Late last year, the Morrison Government announced that it would give Australia’s universities an additional $1 billion of research funding, taking total federal spending on research for 2021 to $3 billion.
Under the plan, Melbourne University will receive an additional $111 million in research funding, while the University of New South Wales and Monash University the will each get an extra $100 million, and Adelaide University $42 million.
Education Minister Dan Teehan touted that the extra funding will help protect thousands of researchers’ jobs and directly support over 40,000 PhD and Masters students in 2021.
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This announcement clearly wasn’t enough to satisfy our universities, with the new vice-chancellor of Adelaide University, Peter Hoj, demanding another $1 billion in funding to help cover the loss from fewer international students:
Professor Hoj’s call follows an email message he sent to university staff this week warning that the university expected a $50m collapse in international student fee revenue this year, compared to the 2020 level…
Professor Hoj told The Australian that his call for another $1bn research boost was based on the expectation that no significant numbers of international students will arrive in Australia this year.
One of the great myths is that the federal government has cut funding to universities. While funding growth did slow over the prior decade, it still rose significantly over that time, as illustrated in the next chart:
The reality is, the whole university research game is one giant ponzi scheme.
Basically, a system has been created whereby the federal government and universities encourage growth in full-fee paying students via:
The Australian government offering the world’s most generous student visa working rights and opportunities for permanent residency; and
Australia’s universities lowering the bar on entry and teaching standards to entice as many students as possible.
The financial windfall from explosive student growth (see above chart) was then funneled into research targeted solely at propelling universities up the international rankings ladder, instead of into areas that provide actual benefits to Australians.
Since gaining a higher ranking equates to more prestige and is a sign of quality, these research rankings were then used as a marketing tool to further grow international student numbers, as well as justifying higher fees.
What was forgotten in the process is the deleterious impacts on domestic students.
As universities shoveled billions of dollars of international student fees into research to rankings, actual pedagogical standards were destroyed.
This is evidenced by the ratio of students to academic staff lifting across Australia’s universities as international student numbers boomed:
The lion’s share of international students come from Non-English Speaking Backgrounds (NESB) and presumably require more teaching assistance than domestic students. Accordingly, the bigger student loads, alongside the higher maintenance of international students, suggests a material decline of both teaching capacity and quality across Australia’s university system.
So, instead of worrying about losing research capability and sliding down the dodgy rankings ladder, Australia’s universities must return to their primary purpose of providing high quality education to Australians.
Running low-quality degree factories for maximum revenue was never in the national interest.
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.
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