As academics strike at multiple universities, so-called sector reforms have turned what were places of higher learning and research into corporatised money makers. By Rick Morton.

University strikes and the profit motive

Protesters march through the Melbourne CBD.
Protesters march in solidarity with striking staff of RMIT University in Melbourne.
Credit: Darren Hocking

In September 2016, John Dawkins wrote to the eight most prestigious universities in Australia and declared his 1987 reforms in the sector were outdated and in need of “major renovation”.

Dawkins had been education minister in the Hawke government before becoming Paul Keating’s treasurer. His prescription was more of what he helped unlock the first time around: increased competition and efficiency, “price signals” to manipulate students into particular fields and even deregulation full stop.

Dawkins, who had long since departed federal politics for a career in business, serving as a director on various boards including minerals explorer Australian Bauxite Limited and mining company Tiaro Coal, even praised former education minister Christopher Pyne for having “had a go” at fixing the “urgent problems” in the sector.

Pyne failed, of course. As did his successor, Simon Birmingham, when Labor warned of “$100,000 degrees”. The Coalition eventually managed to pass a package of changes that danced around the central aim of limiting government funding while charging students more for an education. It called this the Job-ready Graduates (JRG) scheme.

The price signals Dawkins wanted, and which the Morrison government delivered, were a disaster. Student debt increased but the package had no impact on funnelling graduates into specific courses to address industry skills shortages.

Already, the JRG appears to be dead. The only question now is what will take its place. In July, the interim report from Labor’s Universities Accord review, established under Education Minister Jason Clare, warned that continuing the Coalition reforms risks “causing long-term and entrenched damage to Australian higher education”.

For students and academic staff alike, these degree fee structures were simply the latest insult in a decades-long transformation of the Australian higher education system into a mass market production line for degrees that fetishised managerialism, oversaw the gutting of pay and conditions and the erosion of quality, and all but locked in a corporate obsession with profits at the expense of everything else.

That discontent is reaching a crescendo.

On Thursday, staff and students from the University of Melbourne and RMIT marched through the Victorian capital in a historic show of anger at the state of the sector.

Melbourne University staff, on their second week-long strike in as many months, have been bargaining for more than a year for secure jobs, real pay rises and meaningful action to address the “workload crisis”. The first action was the longest strike at any Victorian university in decades.

Monash University members will down tools on Monday and Tuesday after failed negotiations for better pay and conditions, all of which came after its vice-chancellor, Margaret Gardner, received a 12 per cent pay rise last year, well above inflation.

National Tertiary Education Union (NTEU) national president Dr Alison Barnes told The Saturday Paper universities had become “pressure cookers”, asking staff to do more with less while raking in significant profit.

“You can trace so many of these issues back to the completely broken governance models universities are operating under,” she said. “Universities are being run like profit-hungry corporations when they fundamentally need to be about serving the public good.

“The rampant corporatisation of universities we’ve seen in recent decades is driving simultaneous crises for staff. It’s got to stop.”

National Union of Students education officer Xavier Dupé said in a statement that teaching staff had the full backing of students.

“Over decades,” he said, “Australian universities have been corporatised, running billion-dollar surpluses while essential research, teaching and support staff are forced onto casual and low-paid contracts, leading to declines in education quality.”

Against the backdrop of the Universities Accord, which contemplates a dramatic increase in the size and scale of the tertiary education sector to address current and future skills shortages, it is instructive to consider the treatment of associate degrees at RMIT. These are a small program but the saga speaks to the rapacious nature of universities and their disregard for the teaching staff who are central to their operations.

Not only is this behaviour emblematic of a new normal across the higher education sector, it is directed at a bridging degree that targets the precise kind of student cohort universities will need to attract to meet the ambition of the accord.

Addressing the skills shortages considered by the Universities Accord will require the training of hundreds of thousands of Australians, many of whom will be mature-aged or continuing students and those who are looking to retrain for complex skills or to gain more hands-on experience. In other words, they will come from the “mid-tier” associate degrees.

These degrees – which include associate degrees in aviation, business, graphic design and health sciences among almost 20 others – are two-year higher education courses that feature a focus on both practical and theoretical content.

The way in which the teachers of these degrees are treated by universities underscores key issues in the sector. The courses are university degrees, governed by the university regulator and for which students pay anywhere between $28,800 and $70,000 in fees each year, but the people teaching them are not paid as university lecturers or at university rates. Instead, they are paid as vocational education teachers, despite themselves having bachelor and master’s qualifications.

RMIT management, which is in negotiations for a new enterprise agreement, is attempting to force associate degree teachers to pay for a diploma of vocational education and training or have their pay stripped by hundreds of dollars a fortnight. This is not a requirement of any regulator but an initiative of RMIT itself.

