November 2020


When the rivers run dry

By Margaret Simons
Image of the University of Sydney, July 2020.

© Loren Elliott / Reuters / AAP Images

Universities are in trouble, and the government isn’t helping

Australian universities have become unhappy places. It’s the saddest thing. Tragedy is not too strong a word.

Over the past 11 years I have worked on staff at three universities, leaving my last paid post at the end of 2019. Before that, I worked casually as a teacher, research fellow and curriculum adviser.

You never get over the buzz of being part of a big, powerful and relatively wealthy institution devoted to teaching, learning and the creation of new knowledge. You feel it when you walk onto the campus, in interactions with the students and, on a good day, in the mind-expanding conversations you have with colleagues. You feel it at the graduation ceremonies, among those having degrees conferred and in the tears of the parents. That is what sustains you through everything else, the many ways in which the institutions frustrate.

Australia’s universities are entering one of the most difficult periods since their founding. The immediate causes are the end of the boom in international students, and federal government policy. The latest is the Job-ready Graduates Package legislation, which introduces a new fee system for degrees: raising fees for some courses and lowering them for others, ostensibly to encourage students into subjects that will fit them for the job market. But there is a consensus among analysts that the package is unlikely to achieve that aim and will likely have unintended consequences.

The Morrison government is seen as hostile to universities. There are elements of a culture war in some of its moves, but the dominant theme is not vandalism so much as incoherence.

Meanwhile the sector is fractured, with divisions between richer city-based universities and leaner rural and regional campuses. Thanks to rapid growth, funding tensions and decades of shifting government policies, Australian universities have become almost impossible to manage. Our bigger universities are huge by world standards. Underneath their glossy public relations, they are federations of often-warring faculties, departments and disciplines. There is little trust or goodwill. Management becomes a matter of metrics, rules and compliance, of carrots and sticks.

Now, after a long period of rapid growth, universities have lost the flow of dollars from international students, which in some cases accounted for up to 38 per cent of revenue. International education is one of Australia’s largest export industries, coming behind coal, iron ore and natural gas. Almost overnight, it has gone: in August 2020 just 50 international students arrived in Australia; the same time last year the number was 54,960.

The money did more than transform campuses with handsome new buildings – the resulting subsidies for research meant our universities rose through the international rankings.

The rivers of gold brought some independence from government and, arguably, tended to divert universities from the needs of the nation, and from core business. Certainly the government thinks so, which is one of the reasons it is refusing to bail them out, denying them access to the JobKeeper scheme. This would have saved jobs, including by allowing them to retain some of the staff hired to teach big classes of internationals.

Ever since the Hawke government brought in student fees and the HECS loan system in the 1980s, governments have been trying to expand access to tertiary education without the taxpayer having to pay the full costs. The present government is continuing that trend. The Job-ready Graduates Package allows for an increase in student places, with more of the cost shifting from government to students.

The Gillard government introduced an uncapped system of domestic tertiary education. Universities could take as many students as they wanted, and bill the government for the Commonwealth subsidy for those places.

Some universities more than doubled their numbers of domestic students, as well as growing their international intake. By 2017, nearly 42 per cent of 19-year-olds were enrolled in higher education, up by 10 percentage points since 2008 – but successful employment outcomes for graduates fell, and dropouts rose. Commonwealth spending on student places rose by more than 50 per cent. This period of unchecked growth is the context for what the current government is trying to do.

The Coalition government first tried to peg back the spending, then in 2017 it froze the numbers of students who would attract a Commonwealth subsidy for two years, before introducing small increases tied to performance criteria.

It is hard to think of any other part of the public sector subjected to such a U-turn in policy. The cash from international students cushioned the blow. Many universities, perhaps believing that Labor would win the 2019 election and restore the uncapped system, continued to enrol students over and above the cap on Commonwealth subsidies. They still received fees from students, and for some there were economies of scale. But when the Morrison government was re-elected, the freeze remained.

And that was where things were until the announcement of the Job-ready Graduates Package, which represented the government’s idea of the way forward, the end of the freeze and a means of funding more places.

Last year, Minister for Education Dan Tehan made it clear that he wanted to expand the sector but also bend the universities to the government’s idea of the national interest. The sector needed to “change tack”, and accept that the government was a “partner” whose role did not end when it handed over cash.

