LA TROBE University has warned Australia's research powerhouses are at risk of long-term damage.
Vice-Chancellor John Dewar made the comments at his Bendigo campus on Friday in the wake of this week's federal budget.
"The budget papers confirm that over the forward estimates, university funding will decline at a time when [they] are struggling financially because of the closure of international borders," he said.
"It's really not a helpful budget from that point of view."
Australia's universities have long relied on international student fees decimated by pandemic border closures in 2020.
The government's latest budget assumed those students will start returning to Australia in late 2021, with gradual increases from 2022.
The budget warned that economic growth will be hit as the number of international students finishing their studies in Australia will outpace those starting in the next few years.
Professor Dewar feared the budget pinned too much on the return of international students and not on addressing the sector's overreliance on them.
"If the federal government isn't willing to increase funding for universities directly, then we need to think of other ways universities can restore their funding otherwise we will be in serious trouble," he said.
Professor Dewar said the government's latest budget would not solve the long term problems research universities faced, though $1 billion in funding last year had helped.
"At the moment the federal government does not cover the full cost of our research and we have to get a solution to that soon," he said.
"That's the big question and if we don't resolve that soon then it will do lasting damage to the nation's research effort."
Professor Dewar made the comments as La Trobe positioned itself for a post-pandemic world.
The university's plan is to play to strengths including in research. It released a new five-year plan last year in part to increase opportunities for industries to partner with experts including in communities like Bendigo's.
Member for Bendigo Lisa Chesters said she was concerned about a forecasted decline in university funding over the next three years.
"Last year was a very tough year for our universities including the Bendigo La Trobe University campus," she said.
That included with job losses in Bendigo, Ms Chesters said.
She noted that federal minister for regional education Andrew Gee had visited Bendigo on Friday to help open the campus's new library.
"It's disappointing he didn't come to Bendigo with his chequebook," Ms Chesters said.
"It's great to have new facilities like libraries but what is the point if there are fewer staff and students to utilise them?"
The budget papers outline a range of measures to ease university funding pressures, including fee and charges totalling roughly $40 million, as well as $1.1 million to create new "industry PhDs".
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