University of Melbourne's Economic Response Program. (August 3, 2009)

Last week The University of Melbourne announced that in response to the economic crisis it was facing as a result of the global economic recession (its investment income has been reduced by $191 million) together with accumulated financial difficulties resulting from previous governmental decisions such as:

* The cumulative impact of inadequate indexation of Commonwealth funding which has, since 1996, resulted in a decline in the real rate of funding of around $6 million a year.

* The loss of domestic undergraduate fee-paying places which will cost Melbourne around $30 million a year in revenue forgone from 2010.

* The previous government's VSU legislation which reduced income by $13 million a year and requires the University to redirect around $6 million a year from other activities to keep student services alive and viable.

It would need to shed 220 staff positions in an effort to save $30 million this financial year.

Other cost cutting measures that have been or are in the process of being implemented are, according to an email sent to staff: "cuts to travel, improved purchasing processes, a senior staff salary freeze announced in April, and business process reforms. Well managed, and with staff support, these initiatives can reduce the impact of staff losses. Unfortunately, they will only partially fill the gap of around $30 million in annual expenditure that must be addressed."

What cannot be glossed over is that there will be a marked reduction in the numbers of casual staff employed, significant numbers of contracted staff will not be rehired and staff taking voluntary redundancy will not be replaced. Any suggestion that the quality of the university's research and teaching won't be significantly affected would be nonsense.

Unfortunately, while the federal government is developing mechanisms to alleviate the economic effects on polluting industries of its contemplated "climate change" legislation, mechanisms have not been developed to assist the universities to ameliorate their economic environment. Not doing so will have a significant and deleterious effect on the nation's wellbeing over the coming decade.

On the other hand to give Melbourne University's vice-chancellor, Glyn Davis, and his administration their due, they have put forward an "Economic Response Program", and given both university staff and indeed the public a chance to express their views and make suggestions.

Below is an image of the ERP's homepage.