“People are recoiling in horror at the thought of actually having to do it,” an associate degree teacher told The Saturday Paper, “because it’s a terrible course.”

This hints at a fundamental difference between competency-based vocational education and the more general knowledge and abstract thinking favoured in university education.

NTEU RMIT branch president Dr Tricia McLaughlin said the union had been trying to negotiate a single EBA across all of RMIT but RMIT Training had tried to cut the union out, continuing to push a non-union agreement that has already failed at the ballot box once.

“RMIT is in the process of putting another draft ‘agreement’ directly to vocational education teachers through a series of ‘fireside chats’. This agreement is not endorsed by the NTEU. It is likely another non-union ballot will be held for these vocational education teachers in the very near future,” McLaughlin said.

“One of the key features of the RMIT draft agreement for vocational education teachers is the complete disregard for staff who teach into associate degrees and the removal of any reference to their required qualifications and the work they perform, with the abolition of specific rates of pay for the work performed by specific associate degree teachers, leaving many worse off for no reason. RMIT are trying to reduce costs while still pocketing huge fee income from associate degree programs. It is not appropriate that staff qualifications are suddenly ignored in their draft agreement.”

By some estimates, 25 per cent of students at the RMIT College of Vocational Education are enrolled in associate degrees but this quarter brings in 43 per cent of college revenue, including Commonwealth funding, through fees. It’s already a lucrative arrangement for RMIT.

Julian Pratt, a vocational education NTEU branch committee delegate, told The Saturday Paper: “RMIT University is using higher education funding to prop up its vocational education college whilst undermining the academic standards of these associate degrees”.

More than anything else, it is money that helps explain the story of the Australian university over the past four decades. Beginning with the Dawkins paper in the late 1980s – which helped unlock new revenue streams for institutions that did not directly come from government – the reform story has been driven by base arithmetic.

According to Monash University, Commonwealth funding for universities has fallen from 0.9 per cent of GDP in 1995 to 0.6 per cent of GDP in 2021, while enrolments have increased.

Now, the Universities Accord Interim Report has attempted to spell out the perverse outcomes of this declining per-student government expenditure. Chief among them is the increased reliance on revenue from international students.

“A concern raised repeatedly in the Review’s consultations and submissions,” the report said, “was the unhealthy degree to which core research capability in Australia’s universities is funded through volatile international education revenue.”

It’s hardly a new claim. The last full review of higher education in Australia, the 2008 Bradley Review, similarly warned against “institutional reliance on international fee income” because it was vulnerable to “geopolitical” developments.

But what is a cash-strapped university to do?

Universities Australia argued in response to the interim accord report that total operating expenses had grown by 35 per cent in the decade to 2019 while government grants per enrolled student remained dead even.

Many institutions that posted exceptional profits in 2021 after sending in the management razor gang have now dipped back into operating deficits. Melbourne University posted a $104 million operating deficit, RMIT $27.7 million. The University of Sydney did better, recording a $300 million surplus last year, just 12 months after its historic $1 billion result in 2021. In any case, much of the reduction in fortunes for universities over the past year has been due to falling investment returns and, in the case of UNSW Sydney, “increased spend arising from the resumption of operational activities”.

The interim accord report continues to consider a proposal for a tax on international students studying in Australia as a means to raise additional revenue, although it was almost universally panned in response.

“Beyond the risk regarding Australia’s brand proposition,” Swinburne University said in its submission, “such a levy would also create a jarring perception that Australia, a rich country, expects to exploit students from less developed economies to subsidise and enhance its own research and education sector – an unethical and perverse policy in terms of social justice and regional leadership.”

In the same submission, however, Swinburne noted it had to chip in $1 billion of its own “discretionary” budget since 2008 to make up for a shortfall in research funding. All universities cross-subsidise their research in this way, almost entirely off the back of international students.

Queensland University of Technology was more direct, arguing that even though it would likely benefit from such a tax on international students, the organisation “oppose it in its entirety”. Largely, this is because the levy would spell out what has already been happening silently.

“For two decades Australia has enjoyed a de facto subsidy of its public research enterprise from the revenues contributed by the higher education export market,” QUT said.

“A levy would not only entrench this arbitrary cross-subsidy but by transferring it to the national level it would be made much more explicit for the international students themselves. Therefore the market risk to international education is considerable, alongside the risk to Australia’s reputation in a fragile geopolitical world order.”

The NTEU’s Alison Barnes says conditions at Australian universities are not governed by a desire for quality student outcomes across the board but by meeting key performance indicators at the lowest cost possible.

