The neoliberal transformation of higher education

by Rebecca Barrigos • Published 12 July 2013

“Australia is increasingly reliant on an innovative, educated and capable workforce to maintain a strong economic and global standing.”

– Heather Ridout, Australian Industry Group chief executive, June 2011[i]

“The universities too, will need more money and nurture if Australia is to compete with foreign rivals… If Australia is to compete in anything other than iron ore, it will need a highly educated workforce.”

– Economist, May 2011[ii]

These quotes are drawn from a Universities Australia report written in 2011, entitled A Productive Country: the contribution of Australian universities to national productivity. In this report, the peak representative body for the vice-chancellors argued for increased government funding for universities by dedicating higher education to the slavish service of Australian profits.[iii] The picture the vice-chancellors paint is of a university sector whose main aim is to promote economic productivity, and which subordinates its research and scholarship to the task of making the Australian economy more internationally competitive. This picture jars with an enduring ideology that encourages us to think of universities as communities of learning, concerned with seeking truth, knowledge and scholarship to advance societal development. In reality, the idea that universities should serve the needs of capitalism represents no departure from the role that higher education has always assumed in meeting the needs of the ruling class.

The need for universities to serve capital has meant some shifts in the nature of Australian higher education over time. Before the post-World War II boom, Australian universities were elite institutions educating the sons of the rich for the exercise of power and training the middle class for professions like law or medicine or government administration. From the 1950s through to the brief period of free tertiary education from 1974 to 1986, increased government expenditure transformed universities into mass institutions central to the training and production of the highly skilled workers that modern Australian capitalism requires and employers demand. With the onset of world economic crisis in the mid-1970s, government policy was to constrain public spending on universities. The ruling class still needed skilled workers, but the government was no longer willing to foot the bill for educating them. In the 1980s, higher education underwent a period of significant neoliberal restructuring spearheaded by the Hawke Labor government and its education minister, John Dawkins. Dawkins championed the “user pays” approach to higher education. Over the past 30 years this neoliberal logic has transformed students into customers, burdened with making up the shortfall for decreased public funding and saddled with ever rising debt, created an overworked and increasingly casualised teaching staff and shaped universities into the highly corporate bodies they are today.

Menzies to neoliberalism

The first phase in the expansion of the Australian university sector was a product of the postwar economic boom. In 1957 the Menzies Liberal government commissioned the Murray Report, to “investigate how best the universities may serve Australia at a time of great social and economic development within the nation”.[iv] The report concluded that the expansion of tertiary education was absolutely central to the development of the manufacturing sector and for extracting more value from the most profitable section of the economy, primary industries.[v] It stressed the need for more graduates to increase the competitiveness of industry and to meet the demand for more professionals in the public service, teaching and social work. It also recommended the extension of the Commonwealth Scholarship Scheme, which had awarded scholarships on the basis of “merit” since 1951, to encourage higher participation in post-secondary education.[vi] Along with a focus on expanding technical training institutions,[vii] the government scholarships had rapidly drawn thousands of people into tertiary education. By 1957, there were 36,465 higher education students, up from a postwar low of 28,792 students in 1953.[viii] These students were heavily dependent on government funding, with one-third of all full-time students holding a Commonwealth scholarship in 1956.[ix]

From the 1960s to the mid-1970s, the government continued to invest substantial resources in the expansion of the university sector.[x] Government reporting indicates that by 1963 most students were full time, and 37 percent of them received a government scholarship. Furthermore, 24 percent of all part-time students were receiving partial fee concessions to enable them to study.[xi] Government funding for higher education from the 1950s had not only increased student numbers but also helped to cement the idea that post-secondary education was now necessary to secure stable employment. By 1976, almost 30 percent of people aged 18-34 had attained a post-secondary qualification.[xii]

The Whitlam government abolished fees for higher education in 1973. The competitive Commonwealth scholarships introduced by Menzies were done away with and replaced by means-tested allowances for all full-time students under the Tertiary Education Assistance Scheme.[xiii] Free education was a popular policy, established by a government that had promised change and was riding high on the 1970s radicalisation. Yet the introduction of free education was not merely about satisfying public sentiment for reform. It was implemented in order to deliver industry the skilled graduates required to modernise its operations, and particularly IT-trained graduates, a new field for university instruction. Whitlam’s free education policy marked the apex of the drive of the previous two decades to expand participation in higher education. What was new was that the abolition of fees made the Commonwealth government virtually the sole source of income for universities.[xiv]

The rise of the neoliberal university

In 1973-74 the world economy plunged into recession. In all the Western industrialised countries, neoliberal economic policy was seen as the means of propping up falling profits. The turn to neoliberalism or “economic rationalism” was characterised by moves to privatise public assets and open up more sections of society to market forces, coupled with more regulation of labour and attacks on unionism to drive down wages and conditions. With regard to higher education, neoliberalism meant a war on public funding for universities. Whereas government policy under Menzies[xv] and Whitlam had at least paid lip service to the social benefits of university education, governments now increasingly sought to recast it as a “private good” to be paid for by students. When Whitlam was sacked in 1975, this shift was already underway. The succeeding Fraser Liberal government was not confident enough to reintroduce fees, and with the crisis of profitability in capitalism exacerbating old ruling class fears about the economy’s reliance on mining and agricultural commodities, the demand for skilled graduates persisted. The official line from Canberra was that the government could not afford to pay for the necessary expansion of university infrastructure and “the brakes were applied sharply to higher education spending in 1977”.[xvi] The proportion of students receiving some form of government assistance fell sharply, from 70 percent in 1976 to 40 percent in 1982,[xvii] as teacher scholarships and other Commonwealth student grants were phased out.

