding these meetings on zoom and not in person? We would like to ask you questions directly VC.
A: The virtual format allows our whole community to attend. We have many people working from home or living around Australia and internationally, and this format gives equal opportunity for participation. We also see much higher rates of attendance for virtual forums. The VC is always happy to answer any questions put to him in these forums, or you can email him at vc@anu.edu.au
Q: Why don't we have operating funds in the long-term investment portfolio?
A: Operating funds are required for the short term and cannot be subject to potentially significant fluctuations in the investment markets.
Q: What is the current understanding on how soon international travel of academic staff will resume after border control allows for it? Both visits of ANU academics to other universities, and visits of international academics to ANU.
A: Live answered.
Q: How does 2021 enrolment data at the semester one Census Date - broken down by citizenship (i.e. Australian vs international students) - compare with 2019 enrolment data for the same time, and continuing vs new enrolments, translate into projected 2021 Semester 1 teaching revenue vs 2019 actuals?
A: Live answered.
Q: With student retention rates being rather stable, what caused the operating deficit of $219 million?
A: The operating deficit was $162.4 million. The key causes were reduced tuition fees, increased costs of COVID and restructuring costs.
Multi-part question:
Q1: In 2019 total revenue for ANU was $1,496,914,000. What was it for 2020?
A: 2020 revenue is $1.297 billion.
Q2: In 2019 total employee related expenses was $654,356,000, which is 43.71 per cent. What was the total for employee related expenses in 2020? And what proportion of the total revenue was that?
A: In 2020 employee-related expenses are $758 million, which is 57.6 per cent of total expenses. Regarding revenue, it is 68.4 per cent excluding investment income and insurance proceeds.
Q3: Net surplus after tax in 2019 for ANU was $316,359,000. When ANU says publicly it is $200,000,000 in deficit, do they mean they've earnt $200,000,000 less surplus than 2019 so 2020 surplus is $100,000,000? Or do they mean they've lost $500,000,000 in the past year?
A: Comparing the surplus of $316 million in 2019, the 2020 position is a $17.7 million deficit. The VC showed the difference between this to the operating deficit of $162.4 million (the difference between these being insurance proceeds, investment income and deferred superannuation expense). So, the reduction in our surplus from 2019 to 2020 is $334 million.
Q4: If so and if student enrolments are not significantly down, how have they lost $500,000,000 in 12 months?
A: The reduction has been explained in the slides but please let me know if you want me to explain.
Q: Seeing as though hundreds of millions of dollars from overseas student fees (and its associated buyout of teaching with casual academics) has not resulted in an increase of research publications over the past 5 years, will you commit ANU to returning to investing in student education? For example, by having salaried academics take on more teaching and decreasing tutorial sizes.
A: All academics who conduct research at ANU also teach students. Therefore, investment in our research enhances the education experience for students. In 2018, ANU adopted a strategy to reduce its student numbers and reduce its reliance on international fee revenue. This was a policy decision to make the University more "human scale" - a decision that preceded the COVID-19 pandemic and started to come into effect in 2019. The reason we attract students from all over Australia and the world is because they know that when they study at ANU they get access to a world-class qualification that opens doors for them all over the globe. ANU has no intention to compromise on this quality. The number of staff we have is about the same as 2018, and the number of students we have is less than 2018 by about 10 per cent. The amount of resources we have per student is a little higher than pre-pandemic. Nevertheless, the University is going to have to direct resources into ensuring we have adequate number of tutorials, adequate number of teaching staff, and making sure that we have adequate teaching support.
Q: In say five- or 10-years' time, what is our vision of how many international students we would like to have vs domestic students?
A: Live answered.
Q: How many more staff are we expected to lose in 2021 through Change Management proposals, and voluntary redundancies?
A: The Recovery Plan allows for up to a further 40 separations from here on.
Follow-on comments:
- How about through change management proposals?
- Yes, the change management proposals are the way that separations are consulted on and implemented.
- Not necessarily. So, the total expected staff losses for 2021 is 40 across campus? And are you planning to reduce staff numbers further beyond 2021?
- Are you referring to continuing 'voluntary' separations?
