UTAS at the crossroads

UTAS is at a pivotal moment in its history, facing a dramatic outflow of local students, controversy around its management decisions and mounting financial pressures.

 Recent figures from the federal Department of Education reveal a sharp increase in Tasmanian students choosing universities outside the state, rising from 17.9 per cent in 2013 to 28.5 per cent in 2024. While flying the coop is part and parcel of an island upbringing, the rapid growth in students choosing to study elsewhere undermines UTAS’s viability.

Alongside this exodus, UTAS has witnessed a dramatic shift towards online education: domestic students commencing fully online courses increased from 32.5 per cent in 2013 to 73 per cent in 2024. Although university management claims higher interstate online enrolments offset declining Tasmanian numbers, most interstate students remain outside Tasmania, yielding little benefit to the local community. The growth of online learning coincides with course and staff cuts, diminishing the appeal of in-person campus life and fuelling a cycle of declining enrolments and reputational harm.

Redundancy programs have highlighted staff and students’ concerns about poor consultation, predetermined decisions and the shift from face[1]to-face learning. The university now faces a vicious cycle of cuts and declining engagement.

To reverse these trends, UTAS should refocus on robust, in-person experiences, broad course offerings and a vibrant campus culture, ensuring online and on-campus modes are both genuine choices for students.

A critical concern is the lack of transparency and accountability at UTAS. Its council has not prioritised student retention as a core metric, nor has it sufficiently addressed the student exodus. Greater scrutiny from Tasmania’s political leaders is sorely needed.

There are two recent parliamentary reports still awaiting meaningful government response. Without effective intervention, Tasmania risks losing its next generation of skilled professionals.

 UTAS has averaged $50m in losses from core education and research over the past two years. This includes depreciation. However, cash earnings before interest are barely break-even, and far short of the $50m required annually to cover interest payments and capital upgrades.

UTAS’s 2024 annual report claims a “strong” financial position, citing a liquidity ratio of 1.6 – $1.60 in assets to cover each $1 in liabilities. This figure, however, omits $107m in capital commitments due in the next year, reducing the effective ratio to just 1.15.

 Even this is optimistic, as UTAS’s liquidity relies on reclassifying $55m of surplus city properties as “available for sale”. This will be needed to cover ongoing operating expenses.

Universities typically receive income in advance, but when it comes time to spend, cash reserves may be depleted – as in UTAS’s case – necessitating asset sales, sometimes at a loss.

For years, UTAS has accumulated assets via gifts of land from the state, from capital grants and capital growth and from private bequests – but continuing losses will quickly erode them. The forward sale of 30 years of rents from over 90 per cent of its student accommodation (2000 beds) raised $203m but forfeited rental income for three decades, with most rental income now going to the investor, Spark Living.

UTAS retains only enough rent to cover costs. Each year, it amortises $6m of prepaid rent as income, but this does not reflect real cash flow, distorting the university’s financial sustainability. When the National Rental Affordability Scheme ends in 2026, UTAS may need to supplement Spark’s return by an additional $6m a year, further straining its finances.

UTAS’s balance sheet shows a net asset value of $1.3bn, but most of this is tied up in illiquid assets. Available cash and investments, after exclusions, total just $189m in 2024, down from $401m in 2022.

Meanwhile, borrowings have climbed to $512m if what’s owing to Spark is included, up from $103m in 2016, raising serious concerns about the university’s ability to service its debt and redeem green bonds of $280m maturing in 2032.

 Despite impressive new facilities like the Forestry building in Hobart, UTAS’s route to financial sustainability remains unclear. Management, policymakers and the broader community must recognise the gravity of the situation and collaborate to turn the university around. The Auditor[1]General, in a recent presentation to parliamentarians, made specific mention of the urgent need to tackle UTAS’s lack of sustainability.

Nothing will offer greater long-term benefits to Tasmania than a strong, sustainable UTAS. UTAS is at a crossroads, facing a shrinking local student base, dissatisfied staff and students and a dangerously leveraged financial position. The university’s current trajectory threatens not only its own future but also Tasmania’s broader economic and social wellbeing. Retaining talent, restoring vibrant campus life – and embracing transparent, realistic financial management – are essential if UTAS is to fulfil its vital role in the state’s future. Without decisive action, the brain drain and financial spiral may become irreversible, leaving Tasmania without a strong, locally engaged university to educate its next generation and drive innovation.

The time for honest assessment and bold reform is now.

(As published in The Mercury 18^th October 2025)

 

Postscript

·        The author acknowledges the assistance of colleague Robert Hogan Home - The UTAS Papers

·        The Auditor General’s presentation to Parliament with the pointed reference to UTAS  (Slide 11) AGR-2024-25-Vol-1-parliamentary-presentation.pdf

·        The resignation of Deputy Vice Chancellor UTAS loses deputy vice-chancellor as university faces $47.5m deficit | The Mercury occurred on the eve of the crucial annual 2 day UTAS Council meeting on 16^th & 17^th October, a meeting which normally finalises the plans for the upcoming academic year.