Group of Eight’s change of tack smacks of self-interest

Do the Group of Eight universities actually have a cash-flow problem, or are they more concerned about increasing their prestige to attract international students? Flickr/sobriquet.net, CC BY-SA

Last week the Group of Eight (Go8), Australia’s most prestigious universities, stopped supporting deregulation. Sort of. That is to say, they still support it (kind of) but they don’t think enough politicians agree with them, so they are suggesting a review.

Well, not a review exactly – god knows we’ve had enough of those. More like a conversation. With whom? What about? I’m confused and I’ve been studying universities for years.

What just happened?

It was morally disappointing that most university vice-chancellors supported the deregulation of university fees, but it was obvious what the Group of Eight stood to gain by it. As well as having a massive competitive advantage over the rest of the sector, these universities also seemed to believe deregulation was the best deal they were likely to get from any government.

The cost of Go8 support for deregulation, however, seems almost unbearably high. The fissures in the higher education sector – between the Go8 and the others, between vice-chancellors and their staff – were not obvious before. Now they are.

This will make it hard to get the sector to agree on anything together behind closed doors and harder for anyone outside the cloister to believe that anything a university says now represents anything other than self-interest. It is quite a serious thing, undermining trust.

And look what they did it for. The latest Go8 media release pretty much says, “We only said we liked deregulation for your sake.” They now tell the public, academic staff and students alike, who all hated the idea, “It isn’t that we were wrong, but now we have a new idea, listen up…”

But the Go8 media release leaves more questions than answers. What is the problem anyway? What are we trying to fix? Are universities really broke? What is the Go8 suggesting, exactly?

What is the Go8 worried about?

University of Canberra Vice-Chancellor Stephen Parker recently argued that universities have so long been in the habit of asking for more money that they can’t really help themselves. I think this is partly true; but only partly. I don’t really believe the Go8 would put so much effort into this – and undermine so much public trust – unless they were genuinely worried about something.

It is unclear to most of us just what this is. University annual reports look like their finances are okay, for the most part. The base funding review recommended only minor adjustments, generally.

And yet over and over vice-chancellors talk like a Liberal government declaring a budget emergency. Is it greed? Is it the pressure of their university councils seeking financial “performance” from their vice-chancellors?

It could, I suppose, be the question of “quality” that Education Minister Christopher Pyne clumsily gestured to in world rankings. Most people pointed out that per capita Australia does pretty well in the world rankings, but perhaps this is not enough for some university leaders.

Anyone with a calculator can see it would cost the GDP of a small country to fund an antipodean Harvard, but it is plausible that something along those lines is what the Go8 seeks. But to have all eight universities cohere over such a stupid dream – and to do so as desperately as they seem to be doing – seems unlikely to me. I think they must be worried about something structural that affects their mid-to-long-term sustainability.

I reckon it might be international students. In the 1980s, when John Dawkins and others suggested that “rich Asians” seeking a tertiary education might provide the custom for a higher education export market, the world’s higher education system did not look as it does now.

Universities in South-East Asia now have an excellent and growing reputation. India has developed a mega-university that alone enrols 3.5 times Australia’s entire sector – without even thinking about the other 400-or-so Indian higher education institutions.

China is reputed to graduate more engineers in a day than Australia will in a year. For the world, the growth of good-quality universities throughout Asia (and everywhere else) is almost certainly a good thing. But if you are relying on the absence of quality universities in certain parts of the world for a good chunk of your student fee income, this development might pose a bit of a threat. Probably not this year – but soon.

I don’t know for sure, but my bet is that the Group of Eight universities are looking for a new structure, beyond international student fees, that will assure their financial sustainability.

What does it look like they want?

The Go8 media release gives scanty clues, but let’s think about what they seem to want. Under deregulation, growing fees, we can assume, would have allowed the Go8 to continue to compete globally, even if another funding source shrinks – largely because they would hold Australia’s young people to ransom over their participation in the labour market.

Now that deregulation seems unlikely, the Go8 says it wants us to get rid of the

current level of cross-subsidisation [of research] by teaching fees.

I was a bit shocked by this; it seems a risky thing to ask. Especially when the week before you were asking for a massive subsidisation by fees from students. But it is an emotive issue in the current environment.

I expect non-Go8 universities will be outraged eventually, for it implies that society should “pay all those teaching universities only what it costs to teach that mass of students – but pay us, the research bloc, to do research”. Excellence, they imagine, will now come from research money, not deregulated student fees.

(In the 1990s, American scholar Bill Readings said that institutions worldwide were becoming “universities of excellence” that do nothing but be, uselessly, excellent.)

Why research? Well, they may argue that it wouldn’t cost that much, if you limit it to eight universities. The “broken funding model” they keep pointing to in non-specific ways apparently applies only to them (they are not exactly the eight poorest universities, though, I should note).

The other reason is most likely political. When Pyne threatened research funding in the recent Game of Deregulated Thrones, those controlling Australian wealth successfully persuaded the otherwise-intransigent minister that research funding was essential.

The “depoliticised” process the Go8 now wants instead of a review seeks a conversation with those people – representatives of business and industry, especially mining.

The absence of agriculture in their list is fascinating, for agriculture still constitutes a large percentage of exports and relies heavily on research and innovation for global competitiveness. But perhaps the Go8 thinks agriculture doesn’t carry enough influence in Liberal-National political and economic priorities to include them.

What should the rest of us be thinking?

The problem of the Group of Eight’s long-term sustainability does indeed matter, even to those who work outside them. But a solution for eight universities (if indeed that is what it is – I am a little dubious) does not address the questions that a mass system of higher education ought to do collectively.

Presumably the Group of Eight universities would like to divest themselves of some students, educate only the elite (elite by merit, of course – though this overlaps considerably with the other kind, which is no coincidence) and focus on research.

What do we, as a society, think? Do we want research that was conducted mainly by eight universities, while the tens of thousands of other academics in Australia focus on their teaching? Is that best for students and best for research? Do we think that more people than Go8 leaders and the Minerals Council of Australia should have a say in that question?

More, it still leaves the question of student fees unresolved. I think the real issue is that we do not really know how to run a mass system of higher education – a good one, that is.

We are not alone; most other countries are struggling to figure this out, too. Working on that problem will help us figure out how best to fund universities. It will take a different set of questions than those we have seen in the funding debate thus far.