Central Queensland University's 2007 Annual Report was tabled with the Legislative Assembly this morning.

Whilst reporting a modest deficit of $5.5 million for the year ending 2007, CQU retains cash and other financial assets in excess of $100 million, which gives us reasonable ability to respond over the next couple of years to changes largely attributed to a recent downturn in international enrolments and a preference among domestic students to study part-time instead of full-time.

Also, of particular interest to many is the cost associated with the University's full acquisition of our international business operations and ownership of C Management Services (CMS). The transaction cost $12 million. CQU paid for this from its cash assets.

"On balance, I believe the Financial Statements demonstrate, contrary to popular opinion, that CQU's current position is financially sound," Vice Chancellor John Rickard said in a memo to staff.

The CQU restructure, which will be completed this year, and the University's continuing strategies to find efficiencies throughout the organisation have already helped reduce CQU's annual operating costs.

What remains unknown, however, is if this trend in student enrolments (which, by the way, is not unique to CQU) is likely to persist for a long period of time. If it does it will mark a fundamental change in how all universities will need to be funded by the Commonwealth.

Already CQU has seen how changes in federal policy, which make alternative educational pathways such as TAFE more attractive to some international students, have contributed to a reduction in CQU's revenue.

CQU's income in 2007 was down $42 million compared to 2006. 85% of that shortfall, or $35.5m, was due to a decline of 4253 fee-paying overseas students. A $4 million shortfall, attributed to decreased HECS-HELP Australian government payments was primarily due to a larger proportion of CQU students now studying part-time.

The upcoming Review of CQU by the Queensland Treasury Corporation on behalf of the Queensland and Federal education departments should give analysts and policy-makers insight into the significant changes that have occurred in the marketplace.

It should also provide a better understanding of the effect public policy and funding models have on CQU's income and our continuing ability to deliver products and services to our customers in Central Queensland and elsewhere.

"I believe it shows quite clearly that rumours of our demise have been greatly exaggerated. Do we need to remain vigilant and innovative? Do we need to continuously improve and find way of working smarter and more efficiently? Of course we do," said the Vice Chancellor.

"The bottom line is we're helping our customers be what they want to be and that's the bottom line that matters most of all," said Professor Rickard.