The Australian Association of University Professors (AAUP) has called for a Senate Standing Committe on Education and Employment inquiry into the sustainability of the Australian higher education “system” as the current crisis evolves.

The word “system”, however, is placed in italics, as the collective of Australian public universities seems to have moved away from being a collaborative and co-operative system, with institutional ascendancy in the marketplace becoming their prime organisational concern.

A retreat to the past is not a solution.

While 2019 will go down in history as a year of strong financial performances by Australia’s public universities, this was largely because of high proportions of international students making up the student cohort at most universities. However, financial results for the year ended 31 December 2020 are presently likely to produce a complete turnaround.

The factors driving this COVID-19 induced change are broadly well known, but not yet fully understood, and the financial implications may be estimated.  These implications look set to be severe, both in the short and longer terms.

The virus is also driving a substantial economic decline around the globe. There are also increasing geopolitical tensions which seem to be partly driven by virus-impacted circumstances. These have seen the tradition of Australian universities recruiting students from China put at near terminal risk in the foreseeable future.

From a corporate governance perspective, how has this situation been allowed to occur?  For many years, the senior executives and councils of Australian public universities have been arguably aggressive in their strategic focus on recruiting fee-paying international students, particularly from China. As commentators have already observed, in this halcyon period of international revenue generation by universities, the Federal Government actively encouraged it and lauded the contribution to national export earnings.

Both sides appeared to ignore or accept the accompanying increasing levels of the financial risk involved in Australian public universities becoming a significant education export industry. Of course, there were detractors and academic and media commentators depicting concerns about the growing risk tolerance of the country’s public universities.

So, we have witnessed universities appearing and acting more like corporations, with avowedly commercial agendas, and actively competing against each other for international students or “customers”.  Rather than having a co-operative “system” of public universities, over time there has developed a “quasi-market” in which universities individually aim to be “winners”. Winning is evidenced not only by financial profits, but by national and global published rankings of various kinds, which have created a notably passionate desire to improve institutional positioning in such stakes.

Now, due to this unexpected COVID-19 health calamity, universities are beginning to attempt to assess the financial damage and pick up the pieces, facing critical decisions to be made to live within what appears to be much diminished financial means. Universities’ strategic and financial difference between now and pre-COVID-19 periods, however, seems to be indeed stark.

While we all “live and learn”, public universities are “thinking institutions”. They are too precious to be lost due to the prevailing commercial income-earning passions, never-ending growth ambitions, and prioritisation of international fee income, over-delivering public benefit across society in the public interest.

However, having a sustainable and connected public university sector is what the country surely needs in the months, years, and decades ahead. So, what is the answer?

This question is challenging when the Federal Government currently appears to have little sympathy for Australian public universities. Arguably, that attitude has been reinforced by universities’ self-transformed identities imagining commercialised corporates.

One primarily significant move would be for public universities to move away from their identities as homogenised “cookie cutters”.  Despite their attempts at distinctive public mission statements and the production of costly marketing collateral, they arguably mimic one another.

Not all universities, however, need to do the same thing and in the same way. In refocussing on the national community’s needs, as well as on their contributions to knowledge development leadership in the international community, universities are capable of crafting distinctive strategic missions, developing innovative offerings, and streamlining operations.  Neither is it an automatic axiom that large scale and aggressive growth is an automatic recipe for, or definition of, success.

While universities have “professionalised” their executive management, the time has come to draw upon the intellectual capital of the academic community. This will provide a source of renewed strategic ideas and energy for reconfiguring university focus, identity, and service to the Australian community. Rather than seemingly “flogging a dead horse”, exciting new opportunities may arise from engaging teachers and researchers who have driven the engine room of universities for so long, with broad aims revolving around creating a better society, environment, and an innovation-driven economy.

The prevailing market strategy of marketisation is not looking durable or necessarily desirable.

Emeritus Professor Garry Carnegie, FCPA, RMIT University; Distinguished Professor James Guthrie, FCPA, Macquarie University, and Distinguished Professor Lee Parker, FCPA, RMIT University


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