1989 was a critical year. It marked the end of the period of free education for domestic students under the Hawke Labor government. Hawke’s education minister, John Dawkins, was the architect of the changes, which were set out in a 1988 White Paper. This emphasised the need for a further expansion of university education, especially to provide graduates for the emerging high technology industries,[xviii] but it was clear that this expansion was to be funded by students. By 1987, the Hawke government had introduced an administrative fee for all students and had allowed universities to begin charging fees to international students. A policy discussion paper released in December 1987, the Green Paper, had tied future profits to an expansion of tertiary education, stating:

The daily lives of all Australians are now heavily influenced by world events. The effects of social, cultural and political changes, economic adjustments and industry developments are all felt immediately in Australia. Our recent experience in international trade and financial markets provides a stark and irrefutable reminder of this reality… If we are to respond and prosper as a nation, there must be changes in attitudes, practices and processes in all sectors and at all levels of the Australian community. The education sector, and our higher education system in particular, must play a leading role in promoting these changes.[xix]

The Green Paper simultaneously foreshadowed further Common-wealth defunding of education:

In the present and likely future budgetary climate, constraints on public funding for the higher education sector are expected to continue. It will be difficult for the Commonwealth alone to provide for a significant expansion in higher education enrolments… Additional sources of funding will need to be investigated.[xx]

However, even with the constraints on government assistance for study, student numbers continued to grow.[xxi] There were 350,000 university students enrolled in 1983[xxii] and 400,000 by 1989.[xxiii] By the time the White Paper was released, Dawkins had already announced that the government was investigating options for broadening the funding base of universities.[xxiv] The result of these investigations was the 1989 introduction of the Higher Education Contribution Scheme. HECS was a system of deferred loans, whereby the government provided tertiary institutions with funding per student, which students would be required to pay back once working and earning beyond a threshold.[xxv] HECS loans were the decisive step towards enabling the government to pass the costs of tertiary education onto students. They were originally set at a flat rate of 20 percent of the average cost of a university degree, or $1800 in 1989.[xxvi]

It was in the Hawke era that the push to corporatise universities really began. In a 2006 article, Davies, Gottsche and Bansel identified the impact of the neoliberal policies of the Hawke government on education. They concluded that by the 1980s, economic productivity was no longer seen as deriving from government investment in education, but “from transforming education into a product that could be bought and sold like anything else in a globalised market”.[xxvii] As government spending decreased, universities were encouraged to become more entrepreneurial and seek alternate revenue streams.[xxviii] From now on, urged the White Paper, universities should be seen as businesses, subject to market forces and run “efficiently” through the management practices of the private sector:

Many institutions are extremely large and their budgets are equivalent to those of large business organisations. Their managers are required to exhibit high-level management skills and to show strong leadership in meeting the institution’s corporate goals.[xxix]

The White Paper also called on universities to operate with a higher consciousness of the corporate sector’s needs. Dawkins complained that in the past “institutions have not paid much attention to employers’ views about course design and content”.[xxx] The White Paper also stated that the government intended to “continue to encourage the development of close links between higher education institutions and employers in all sectors of the Australian economy”.[xxxi] By the end of its term, the Labor government had created the infrastructure to shift higher education costs onto students. Since the White Paper, students have picked up the tab for the changes in university infrastructure that were necessary to accommodate the explosion of student numbers also synonymous with that era, in which enrolments increased 65 percent from the early 1980s to 580,000 students by 1993.[xxxii]

Dawkins to today: current trends in higher education

Today the number of enrolled students has ballooned to over one million,[xxxiii] yet Australian universities receive one of the lowest proportions of government funding as a percentage of GDP of all the OECD countries (ranking twenty-fifth out of 29).[xxxiv] This presents an acute contrast with 1964, when Australia stood third amongst 44 countries for direct government aid to students.[xxxv] Government funding for higher education has declined as both Liberal and Labor governments have continued the neoliberal policies of the Dawkins era through the 1990s, 2000s and into the present.

The Howard Liberal government was responsible for a massive cut to university spending from 1997, picking up where Labor left off.[xxxvi] By the time Howard came to power in 1996, HECS had risen from the $1,800 student contribution per year of 1989 to $2,454 per year.[xxxvii] At the end of the Howard government, HECS fees, or HECS-HELP fees as they had become from 2005,[xxxviii] now determined in bands according to the discipline studied, ranged from $4,077 per year for students studying the “national priority” courses of education or nursing, to $8,499 per year.[xxxix] From 1996 to 2003, there was a real reduction in base funding for universities[xl] that was accelerated when the Howard government legislated to give universities the power to increase HECS contribution levels by up to 25 percent of the fees formerly set by the government. The vice-chancellors were willing partners in the HECS hike, and the maximum student contributions rapidly became the norm across all universities.[xli] The Rudd and Gillard governments have hardly stalled the pace of defunding, despite the fact that both of the significant reviews into higher education commissioned during their terms, the Bradley Review of 2008 and the Lomax-Smith Base Funding Review in 2011, have argued for a significant increase in public funding for universities.

