UWS Finances

In 2004 the University reported that it was likely to have a projected budget deficit if we did not increase non-government funding and reduce spending.

The steadily declining (in real terms) Commonwealth grant to universities over the last ten years and rising costs have forced UWS, like other universities, to find more cost-effective ways of organising, running and building the institution.

Given the severely constrained financial circumstances of the past three years and the impact of the new Commonwealth funding arrangements, the University has focused consistently on expenditure restraint. The financial results for 2004 demonstrated the need to approach the budget planning process conservatively, with an eye to the potential risks and to the rapidly changing environment within which the University operates. Projections for 2006 have been framed prudently, continuing the approach taken in 2005.

A number of projects have successfully achieved significant savings, and we congratulate UWS staff and students for their support and effort in achieving these savings.

Budget position for 2005-2006

2005
UWS's 2005 budget is in surplus by $2.088million, however this included some one off gains, and will not be sustained medium- or long-term if we do not continue to reduce costs permanently and generate additional and reliable income streams.

This surplus was less than the real deficit in 2004 and has been used to recover lost reserves from 2004.

Revenues in non-Department of Education, Science and Training (DEST) areas are quite variable and risky. DEST has suggested that universities should set a target operating surplus of 5% of revenues which would have been equivalent to $17.75million for UWS in 2005. Many other universities also target 5% of revenues as a surplus. A consistent, sustained annual surplus is desirable as it would give UWS greater options for expenditure and investment.

2006
There are some concerns about emerging 2006 amounts, mainly due to less income coming from UWS's activities overseas and a reduction in student services fees. Voluntary Student Unionism legislation is likely to leave a $10million hole in the annual UWS budget from 2007 and this funding shortfall is being addressed.

The highest risks to achieving the 2006 budget strategy are:

• failure to generate projected non-government income as budgeted
• inability to attract additional student numbers to fully utilise new HECS places or meet over-enrolment targets
• the inability of Budget Unit Managers to contain expenditures within set budgets, particularly in the Divisions, where no overall budget increases have been provided on 2005 budget allocations
• costs of the on-going UWS Change Management process exceeding the 2006 Change Management budget allocation of $5.0million.

What plans are in place for spending the surplus?
The University’s financial strategy will continue to focus on:

1. the use of targeted investment in the University’s strategic priorities (teaching and learning, research and engagement)
2. growth in non-government income (ie fee paying students, commercialisation, other commercial activities, campus development project)
3. realistic income projections
4. strategic cost management

The budget includes substantial expenditure on capital development projects, most particularly the Parramatta Teaching Building and the Medical School Building on the Campbelltown Campus.

The strategic initiatives for 2006 will build momentum in 2007 and 2008. The budget provides for:

1. specific and strategic research investment
2. funding for enhancement of teaching and learning
3. seed funding for University engagement projects
4. scholarships – both equity and merit-based to attract high achievers