The Self-Serving Universities, By Professor X
Australian universities, long ago pillars of public good and intellectual pursuit, have increasingly morphed into large, corporatised entities where self-interest often overshadows educational and societal missions. This shift is starkly evident in their financial advocacy, particularly in pre-budget submissions and public lobbying, where claims of chronic underfunding, impending crises, and desperate needs for more public money, frequently rely on misleading, exaggerated, or outright erroneous assertions. These self-serving narratives aim to secure greater taxpayer support while downplaying the sector's substantial revenues, surpluses, and alternative investment priorities.
A prime example comes from Universities Australia's (UA) 2026-27 pre-budget submission, which Universities Australia represents the sector's peak body. It opens with the bold assertion that its members educate "1.5 million Australians every year." This is inaccurate: total enrolments hover around 1.5 million, but roughly one-third are international students, meaning only about 1 million are actually Australian. By inflating the domestic figure, the sector amplifies its perceived service to the nation, strengthening appeals for increased public funding. Such misrepresentations border on deceptive, as they obscure the heavy reliance on fee-paying overseas students.
International education exports provide another arena for creative accounting. UA frequently cites figures like "$52 billion in export earnings" for the broader sector, with higher education contributing around $39 billion. However, these numbers are inflated because they classify all onshore spending by international students as "exports," even when funded by earnings from working in Australia (estimated at about one-third of expenditures). Adjusting for this, true export value drops to roughly $26 billion. The Australian Bureau of Statistics (ABS) itself notes this methodological quirk, yet universities persist with higher figures to portray international students as an unparalleled economic boon justifying policy leniency and subsidies. So much for universities seeking "truth."
On research and development (R&D), UA pushes for lifting public investment to the OECD average (around 0.86% of GDP for government funding), claiming Australia's lag hampers innovation. Yet Australia's total higher education R&D spending already stands at 0.80% of GDP — well above the OECD university average of 0.43% — largely financed through tuition fees, including government-subsidised domestic places (only about one-third of university research funding comes directly from government). This reliance on student fees (often taxpayer-backed) for research undercuts pleas for dramatically more direct public R&D dollars, especially when low overall government R&D ties more to underfunded defence than university neglect.
Claims of funding cuts also falter under scrutiny. UA has long decried the 2021 Job-ready Graduates package as slashing "$750-800 million per year" in revenue. In reality, after adjusting for 19% CPI inflation from 2020-2024 and a modest 4% drop in domestic student load, the real-term shortfall in Commonwealth Supported Places revenue is closer to $200 million annually — less than 0.5% of total sector revenue. Similarly, assertions that abolishing the Education Investment Fund in 2019 removed "$4 billion in dedicated infrastructure funding," causing a "40 per cent" real fall in capital expenditure, ignore that the fund ceased payments back in 2014; its formal closure had zero ongoing impact.
These distortions occur against a backdrop of robust financial health. Australia's 38 public universities collectively posted a $2.1 billion surplus in 2024, even amid warnings of deficits and infrastructure crises. Rather than channelling funds solely into teaching facilities or core operations, many prioritise expansive property developments, stock portfolios, executive salaries (with numerous vice-chancellors earning million dollar + far above state premiers or even the Prime Minister), and other non-core investments. Meanwhile, issues like wage theft scandals, high casualisation rates (up to 60% of teaching staff), course cuts, and job losses persist, often framed as unavoidable due to "underfunding" rather than poor management or misallocation.
The pattern is clear: universities present themselves as perpetually beleaguered to extract more government support, while minimising their own resources and the benefits derived from international student fees (which, despite recent policy caps and adjustments — like the 2026 National Planning Level rising to 295,000 new commencements — remain a major revenue stream, often exceeding 25% of total income for many institutions). This self-serving approach erodes public trust, especially when genuine challenges — like policy volatility, rising costs, and post-COVID recovery — exist but are exaggerated for leverage.
Ultimately, Australian universities must prioritise transparency and integrity in financial reporting if they expect billions in ongoing public funding. Exaggerated claims not only undermine legitimate needs but highlight a deeper corporatisation: where institutional growth, executive perks, and revenue maximisation take precedence over accessible, high-quality education and research for Australians. True reform would start with accurate accounting, better resource allocation, and a renewed focus on serving the public interest rather than institutional self-preservation.
https://www.macrobusiness.com.au/2026/02/university-financial-claims-are-full-of-self-serving-errors/