The Bradley Review highlighted the fact that, despite increased government investment in the sector in the preceding decade, Commonwealth funding per subsidised student in 2008 was 10 percent lower, in real terms, than it had been in 1996.[xlii] It argued that this “was the result of a combination of direct cuts, constrained indexation and shifting of the balance towards higher student contributions”.[xliii] Essentially, student numbers have continued to grow, which has led to increased total expenditure by government, but students are contributing more funding than ever before. The Bradley Review’s findings are confirmed by the available data. Whereas in the 1980s, government funding accounted for about 90 percent of university revenue,[xliv] after the first decade of neoliberal change, the proportion of government funding had sunk to 57.2 percent in 1995.[xlv] Commonwealth funding for universities fell to 42.4 percent of revenue in 2011,[xlvi] the latest year for which the department has provided comprehensive data. Australia has a significantly higher private funding contribution for its universities than many other developed countries. Therefore, while Australian government investment as a proportion of GDP, at 1.6 percent, is comparable with some of the highest ranking countries, private expenditure is more than half the level of government expenditure.[xlvii] The Bradley Review recommended that the government increase base funding for teaching and learning in higher education by 10 percent from 2010.[xlviii]

The Labor government rejected the Bradley recommendation for more public funding to universities and in 2011 commissioned the Higher Education Base Funding Review (the Lomax-Smith Review).The whole point of the Lomax-Smith Review was to ascertain the level of funding that Australian universities required in order to perform “competitively”.[xlix] Its final report emphasised that a well-funded higher education sector is necessary to produce the skills required to offset the impact of a two-speed economy and meet future “economic challenges”.[l] Despite its aims, the research undertaken by the Lomax-Smith Review confirmed the Bradley Review’s findings that students were increasingly making up for the government’s funding shortfall. The Lomax-Smith Review pointed out that the “real value of the Commonwealth contribution per student fell sharply after the mid-1990s and, while it has increased since 2003, it remains well below the 1994 level. The overall level of base funding has been sustained through increases to the student contribution.”[li]

Moreover, the Lomax-Smith Review concluded that many disciplines, ranging from accounting to law, visual and performing arts and the humanities, were underfunded: the funding they received was not commensurate with the costs of teaching. No discipline was found to be overfunded.[lii] The review also identified inequity in the student contributions scheme, as students concentrated in low-cost study areas with less prospect of future high paid employment, such as the humanities, are contributing more (in their HECS-HELP bands) than those in disciplines that yield the prospect of higher paying jobs upon graduation.[liii] To remedy the inequity, Lomax-Smith advocated an increase of public funding “with the aim of eventually reaching a more equitable 40:60 split of base funding between students and government in all disciplines.”[liv] The final report was unequivocal in its recommendation for more direct government funding per student, stating: “[T]he average level of base funding per place should be increased to improve the quality of higher education teaching and to maximise the sector’s potential to contribute to national productivity and economic growth.”[lv]

The response of the Labor government to the Bradley and Lomax- Smith findings has been deregulation and further cuts to government funding. The Gillard government has expressed its desire to increase participation rates in higher education so that by 2025 40 percent of young people will hold at least a bachelor degree, up from the current level of 32 percent.[lvi] Since 2009, the government has removed previously legislated maximums on places at publicly funded universities.[lvii] In this new “demand-driven” system, university managers have an interest in pushing as many students as possible through their degree factories as quickly as possible. In April 2013, Gillard announced cuts of $2.3 billion in public funding for universities, on top of a $1 billion cut in October 2012. The current Labor government’s program of deregulation, coupled with further defunding, means that the expansion in graduates the government desires will occur with inadequate funding as universities rely on existing infrastructure to expand capacity.[lviii] Students will pay for the expansion, while the quality of their education is compromised.

Student poverty

Poverty is a feature of students’ experience in the neoliberal age of higher education. Some reports have calculated that up to 60 percent of the student population live below the poverty line.[lix] In 2006, Universities Australia commissioned an investigation of student poverty, which found that 14.1 percent of full-time undergraduate students surveyed regularly went without food because they could not afford it, and struggled to pay the rent as Youth Allowance payments fell.[lx] In the main, high rates of student poverty can be explained by three factors. The most important is the decline in government income support for students from the Dawkins era to today. Additionally, the amount of “ancillary” fees or fees related to study that students are expected to pay has increased over the years with the embrace of the “user pays” approach by universities. The last and most difficult to calculate factor is the increased proportion of students from working class family backgrounds at university as a result of the expansion of higher education.

Today students receive less income support from the government than at any point since the mass expansion of the university sector began in the 1950s. Then, the government desired more skilled graduates and was prepared to encourage the requisite growth in enrolments by providing scholarships. The Whitlam government replaced the Commonwealth scholarships with means-tested allowances under the Tertiary Education Assistance Scheme (TEAS). In 1976, 70 percent of students received TEAS payments,[lxi] and the allowance was set at 75.4 percent of the poverty line.[lxii] Under Dawkins, TEAS was converted from a scheme that supported the majority of students and their living costs into one that merely targeted the most financially disadvantaged, or those considered of low socioeconomic status (SES). By 1987, when the White Paper changes were being devised, student income support payments, now renamed Austudy, had declined to a maximum amount of 61.2 percent of the poverty line and were granted to only 42 percent of students.[lxiii] The Howard and Rudd-Gillard governments continued the attacks on student welfare that had been set in train in the 1980s. By 2003, student welfare payments had become “Youth Allowance” or Austudy for students over the age of 25. The National Union of Students has used ABS data to calculate that in that year the maximum student income support payment for students in receipt of Youth Allowance or Austudy had declined to a mere 51.7 percent of the poverty line.[lxiv] For the December 2012 quarter, the Henderson poverty line was set at $481.98 per week for a single person with housing costs. Under the current Gillard government, the maximum Youth Allowance payment that a student could qualify for is $407.50 per fortnight.[lxv] This means that student income support payments are now set at a measly 42.3 percent of the poverty line. It is little wonder that student poverty levels have reached such astronomical heights.

