by JAMES GUTHRIE
As reported in Campus Morning Mail (July 5), a redundancy round starts this month at Latrobe U to deal with finances expected to be worse this year than last. In February, Vice-Chancellor John Dewar told staff, “the challenges we face have not diminished” (CMM February 19).
New redundancies will follow 335 people taking voluntary redundancies (300 FTE) as part of COVID-19 savings last year (CMM March 5), plus departures under two separate restructure (CMM July 17 and August 14 2020).
The new round is on top of over 1200 employees who lost work in 2020, based on headcount from the LT U annual report.
The cost-cutting is justified on an accrual loss of $8.4m. However, the Statement of Cash Flows in LT U’s annual report shows a positive cash position, especially when considering the spend on $120 million on property plant and equipment in 2020.
Like most public universities in Australia, Latrobe U’s business model has been to pursue international students’ on-shore fees and involve itself in commercial activities. For instance, LT U has built new student accommodation at Bundoora Campus. This includes 624 beds across two buildings, managed by a private provider, but the university is responsible for the capex. It is difficult to determine from the annual report how much this project cost, but it should have been provided by a private provider.
For this and other developments Latrobe U, extended the existing Syndicated Debt Facility of $170m to $345m last year.
But as Susanne Newton, VP (Professional Staff) of the LTU branch of the National Tertiary Education Union puts it,”I know exactly how important it is that La Trobe cares for its staff during this time. While I understand the financial reality we are dealing with, the university’s most important asset is its people, and the university must do its best to care for the workers that make this place run. There are better ways to do this than through involuntary redundancies.”
In past decades we have seen public universities in Australia turned into corporatised entities with accrual accounting and weak accountability mechanisms to their staff and students.
This corporatisation of universities budgets and consequences for workers must be rectified in the current situation. The choices made by vice-chancellors and senior executives should not continue, with business models that have placed the Australian higher education system in chaos.
I call on vice-chancellors to move to strategic planning and university budgeting for the public good. The university community must engage and push for change that builds a more inclusive and equitable budgeting and funding process. Built into any university budget must be a respect for intellectual integrity, freedom of inquiry, and democratic space for discussion; promotion of equity and justice, recognition of the diversity of the university community, collegial governance that involves all parts of the community and a system of fiscal responsibility and accountability that allows for all the university community to debate and set priorities.
The current over-reliance on international on-shore student fees, and building substantial infrastructure should not be incorporated into any future strategy. This wholesale loss of public university employment via sackings and voluntary redundancies and reducing casual workforces should stop.
In a forthcoming book chapter, based on a working paper, “Four decades of new public management and Australian universities: a revolution by stealth,” I and colleagues assesses the impact of neo-liberalism and new public management in Australian public universities and the influence of accounting, auditing, and accountability in the higher education system.
It outlines the significant changes in higher education policies since the 1980s, reveals, the growing intrusion of accounting-based performance measurement, control, and audit systems into university operations, and exposes the involvement of these systems in the financial and social crisis now facing the Australian higher education system.
Although public universities have developed into corporatised organisations with predominantly commercial agendas, their profitability, and financial and social risk management and accountability are found wanting when confronting the crisis caused by the COVID-19 pandemic.*
* Parker, L., Guthrie, J. and Martin-Sardesai, A. (2021), “Four decades of new public management and Australian universities: a revolution by stealth,” (Macquarie Business School working paper)
Distinguished Professor James Guthrie AM, Macquarie U Business School