And then came COVID.

The Job-ready Graduates Package had been worked on by the Education Department, but that work largely stopped with the crisis. As a result, the legislation that has now passed parliament is undercooked and incoherent. Andrew Norton, a professor at ANU specialising in education policy, and generally seen as closer to the Coalition’s side of politics, told a Senate committee it would have to be unwound by future governments.

He and other analysts say the legislation creates incentives that run counter to the government’s declared aims of encouraging students to study “job-ready” subjects such as engineering and nursing, rather than law and the humanities. Given that the additional cost of enrolling extra humanities or law students is low – same lectures, just a bit of extra marking – and the universities will still get the student-fee contribution, there is an incentive to enrol more of these students. In contrast, the occupations the government wants to encourage – nursing and engineering, for example – are costly to teach. That is even before you get into whether the jobs market is as the government sees it, which is far from clear. The universities were divided in their response, but desperate for the freeze to end.

In answers to questions sent to him by The Monthly, Tehan points to an expected $2 billion increase in university funding by 2024 – so long as universities enrol more students, of course. Asked about the apparent unintended consequences, shown in analyses by Norton and others, Tehan says they assume no change to universities’ enrolment practices. “The Transition Fund explicitly gives universities a chance to adjust to the new arrangements … and to respond to emerging demand.” But it is not clear how that answers the critics.

The rural and regional universities will benefit from extra incentives and funding, and the city-based research-intensive institutions were mollified by a promise of a research-funding package in the budget to offset the collapse of the international education market. That money – $1 billion – will save many jobs, but is for just one year. Nobody knows how the government plans to deal with research funding after 2021. A large part of the nation’s future research capacity is in limbo.

There is another message underlying the legislation. The government thinks universities are not well managed, and it doesn’t trust them.

A range of compliance measures, originally designed for dodgy vocational colleges, has now been imposed on universities to prevent the enrolling (and gouging) of students who don’t have the abilities to successfully complete their degrees. Universities say it doesn’t happen and they can be trusted not to gouge students, allowing them to rack up debts for no benefit. Tehan responds with a number of examples of exactly that happening. And on this, I think he might be right.

Outside the prestigious Group of Eight universities, most academics can tell stories of how, particularly under the uncapped system, universities rushed to get as many students on the books as possible.

I have seen it myself. I have participated in it. And I don’t doubt this is the story behind all those dropouts, those student debts acquired for degrees not completed.

Asked if he thinks universities are well managed, Tehan responds with a flat bat. “Australian universities are autonomous institutions and they are responsible for their operations.” Hardly a vote of confidence.

And, again, I think he’s not necessarily wrong. In my experience, universities are not well managed. It’s not surprising, perhaps, given how fast they grew. The best university leaders are impressive, but can also be out of touch with the gap between their intentions and the reality on the ground. As well, universities are almost impossible to run well. They are too big, too unhappy, too strung between staying afloat and fulfilling their mission, and for many years they have lacked a clear and empathetic approach from government.

Take research. Australia shapes up well on most of the measures that are public – research output per academic and per dollar spent, for example – but research is not something where such measures of efficiency are all that revealing.

Tehan wants universities to collaborate more with industry. A 2016 report ranked Australian industry collaboration with higher education and research institutions as the lowest of 27 countries in the OECD. As one former academic now in private consultancy put it to me, universities say that industry doesn’t understand how good they are, and industry complains that universities can’t move fast enough: “They are both right.”

Large parts of the research-funding system – the slow and exhausting process of applying for grants – are not suited to industry collaboration. With Australian Research Council Linkage Projects, which are specifically designed for such partnerships, industry partners are asked to commit to a burdensome process for something that may or may not be funded, and with that decision being made up to 18 months after they are first approached. It’s just not how business works. The government has allocated $5.8 million for a “scoping study” on commercialising university research. But again, no clarity yet on what that means.

For junior academics, universities have become tough places to work. According to the National Tertiary Education Union, only 33 per cent have secure employment, 43 per cent are casuals and 22 per cent are on fixed-term contracts (typically between one and two years). These are the people who will probably be the first to lose their jobs.