It is also the case that fewer students are eligible to receive government support for study than in previous eras. In sharp contrast to the pre-Dawkins days, when a large majority of students received some form of government support to study, the most recent available report on student finances established that by 2006 only 30.4 percent of full-time students received Youth Allowance.[lxvi] Eligibility for Youth Allowance is in most cases determined by a parental means test. For the 2011-12 financial year, parents of Youth Allowance applicants must have had a combined taxable income lower than $47,815 for the student to qualify.[lxvii] In 2008 average family income stood at $58,608 per year.[lxviii] Thus the National Union of Students submission to the Bradley Review pointed out that the income test threshold is so low that “most of the children of working families are excluded by the parental income test regardless of whether they are battlers or high flying professionals”.[lxix] Increasingly, students from working class backgrounds must rely on proving their “independence” to qualify for Youth Allowance. Under current arrangements, students are deemed independent from their families when they turn 22 or if they can demonstrate that they have engaged in at least 30 hours per week of paid work for a continuous 18-month period.[lxx]

Class divide in universities

Over the years, the “user pays” logic introduced into higher education by Dawkins has translated not only into higher fees upon graduation, but also less government support for students as they obtain their qualifications. This has served to entrench a class divide in education as the decline in income support has coincided with higher costs of living and increases in other study-related fees. For example, in 2008 Universities Australia found that “54.8 percent of low SES full-time undergraduates reported difficulty affording textbooks compared with 43.4 percent of high SES students”.[lxxi] Furthermore, almost 68 percent of low SES students report that their finances are “often a worry” compared to 50 percent of high SES students.[lxxii] The outcome is obvious: students are more reliant than ever before on support from their families or paid employment to meet the costs related to study.

The changing class composition of university students is a key factor in understanding student poverty. Until the extension of the Commonwealth scholarships scheme under Menzies, university education had been widely out of reach for the children of the working class. With the government-funded transformation of universities into mass institutions, working class participation in higher education was encouraged and increased steadily through to the 1970s. By the 1980s it was popularly accepted that university education increased one’s job prospects, and university qualifications were indeed becoming more central in the developing labour market. So when Dawkins arrived on the scene, although government income support for students was cut and course fees increased, participation levels of students from “low SES” backgrounds did not decline. Greater participation of students from working class backgrounds in university education clearly helps to account for increasing poverty levels amongst students. Working class students are less able to depend on their families to support their study costs, pay their rent or buy their textbooks. We can surmise this despite the fact that statistics on current participation rates of students from working class backgrounds are difficult to obtain. Problematically, much education literature conflates “working class” with the low SES category. However, a student’s socioeconomic status is inferred from the postcode of their permanent address. This is a very narrow measure that categorises only the most underprivileged students as low SES. In 2011 low SES students made up between 16 and 17 percent of all enrolled students.[lxxiii]

However, when we look at the student population from the perspective of parental occupation, we get a slightly clearer picture of the class composition of students. For instance, research by the Grattan Institute on the parental occupations of currently enrolled students revealed that in 2012 at least 29 percent of students were from primarily working class backgrounds. The parents of these students worked as machinery operators, labourers, drivers, technicians or tradespeople, community workers or clerical and sales workers.[lxxiv] By comparison, 71 percent of students recorded a parental occupation of “professional” or “manager”.[lxxv] Even these statistics are flawed as a measure of the class composition of university students. They are broad and do not indicate the exact relationship of the parents to production. There is no category for small business owners. But more importantly, the broad category of “professional” must include many white collar workers. In any case, we can conclude that students from working class backgrounds make up a significant proportion of the total student population today. With more students today drawn from working class families, less able to rely on income support from their parents, especially if they have siblings still at home, and less eligible for decreasing Youth Allowance payments, increased numbers of students have been forced to undertake high levels of paid work to support their study.

In 2007, Universities Australia commissioned an investigation of student poverty, which found that 16.5 percent of full time undergraduate students worked at least 20 hours a week in order to support their study.[lxxvi] The authors of a journal article summarising the report concluded that the “incremental transfer of the cost burden of higher education to the individual student is having a significant impact… As students struggle to meet this burden through increasing hours of paid work, there is evidence that the quality of their engagement with university, and the quality of their education broadly, appear to be compromised as a result.”[lxxvii] A more recent report, released in early 2013, found that 80 percent of undergraduates work to support their study, on average working 16 hours a week.[lxxviii]

Graduate debt

When students graduate, after years of impoverishment, they have increasing levels of debt hanging over them. As government funding for tertiary education has declined, individual students have increasingly borne the burden of funding higher education in the form of increased HECS-HELP debts. The comprehensive report into higher education by the Grattan Institute in 2013 stated that since 1989 the total amount of HECS-HELP debt had increased by a hundred times as a result of the expansion of student numbers at a higher rate of fees per place.[lxxix] In 1989, when the HECS charge was a flat fee per year, students would incur a $5,400 debt for a three-year degree. In 2013, taking into account the maximum allowable contribution level per band, students can expect that their degree will cost anywhere between $17,604 for a three-year humanities or education degree to $39,168 for four years of law.[lxxx] The Grattan Institute estimated that average HECS debt stood at $15,200, repaid over 8.3 years.[lxxxi] In 2002, research carried out by the Council of Australian Postgraduate Associations showed that average HECS debt was $7,817 per student.[lxxxii] In 2011 dollar terms, income from HECS-HELP fees more than doubled from 1997 to 2011.[lxxxiii]

