All but one of the public universities in?Australia¡¯²õ?most populous and richest state finished 2022 in?the red, as?rising costs and investment reversals erased the wall-to-wall surpluses posted the previous year.

Accounts presented on 31?May suggest that New South Wales¡¯ (NSW) universities are still weathering the financial impacts of?the Covid-19 pandemic and other global disruptions. Nine of?the 10?institutions registered deficits last year, with earnings down and expenses?up.

Collectively, the 10 universities traded a A$2.1?billion (?1.1?billion) surplus in 2021 for a A$134?million shortfall in 2022. As in?other states, investment losses were the major factor, accounting for A$1.3?billion of the turnaround.

But inflation also had a significant influence, with ¡°other expenses¡± ¨C an umbrella category covering areas such as security, travel, cleaning, consumables, marketing, student scholarships and contracted services ¨C rising by about 14?per cent to increase the cost base by some A$360?million.

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Employee-related costs rose by about 5?per cent, adding another A$320?million to expenses. Overall, operating costs surged above 2019 levels after two years of Covid-induced belt-tightening.

The biggest reversal occurred at the only institution that managed to avoid falling into deficit. The University of Sydney¡¯²õ A$302?million surplus was well down from its A$1.05?billion result the previous year.

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Sydney¡¯²õ investment earnings were down by some A$440?million, while its federal government funding declined by about A$90?million. Meanwhile, staff costs rose by some A$80?million and other expenses by about A$50?million.

But the university¡¯²õ losses were softened by a A$50?million boost in international education earnings, raising revenue from this source to about A$1.4?billion ¨C well over the total earnings of most of the state¡¯²õ other universities.

¡°Despite ongoing headwinds, the university again finished the year in a remarkably good position,¡± chancellor Belinda Hutchinson and vice-chancellor Mark Scott remarked in a foreword to their annual report.

Sydney¡¯²õ finances have proven immune to Covid-19 border disruptions, with its income from overseas students rising to more than 30?per cent above pre-pandemic levels. Three other NSW universities increased their international education takings in 2022.

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A A$6?million boost in earnings from foreign students at the University of Wollongong¡¯²õ Australian campuses took some of the sting off the institution¡¯²õ A$28?million deficit.

¡°While the financial impacts of the pandemic linger, the university remains on a sound and sustainable financial footing and the gradual return of international students to our Australian campuses is a positive sign for the future,¡± Wollongong noted. But it added that its domestic teaching revenue had declined, partly because of government funding changes.

The NSW Auditor-General¡¯²õ office, which released a on the state¡¯²õ universities, said domestic enrolments had decreased by 5?per cent while international student numbers were down by just 1?per cent.

Vice-chancellors¡¯ pay declined at five institutions and remained unchanged at two others, reducing the average package by 4?per cent to about A$924,000. Nevertheless, half of the state¡¯²õ university leaders pocketed seven-figure earnings.

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john.ross@timeshighereducation.com