But the tertiary sector union has questioned the disclosure,
suggesting the university is using the loss as a gambit in enterprise
bargaining negotiations.
“We are currently facing an annual loss of investment
income in the order of $100 million and this will require some prudence on the
part of the university,” the vice-chancellor, Michael
Spence, wrote in an email to staff this week.
Faculties will have to cut planned budgets by 6 per cent,
and also cut 9 per cent from planned administrative expenses.
Until recently, funds investing surplus income have been a
growing source of revenue for universities and charities.
The University
of Sydney’s funds were
worth about $1.3 billion in December, spread between local and international
shares, bonds, and listed and unlisted property and infrastructure.
The investments have delivered an annual return of about
$150 million in the past few years, but that is expected to drop to $50 million
this year.
“All universities have different policies,” said
the vice-chancellor of the University
of Technology, Sydney, Ross Milbourne.
“We have a policy that is basically we are holding in
trust both government money and money donated to us by various people, and we
have taken the view that we are not going to play a lottery with other people’s
money,” Professor Milbourne said.
He said universities that speculated on the sharemarket
enjoyed big gains when prices were rising, which should offset their present
weakness. “If they are taking a short-term view of slashing and burning I
think that is a very short-term focus.”
The vice-chancellor of the University of New South Wales,
Fred Hilmer, said his university would not need to pare back planned spending,
and that it did not rely on its funds for regular programs.
Representatives from the National Tertiary Education Union
will meet with the University
of Sydney’s deputy
vice-chancellor and chief operating officer, Bob Kotic, on Monday to discuss
the university’s financial position.
“The NTEU is concerned that the university management
is using the ‘current economic climate’ to avoid dealing with the issues raised
in our log of claims for a new enterprise agreement,” said a union
spokesman, Michael Thomson, in an
email to members. “This just seems to be just another excuse.”
The university’s acting vice-chancellor, Don Nutbeam, said
the university was just tightening its budget for next year. “It is not
like we are in trouble and we are making cuts,” he said.