From 2023 onwards, the University of Melbourne Student Union (UMSU) will be required to pay the University almost $400,000 in property outgoings when it relocates to the newly built student precinct.

This diverts significantly from their prior tenancy agreement in Union House, where they paid only a “peppercorn” rent—a small payment satisfying the minimum requirements for a contractual agreement. This was in recognition of UMSU’s importance as a student activist organisation, rather than as a commercial tenant.

The union has been advised that these new payments will go towards subsidising utilities, cleaning, landscape management and security services needed for the student precinct.  

But their interim CEO Phoebe Churches has raised concerns over the potential for these charges to undermine proper expenditure of the Student Services and Amenities Fee (SSAF).

This fee, paid annually by students, is allocated by the University towards services which provide them with direct benefits.

Disbursement of the SSAF is stipulated by the 2003 Higher Education Support Act (HESA), which allows funding for services like legal and financial support, and amenities such as sporting facilities.

Under the HESA, UMSU can use the SSAF to pay for any required infrastructure which supports them in providing activities and services benefiting students.

However, Churches has pointed out their allotted SSAF funds will now be diverted towards paying the new property outgoings levied by the University.

“Whether it is intended or not, allocating SSAF funds to UMSU and then taking that money in the form of [rental] charges back to the University is a kind of ‘SSAF laundering’,” she said.

“To be clear, I am not alleging this is an intentional strategy,” she explained. “However, regardless of the intention … the effect remains that SSAF collected to be spent on allowable activities will be diverted back to the University, free from any requirements to be spent on SSAF-related services or programs.” 

The University declined to make a statement on the matter, citing ongoing consultations with UMSU.

Instead, the University spokesperson offered a general comment on the Student Precinct.

“The Student Precinct Project is one of the largest investments the University has made at the Parkville campus, and demonstrates the University’s commitment to improving the student experience.”

UMSU President Sophie Nguyen has argued that these charges will have a tangible impact on the Union’s ability to fund important student services.

“I think with the amounts of funding we get, we should be putting it into our autonomous departments, our student welfare services, and our legal and advocacy department rather than space charges—another way the University can get our SSAF back into their budgets,” she said.

Although the University has since agreed to allocate UMSU extra SSAF funds for the new property outgoings, students remain concerned over the union’s ability to provide services and activities once these charges take effect.

“The new student precinct is a great upgrade and I’m already enjoying using it as a study space, but it’s a shame that it may come at the cost of less funds available to UMSU,” said Max Treutlein, a third-year Science student.

“To be allocating money to the Union, only to then take it back in space charges seems somewhat counterproductive,” he continued.  

UMSU intends to utilise further discussions with the University to ensure both students and the Union will not be disadvantaged by these new payments. 

“The fact is, the University uses [the] SSAF for its own student experience programs, while making billions in revenue … UMSU’s funding should be going directly to students, [to] make tangible differences to their lives,” said Nguyen.

Image source: https://students.unimelb.edu.au/student-life/campuses-and-facilities/student-pavilion