The effects of the University of Wollongong's $90 million budget shortfall will undoubtedly be felt throughout the Illawarra, according to the Illawarra Business Chamber's Adam Zarth.
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Last week, UOW Vice-Chancellor Prof Paul Wellings announced the multi-million shortfall as COVID-19 restrictions continue to hamper the university.
"The university is facing significant revenue loss because of reduced onshore international student enrolments and associated impacts," Prof Wellings said in a letter to all staff.
The Vice-Chancellor said the effects would be felt for several years to come.
"We think that the 2020 losses will be with us for a number of years as a consequence of the scale of the recession and the limitations on the movement of people across international borders," he said.
As part of a range of actions to alleviate the impact, Prof Wellings, all Deputy Vice-Chancellors, Executive Deans and the Chief Operating Officer have taken a 20 per cent for the next 12 months.
Mr Zarth said, with around 3000 full-time equivalent positions, UOW was on par with the Port Kembla steelworks when it came to the number of jobs it created.
"The tertiary sector is a major driver of economic growth, not only for the nation but particularly for our region," Mr Zarth said.
"The number one and two sectors hit have been hospitality and tourism - which includes entertainment - but in the mix there is the tertiary sector.
"The University of Wollongong is inherently connected to our productivity and our economic growth. Every dollar spent by a student at the University of Wollongong generates $3.20 somewhere else in the economy here in the Illawarra."
If there were fewer students at the university due to a drop in recruitment and a restriction on overseas travel, Mr Zarth said that would flow on to affect a range of businesses that would miss out on that $3.20 benefit.
These include the cafes, pubs, hairdressers, stores and even professional services like accountants and lawyers.
Mr Zarth said the university also gave a "significant stimulatory effect" to the rental market as students coming from out of the area needed a place to live.
The last time the city had to deal with the economic flow-on effects from a regional giant was in 2015 when BlueScope downsized at the Port Kembla steelworks.
Mr Zarth didn't feel the situation at the university will see such drastic change as at Port Kembla.
"It's not a restructuring of the organisation," he said.
"It's a two to three-year challenge but we hope to see the University of Wollongong functioning and growing once it's gone through this period of recovery."
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