“Two-thirds of university staff are employed insecurely. There’s been more than $100 million in wage theft – that we know about,” she said.

“In the current round of bargaining, some managements have behaved appallingly. Some vice-chancellors and senior executives have adopted these hard-headed industrial tactics usually the domain of ideological warriors in the private sector.

“Where’s the accountability for vice-chancellors earning more than $1 million a year? Does anyone really think the people running our public universities should be getting paid double the prime minister’s wage?

“The accord really is a critical moment. A review of this scope is an enormous opportunity but the risks are also huge if we don’t get it right.”

Universities are strange beasts. While they are typically funded and regulated through the Commonwealth, state and territory governments have responsibility for legislation that governs the functions of university councils, academic boards and the most senior management.

There is a significant gulf between what the sector is now and what it needs to be by 2035 or 2050. Still, one has to start somewhere.

In August, Jason Clare introduced legislation that responds to two priority recommendations from the accord interim report, most notably the 50 per cent pass rule from the Coalition’s Job-ready Graduates scheme, which removed Commonwealth support from students who failed more than half of their subjects and was derided as being “unnecessarily harsh” by the peak university body Universities Australia. Clare said this rule had already affected 13,000 students across 27 universities.

“At Western Sydney University this year alone, the 50 per cent pass rule has already led to 1350 students being forced to quit. Most of them from poor backgrounds,” he said in a statement. “Instead of forcing them to quit we should be helping them to pass.”

The bill will also extend Commonwealth funding on a demand basis to all Indigenous students in the country, not just those in rural and remote areas under the Coalition’s reforms. A Senate legislation committee is considering the bill and is due to report on Wednesday.

Speaking at the National Press Club on the back of the accord interim report in July, Clare distilled the agenda to just a few simple lines.“We live in a world where almost every single new job that’s created will require you to finish school and go to TAFE or uni,” he said. “That means we need more people to do that. Not less. Rich. Poor. City. Bush. Black. White.”

There are about 900,000 university students supported by the Commonwealth today. By 2050, that number will likely be 1.8 million.

Tinkering around the edges of the Coalition’s previous university effort will do little to meet this trajectory. QUT was the most refreshingly blunt in its assessment of the situation. “The poorly designed JRG Package significantly distorted the funding of undergraduate coursework learning and teaching, and requires an urgent and extensive overhaul,” it said.

“Simple repeal of its worst aspects will not suffice, since the preceding arrangements were burdened by an accumulation of earlier distortions going back to the mid-1990s. Total CGS [Commonwealth Grant Scheme] funding per subject must be realigned to the actual cost of provision, to remove perverse incentives, relieve manifest unfairness and restore equilibrium.

“The ratio of student to Commonwealth contributions must be overhauled across the field of education funding clusters, and substantially revised and simplified, to strip out the futile price signalling, attempted social engineering, and crude, reductive assumptions about graduate destinations that have distorted this cost-sharing scheme since the division of HECS into three bands under the Howard government.”

Universities Australia estimates the “minimum requirement to maintain Australia’s research capability” is $3.5 billion over the next four years. That figure does not touch the sides of any broader reform contemplated by QUT.

John Dawkins shaped Australian universities and made them increasingly competitive, as he wished. Students, however, have been left competing for scraps. Debts are higher but course quality has declined.

At RMIT, where the associate degree acts as the “connective tissue” between two parts of the university, vocational and higher education, management is motivated to make these even more profitable by erasing any mention of them in the workplace agreements.

It is no small irony that this type of degree is the precise future imagined by the interim accord, and this example of management cost-cutting the kind found to be so objectionable by the same reviewers.

“I think it has become a very narrow vision of what a university is,” an associate degree teacher said.

“And it’s running the university as a business rather than a public institution that is contributing to the cut to Australian culture.”

Last week, a cadre of RMIT leaders, including Vice-Chancellor Alec Cameron, Deputy Vice-Chancellor Saskia Loer Hansen and other academics, travelled to Spain to celebrate a decade of RMIT Europe. While management sought to cut pay and conditions in agreements back home, they drank champagne in the art nouveau surrounds of the Sant Pau Recinte Modernista in Barcelona.

A spokesperson for RMIT said the university had “different enterprise agreements to recognise that different staff groups are operationally and organisationally distinct”.

“We are still in the formal bargaining process for a new RMIT Vocational Education Enterprise Agreement,” the spokesperson said, “and no negotiation outcomes have been formalised at this time.”

The Universities Accord will deliver its final report to government in December.

This article was first published in the print edition of The Saturday Paper on October 7, 2023 as "Classes warfare".

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