But life can also be miserable for senior, tenured academics. There, the inefficiencies are largely hidden from outsiders, because academic time is endlessly malleable. (My observations here are not to do with any one of the institutions at which I have worked. They are common, sector-wide problems. Also, my experience is entirely within the humanities.)

On most campuses you will hear of academics working weekends and even taking holidays so they can complete their research, because their time on campus is absorbed by that catch-all descriptor “administration”, sometimes euphemistically labelled “academic leadership”. It’s not unusual to find a professor on a six-figure annual salary doing data entry, such as coding credit-card expenses, because the university has economised on administrative support. Such economising supposedly allows for more spending on “research” – often by hiring superstars from overseas, to boost the institution’s ranking.

Other “administration” arises from the constant fear that unruly academics will run wild unless controlled. Even small course changes go through an exhaustive process of approval, with endless form filling, and a final decision made by people who have no knowledge of the discipline. The administrators charged with guiding the process are called “shepherds”. The implication is clear: the academics are the sheep.

Then there are endless meetings. I used to do the maths on what it cost to hold a meeting, based on the hourly rate for each attendee. Often, we spent more on staff time than the amount of money we were there to consider spending.

Underlying all this is the idea that universities are businesses; that they must measure what they do. For example, there is the dreary Excellence in Research process, which “identifies excellence” by counting journal articles in a field of study, with dubious metrics of quality. Nobody ever asks if the publications are interesting, enlightening or useful, and a huge amount of time goes into the process. As one of my professor friends used to say, not everything worthwhile can be measured.

If universities are trying to behave like businesses, as is often claimed, they are doing a poor job of it. No well-run business would allow key staff to spend so much time nonproductively.

The government isn’t necessarily wrong to want reform, but there’s no sign so far that it understands how to tackle these problems, or has a plan to do so.

Finally, although universities historically have been some of the most trusted institutions in Australia, there is a sense that their political and social capital is eroding, perhaps because of their very visible focus on international students. Most universities pay lip service to reaching out to the wider community. But this is not measured, not rewarded and not directly tied to funding outcomes, unless it is to do with research and teaching. It boils down to a view of engagement with the community as being done through teaching and research. In other words, no extra effort, other than more teaching and research, is required.

So how will the current crisis develop?

We are not going to lose a university. The government won’t want that to happen on its watch. Rural and regional universities will be supported, and, if necessary, rescued. The big city universities are still wealthy. They will survive. The international students may return, post-COVID, although most believe the boom is over.

In their public relations, universities emphasise the impact on future research, but it is likely that the deepest staff cuts will be in the areas where international students were concentrated: business and commerce. These are not research-intensive disciplines. The real problem is that the international rivers of gold subsidised the universities’ efforts in other areas.

It is a long time since the government thought through a research strategy for the nation. The need is now clearly urgent – of a piece with the renewed focus on manufacturing.

Tehan denies rumours that he wants to move to a two-tier system of universities, but the government has accepted the findings of a review that recommended an additional category of institution, called university colleges. This will, as Tehan puts it, “enable providers with a track record of teaching excellence to open up campuses in thinner markets, including in regional areas, which may not be able to sustain a full university campus and intensive programs of research”.

Meanwhile, universities have discovered something about their processes and their capacity. In the past few months, as campuses closed due to COVID, whole courses moved to online teaching in the passage of days. In medicine and public health, research efforts were rapidly redeployed to the fight against the virus. Normally it would have taken years, many meetings, much resistance and approvals from multiple levels of slow-moving bureaucracy.

Amid all the stress and misery, this rapidity offers hope. Universities can move quickly. They can respond, powerfully, to crises. But while COVID may point the way towards the possibility of more radical change, it is also like ink in white china. It shows up the cracks that were already there.

This crisis will likely impose a reset, a reconceptualisation of mission.

Ideally that would be done in an atmosphere of trust – between university management and their staff, between campuses and their communities, and most of all between government and the academy. Sadly, that trust is in short supply.

Margaret Simons

Margaret Simons is an author, journalist and journalism academic. She has written numerous books, articles and essays, including the Quarterly Essay Cry Me a River: The Tragedy of the Murray–Darling Basin.


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