- Oh, I think I see what you mean. I am talking about the Recovery Plan and change management proposals. There may be other separations outside that, but not as part of the Recovery Plan. Every year there are small numbers of voluntary separations in certain circumstances, as allowed for under the EA.
Q: Will the executive pay cut continue?
A: Live answered.
Q: I understand that we have a deficit, but can we talk about 'false economies'?
I work in an area where we have just received new laptop computers (productivity has improved 1,000%).
But management won't spend the $280 for additional 'docks' for staff who are required to work at multiple locations.
Staff have to put their laptop in a a bag (like a green woollies bag - there is no money for laptop bags either), pack laptop along with the dock, transport both. Plug and unplug multiple cables (etc).
The time wasted costs more than a $280 dock, surely?
On top of that, staff who were using their computer boxes as monitor stands have been told there is no money to buy a monitor stand (about $15 from WINC). Staff have been told to use an old book. There aren't a lot of staff left, it's not a lot of money.
Professional staff bear the brunt of false economies all the time. Brian talked about bordering on being 'burnt out'. So true, we can only make do and mend for so long before it's all too much.
A: These decisions are made by each portfolio and college. If you are in the Service Portfolio, docks were purchased for each laptop.
Q: Dear VC, why did ANU not reduce its administration overhead when COVID-19 hit. Especially at the College level where there is much duplication in roles in HR and finance?
A: ANU has reduced overheads through the Recovery Plan.
Q: In 2019 total employee-related expenses were $654,356,000. What was the total for employee-related expenses in 2020? And what proportion of the total revenue was that?
A: In 2020 employee related expenses are 57.6 per cent of total expenses. Regarding revenue, it is 68.4 per cent, excluding investment income and insurance proceeds.
Q: Is there any plan to increase student tuition income by simplifying our international admissions?
Our process for international students is one of the more complex among Australian unis and receives constant complaints from students, partner universities and educational agents.
A: Live answered.
Q: 75 per cent of separations have been professional positions. IT is completely overwhelmed. The value of local knowledge is being disregarded as professional staff are being rapidly centralised. When is obtuse talk about "operating" and "reported" deficits going to become transparent discussion of what workers at this university actually need?
A: Live answered.
Q: What date will we be paid our deferred pay increase from last July (last pay this June or first pay in July)?
A: The pay increases are going ahead as scheduled in the ANU Enterprise Agreement: 2 per cent on 8 July 2021 and 2 per cent on 7 July 2022.
Follow-on comments:
- Is there a prospect of another vote to again cut our upcoming pay increase in July? I have found the higher the staff salary, the more open they are to the cut. Lower paid staff are not as able to make these sacrifices.
- This is not being considered.
Q: In Brian's update he said insurance money can't be spent on salaries. But everyone knows that the library is spending Chifley flood money on staffing to support the project.
A: That is because library staff are working on the replacement of the books. The University cannot spend on other unrelated things.
Q: I thought that UniSuper is separate to the university, so I am confused when the VC is talking about the university's superannuation expenses. Can this please be explained?
A: The deferred superannuation expense relates to the commonwealth superannuation scheme for defined benefits superannuation. It is not UniSuper.
Follow-on comments:
- That means that some staff are on the commonwealth superannuation scheme? I thought we were all on UniSuper.
- Yes, some staff are on the commonwealth superannuation scheme.
Q: Can you speak to the forecast financial position in 2021-2023? With International borders remaining closed, do you see us remaining in deficit each of these years or is there a pathway back to surplus?
A: Our budget and forward estimates to 2023 are that we will continue to remain in deficit. This is what we have in our Recovery Plan also.
Q: Last year, the advice was that $250 million was retained in cash reserves.
A: Live answered.
Q: We've lost a lot of Facility and Services staff, but the maintenance work still needs to be done. Is it going to be contracted out and how much will that cost?
A: Live answered.
Follow-on comments:
- But what's the plan? You didn't say.
- The plan is as announced in the Facilities and Services change management plan.
Q: The University is operating with a reduced operating (R) budget in 2021. Is there any information available to staff showing how the operating budget has been allocated in 2021? Will budget units be able to carry forward any unspent R monies from 2021 to 2022?