The high costs associated with study make university less accessible. Although enrolment numbers have continued to grow alongside increasing debt, there is significant evidence that increasing debt is a deterrent for students from poorer working class families. The fact is that higher education is now much more central to employment than in the period predating the 1970s, so more students are likely to accept HECS debt as a passport to better job prospects. In fact, three-quarters of bachelor-degree students give a job-related consideration as the main reason for study.[lxxxiv] However, it is still the case that only a small proportion of the children of low-paid manual or service workers are likely to go to university.[lxxxv] In 2008, only 15 percent of students came from low socioeconomic backgrounds, and this figure has remained stagnant.[lxxxvi] It is also unsurprising that students from low socioeconomic backgrounds are poorly represented at the “sandstone” universities and in the disciplines of law and arts, and more concentrated in vocational courses, such as education.[lxxxvii] Studies have also demonstrated that HECS debt makes it harder for graduates to save for home loans,[lxxxviii] an issue more likely to be of concern for working class students.

The Dawkins era killed off any remaining suggestion that higher education bestowed such important societal benefits that it should be provided free by the state. As neoliberal education policy rose to prominence, tertiary education was more and more considered a privilege that students should be willing to pay for. Growing up alongside this idea is the corresponding argument that tertiary education confers great so-called “private” benefits for students. Recent reports on education, by government and think tanks alike, stress the economic advantages students derive from their qualifications. While it is true that in general graduates earn more than non-graduates, this does not make students a privileged group. Leaving aside the statistics on student poverty, the main beneficiary of increased participation in higher education is the capitalist class, not individual students. In its study of Australian higher education, the OECD found that while university education adds an earnings premium, this premium is lower than in many other countries. In 2009, a university-educated worker was likely to earn 35 percent more than a worker with a high school qualification. This placed Australia twenty-seventh out of 32 OECD countries for graduate earnings.[lxxxix] The Lomax-Smith Review concluded that in Australia the “public” rate of return on higher education – in the form of research innovation and skills for employers, higher tax contributions and lower costs for provision of health care – is much higher than the “private” or individual return for students.[xc] In short, students are paying more for their education, and Australian capitalists continue to benefit from a higher education sector that has been increasingly structured to meeting their needs.

Corporatised universities

Decreasing government funding for higher education since 1989 has created a heavily corporatised university sector. Increasingly, university managers have been concerned to convert their institutions into profitable enterprises and to employ a “for profit” approach to education. The vice-chancellors preside over governance boards that operate like the boards of large corporations, and indeed look like them. To give just one example, the governing body of the University of Queensland, the Senate, includes as its sitting members Charlie Sartain, the CEO of Xstrata Copper, and Timothy Cromnmelin, the executive chair of the stockbroking department of the finance corporation AMRO Morgans, and its chancellor is a corporate and commercial lawyer. In 2006, the University of Queensland proudly proclaimed that its conscious efforts to appoint business figures to the Senate paved the way for a “more corporate-based management style.”[xci] Since these appointments, the University of Queensland Senate has reached such “corporate” outcomes as the decision to cut the gender studies major on the basis of “low demand” and to discontinue a further four majors in the Bachelor of Arts.[xcii] The governing board of the University of Queensland is no exception, but rather the rule in terms of the make-up and aims of university bodies today.

The example of this year’s address to the Press Club by the head of Universities Australia, Glyn Davis, is instructive. Davis was at pains to emphasise the profitability and “productivity” of Australian universities; he boasted that they were amongst the world’s most efficient universities and “outpace productivity growth in most other sectors of the Australian economy”.[xciii] According to the Bradley Review, higher productivity levels can be judged by the fact that most universities record “surpluses” – that is, profits – that have been wrought by more efficient use of building space and cramming more courses into the year, with the introduction of summer semesters or trimesters[xciv] – basically by pumping more students through the degree factory at a faster rate.

With the declining proportion of government funding since the Dawkins era, universities have employed two main strategies to seek alternative funding. The first and by far most important of these is the introduction of full fee places and the massive exploitation of international students. In the 1990s, international student numbers exploded. The Bradley Review employed Department of Education, Employment and Workplace Relations research to show that international students formed 26.5 percent of the student population in 2007, up from 8.5 percent in 1996,[xcv] declining slightly to 25.4 percent of total enrolments by 2011.[xcvi] The Grattan Institute report pointed out that international students generate $4.1 billion a year in revenue for the universities.[xcvii] Thus it is with good reason that Glyn Davis could declare to the Press Club that international students now “support the finances of every institution”.[xcviii] In addition to meeting ruling class demand for skilled labour, universities now generate significant profits for the Australian economy. The neoliberal transformation of the university system has converted higher education into an export industry based on international student demand. In 2011 higher education was Australia’s fourth biggest export industry, generating $15.1 billion in profits. Higher education was only narrowly surpassed by gold exports, which generated $16 billion in profits. The two most profitable exports were iron ore and coal.[xcix]

