The Guardian 25 May, 2005

Universities teeter on financial ruin

Peter Mac

Some NSW universities are in big financial trouble, and others are only surviving because of full-fee special courses, mostly for overseas students. The promotion of such courses, rather than home campus courses focused on academic excellence, is the logical outcome of the Howard government’s tertiary education policies.

The government has cut funding to the ten NSW universities by some $1.7 billion recently, in a policy intended to force them to seek alternative sources of finance — from private sources. They are being put on a business footing, chasing maximum financial returns. Their aggregate financial surplus has fallen from $168 million to $49 million in 2003-2004 in a situation which is unsustainable.

The two worst-hit are University of Western Sydney and Newcastle University, both located in heavily working class areas. Each institution owes some $27 million. The University of Technology Sydney also owes $12 million, University of NSW $10 million, and Southern Cross University $6 million.

Overseas students are big business

By contrast, other universities have managed by selling special “metropolitan campus” university courses in major Australian cities, particularly for overseas students. There are now ten universities based outside of NSW, operating these courses in central Sydney, and more are planned.

Central Queensland University (CQU) has benefited by exploiting a market created by academic corruption. Many of their English course students appear to have gained Australian university entry via an allegedly corrupt system of entrance examinations in their countries, and must now take supplementary courses.

The large fees from the CQU Sydney campus courses have enabled it to fend off its Rockhampton home campus debts. In 2003 the University lost around $4.6 million. However, its metropolitan campus courses are run by C-Management Services (a special metropolitan campus company set up in conjunction with the private Campus Group firm) which made $1.2 million profit, and received $43.6 million in revenue in 2003.

This activity is encouraged by a government determined to turn education into a private, for-profit, industry. It foreshadows the privatisation of much, and possibly all, university activity.

For a start, metropolitan campus courses are largely generated in partnership with private firms, including financial institutions, developers and hotel chains to provide finance, buildings (for classes and accommodation) and manage residential quarters. They often bleed the public parent university of its curriculum development and exploit casual and contract teaching staff on inferior working conditions to their colleagues in the public sector.

The CQU Deputy Vice-Chancellor, Professor Mienczakowski last week stated bluntly that, “We would not have been here as a university in the last two years without the partner’s input”.

The attendance at these courses is now often bigger than for the home campus courses. CQU’s Sydney campus has 4369 students, as opposed to 4000 students at Rockhampton. It now operates in Hong Kong, Fiji and Singapore, and 57 percent of its students are international fee-payers.

Overseas students, and the small percentage of local students at the metropolitan campus courses, pay full university fees.

For the Southern Cross University’s three-year Bachelor of Business in Hotel Management course, fees are $40,500 for domestic students and $46,500 for international students. For pre-university English language foundation or diploma programs, the University of Wollongong charges $4950 or $7000 per session with a minimum of two sessions required.

Public universities used to seed private ventures

But this is not where the story ends. Private enterprise seeks profit maximisation, and the last thing private firms want is for their university partners to be saddled with non-profit traditional courses. The logic is for joint companies such as C-Management Services to be cut free from their university origin, and if possible to be taken over by a private partner.

The process is illustrated by the recent history of the Macquarie University School of Management, which has operated special courses in conjunction with the Singapore-based Raffles Campus company, a division of the massive Singapore Technologies group.

When the current arrangement with Raffles was brokered by John Hewson, former Dean of the School (and former head of the federal parliamentary coalition) in 2003, he boasted (with no apparent sense of irony) that the venture could become so big that “we could end up being an Australian campus of an Asian university”.

In order to do this, Hewson sought to split the School off from the main university body and establish it as an Asian-focused postgraduate business corporation. This was opposed by the University’s Vice-chancellor, Professor Di Yerbury, and Hewson left the School.

Raffles Campus has now also pulled out of the deal. They apparently do not see a particularly profitable role for their shareholders in an association with the university proper.

These bizarre developments, together with the enforced introduction of other Howard government policies such as the introduction of “voluntary union fees” and the enforcement of individual work contracts, offer a really nasty foretaste of the future of university activity in Australia.

In this future, academic excellence will only be possible as the non-essential by-product of the pursuit of profit. Main campus courses could even be forced out altogether, with only the full-fee metropolitan campus type courses available. Only the defeat of the Howard government and its replacement by a coalition of left and progressive forces can save Australian tertiary education from such a catastrophic fate.

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