University finances in Australia¡¯s sunshine state rebounded last year, converting a combined deficit into a surplus of almost half a billion dollars.

Six of Queensland¡¯s seven publicly funded universities registered surpluses in 2024, up from two the previous year, as spikes in revenue from students, investments and government dwarfed the inflationary bumps in their costs.

However, the figures ¨C contained in the year¡¯s first release of published annual reports ¨C were inflated by a one-off spurt in indexation, and predate a looming plunge in international earnings.

The accounts show that revenue across the seven institutions rose by over A$700 million (?339 million), or almost 11 per cent, while expenses rose by less than 4 per cent.

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The turnaround reflected robust earnings growth from both domestic and international students. Teaching subsidies through the Commonwealth Grant Scheme (CGS) and domestic fee income through student loans rose nearly A$100 million each, driving a boost of almost A$300 million ¨C close to 9 per cent ¨C in federal government allocations.

Increases in international tuition fee earnings at all seven institutions added a combined A$205 million or 13 per cent to their already considerable education exports. Foreign students provided almost 24 per cent of the seven universities¡¯ collective A$7.4 billion in revenue.

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The institutions also garnered well over half a billion dollars from their investments ¨C the best result this decade, and a big turnaround from a combined loss of a quarter of a billion dollars in 2022.

However, Monash University higher education expert Andrew Norton said the investment earnings and ¡°very healthy¡± revenue from student contributions masked underlying vulnerability in the Queensland finances.

But for their investments, Norton said, three universities would have ended the year in deficit and the near record A$315 million surplus at the University of Queensland would have been about one-hundredth of that size.

He said the increase in government funding was mostly?because of an unusually high 7.8 per cent indexation rate applied to teaching subsidies and student contributions, in a belated adjustment for generation-high inflation. CGS allocations across the seven universities rose by 6.6 per cent, meaning teaching subsidies would have declined without indexation.

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¡°It suggests that despite overall good cost control compared to the previous year, and recoveries in student revenue sources ¨C other than full-fee domestic postgraduate ¨C operating conditions remain difficult,¡± Norton said.

The annual reports show that fees from domestic postgraduates are declining at most Queensland universities. Meanwhile, international education earnings are expected to plunge because of multiple changes to visa rules, culminating in the government¡¯s unsuccessful move to impose caps last year.

Norton said these changes had begun too late to significantly affect international education earnings in 2024, because most foreign students would already have obtained visas. But 2025 would be a different story, with monthly visa applications now tracking at about half of their 2023 levels.

¡°While a few universities have posted surpluses, it¡¯s important to understand what¡¯s driving those figures,¡± said Universities Australia chief executive Luke Sheehy. ¡°In many cases, revenue has remained flat or unpredictable and expenses haven¡¯t increased ¨C not because costs are falling, but because universities are delaying investments, freezing recruitment or putting major projects on hold to maintain financial stability.¡±

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Sheehy said universities needed financial stability to achieve the Universities Accord target of a million more domestic enrolments by 2050. ¡°This is about long-term national capacity, not short-term balance sheets.¡±

john.ross@timeshighereducation.com