The Guardian August 30, 2000

Universities' business arms losing money

by Kerry Ans

Continued reductions in funding to the country's public universities since 
the Keating Labor Government have forced these institutions to increasingly 
look to the private corporate sector and to user-pays mechanisms to make 
good the shortfall.

Over a period of about 15 years, beginning with Senator Susan Ryan and then 
John Dawkins (Labor Ministers of Education) and continued by Dr Rod Kemp 
today, the amount of government funding to Australia's public universities 
has declined in real terms.

Funding has not kept up with the large increase in student numbers over 
this period.

The universities have been encouraged to find a variety of ways of 
extracting funding from other sources.

These include attracting full fee-paying students (both local and 
overseas), corporate sponsorship of a range of activities and Chairs 
(Professorships) within departments, selling courses overseas, and joint 
research ventures with private companies and government (especially 
corporatised) utilities.

This last category is usually administered by special business arms set up 
by each institution which have to compete with each other for mainly 
corporate funding sources.

Academics are encouraged to supplement their base salaries with research 
consultancies paid by the private sector. These sorts of arrangements bring 
credibility and prestige to the private companies working jointly with 
university staff.

The arrangements appear to make university research and teaching activities 
"removed from the ivory tower of old".

In effect, they have enabled the growth of a private corporate "culture" or 
mentality within universities to a much greater extent than had been the 
case in the past.

And judging by the losses made by many of these business arms of the 
universities, they don't necessarily bring good monetary returns for such 
"prostitution of intellectual property".

The NSW Auditor General's Office recently released its report into the 
balance sheets of these universities' commercial arms.

It indicates that many have made significant losses and some have incurred 
significant liabilities, particularly the University of New England and the 
Australian National University.

Universities were not set up as direct profit-making ventures (their role 
under capitalism has always been more educational and ideological), so it 
should come as no surprise that they would not have the same commercial 
savvy as the corporate sector they are dealing with, and not come off the 
best in any arrangements.

When the credit-bubble led "recovery" in the US crashes, and corporations 
start to rationalise their sponsorship and research arrangements, the 
university Vice Chancellors will finally wake up to the fact that a market-
led recovery in the funding base of universities is never going to happen.

It's time they started demanding adequate government funding for public 
teaching and research.

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