2007 ESTIMATES OF INCOME AND DISTRIBUTION Presentation to University Managers’ Group 16 November 2006

Budget Process is : Transparent/Performance Based/Integrated Planning Strategic Plan, OPP, Academic Profile, Admissions and Quota Policy Cycle of Planning and Accountability Income Estimates & Distribution, Bottom Up Budget Process

Balanced Budget in 2007 Income to increase by $59.5M or 11.6% General Purpose income as % of total income declines from 52.9% in 2006 to 50.7% in 2007

Directional Focus Continue to provide core funding to all areas of the Budget Continue to Support Priority areas such as:- Increase $9.801M Core Fund for Faculties/Cent Admin + Library Increase HDR Int Enrolments by add 20 SIRF Awards $0.400m Increase Uni Postgrad Awards/Schols $1.526M (CRA)

Increase Uni Facilities by $2.225M Compliance Increase infrastructure by $1.M Increase Student Experience by $0.7M Increase Maintenance from $7.M in 2006 to $7.4M in 2007 Financial Assistance of $1.M re Salary Supplementation

INCOME INCREASE Additional $59.5m (11.6%) for 2007:- Comm Govt Grants Max Stud Contrib Amt (HECS) Other Grants WA Govt Grants Research Grants/Contracts Donations/Bequests Investment Income Fees and Charges (incl ISFs) & Other $M

Additional Income Comprises:- $M General Purpose Specific Purpose

Additional Income Distribution Faculties Teaching and Research Support Library Central Admin Capital University Facilities Community Activities Uni Discretionary Fund - Reduction Course Fees $M (1.000)

Commonwealth Supported Places 2007 Projected Student Load UWA Load = 10,487 EFTSL DEST Target Load = 10,466 EFTSL Variance in % Load of 0.2 of 1% or 21 Variance within DEST Limits

International Students Coursework Increase of 67 EFTSL or 3.7% Higher Degree by Research Increase of 16 EFTSL or 7.9% Average Price Increase of 3% - 5% Estimated Increase in Income of $2.319M

BUDGET REVIEW Teaching Weights Field of Education (FOE) Weights Complete Review – Simplify + Reduce Course type Weights Removal of Domestic Fee Pay P/Grad Subsidy 0.25 Removal of Honours Project Units Weight of 0.3 Research Cost Discipline Weights Removal of Mid Cost Band

Salary Supplementation removed Fee Distribution adjusted Interest on Term Deposits Items included in 2007 Estimates but not recurrently funded:- 50% SIMS Project $0.743M (ex USF) Undergrad Scholarships $0.701M (ex USF) Items not included in 2007 Estimates Funding to replace/update Uni-wide systems

THE FUTURE Continuing Cost Pressures Ongoing Enterprise Bargaining Increases Increasing Uni Facilities Costs (Energy/Building Maintenance/Minor Works/Compliance etc.) Increasing Demands on Discretionary Funds + Reduction in 2007 Allocation

Uncertainty In Investment/Equity Markets Gross Earnings Rates Used in 2007 Budget re Investment Funds Long Term Pool 7.96% Short Term Pool 6.80%

LTP Distribution Rate For 2006 = 6.37% For 2007 – Est 6.58% Less than full indexation of DEST CGS Grant – Higher Education Index Factor of 2.0% vs CPI of approx 4%

INCOME/DISTRIBUTIONS – 3 YEARS 2005 – 2007 Income $M % (General Purpose) Distribution $M (53.9) (52.9) (50.7)

INVESTMENT INCOME (5 YEARS) $M (Budget) (% of total budget) $M Actual N/A N/A

BUDGET DISTRIBUTION $M% % % T + R Central Admin Library Univ Facilities Capital UDF + Sen Res

RESERVES $M 2004 $M 2005 $M Capital Reserve (GP) Inv Fluctuation Reserve (GP) Gen Fluctuation Reserve (SP) Currie Hall (SP) GP = General Purpose SP = Specific Purpose

CHALLENGES All areas to review their 2007 anticipated Expenditure Levels and Adjust downwards where applicable Lower Growth patterns re International (Onshore) enrolments and dollars Lower Investment Fund Returns caused by a Reduction in Contributor Balances (GP Funds)

Less than Satisfactory Indexation Mechanism GP Funds decreasing and SP Funds increasing as % of Total Funds End of Additional 2.5% EFTSL Funding as at ie $6.225M Reduction of Workplace Reform Grant of approx $1.065m as at (residual component)

Inadequate Capital Works Funding Likely Borrowing Programme in 07/08 Items to be Mainstreamed into 2007 Estimates SIMS Project 50% or $0.743M UWA U/Grad Scholarships 50% or $0.701M Items not currently Centrally Funded Replacement of Uni-wide systems 16 November 2006