It’s time to rein in university fat cats


While universities are being hit hard from reduced international student revenues, and lower level jobs are being slashed, Australia’s vice chancellors and senior executives continue to earn enormous salaries that are way out of step with their overseas peers and the Australian economy:

A News Corp analysis shows University of Melbourne’s Professor Duncan Maskell is Victoria’s highest paid Vice-Chancellor, earning $1.499 million, slightly less than his predecessor was making in 2018.

Professor Maskell and his top tier executives, earning up to $1.1 million, have taken a 20 per cent pay cut to be reviewed after six months.

University of Sydney’s Vice-Chancellor Michael Spence refused a cut to his $1.6 million salary and Australian Catholic University Vice-Chancellor Greg Craven, who has university residences in Melbourne and Sydney, maintained his $1,359,999 salary.

Sydney’s Macquarie University boss Professor Bruce Dowton also declined to reduce his $1,050,000 income.

In Victoria, Monash Vice-Chancellor Margaret Gardner’s salary is $1,289,000 and she and her team took a 20 per cent pay cut.

RMIT’s Vice-Chancellor Martin Bean took a 20 per cent cut to his $1,119,999 wage, with his top executives earning up to $999,999 before the voluntary cut and La Trobe University Vice-Chancellor, Professor John Dewar has absorbed a 20 per cent pay cut from his $980,000 wage.

One of Victorian’s lowest paid Vice-Chancellors, Professor Iain Martin at Deakin University, voluntarily took a substantial pay cut when he took the job, bringing his salary to $819,000 for 2020 from his predecessor’s wage of $1,105,000.

But even with a further COVID-19-related 25 per cent cut, he still earns more than many of the country’s top public servants, including Brendan Murphy, who makes $567,606 in his role as Chief Medical Officer.

Over the border in NSW, new figures show UNSW Vice-Chancellor Professor Ian Jacobs is on $1,314,248 and has taken a 20 per cent salary reduction during the COVID-19 crisis, still earning him just over $1 million…

“With universities needing to control costs for several years due to their loss of international student revenues now would be a good time to re-set executive salaries,” said Higher Education commentator Andrew Norton.

Universities Australia Chief Executive Catriona Jackson said the federal government needs to step in and support universities and says their modelling shows a projected loss of $16 billion over four years…

But there is a steep discrepancy between what university’s top brass are paid, often between $800 and $1 million more than the principal university academics and researchers who drive the core business of the universities.

UNSW’s Professor Gigi Foster, Director of Education, School of Economics said the trend towards highly paid executives was out of sync with overseas wages and what academics and public servants make.

Nick Cater, executive director of the Menzies Research Centre, neatly summed up the farce yesterday at The Australian:

Universities would no doubt deny that overseas students have been taking places from Australians at our best universities, but that is what the numbers suggest.

The number of Australian students commencing courses at Group of Eight universities fell by more than 2000 between 2009 and 2018. The number of overseas students doubled to 60,000.

Universities are under no obligation to educate other nations’ progeny. Yet the growth in the overseas student market has been extraordinary, particularly from mainland China, from where half the foreign students come.

At Monash University, for example, revenue from overseas students has tripled in the past 10 years to $1.1bn last year, overtaking the money it receives from the commonwealth government for Australian students…

At Monash the payroll for bureaucrats has risen by 60 per cent in real terms since 2009, twice as fast as the academic payroll…

If universities want to behave like businesses, enrolling students for no higher purpose than clipping the ticket, they should shoulder the risk. Managing a business in contraction is a novel experience for university administrators…

The rapid growth in foreign admissions has degraded the university experience for many domestic students, particularly in the courses where overseas students are in the majority. Teaching staff are obliged to divert their attention to issues of basic literacy…

Yet the bursting of the overseas student bubble could be the salvation for higher education if it returns to its core business of educating young Australians.


Any government assistance for the university sector should come with strict conditions, including:

  • An increase in English-language requirements to enter courses in order to improve student quality;
  • Increased financial requirements to ensure international students can support themselves;
  • Requirement to deliver educational and research activity relevant to Australian domestic students and to Australian industry needs;
  • Increased teaching staff-to-student ratios;
  • Pay caps on administrator pay (e.g. VC salaries capped at $500,000); and
  • Expunging ties to the Chinese Communist Party, including shutting down Confucius Institutes.

The university sector must, first and foremost, serve the education and research needs of Australia.

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.