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Unis share blame for profit motive funding model



The debate about education in Australia has always been a skewed one between the issue of operating costs and profits on the one hand, and that of noble accessibility on the other.

University of SydneyWhat tends to be relegated to minor argument is the notion that education is an unqualified good that should be founded by the tax payer, with minimal costs issuing to the student. The beneficial proof is always in the pudding of education.

For various reasons, then, the idea of a 'free' education in Australia has been qualified by the notion of the Higher Education Contribution Scheme (HECS), which actually serves to wedge the liquid incentive of government and educational institutions on the one hand with the need for students to obtain affordable education on the other.

Even that balance is now under threat, with the pre-budget announcement by Education Minister Simon Birmingham suggesting cuts to university funding and increasing costs to student degrees are in the offing.

In the mania to attain budget surplus, the Turnbull government is effectively slashing its wrists by making education less appealing, let alone accessible. Student fees are projected to rise between $2000 and $3600 next year, to a total of 7.5 per cent by 2021. Repayment of HECS debts will commence at the lower threshold of $42,000 a year.

The Group of Eight (Go8) CEO, Vicki Thomson, was unimpressed, stating in a timely reminder that education remains trapped in a 'distorted' funding model, despite being Australia's third largest service sector export that provides revenue rather than 'budget cost'. So much, it seems, for a prime minister captivated to distraction by notions of research and innovation.

Universities, however, are far from blameless in this distorted funding model. Morrison, for instance, praises and exonerates universities for doing excessive 'budget "lifting"'. The enormous elephant in the room that also jeopardises the Australian education system lies in the squeeze inflicted by the management class, notably pro-consuls who have sprouted at the top of the university hierarchy.

Vice chancellors in Australia are paid well — too well. Much of this suggests the illusion that the VC is analogous to the position of an entrepreneur, which it is distinctly not. As ever, the academy has produced a monster of sorts, straddling the academic and administrative sector without the awareness or skill of private sector adventurism.


"The profit motive should be excised altogether, with education deemed an automatic social and economic good that ultimately rewards rather than restricts."


The result, all too often, is unwarranted graft and largesse, with VCs having no incentive to adjust poor or failed policies. Indeed, the converse is true, with VCs essentially aware that holding fast to the job will guarantee a pay rise, wherever the university lies in the infamous university rankings.

All this is taking place even as the Australian university has become the exemplar of casualised, untenured labour, a point that has also been noted in other countries. While upper management bloats in satisfied aimlessness, lower and middle ranked academics engage in Sisyphean toil at the mercy of college or senate decisions, many which have little to do with pedagogy or research.

In 2012, the Australian published a list showing that the number of students, or size of the university, had little to do with the salary package. Steven Schwartz, for instance, netted $1,185,000 in 2012 at Macquarie University, with 37,000 students, while Ian Goulter of the CSU came in at number 37 with a more modest $300,000, covering a student body of 37,800.

In 2015, Michael Spence of the University of Sydney had raced to the top of the tree with generous pay rises — up $220,000 from 2014 to sit at $1.385 million. Professor Greg Craven of the Australian Catholic University meanwhile saw his salary swell from $739,000 in 2010 to $1.355 million in 2015.

None of this even considers the growth and mutations that have taken place at the top of the tertiary tree, with a rampant proliferation of privileged underlings, for instance pro-vice chancellors, who act as overly paid courtiers in an administrative castle.

Their salaries could account for several lecturers on an ongoing basis across departments. While no one should ever begrudge the formal and substantive head of a university a decent package, to use managerial speak, the astronomical costs of funding the bloated hierarchy has become apparent.

Governments are proving less receptive to modern university environments, and while Birmingham and his colleagues may be a touch disingenuous in the way they go about making suggestions about how a university should financially order itself, a balance is needed. Transparency and accountability are far from dirty words in that pursuit.

In its broader sense, the profit motive should be excised altogether, with education deemed an automatic social and economic good that ultimately rewards rather than restricts. With Australia having some of the world's highest rates of taxation, lacking a free education system in its truest sense is a dire state of affairs indeed, proving more punishing than rewarding.


Binoy KampmarkDr Binoy Kampmark is a former Commonwealth Scholar who lectures at RMIT University, Melbourne.

Topic tags: Binoy Kampmark, universities, Budget 2017



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Existing comments

Yes. Too many Hon Doctorates given out as well.

Jeffrey Morrall | 05 May 2017  

As a Graduate myself from the heady 1980's and later a Masters during the "pay as you go" 2000's , I have to agree with Binoy that the "Heads" are paid much more than is reasonable, while the Academic staff ( Lecturers) are paid a pittance, yet it is they who do the "heavy lifting". Sadly this Government, like those before it, have lost the plot when it comes to Tertiary Education. Without well educated personal, we will continue to import 'experts' from overseas at the expense of our own aspiring applicants . So much for the mantra "Enovation and Growth" !

Gavin | 05 May 2017  

Great analysis of the reduction of our universities to job training institutes run by overpaid businessmen with the work of education being left to underpaid academics and researchers, many without tenure. Our universities are in dire need of reverting to academic institutions maximising the training of the academically endowed for the benefit of society at large by obliterating those mushrooming faculties providing courses in all manner of occupations in which anyone can become very proficient with little more than a few weeks training. Universities offering admission to students who fail at high school should be closed down. Then perhaps there would be more than sufficient money to devote to genuine tertiary education.

john frawley | 05 May 2017  

Thanks Binoy; highly insightful article. What has happened to universities in the last decade or so is momentous and unfortunate to the point of being disastrous. The so called "corporatisation" is a huge mistake and a conspiracy between an un-affordable left-wing PC "vision" that everyone should be able to go to university (or at least half the population (i.e down to an IQ of 100), and greed by those who should have been protecting the ancient concepts of intellectually elite institutions which real crew about outcomes.Some real academic spivs have jumped on the bandwagon/gravy-train. Academics are now merely "fixed-costs" overseen by aggressive finance guys with no idea of what academic do, and no idea of their true value(s).

