Two of Australia’s richest universities reaped sector-record income in a year of policy upheavals that threatened the sector’s financial health, institutional accounts reveal.

The universities of Melbourne and Monash earned A$3.7 billion (£1.8 billion) and A$3.8 billion respectively last year, both exceeding the A$3.5 billion revenue record set by the University of Sydney during a year of investment windfalls in 2021.

The results highlight the wealth gulf between the “big five” universities, as they are known, and the rest of the sector. The three institutions in this group that have so far published their 2024 financial accounts – Melbourne, Monash and the University of Queensland – achieved combined earnings of A$10.3 billion and posted a collective A$840 million surplus.

This compared with a combined deficit of A$98 million at Deakin, Federation and La Trobe universities, the three Victorian institutions that ended 2024 in the red.

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Income across the three “big five” institutions was 13 per cent higher than in 2023, fuelled by a 19 per cent surge in international student tuition fee revenue and a 9 per cent increase in federal government funding. The other two institutions in the group, the University of Sydney and UNSW Sydney, are expected to report their results later in May.

Australian universities campaigned against a spate of international education rule changes in 2024, including visa fee hikes, erratic visa processing and the last-minute withdrawal of proposed foreign enrolment caps.

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The policy volatility has so far failed to dent the sector’s overall earnings from overseas students, according to the financial accounts published so far by the 19 public universities in Victoria, Queensland and Western Australia. International tuition fee revenue across the three states rose by 21 per cent last year.

Analysts say the impact of the rule changes is still to be felt, because most Australia-bound students had already committed to going Down Under before the new policies emerged. The sector’s earnings have also been bolstered by unusually high indexation, which added 7.8 per cent to teaching grants and domestic students’ fees, along with healthy investment earnings.

Melbourne and Monash also incurred sector-record expenses of almost A$3.5 billion each, thanks to inflationary influences on their salary bills and sundry costs. Nevertheless, their robust surpluses – A$217 million at Melbourne and A$308 million at Monash – sit uneasily in a sector characterised by bitter pay disputes and underpayment scandals.

Monash said its “underlying net result” reflected its “true financial performance” by excluding philanthropic donations – which are often quarantined for specific uses – and investment income. On that measure, it had achieved a A$6 million deficit in 2024, which it described as “a substantial recovery” from a A$124 million shortfall in 2023.

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Melbourne said it had recorded a 2024 “operating deficit” of A$99 million, up from A$71 million in 2023. “The 2024 operating deficit was expected,” said chief operating officer Katerina Kapobassis. “While it is slightly larger than our initial projections, it is a result of strategic investments in student experience, our systems and processes, along with increased staff costs and inflation.”

The two universities’ investment and philanthropic earnings dwarf such shortfalls. Melbourne netted A$974 million from its investments between 2021 and 2024 and Monash cleared A$625 million, despite investment reversals in 2022. The two institutions have pursued philanthropic fundraising targets of A$1 billion and A$500 million respectively.

Former federal opposition leader Bill Shorten said the sector expected the government to “fund us” because “we’re very good people. That doesn’t work any more…in a world with competing resources,” warned Shorten, now vice-chancellor of the University of Canberra.

“Governments can kick universities, and there’s not a riot in the streets from all those people who’ve been to universities,” he told a La Trobe University webinar. “[That] raises the question: why aren’t the people who’ve been to uni more grateful? We have to make the case. That doesn’t just mean marketing. It means universities have got to get their…payrolls right, so there’s no wage theft. It means that we’ve got to make sure that people don’t think the v-cs are swilling at a special trough.”

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Victorian vice-chancellors’ earnings averaged A$1.073 million last year, the public universities' annual reports reveal. Retiring Melbourne vice-chancellor Duncan Maskell’s final-year remuneration of A$1.583 million was the second-highest annual package for a university boss in Australian history.

john.ross@timeshighereducation.com