Treasurer Rob Lucas confirmed to InDaily today that Adelaide, Flinders and the University of South Australia made a joint submission seeking to be exempted from payroll tax for 12 months as the institutions grappled with the fallout of the COVID-19 pandemic.
A letter sent on April 8 requesting the handout was signed by Flinders vice-chancellor Colin Stirling, UniSA’s David Lloyd and Peter Rathjen, who has since taken leave from his role at the helm of Adelaide University pending an ICAC investigation into alleged “improper conduct”.
But Lucas said he refused the request – which would have allowed the three institutions to forego $58 million in payroll tax over 12 months.
“We said no [because of] the cost,” he said.
“We have to be as cautious as we can with taxpayer funding… we’ve got a finite amount of money which is there [and] unis have got big balance sheets, so they’ve got the capacity to continue.
“It’s not as if they’re going to go broke or become insolvent as a result of not getting that level of assistance.”
He said each university had “big assets… so they’ve got the capacity to struggle through” the pandemic.
“They’re impacted, but it’s not like they’re going to go broke or close down as a result of the lack of assistance,” he said.
Lucas’s Treasury Department boss David Reynolds raised the possibility of a request from the universities for payroll exemption at a Budget and Finance Committee hearing last week, saying the institutions also sought a $10 million funding grant to help struggling international students, which was granted and announced last month by Trade and Investment Minister David Ridgway.
“They did request some other payroll tax assistance in that particular correspondence, but we have just referred that to say that they would get the same payroll tax assistance that everyone else gets,” Reynolds told parliament.
Lucas said the tenor of the approach was “hey, times are tough – can you give us relief on payroll tax?”
The Government’s coronavirus assistance package currently offers a six-month waiver for all businesses with an annual payroll up to $4 million, while larger employers can instead defer for six months.
Lucas said he suggested they apply for that deferral.
The University of Adelaide said in a statement that “the State Government encouraged the three universities to apply for a payroll tax deferral [and] the University of Adelaide can confirm it has been granted a payroll tax deferral of six months, in line with the government’s process”.
A Flinders spokesperson said that university had also received the six-month deferral.
It’s believed a six-month deferral was also granted to UniSA, but that institution declined to comment.
Adelaide University has previously disclosed that it expects “a $100 million shortfall against its budget for the remainder of 2020 due to the impacts of the COVID-19 pandemic”.
It has said it may “draw upon short-term borrowings if required” and will put in place measures including “a staff recruitment freeze, a pause on new capital works, revised Faculty and Divisional budgets, development of new sources of revenue, including online short courses and micro-credentials, and research funding from major schemes, linked with industry and government need”.
It comes as Melbourne’s Deakin University declined to sign a National Tertiary Education Union proposal put forward to mitigate the economic impact of COVID-19, instead putting forward its own plan includes a reduction of 300 staff positions. Deakin has five campuses in Melbourne and the Victorian regional cities of Geelong and Warrnambool, with job losses expected at all of them.
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