Obiter dicta by Professor Gavin Brown AO

Fish or fowl

6 June 2003

Early in a recent article in Campus Review, the author noted that, in 2001, the University of Sydney earned $820m in revenue and made $96m profit. This was compared with the 2002 figures for transport giant Patrick Corporation, $875m and $102m, and Australia's largest electricity producer Macquarie Generation, $813m and $121m. It was noted that our revenue is nearly one-third of Australia Post's and our net assets over four times those of Sons of Gwalia.
The article could have continued in many ways. It might have analysed the superficiality of the comparisons, observing that 'profit', in our case, had already been re-invested in necessary refurbishment and capital upgrades, that it represented an enhancement of quality for the educational experience. The author might have compared the compensation packages of senior executives. She might have compared regulatory frameworks or explored the relative complexities of mission.

In fact she continued with a fact-free assertion: "With resources like this, how can universities continue to offer a standard of consumer service that no other industry would consider acceptable?"

Last week, our new State Minister for Education announced foreshadowed tightening of rules for commercial engagement by universities. His argument was that Federal funding gaps are driving us to greater entrepreneurial efforts so we must be assisted by tougher regulation.

Brendan Nelson's budget package contained significant new taxes to be taken from our international operations to provide for comprehensive government spending on regulatory and organisational measures to enhance the business prospects of that aspect of our industry. He also announced that, from 2005, universities will no longer be paid general operating grants but will be compensated, within an error margin of 1 per cent tolerance, for tightly negotiated educational profiles which will count student numbers in individual disciplines and weight these by government-determined dollar amounts ranging from $1,509 in Law to $16,394 in Agriculture. In particular this regime implies that, if we allow students from 'low-cost' disciplines to choose units from other areas, then we could face swingeing financial penalties.

The Government, commendably, has decided to replace some 25,000 overload places which currently receive only marginal funding with fully funded places. However these will be redistributed throughout the system, as a DEST official explained, after manpower requirement discussions with state governments.

A major injection of funding is conditional upon universities adopting strictly prescribed changes to the composition of governing bodies - changes which lie at the discretion of the States which determine our Acts.

Not unreasonably, in the context of HIH, Enron and so on, society seeks universities which are exemplars of good governance. Equally plausibly we are exhorted to arrest quality erosion by raising more income from private sources. Unfortunately governments, state and federal, and politicians of every colour seek to help - by reserving a greater percentage of our funds for regulatory functions and by increasing the specificity of usage requirements for those reduced funds which remain. Meanwhile Campus Review complains anecdotally of grumpy secretaries, poorly trained employees and (university generated) red tape hurdles: "Students continue to meet poor service on campuses across the country, a lot of which is administrative."

We are trying very hard to maintain a fundamental focus on core teaching and research while facing exponentially escalating administrative demands. The ultimate irony is that, since the Budget, business friends congratulate me on a new deregulatory environment.