The concern to attract more international students has flowed through to expanding advertising budgets, as universities attempt to capture more “market share” and sell their particular brand of degree, whether the “real world degrees” of Queensland University of Technology or the “world standard degrees” sold by Melbourne University. Universities have also become obsessed with their “international rankings”, employed as a market measure of the value of their products. Education commentators such as Raewyn Connell have recently pointed out that as these rankings are determined primarily by the research output of universities, the focus on them has served to entrench a two-tiered higher education system, increasing the divide between the so-called “sandstone” or Group of Eight universities and the more vocational universities. The second strategy for boosting non-government revenue has been increasing connections between universities and business, especially expressed in the idea that research by universities should serve the needs of industry. This idea is expressed in Davis’s exhortation that “great things happen when researchers and industry work together”. His address to the Press Club lauded the University of the Sunshine Coast’s “Innovation Centre”, which has “helped entrepreneurs raise $26 million in capital for more than 90 local businesses”.[c]

Attacks on staff and the quality of teaching

The neoliberal restructuring of Australian universities has resulted in course cuts, larger student-staff ratios and an increasingly overworked and casualised university workforce. All of these phenomena are part and parcel of university managements’ push to increase the profitability of their institutions. Course cuts, especially in the humanities, have become a common experience on campuses as arts faculties are constantly forced to justify their budgets. Even when courses are not directly cut, some faculties have been the victims of underfunding created by cross-subsidisation, a process by which universities take funding for student enrolments in one faculty to prop up another. The Lomax-Smith Review identified that law and humanities were suffering a funding crisis in 2011. This was not because the cost of providing these courses outstripped government funding, but was due to the budgetary decisions that universities are making – funnelling funding towards the more lucrative courses, those they can market to international and full fee-paying students.[ci] The review confirmed that arts courses have been an “obvious target for efficiencies” by university administrations concerned with the bottom line.[cii] With reduced government funding per student, yet escalating student numbers, university staff have been forced to become more productive by teaching more students, at a lower cost. The Bradley Review determined that there was a clear link between class sizes and the level of government funding available to universities:

The amount of Commonwealth funding per subsidised place in real terms remains substantially below 1989 levels having declined from $12,335 in 1989 to $10,802 in 2008… Over the same period staff and non-staff costs of teaching and research have risen sharply. These cost pressures have been met to date by teaching on average in much larger classes, and by academic staff working long hours, having fewer opportunities for one-to-one contact with individual students, and reducing their involvement in scholarship and research.[ciii]

Universities Australia conducted research on staff-student ratios, comparing the number of all full-time staff with teaching or research and teaching responsibilities employed in a year with the total number of enrolled students. In 1990, there were about 13 students per staff member;[civ] by 2001, the student staff ratio had become 20:1.[cv] In addition, the proportion of university staff employed on a casual basis has soared. Although official government statistics on staffing from 2012 show that 16.4 percent of all staff are employed on a casual basis,[cvi] other education researchers and the National Tertiary Education Union have confirmed that 40-50 percent of full-time equivalent teaching staff are now casual.[cvii] The Lomax-Smith Review also used more recent data to demonstrate casualisation rates which suggest that casuals are now 53 percent of the academic workforce.[cviii] This is in stark contrast to the situation in 1990, when casuals undertook about one-tenth of all teaching in universities.[cix] Casual teaching staff have no entitlements to paid leave and are not paid to research the knowledge they are nonetheless required to use in their teaching. The authors of a journal article on increasing casualisation rates put it well when they observed that quality of teaching today comes down to how willing staff members are to “exploit” themselves out of a sense of “personal and professional obligation to students”.[cx]

Casualisation, high student-staff ratios and fewer and underfunded courses mean that students are being sold a shabby product by universities, and they are conscious of it. The Lomax-Smith report indicated that student satisfaction levels have not increased since 2000.[cxi] Dissatisfaction expressed in the testimonials given by more than 6,000 students as part of the NUS Undergraduate Student Perceptions of Education Quality Survey in April-May 2010 mainly related to lack of contact with staff. Sixteen percent of respondents had watched recorded lectures due to large student numbers. Some of the most common complaints related to limited consultation hours with staff and high student numbers. Tutorials were deemed to be too large.[cxii]


The whole history of Australian universities has been the history of “higher education” turned to serve the interests of the capitalist class. From the end of World War II through to the 1980s, industry’s need for more highly educated workers translated into a massive government-funded drive to transform the previously elite universities into mass institutions. The expansion of student numbers, backed by public money, was the policy of Liberal and Labor governments alike and culminated in the period of free education under Whitlam. From the mid-1970s, the onset of economic crisis set the scene for the neoliberal overhaul of the universities that was to come under Dawkins. With fears about declining profit rates running high, the capitalist class was no longer willing to foot the bill for educating the skilled workers it required. Dawkins ushered in a whole period of change, the main legacy of which has been the transfer of the costs of providing higher education onto students.

The decline of government funding for higher education over the past 20 years has also turned universities into corporate-minded institutions, whose vice-chancellors and governing boards make decisions – from which courses to run to what contracts to offer to staff – on the basis of what will generate the most profit. Now burdened with some of the highest tuition fees of all the OECD countries and saddled with increasing levels of debt, students are being sold a substandard product, as universities cut costs by employing fewer staff on more tenuous casual contracts. If we are to fight for a better higher education system, we will need to challenge the neoliberal logic buried deep in the heart of the modern university.

[i] Heather Ridout, “Higher education and industry”, The Australian, 30 June 2011.

[ii] “The case for action: be prepared”, The Economist, 26 May 2011, p.7.

