The institutional identity crisis of Australian Higher Education
Australian universities are facing a financial reckoning as Vice Chancellors, Executive teams, and University Councils have pushed back against the government’s cap on international students. For years, universities have relied heavily on the lucrative fees paid by international students to sustain their operations. Now, with such revenue streams being restricted, universities are again (after Covid) confronting the uncomfortable reality that their dependency on this income has diverted focus from maintaining academic quality regarding curriculum design, content delivery, and quality face-to-face time with students. The relentless pursuit of profit has raised concerns that universities are compromising the standards needed to produce highly skilled, job-ready graduates. Higher education has become a cut-throat business… but should it be?
A few months ago, I was invited as a visiting Professor to the Amsterdam University of Applied Sciences, to help launch one of their sport business programs. I had the privilege of working with an amazing team of passionate academics, most of whom also have direct professional involvement in sport businesses. The new degree’s curriculum is highly innovative, industry-embedded, and approved and endorsed by the federal government. The costs of this 12-month full time master’s degree? If you are from the Netherlands or any other EU country, the European Economic Area, Switzerland or Suriname, or if you are a refugee, you pay €2,530 (approximately AUD$4,200). I have not forgotten a zero in that number… If you are from outside these regions – say, as international student, you pay €10,000 (approximately AUD$16,600). Compare this to a full-fee amount of AUD$32,600 for a 1-year full time Master of Sport Business at a well-known Australian university, or AUD$34,000 (domestic students) and AUD$58,000 (international students) for a 1-year full time Master of Sport Business at one of the leading sport universities in the UK.
Although the new right wing government in the Netherlands is starting to cut into higher education budgets as well, the investment in access to quality education for Dutch nationals and European citizens at large remains significant. The investment across all institutions is further underpinned by fixing senior executive salary scales and legislating them by federal law. The average salary for a Vice Chancellor running a (global top 100!) University in the Netherlands is AUD$232,000. It was recently reported that the highest earning Vice Chancellor in Australia takes home AUD$1,800,000. Our Australian Prime Minister makes AUD$586,950. In principle I am too, a capitalist at heart… let the market where possible determine value exchanged. I can even live with high remuneration levels in higher education, nor am I blaming current executives for pocketing it. But those who earn it should be made accountable to deliver on the right performance targets. So, what is our purpose as (academics in) universities? I would argue that it is to maximise the accessibility to and quality (delivery) of evidence-based education for all young Australian citizens. This will best prepare them for a competitive future in, for and beyond Australia. By the way, this does not prevent universities from servicing international students!
In 1994, when I came to Australia as an ambitious and aspiring young professional, Australian (federal government) investment in its young people’s education was at the level it still is in many nations in Europe. Higher education in Australia was free from 1974 to 1989. In recent decades however, Australia’s higher education sector has drifted far from its foundational ideals, betraying the very principles that once made it a beacon of accessibility and academic excellence. Today, the sector is a case study in how neglecting public service values can lead to a fractured and increasingly elitist system. The shift from a near-free education model in the 1970s and 1980s to a marketplace-driven approach has profound implications not only for the quality of education but also for the societal equity that education should champion. The cherry on top of near-equal access to higher education is that it makes the economy grow faster as well…
Education and healthcare, as fundamental public services, should be universally accessible or at the very least, affordable to all citizens. In Australia, as in the UK, however, the identity crisis that universities find themselves in, I believe, started with the historic dichotomy between public and private secondary education. It reveals a troubling trend that is only getting worse and will ultimately relegate equity in Australian education to the very bottom of international league tables.
Private secondary education institutions, despite being ostensibly independent, continue to receive substantial public funding. Why is it that the majority of Australian taxpayers pay for the private education of a minority group that is already at the top of the socio-economic tree? This arrangement creates an environment where access to quality education is not solely based on merit or need but increasingly on one's ability to pay. It also leads to excessive expenditure of taxpayer dollars on exorbitant facilities (often sport facilities) at private schools that only benefit (an even smaller cohort of) private school students. Such a system is inherently divisive and discriminatory, reinforcing social stratification rather than fostering a more equitable society. During the 1990s the commercialisation of the secondary system extended to the university sector. Pretty much all universities now run their business models on revenue and ‘international bums on seats’ targets. Government investment in subsidising the education of Australian citizens is grossly insufficient to allow access for those who struggle to pay their basic cost of living bills, let alone afford expensive courses.
The influx of high-paying international students has indeed been lucrative for Australian universities, but it has come at a significant cost. To accommodate the increasing number of full fee-paying students whose first language is not English, many universities have lowered their academic standards and diluted their curriculum. I can hear the critics say that ‘we have rigorous language skills courses and testing standards that international students have to live up to’. Whatever these critics want to argue, skills courses and language standards have unfortunately not been able to prevent the shifting focus from providing a robust educational experience to managing a profitable business model. Consequently, the quality of graduates has suffered, undermining the very purpose of higher education: to produce well-rounded, critically thinking, and competent professionals.
Recent research from PwC in the Netherlands highlights a crucial point: economies that significantly invest in education are those that achieve the highest levels of labour productivity. Well-educated workers are not only better skilled but also better informed and motivated. They approach their jobs with enhanced efficiency and contribute to their workplaces with evidence-based insights and information. By contrast, Australia's current approach, which prioritises financial returns over educational quality, is now producing a workforce that is less capable of meeting the demands of a competitive global economy. This in turn slows down the economic growth, which leads to lower levels of welfare and greater division between those who can afford and not afford to pay for their (kids’) education. We are increasingly seeing the political consequences of such division between ‘haves’ and ‘have nots’.
The lack of vision demonstrated by successive federal governments on both sides of the political spectrum is glaring. Yes, the solution is at the level of the government. We can’t expect one or few Universities to return to being public service providers, without having the resources to subsidise the cost of delivery. As noted earlier, the government instigated shift towards a market-driven approach has led to a paradox where all public universities that were once the cornerstone of accessible education now have been forced into a system of inequality and reduced quality. This misalignment between public service values and economic strategies reflects a broader failure to recognise the long-term benefits of investing in a robust and equitable higher education system. For that, I believe, we need (a) visionary politician(s) whose legacy will be the implementation of a dramatic systems change to (almost) free education, rather than using the education portfolio merely as a stepping stone to more political gravitas.
Australia’s higher education sector must reclaim its role as a public service committed to accessibility, quality, innovation, and productivity that will lead to long term economic growth. In today’s polarised vernaculars this may be misperceived as a socialist or woke ploy. But ‘socialist’ in the pure sense of the ideology is all about pooling (tax) resources, and then redistribute these in a way that most of us can live at a reasonable human standard… To that end, being ‘socialist’ (pool resources to make higher education accessible to all) will lead to increased productivity, to bigger economic growth, to more tax resources, to more welfare… etc.
The prevailing market-driven approach to higher education has not only compromised the quality of education but is also reinforcing divisions within society. To address these issues, we need a fundamental rethinking of how higher education is funded and managed, ensuring that it serves the broader societal good rather than merely functioning as a profitable enterprise. Only by realigning our priorities can we hope to restore the integrity and effectiveness of Australian higher education, ensuring that it remains a powerful tool for personal and societal advancement and to give every Australian a fair go.