A: The Recovery Plan available on our website shows the R allocation percentage to each College and Portfolio. The budget model for 2022 is being worked on and will be made available once it is ready and approved.
Q: What was the $200 million loan taken out by the University in 2015 used for? And what are the plans to repay this loan in 2025, noting that the loan is currently 'interest-only'?
A: The $200 million loan was originally invested in the long-term investment portfolio (LTIP) and in 2020 was withdrawn from the LTIP and utilised for our expenditure. Repayment options are being reviewed as part of our financing strategy.
Q: What is the forecast student numbers for 2021 at present and what is the breakdown into international and domestic cohorts?
A: The latest student numbers for 2021 are 15,011 (domestic) and 7,085 (international), making a total of 22,096 (as of 10 May 2021).
Q: I appreciate your words about burnout and fatigue. For those of us who are dealing with higher student numbers and less assistance than before, and who - it seems clear - will need to keep working extra hard in the future: can you give some examples of how current burnout and fatigue will be addressed and future (increased) burnout and fatigue will be prevented?
A: Live answered.
Q: When will the financial model for the ANU's budgeting process for 2022 and beyond be released?
A: That is being worked on right now. We are looking at sharing high-level principles in the next couple of months to help with your forward planning, with details worked through in the third quarter of 2021 as part of the 2022 budget process.
Q: What is the gender balance of academic separations? (I think that the 50/50 figure was for all separations.)
A: The University has not done that level of analysis. However, the gender balance of all separations has been as close to 50/50 as possible. Given that the nature of where those separations have occurred in the University, we will be more gender balanced than we were pre-pandemic.
Q: What is the university doing to ensure equity - among students and staff? For example, ensuring people from non-traditional university backgrounds are represented at the university. I know this might be an inappropriate time to ask this for some, but I fear all the hard work we've put in might be lost.
A: In 2017, we set some ambitious goals as a community - to use our research to transform society, to embed equity in everything we do, to deliver an experience unique to our national university and to deliver on our responsibilities to our nation. And I am proud of the progress we have made. The Kambri Scholarships - a $50 million investment in scholarships for talented First Nations students anywhere in Australia - represent a landmark in Australian higher education. We have expanded parental leave entitlements, providing our staff with up to 26 weeks of paid leave for both primary carers and their partners, allowing for greater flexibility for families within our community. We remain deeply committed to these initiatives through the pandemic and beyond.
Q: People are mentioning loss of staff due to centralisation, but I work in a central area and we have lost many staff with no replacements - just more work. We have not added any new staff, and have not been able to recruit replacements. Our division has also not had our recovery plan circulated to staff. Will central areas be seeing change management? Will we get to see our area's recover plan anytime soon?
A: Live answered.
Q: Will we be operating under the Expenditure Control Framework (ECF) in 2022?
A: The ECF was designed as a short-term approach for 2020 and 2021. We are planning to move to an improved budget model for 2022.
Q: There are a lot of rumours circulating about the future of Q Discretionary Accounts and the potential transfer of these balances to the University. Can you please advise the plans?
A: Live answered.
Q: Other universities are doing one- to three-week shutdowns to save money. Could we do this too?
A: This would ultimately be a short-term measure that would not improve the University's overall financial position. The University cannot stop important research for this period of time, and it would cause disruptions to teaching. Furthermore, this would require a change to the ANU Enterprise Agreement and it's not likely that we would do so for equity reasons as it would require staff to take leave.
Q: A couple of other universities, including Monash University, officially posted a surplus of a couple of hundred million dollars. I am not in any way suggesting that their overall policy was better than the policy of ANU, and I also understand that you cannot speak for other universities, but are you able to briefly explain the major reason for these vastly different financial results across universities?
A: Live answered.
Q: Do we know our student DFW (Drop, Fail, Withdraw) numbers for all of our courses? And why? All caused by the travel ban?
A: Under difficult circumstances, the University's student retention in 2020 was very strong. There was a 21 per cent decrease in international student load (1,774 EFTSL) and a 5 per cent reduction in domestic student load (572 EFTSL) in 2020, compared with 2019. There was an extra 9 per cent drop in course enrolments, compared to 2019. There was only a 2 per cent fail rate for courses, compared to 4 per cent in 2019. We have had unprecedented demand domestically for ANU places this year.
