Australian universities are registering some of their biggest deficits ever, with prestigious Group of Eight (Go8) institutions incurring the worst losses, because of a savage downswing in the financial markets that drove unprecedented surpluses in 2021.

The University of Queensland (UQ) went backwards by a staggering A$310 million (?168 million) last year, after achieving a A$342 million surplus in 2021. The reversal was fuelled by a A$209 million loss in the ¡°fair value¡± of its financial assets, which all but erased the previous year¡¯s A$212 million gain.

It could be the largest Australian university deficit ever recorded,?eclipsing?a A$246 million shortfall at the University of Melbourne in 2008 following a quarter-billion-dollar write-down of its assets. Five other Go8 institutions reported hefty deficits that year because of ¡°impairment expenses¡± at the height of the global financial crisis.

But Melbourne¡¯s 2022 deficit is of a similar scale, according to released ahead of the formal tabling of its accounts. The institution finished the year A$203 million in the red, in a massive turnaround from its 2021 surplus of almost A$600 million.

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Melbourne said ¡°unrealised investment losses¡± due to a downturn in the financial markets had reversed its 2021 investment gains of A$165 million. It said scholarships, student grants and other pandemic support had also contributed to the deficit.

Fellow Go8 members Monash University and the University of Western Australia have also reported 2022 deficits of A$78 million and A$204 million respectively. Go8 institutions are particularly susceptible to market downturns because they have relatively large investments.

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UQ said its long-term investment portfolio had increased tenfold in the past decade and the 2022 result reflected global stock market movements. Vice-chancellor Deborah Terry said the university¡¯s investments had performed well over the past seven years, with annual earnings averaging over 8 per cent.

The Go8 losses also appear inflated because its members claimed the lion¡¯s share of an extra A$1 billion in research funding, allocated as a Covid stimulus measure. Professor Terry said UQ had received A$100 million from this source in 2021 and spent A$61 million of it in 2022 ¨C factors that augmented both the 2021 surplus and the 2022 deficit.

But last year¡¯s financial losses were not limited to Go8 institutions. All but one of the seven public universities in Queensland incurred deficits in 2022, according to annual reports published on 31 March. In 2021, all but one of them achieved surpluses.

The state¡¯s second richest institution, Queensland University of Technology, has delayed releasing its financial results following a cyber attack. But vice-chancellor Margaret Sheil said her institution had registered a A$130 million deficit. ¡°The financial projections for 2023 are similarly challenging,¡± she warned staff.

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Other deficits include A$70 million at Griffith University, A$45 million at James Cook University, A$24 million at Central Queensland University and A$16 million at the University of Southern Queensland (USQ). The University of the Sunshine Coast was the only Queensland institution to finish the year in the black, recording a healthy A$35 million surplus.

While Griffith and USQ experienced sharp downturns in investment revenue, international education has not been a major factor in Queensland universities¡¯ financial problems. UQ¡¯s earnings from this source declined by just 3 per cent last year, while three other Queensland universities increased their international student income.

john.ross@timeshighereducation.com