University of New South Wales to cut 493 jobs and merge faculties

The University of New South Wales has slashed 493 jobs, citing an estimated $30-40m revenue hit from proposed university funding changes among the causes of its financial hardship.

It comes as the regional education minister conceded the government may need to fix the package to address concerns it could push prospective regional students to move to the city and harm regional mental health services.

Australian universities face an estimated $16bn black hole from Covid-19 due to a massive drop-off in international student numbers.

On Wednesday in a presentation to staff, the UNSW vice-chancellor, Ian Jacobs, revealed the university is currently facing a $370m financial shortfall in 2021 which can be reduced to $75m with cost-cutting and dipping into reserves but will still require it to reduce its workforce by 493 full-time positions.

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“This is a painful but unavoidable reality in current circumstances,” Jacobs said.

“To minimise the need for compulsory job losses, a voluntary redundancy program will be offered, starting immediately.”

UNSW will restructure to six faculties, by combining the faculty of the built environment, art and design with arts and social sciences. The university will also cull its senior leadership, with two dean and two vice-president roles to be cut.

Although international border closures to prevent the spread of Covid-19 are the biggest factor in the shake-up, the university also pinned blame on the government by citing “jobkeeper exclusion”, the unlegislated higher education overhaul and “international students messaging from government” as among the causes of its financial position.

The Morrison government has guaranteed its $18bn contribution to universities, but refused to kick in extra while also making a series of changes effectively excluding public universities from the jobkeeper wage subsidy scheme.

In June the education minister, Dan Tehan, unveiled proposed changes reducing the overall government contribution to degrees from 58% to 52% and increasing fees for some courses to pay for 39,000 extra university places.

Jacobs noted that although a transitional fund is in place to soften the blow of course funding changes during 2021-23, the university “must prepare for the long-term impacts”.

The Community and Public Sector Union, which represents non-academic staff, expressed outrage at the cuts. Its NSW assistant secretary, Troy Wright, said “Australia’s higher education sector is in a perilous situation – we need jobkeeper in our universities now, and then we need a fundamental rethink of the higher education system”.

After meeting regional university vice-chancellors, the regional education minister, Andrew Gee, said on Wednesday that concerns about unintended consequences of the proposed $5,000 tertiary access payment and fee increases for social work, behavioural studies and psychology courses “are important and should be addressed”.

“I will also be taking all of the issues raised at the roundtables back to the Nationals’ party room to get the viewpoints of other country MPs on what our position should be,” he said, in a sign that Dan Tehan’s university funding changes could face a revolt from within the Coalition.

Among the university changes announced by Tehan was a $5,000 grant to students from outer regional and remote areas to help pay for relocation costs to begin university.

Gee said: “A number of regional universities, from Tasmania up to Queensland, are concerned that the tertiary access payment may have unintended adverse impacts on regional university student enrolments, by acting as an incentive to move to metropolitan areas”.

Gee also noted that “a number of universities, including the University of New England, expressed concern that increasing the cost of studying social work, behavioural studies and psychology may have adverse impacts on the rural and regional mental health workforce, and the community”.

Related: Australia to allow international university students to return before all state borders open

“I have listened and understood their views, and will ensure these are fed into the broader discussion on tertiary education reform.”

From 2021 students taking social studies and behaviour studies courses are facing fee rises of $7,696, up from $6,804 a year to $14,500.

CQUniversity vice-chancellor, professor Nick Klomp, told Guardian Australia it is “supportive of a tertiary education access payment, however it must be designed in a way that encourages regional students to attend regional universities, if they so choose”.

“We are not supportive of a scheme that would favour metropolitan universities at the expense of regional prosperity.”

Caroline Perkins, the executive director of the Region Universities Network, told Guardian Australia the package could be fine-tuned to address “perverse consequences” but overall it gave a “lot to help regional universities”.

The concern about the access payment could be addressed by a tiered system such as $2,500 for students moving to the city, or a stipulation that if a course is offered at a local regional university, funding will not be given to move further afield, she said.

In terms of benefits to regional universities, Perkins cited the 45% weighting for regional backgrounds in student support programs, a $50m research fund, and the fact regional universities’ places grow by 3.5%, which can be traded for cash if they are not filled.