University JobKeeper hopes dashed again

A week ago, when I last reported on the saga that is university eligibility for JobKeeper, the government had just announced that its grants would be counted in university revenue, making it harder for universities to get the required 30 or 50 per cent (depending on their size) drop in their income.

Despite this, I thought that some universities might still be eligible. The University of Sydney believed that it was. This was because while no university is likely to be down 30 or 50 per cent on its annual revenue, the timing of when international students pay their fees could mean that, in certain months, the cash flow reductions were that large.

The amended JobKeeper rules dash that hope. While other organisations can calculate their revenue losses over a monthly or quarterly period, for universities the relevant period will be the six months starting 1 January 2020. Over a six-month time period, the fortnightly payments of Commonwealth grants are likely to push university revenue losses back below 30 or 50 per cent.

The same legislative instrument also changes the rules so that anyone aged 16 or 17 years who was a full-time student on 1 March 2020 is not eligible for JobKeeper. There is an exception for people who meet the social security independence test. In the case of teenagers that is likely to require difficult family circumstances.

The higher education enrolment statistics report about 50,000 16 and 17 year old domestic students. Many of them would miss out on JobKeeper anyway due to not working or being employed on a casual basis for less than 12 months.

But for those who would otherwise meet the JobKeeper criteria small age differences will turn into big financial differences. A student who turned 18 on 29 February can more than double their income with JobKeeper, while a student who turned 18 on 2 March will get nothing (I will let the lawyers work out what happens to people with 1 March birthdays).

There is a reasonable argument that JobKeeper is not the best way to deal with the problems universities face. Under the rules we expected last weekend, which institutions received JobKeeper would have a 29 February versus 2 March birthday aspect – driven by technical issues of timing that don’t reliably address the underlying issues.

While universities like other organisations across Australia will have to make painful cuts, more strategic government assistance could deliver greater public value than JobKeeper .

For example, will research projects fall over, wasting all the money and time spent to date, because universities can no longer afford them? The Commonwealth only partially funds ARC and NHMRC supported projects, a policy that could work when universities had discretionary income from international student profits, but may not be feasible now.

Improving funding on existing ARC and NHMRC grants, along with grants to be awarded in the next couple of years, would use existing information and administrative systems, the most efficient way of running COVID-19 assistance programs. It would also spread the assistance into 2021 and 2022, which are likely be worse years than 2020 for universities, rather than paying it all by 27 September 2020 under JobKeeper.

But whatever the eventual policy the government would have saved itself multiple rounds of negative media, and saved the higher education sector much false hope and wasted effort, if it had just said at the start that it did not want universities to receive JobKeeper.

 

 

 

 

 

2 thoughts on “University JobKeeper hopes dashed again

  1. Hi Andrew,

    Thanks for covering this. Regarding current NHMRC, an additional concern. Hospital based projects have likely stopped as medical staff are re-directed to anti-COVID efforts. Meanwhile, social distancing rules have curtailed academic and technician access to university labs and facilities. In the meantime, most people will be fully paying staff (and other costs) but not fully pursuing projects. So, it is likely, projects may not hit those milestones.

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  2. […] Australian National University policy expert Andrew Norton said Canberra only partially funded research projects supported by the Australian Research Council (ARC) and the National Health and Medical Research Council (NHMRC). That policy “could work when universities had discretionary income from international student profits, but may not be feasible now”, Professor Norton blogged. […]

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