Deficit rises as ANU misses financial target

In the face of this climbing deficit, it's put in new controls to tighten spending on staff recruitment.

It has set up a recruitment approval committee made up of the ANU's most senior officers, including the vice-chancellor, chief financial officer and the "chief people officer".

But the university's main union said the tighter grip on recruitment has led to vacancies being unfilled. It's written to the ANU citing "high levels of workplace stress and anxiety, due to increased feelings of insecurity and uncertainty".

The ANU's rising deficit was on its running costs - its day-to-day costs compared with revenue.

Overall, the new annual report shows a surplus of $147 million but this took into account income from investments which has to be used for staff superannuation and scholarships.

The ANU also received $112.8 million of insurance payments but these were tied to repairing buildings damaged in the hailstorm of 2020.

The university authorities blamed the aftermath of the pandemic and the state of the economy for its widening shortfall in revenue to cover running costs.

"The COVID-19 pandemic significantly altered the financial position of the higher education sector in Australia, including ANU," a statement said.

The leader of the National Tertiary Education Union in the ACT, Lachlan Clohesy, said that there was no formal hiring freeze at the university but there were severe delays in hiring to fill vacancies. There were delays in re-signing fixed term contracts, he said, so staff had to exist in great uncertainty, without pay when a previous contract expired but before a new one was offered.

"Staff are reporting that they are already working to cover unfilled vacancies, and these measures are exacerbating the problem - they are already stretched and can stretch no further," the union has told the university.

This has resulted, the union said, in overseas staff reliant to get to Australia by having a contract not being able to get visas.

There has been a "negative impact on student experience, including cancellation of courses which is only known to students just before start of teaching periods".

"Compounding effect of multiple concerns is that collegiality is decreased as staff are exhausted, stressed, and less patient."

The causes of the widening excess of spending over revenue may worsen in 2024 and 2025.

Last December, the ANU's then vice-chancellor Brian Schmidt warned that the university would have to "massify" its classes and compromise on the service to its domestic students because of a squeeze on government funds.

"We actually have a lot less money for domestic students than we had in 2019," Professor Schmidt said. He has since left the top job at the university but remains as a professor there.

He added that the choice for the university was either to increase the size of classes - "massify" them as he put it - or find a way of subsiding domestic students.

The slow-down in staff recruitment may be one way of trying to maintain standards for students.

"But there's a limit of how long we can do it. At some point, I'm afraid we're going to have to go and do what everyone else has done, and just treat our domestic students less well," Professor Schmidt said.

One looming issue for the ANU and the other seven highest-prestige universities in Australia (known as the Group of Eight) is the government's upcoming ceiling on the number of international students.

The political argument had been that international students were taking housing which could alleviate the wider shortage of housing in Australia.

"We have to ensure that we manage the international education industry in a way that delivers the greatest benefit to Australia," the federal Education Minister Jason Clare said in May.

But the immediate problem for the ANU is an excess of spending over income, with more constraints on revenue on the way.