The Australian National University (ANU) expects a $225 million financial shortfall this year.

ANU vice-chancellor Professor Brian Schmidt says the university will earn about $150 million less than expected in 2020, and will “spend about $75 million more than we planned due to the crises we have endured this year”.

“The $225 million gap that creates is what we now need to address,” he said.

The big hit is largely due to the outbreak of COVID-19, the closure of Australia's borders and subsequent loss of international students.

But things were rough before that too, with a hail storm in January damaging dozens of buildings and destroying years of academic and scientific research, and the summer bushfires both taking a toll on the ANU’s finances.

“The fires, smoke, hail and coronavirus we've endured together have all increased the cost of running ANU,” Professor Schmidt said.

“The COVID-19 pandemic, in particular, has caused a big hit to our revenue, a downturn that we will feel not just this year, but in the years to come.

“I don't think any of us were expecting something like the COVID-19 crisis to come in quite so hard.”

The university will have to borrow money and look to cut costs in order to keep running.

Each faculty will be asked to look for savings.

“The areas that we're looking at cutting are things like travel, but also restricting new expenditure,” Prof Schmidt said.

“Universities often invest in new ideas, risky ideas, and we're going to have to probably curtail some of that and finish off some of the activities we're doing.

“I need everyone to think carefully about every ANU expense and ask; ‘Is this essential to our mission?’

“If it isn't, we need to save the money. This will involve sacrifice, but every saving will help.”

Professor Schmidt is taking a 20 per cent pay cut, while ANU senior management will take a 10 per cent pay cut.

He said compulsory redundancies “would be a last resort”.

“We are really going to not be leaving any stone unturned and, from my perspective, keeping as many staff as part of the university as possible, is right at the forefront,” Professor Schmidt said.

“We are doing lots of important things and they, the staff, are absolutely essential for that.”

There is no word on whether budget cuts will affect courses.

“We haven't made any decisions yet,” Professor Schmidt said.

“We teach a huge number of courses each semester, and some have very small numbers of attendance … I'm talking about one, two or three students.

“So it may well be that we decide to defer some of those classes that have very small numbers.

“We are really trying to focus on our students and the education they get and not compromising that if we possibly can.”

National Tertiary Education Union ACT division secretary Cathy Day says staff should gain something from giving up some of their salaries.

“All he is saying is that; ‘We're all in this together, you get a warm fuzzy feeling if you give up your pay’,” Ms Day said.

“The thing is, warm, fuzzy feelings don't pay the bills and we would want to see some concrete proof that by giving up the pay rise, that would actually help to preserve the jobs of other people, and we've seen no evidence of that.”