Eugene | 05 May 2017  

Thanks, Binoy. As a graduate of the earlier system at a 'traditional" university in Australia, as well as a former academic at your own twenty-five years later, I don't know where to start my reply- due to frustration. But unfortunately, I can't see any prospect of "excsising the profit motive altogether". in my view, the current mess has led to universities in general being unable to focus upon their unique contribution to society. They really have only one thing to "sell" (and I hate that term), namely excellence, and that is incompatible with the current "business model" of a mass market. Left-wing ideology about unconstrained access and against "elitism" has already produced a country with more publicly funded universities per capita than elsewhere on the planet, the demise of academic tenure via casualisation (hence loss of continuity in development of courses) the loss of influence of academic boards in determining both courses offered and course content, and the bloating of governance by administrative gurus obsessed with marketing and misleading "performance measurtes" but starving funds at the academic coalface.

Dennis Green | 05 May 2017  

Well said Binoy. These V-C packages, in particular, are just obscene! Such largesse with public money at the top of the tree - while the increasing numbers of casual uni staff are being screwed down ever tighter and forced to 'volunteer' increasing amounts of their time to get their basic work done. And, of course, it is the students who ultimately suffer the most. What a sad irony that Minister Birmingham can legitimately criticise universities for these crazy V-C packages - but can then go on to use the excesses of the university elite as cover for his budget attack on student finances and conditions. Again, the students suffer the most; just another pernicious outcome of the pervasive corporatist university model, which puts the students' needs last.

Horatio | 05 May 2017  

May I suggest a TV series titled "A Very Peculiar Practice". It is a satirical look through the eyes of the campus medical practice, and one idealistic doctor in particular, at the decline of university culture from being based on the love of academic pursuits in the broadest human sense, to the economic rationalist business enterprise which has seen the demise of education for its own sake, to education for the production of human resources, and the economic survival of the institution. It was made and set in the 80s but still very applicable, if not even more so. Catholics should also get some great laughs, sadly. I weep for the demise of the university, seeing my old university devolve from a vibrant place of inquiry and, "all our knowledge is ourselves to know", to one where, 'will we get the outcomes that will keep the funding coming', an approach that has resulted in the demolition of all those B-ugger A-ll degrees., like the one that gave my life so much meaning and direction and taught me so much more about why we live rather than just how to get a job to maintain corporatism.

Stephen de Weger | 05 May 2017  

Why are degrees going up in price when technology is able to make courses incredibly cheap? Internet, video-based courses can be accessed from anywhere. They can be pre-prepared. Students logon when they want and send in assignments when they are ready. Everything is web-based. There is no excuse for increasing prices. There is no justification that students will make more - wages are not rising. To be charged increased prices for degrees that get you nowhere, and qualify you for only middle income jobs is crazy. Education is a public good that is under-consumed when market forces and user-pays is applied. We have been dudded by successive governments; labor or liberal, they are all the same. With Australia going over the demographic cliff the only way for governments to turn the revenue tide is to get people into higher paying work so they pay more tax. This requires more people achieving higher degrees. So what does government do? Make it harder and more costly for people to study. Wake-up Australia and vote these morons and their sympathisers out!

Matt K | 05 May 2017  

Great article. A proper comparison of the pre- and post-bureaucratisation eras of Australian universities (especially of ANU versus the others) assembling evidence of productivity (teaching and research) would be very instructive, but would probably be ignored.

Adrian Gibbs | 05 May 2017  

What an insightful look at the issue: beautifully written; points , decisively drawn

Helen Clarke | 06 May 2017  

Not to mention the unnecessary excessive population of lower level make work administrators, who require academic support to provide unnecessary reports to the higher ups and government. University administrators like to think of themselves as businesses, there to make a profit, but they do not promote research and teaching, which in a business model would be the income centres. Instead, they are often seen as cost centres. In the university I was once closely associated with, 60% of the staff was non-teaching and non-research. Originally there was a reason for that - publishing was essential to off-campus. But, now, it is all down to the few academics directly responsible for the material. But the balance did not change.

Peter Horan | 06 May 2017  

Yes, letting greedy managers take over and use government funding is like Animal Farm within the university system - look at the promises in the 90s of reduced fees from internet courses. The article mentions the value of degrees as an export item. Apart from them being sold as tickets to PR, it does seem self-defeating to punish domestic students who bear the brunt of English standards in 'group work' assignments, and with the university jobs increasingly not going to Australians, their role in 'proofreading' to get the essays and theses of overseas students up to a fudged high standard - so surely domestic students should be sponsored rather than slugged.

Ruth | 07 May 2017  

You have well summarised the malaise which lies at the heart of the Australian tertiary education sector. Someone suggested that the remedy was to have a truly independent enquiry into this sector by someone outside it. It can be done and is long overdue. Ultimately the only true 'national capital' this country has is its people. Their education is vital to its future.

Edward Fido | 08 May 2017  

Thanks fo the information!

Lesley | 20 May 2017  

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