CDU’s ‘serious financial risk’ from COVID-19: vice- chancellor

by | Apr 30, 2020 | COVID-19, News | 3 comments

Charles Darwin University will be plunged into a $22 million deficit if it does not embark in significant cost-cutting measures as a result of the coronavirus crisis, vice-chancellor Simon Maddocks has said.

In an email sent by Prof Maddocks to all staff, CDU estimated its current 2020 revenue will fall by between $20 million and $30 million compared to its budget, due to a decline in international students, less student accommodation demand and reduced investment income.

“To put that in perspective, the revenue decline will put us into a cash deficit by more than $22 million if we take no action, placing the university at serious financial risk,” the email read.

As a result, the university’s Executive Leadership Group have agreed to an immediate pay cut between 10 per cent and 15 per cent for the next three months.

CDU will also look to negotiate a possible 12-month pay freeze to staff, a halt to increments and bonuses, directions to use excess leave balances and fractional working arrangements.

The University’s Semester 1 intake of international students was “impacted negatively in only a small way” because of travel restrictions, however the email tips the “impacts for Semester 2 will be severe”.

Federal Government advice on global travel restrictions into Australia could be maintained for several months into 2021, meaning a new intake of students from outside Australia for CDU’s Semester 2 this year is unlikely, with possible impacts for 2021 also.

“Unfortunately, none of the Australian Government stimulus packages made available to businesses have, at this point, provided any relief for universities,” the email read.

“In the absence of additional external support for the critical enterprises of research, education and skills training, we have no option but to continue to reduce expenditure to compensate for the loss in revenue.”

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