Q: When will we receive a copy of the results of the Semester 1 Pulse survey sent to staff on 24 February?
A: We will not release the survey data. Similarly, we did not release the Voice survey data publicly. The Pulse Survey results have been provided to the Vice-Chancellor, College Deans and heads of the Service Portfolios. Colleges and Portfolios will develop responses within their local areas about how to address the results. Their feedback to the survey results will be released later this year.
Q: How much did the rebranding exercise cost the campus last year?
A: $159,000 was spent on design services from the marketing budget between January 2019 and March 2020.
Q: When can we expect the change management plan from the central divisions to be publicised? Thus far, most of the cuts appear to have been borne by the Colleges and academic areas.
A: Each of the central areas have change management plans or will have change management plans. Not all of them could be done last year. The University has not tried to do all the change management plans at once, because all of the plans need very careful consultation. The University is trying to join up service delivery, centrally and out in the colleges and other places, to reduce duplication and have better business systems. There has not been a widespread program of centralisation. We will continue to have discussions around ensuring the best possible levels of service quality, efficiency and effectiveness.
Q: Early-career academics report to ANU NECTAR that they don't know if they will have income to support their families this year, or if their contracts will be renewed. Should they take up other opportunities? How can we help them make decisions?
A: We will do all we can to provide as much certainty as possible, because our early-career academics will play a vital role in the University's future. We acknowledge that this has been an incredibly difficult period for everyone in our community, especially our early-career academics. Support is available for anyone in our community who is finding this process distressing.
Nonetheless, it is natural to explore career options - particularly in uncertain times. If you are considering other options, we urge you to consult your supervisor, mentors, colleagues and trusted friends, to ensure that any decision you make about your future is the right one for you and your family.
Q: It's not enough to say that staffing levels are at 2018 levels - the cuts are not the same across departments. Does ITS or the Library have 2018 staffing? More? Less? What work are they not going to do from now on?
A: ITS and Library services were specifically given a smaller cut in the Service Portfolio Recovery Plan when compared with all other areas in the portfolio.
Q: We have some wonderfully appreciative stories from students in 2020 of how remote learning finally allowed them to participate at ANU (disabilities, carer responsibilities, work, etc.) and love this place.
There is so much tone of "open up and come back to campus" from Chancellery this year and I worry that we are closing ourselves off again to this quiet cohort by outwardly valuing only the physical presence here.
Can we continue to look at online-only or Hybrid (planned properly) offerings as a valued part of the ANU identity?
A: Live answered.
Q: The change management process has been incredibly hard and stressful - and not just for the staff who lose their jobs. Those of us who have stayed in our position have seen threats of possible redundancy used by managers to coerce compliance and shut down discussion and dissent. I admire the transparency of the Vice-Chancellor's and University's leadership in these meetings, but what is being done to change the culture at lower levels of the university to increase transparency and decrease bullying through this awful, stressful few years?
A: Live answered.
Q: Is closing the smaller libraries and centralising to one or two libraries an option being considered?
A: As with all areas in the University, the financial health strategy has meant some reductions in staffing for ANU libraries. There is no increased workload for library staff and we continue to seek improvements for our students' educational experiences. All ANU libraries reopened on 2 June 2020, following closure due to the pandemic. The two major libraries are open 24/7 so students can study and use the facilities including PCs, printers and digital services such as the recording studio at any time. For the smaller library, hours reflect the University's approach to managing space in 2021 given COVID-19. We will continue to review needs and opportunities to provide service innovation.
Q: Will the university carry out a review or cost/benefit analysis on the implementation of the Separation scheme? The scheme costed the university significantly in many aspects. It appears many staff were forced out of the university for political reasons.
A: The need for the University to reduce both salary and non-salary costs was an essential component of the ANU Recovery Plan. Each College and Portfolio determined how much of their savings would come from salary and non-salary expenditure. This included an expected reduction of positions across the University to achieve the salary savings required. Each College and Portfolio needed to make tough decisions on what organisational arrangements and continuing positions could be afforded within their budget and to ensure the University could remain financially viable. The once-off separation costs were incurred to deliver ongoing savings to the University.