[iii] Universities Australia, A Productive Country: the contribution of Australian universities to national productivity, September 2011,

[iv] Committee on Australian Universities, Report of the Committee on Australian Universities (The Murray Report), Parliament of the Commonwealth of Australia, 1957, Appendix A,

[v] Committee on Australian Universities, Murray Report, p.13.

[vi] Committee on Australian Universities, Murray Report, p.66.

[vii] Alan Barcan, A History of Australian Education, Oxford University Press, Melbourne, 1980, p.329.

[viii] Committee on Australian Universities, Murray Report, p.29.

[ix] Committee on Australian Universities, Murray Report, p.25.

[x] OECD conference papers, The Transition from Elite to Mass Higher Education, June 1993, Commonwealth Government Printer, Canberra, p.28.

[xi] Graham Hastings, “An outline of the historical development of Commonwealth student financial programs in Australia (1942-2008)”, NUS Higher Education Review Submission, July 2008, p.3.

[xii] Australian Bureau of Statistics, Australian Social Trends, April 2013, cat. no. 4102.0.

[xiii] Barcan, History of Australian Education, pp.392-393.

[xiv] Barcan, History of Australian Education, p.392.

[xv] Committee on Australian Universities, Murray Report, Ch.1.

[xvi] Peter Karmel, Reflections on a Revolution: Australian Higher Education in 1989, Australian Vice Chancellors’ Committee, Canberra, 1989, p.4.

[xvii] Bruce Chapman, Austudy: Towards a More Flexible Approach – an Options Paper, Department of Education, Science and Training, 1992, p.46, cited in Hastings, “Commonwealth student financial programs”, p.9.

[xviii] John Dawkins, Higher education: a policy statement (White Paper), Australian Government Publishing Service, Canberra, 1988, p.8.

[xix] John Dawkins, Higher education: a policy discussion paper (Green Paper), Australian Government Publishing Service, Canberra, 1987, p.iii.

[xx] Dawkins, Green Paper, p.75.

[xxi] Karmel, Reflections on a revolution, p.4.

[xxii] OECD conference papers, The Transition from Elite to Mass Higher Education, p.12.

[xxiii] Dawkins, White Paper, p.6.

[xxiv] Dawkins, White Paper, p.4.

[xxv] OECD conference papers, The Transition from Elite to Mass Higher Education, p.33.

[xxvi] Universities Australia, “Historical HECS data”, http://www.universitiesaustralia.

[xxvii] Bronwyn Davies, Michael Gottsche and Peter Bansel, “The rise and fall of the neoliberal university”, European Journal of Education, 41 (2), 2006, p.311.

[xxviii] OECD conference papers, The Transition from Elite to Mass Higher Education, p.14.

[xxix] Dawkins, White Paper, pp.101-102.

[xxx] Dawkins, White Paper, p.66.

[xxxi] Dawkins, White Paper, p.66.

[xxxii] OECD conference papers, The Transition from Elite to Mass Higher Education, p.12.

[xxxiii] Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, “Student 2012 first half year: selected higher education statistics publication”, Statistics/ Documents/Publications/2012firsthalfyearsummary.pdf.

[xxxiv] Denise Bradley, Peter Noonan, Helen Nugent and Bill Scales, Review of Australian Higher Education Final Report (Bradley Review), Department of Education, Employment and Workplace Relations, Canberra, 2008.

[xxxv] Hastings, “Commonwealth student financial programs”, p.3.

[xxxvi] Jane Kelsey, “Privatising the universities”, Journal of Law and Society, 25 (1), 1998, p.69.

[xxxvii] Universities Australia, “Historical HECS data”.

[xxxviii] In 2005, HECS became the Higher Education Loan Program or HECS-HELP.

[xxxix] Universities Australia, “Historical HECS data”.

[xl] Jane Lomax-Smith, Louise Watson and Beth Webster, Higher Education Base Funding Review Final Report, Department of Education, Employment and Workplace Relations, Canberra, 2011, p.7.

[xli] Andrew Norton, Mapping Australian Higher Education 2013 Version, Grattan Institute, 2013, p.51, mapping_higher_education.pdf.

[xlii] Bradley et al, Bradley Review, p.144.

[xliii] Bradley et al, Bradley Review, p.144.

[xliv] Raewyn Connell, “Neoliberalism in higher education: the Australian case”, 20 February 2013,

[xlv] Department of Employment, Education, Training and Youth Affairs, Selected Higher Education Finance Statistics 1995, HigherEducation/HigherEducationStatistics/Documents/Publications/Finance1995. pdf.

[xlvi] Department of Industry, Innovation, Science, Research and Tertiary Education, Finance 2011: Financial Reports of Higher Education Providers, 2012,

[xlvii] OECD (2012), Education at a Glance 2012, Table B2.3, p.47,

[xlviii] Bradley et al, Bradley Review, p.153.

[xlix] Lomax-Smith et al, Higher Education Base Funding Review, p. viii.

[l] Lomax-Smith et al, Higher Education Base Funding Review, p.3.

[li] Lomax-Smith et al, Higher Education Base Funding Review, p.4.

[lii] Lomax-Smith et al, Higher Education Base Funding Review, p.x.

[liii] Lomax-Smith et al, Higher Education Base Funding Review, p.xiii.

[liv] Lomax-Smith et al, Higher Education Base Funding Review, p.xv.

[lv] Lomax-Smith et al, Higher Education Base Funding Review, p.xix.

