Universities are in talks with government about research funding beyond 2021, after the coronavirus pandemic blew a hole in their budgets.
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Group of Eight chief executive Vicki Thomson told a parliamentary inquiry into temporary migration on Wednesday the pandemic shone a light on the "distorted funding model" universities were using to fund research.
Government funding for university research had fallen from around 45 per cent to 35 per cent in the past decade, forcing universities to increasingly rely on international student fees, she told the committee.
Since the pandemic halted international students arriving in Australia, universities were likely to see a shortfall in revenue of between $1.3 and 1.8 billion, Ms Thomson said.
"[In] 2021 we are expecting that to be a greater figure," she said.
The $1 billion research fund announced in last week's budget would help but it "won't solve that problem completely", Ms Thomson warned.
Already the Australian National University pared its job cuts back from 215 to 194 after the fund was revealed, with vice-chancellor Brian Schmidt saying it would help keep their researchers on deck in the short-term.
"We will still see job losses. I can't sit here and say it will mean we won't have job losses, we will still have job losses but it will hopefully reduce the severity of those job losses for our research staff across our universities," Ms Thomson said.
"We're now in a longer dialogue with the federal government about what we need to do in the face of not getting international students in, how do we actually fund research?"
Ms Thomson said it was unlikely Australia would see the number of international students as it did before the pandemic for some years.
"Federal Education Minister Dan Tehan is certainly aware that we need to look at what happens in year two, three, four, five etcetera, because as I said we don't think we're going to have international students back in the same way that we did.
"Frankly it really has shone a light on the distorted funding model that we've operated under and ... there is no going back to normal, there is no going back to just relying on international student income to subsidise our research."
The Group of Eight - whose institutions conduct 70 per cent of the research done in Australian universities - has put a proposal to government about future research funding.
"We've issued a policy document which government has looked at, it focuses on what research we fund, what are our priority areas, do we fund research at excellence, that means do we fund it better but do we do less research, how do we align with government priorities so there's a whole raft of complexities in that as to how we do it," Ms Thomson said.
"I'm fairly confident at least that government understands we've had a distorted funding model ... we cannot rely on external international fee income to fund our research in this country, so now we have to have the really challenging discussion about how we fund research."
Ms Thomson also hit back at depictions of international students as "cash cows".
"We must also ensure international students understand that they're appreciate by Australians not for their fees but for the intrinsic value they bring to our society," she said.