Q: The University recently released a 'background checking' process, which has delayed the appointment of new staff, caused a much higher workload for HR staff and impacted all staff due to having to work with less staffing resources. How is the remediation process in relation to the problematic roll out of the background checking process going? This has significantly impeded the ability of business units on campus to replace staff and fill these gaps. In some cases for up to 8 weeks.
A: The background checking process has been in place since mid-March. At the time of the forum this process had been in place for 6 weeks, so delays of 8 weeks would not be possible. We have already made significant changes and we are constantly reviewing the background checking process in consultation Colleges and SMG and with Access Canberra, and our partner Makesure. We are educating local areas on the types of checks that are required.
Q: Does adequate number of tutorials mean that sessional staff (tutors) will be supported? At present some academic staff (myself included) teach large classes without any tutors. I have concerns regarding maintain teaching quality and workload pressures.
A: The number of staff we have is about the same as 2018, and the number of students we have is less than 2018 by about 10 per cent. The amount of resources we have per student is a little higher than pre-pandemic. The University will ensure we have an adequate number of tutorials, adequate number of teaching staff, and that we have adequate teaching support.
Q: Nothing that has been said addresses the massively redistributive aspect of the 2021 budget, specifically away from the College of Science. Could the Vice Chancellor please provide the justification?
A: The ANU College of Science encountered difficulties in meeting its 2020 expenditure control target due to the high costs associated with its research and recent strategic growth in a range of areas, including the creation of a number of university-level institutes and centres. The 2021 allocation reflects the additional savings necessary through 2021 while ensuring that the College can maintain its excellence in research and teaching.
Q: Centralisation has happened because you have pushed the savings responsibility out to the Colleges and Schools. They are scrambling and you are disconnected. Clearly.
A: We are all sharing in the savings efforts. Colleges and Schools have said very clearly they want to decide their own changes, rather than have them imposed.
Q: How can Colleges and Schools participate in the discussions around the Service Performance Framework, its design and implementation?
A: Anyone who wants to participate is welcome.
Q: ANU has long been proud of its staff to student ratio (1:15), yet students across the campus are sitting in tutorials with numbers that are substantially higher than what they signed up for (some tutorials having numbers as high as 30-40 students). What is being done to provide teaching staff the support that they need to deliver the quality education we keep advertising?
A: Live answered.
Q: Does the ANU have any plan to rewards policies to encourage teaching and teaching support staff? In turn, to encourage better teaching quality and student experience.
A: ANU participates in the Advance HE Fellowship Scheme that provides an internationally recognised award for teaching and teaching support staff. We also have the Vice-Chancellor's Awards for Excellence in Education and the Australian Awards for University Teaching. Each College also has awards for teaching. Please contact the Centre for Learning and Teaching for more information.
Q: Setting aside the pandemic, how does limiting student intake (revenue) in the midst of a period of significant capital expenditure (e.g., Kambri) sound like a good idea?
A: When we reshaped the size of the University, starting in 2018, we envisioned a university of around 19,200 students (EFTSL). At the time of this decision, the University was having large surpluses and was in a strong financial position for capital expenditure on Kambri, which has greatly improved the campus experience for staff and students. Due to the pandemic, we are currently around 2,000 student places short of what we envisioned to be the right size of the University back in 2018. We are going to be focusing on making sure that we get the University to the right size, and indeed we can look at thinking about what the right size is in the post-COVID world, noting that a lot has changed from 2018.
Q: Can we have an indication of what the budget model will look like from 2022? Colleges and schools need time to plan and we're currently in the dark.
A: That is being worked on right now. We are looking at sharing high level principles in the next couple of months to help with your forward planning, with details worked through in the third quarter of 2021 as part of the 2022 budget process.
Q: Since the on-campus experience is valued would we have exams on campus again?
A: The University is planning a wholistic review of our approach to assessment, including exams. As part of this, we will consider the advantages and disadvantages of both online exams and exams on campus before we make a decision. One possibility is that we will have a mix of both.
