A big surplus at Australia¡¯s largest university could undermine warnings that an election battle over international student numbers is jeopardising the sector¡¯s financial health.

A near-tenfold increase in Monash University¡¯s surplus put the institution in the black by A$308 million (?150 million) last year, according to vice-chancellor Sharon Pickering.

Announcing the result to staff ahead of the publication of Monash¡¯s financial accounts in May, Pickering credited investment gains, increased research revenue, a ¡°steady recovery¡± in international student numbers and ¡°strong growth¡± in domestic enrolments, ¡°combined with diligent expenditure management¡±.

She said the ¡°hard-fought¡± financial result was achieved amid growing costs, ¡°declining sector-wide government funding¡± and an ¡°uncertain policy environment¡± as the federal government attempted to ¡°mandate¡± international student numbers.

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¡°Monash navigated these challenges through disciplined financial management and controls,¡± Pickering told staff. ¡°We prioritised the removal of operational complexities so that we [could] remain focused on our core reason for being.¡±

Queensland¡¯s public universities likewise revealed strong financial results in annual reports published at the end of March. The state¡¯s richest institution, the University of Queensland (UQ), outshone Monash with a A$315 million surplus.

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Such figures could dent universities¡¯ arguments for funding boosts to bankroll more student places, bridge gaps in research funding and offset the financial losses from last year¡¯s government crackdown on international student numbers.

However, Monash was relatively unaffected by the government¡¯s thwarted plan to cap foreign commencements. Its quota for new overseas enrolments this year was the second biggest in the sector, and ¨C uniquely among Australia¡¯s top research-intensive universities ¨C substantially higher than the federal education department¡¯s estimate of its 2023 commencements.

While the government failed to legislate the caps, their influence lives on under ¡°ministerial direction 111¡±, which instructs immigration staff to slow down the processing of visas for institutions whose commencing student numbers are within 20 per cent of the quotas announced last year.

The financial result at Monash, like UQ, was heavily reliant on volatile investment returns. Pickering revealed that investment earnings had accounted for at least half of the 2024 surplus.

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Monash¡¯s strategic investments grew from A$1.93 billion in 2023 to A$2.32 billion last year, according to the university¡¯s website.

Pickering told staff that the university was operating in a ¡°turbulent and often unpredictable¡± environment. ¡°While our financial outlook has improved, this is not a time to lose focus.

¡°We must tread carefully so that our operating model and expenditure remains below our revenue and aligns with our founding purpose. We are still rebuilding our margins to a position where we can afford to fund the large strategic and capital investments required for our future education and research ambitions and long-term financial sustainability.¡±

But she lauded the ¡°robust¡± financial result of Monash¡¯s Australian operations, which had transformed a A$9 million ¡°net deficit¡± in 2023 to a A$181 million surplus last year.

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The National Tertiary Education Union said the ¡°impressive¡± financial results had been ¡°achieved off the back of increasing class sizes, declining student experience and eroding academic freedom¡±.

Branch president Ben Eltham said student experience surveys were a ¡°more important¡± metric. ¡°Monash¡¯s dismal score¡­is amongst the worst in the country. That¡¯s because Monash continues to prioritise financial gain over its core mission of education.¡±

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Pickering told staff that Monash¡¯s 2024 financial performance would allow it to ¡°accelerate investment in the student experience¡±.

john.ross@timeshighereducation.com