[lvi] Department of Education, Employment and Workplace Relations, Transforming Australia’s Higher Education System, 2009, p.12, HigherEducation/Documents/TransformingAusHigherED.pdf.

[lvii] DEEWR, Transforming Australia’s Higher Education.

[lviii] Lomax-Smith et al, Higher Education Base Funding Review, p.14.

[lix] Amy Lawson, “60% of uni students live below the poverty line”, Sydney Morning Herald, 15 May 2005.

[lx] Marcia Devlin, Richard James and Gabrielle Grigg, “Studying and working: a national study of student finances and student engagement”, Tertiary Education and Management, 14 (2), 2008, p.114.

[lxi] Hastings, “Commonwealth student financial programs”, p.9.

[lxii] Hastings, “Commonwealth student financial programs”, p.10.

[lxiii] Hastings, “Commonwealth student financial programs”, p.10.

[lxiv] Hastings, “Commonwealth student financial programs”, p.12.

[lxv] Department of Human Services, “Payment rates for Youth Allowance”, 2013,

[lxvi] Australian Vice-Chancellors’ Committee, “Background: Australian University Student Finances 2006”, 2007, resources/272/1287.

[lxvii] Department of Human Services, “Income and assets test for Youth Allowance”,

[lxviii] Graham Hastings, Submission to Department of Education, Employment and Workplace Relations Review ofAustralian Higher Education, National Union of Students, 2008, pp.25-26, NUS%20HEReview%20Submission.pdf.

[lxix] Hastings, Submission to Department of Education, p.26.

[lxx] Department of Human Services, “Income and assets test for Youth Allowance”.

[lxxi] Richard James, Participation and Equity: A Review of the Participation in Higher Education of people from Low Socio-Economic Backgrounds and Indigenous people, Universities Australia, 2008, p. 40.

[lxxii] James, Participation and Equity, p. 40.

[lxxiii] Norton, Mapping Australian Higher Education, p.29.

[lxxiv] Norton, Mapping Australian Higher Education, p.30.

[lxxv] Norton, Mapping Australian Higher Education, p.30.

[lxxvi] Devlin et al, “Studying and working”, p.114.

[lxxvii] Devlin et al, “Studying and working”, p.121.

[lxxviii] Daniel Hurts, “Uni reform to hurt students”, The Age, 8 May 2013.

[lxxix] Norton, Mapping Australian Higher Education, p. 42.

[lxxx] Department of Industry, Innovation, Science, Research and Tertiary Education, “Commonwealth supported places and HECS-HELP information for 2013”, p.3,

[lxxxi] Andrew Trounson and Christian Kerr, “Lost HECS debt $6.2bn, and rising”, The Australian, 21 January 2013.

[lxxxii] Hilary Pearse, “The social and economic impact of student debt”, Council of Australian Postgraduate Associations, 2002, p.8, impact_of_student_debt.pdf.

[lxxxiii] Norton, Mapping Australian Higher Education, p.50.

[lxxxiv] Norton, Mapping Australian Higher Education, p.69.

[lxxxv] Norton, Mapping Australian Higher Education, p.30.

[lxxxvi] Bradley et al, Bradley Review, p.10.

[lxxxvii] Bradley et al, Bradley Review, p.30.

[lxxxviii] Pearse, “The social and economic impact of student debt”, p.9.

[lxxxix] OECD, Education at a Glance: OECD Indicators Australia, 2012, p.2,

[xc] Lomax-Smith et al, Higher Education Base Funding Review, p.108.

[xci] “UQ Senate’s downtown experience to take education higher”, UQ News, 1 August 2006,

[xcii] “Gender studies at the university of Queensland”, UQ News, 15 March 2013,

[xciii] Glyn Davis, “Address to the National Press Club”, 27 February 2013,

[xciv] Lomax-Smith et al, Higher Education Base Funding Review, p.7.

[xcv] Bradley et al, Bradley Review, p.70.

[xcvi] Department of Industry, Innovation, Science, Research and Tertiary Education, “Statistics on students attachment”, HigherEducationStatistics/Documents/Publications/FirstHalfStudentStatistics2011_Students.pdf.

[xcvii] Norton, Mapping Australian Higher Education, p.38.

[xcviii] Davis, “Address to the National Press Club”.

[xcix] Department of Foreign Affairs and Trade, Trade Matters 2012: Australia – Trading with the World

[c] Davis, “Address to the National Press Club”.

[ci] Lomax-Smith et al, Higher Education Base Funding Review, pp.55-57.

[cii] Lomax-Smith et al, Higher Education Base Funding Review, p.60.

[ciii] Bradley et al, Bradley Review, p.149.

[civ] Universities Australia, “Student to teacher ratio”, http://www.universities australia.

[cv] Bradley et al, Bradley Review, p.71.

[cvi] Department of Industry, Innovation, Climate Change, Science, Research and Tertiary Education, “Selected higher education statistics: staff 2012”,

[cvii] Tony Brown, James Goodman and Keiko Yasukawa, “Academic casualisation in Australia: class divisions in the university”, Journal of Industrial Relations, 52 (2), 2010, p.171.

[cviii] Lomax-Smith et al, Higher Education Base Funding Review, p.3.

[cix] Brown et al, “Academic casualisation”, p.170.

[cx] Brown et al, “Academic casualisation”, p.177.

[cxi] Lomax-Smith et al, Higher Education Base Funding Review, p.29.

[cxii] National Union of Students, Undergraduate Student Perceptions of Education Quality Survey, 2010, p.12,

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