Time to Our Evil Universities to Pay Income Tax! By James Reed

The article "Is the Jig Up for Elite Higher Education?" from American Greatness, by leading social critic, Victor Davis Hanson:

https://amgreatness.com/2025/03/13/is-the-jig-up-for-elite-higher-education/

delightfully skewers the state of elite U.S. universities, arguing that their decades-long spree of unethical and unsustainable practices has finally hit a wall. It describes how these institutions, once cloaked in untouchable prestige, gorged on government grants, jacking up "overhead" fees to 30-60 percent while charging private foundations far less, as if the public purse was a bottomless well. The piece highlights a US $1.7 trillion student loan bubble, inflated by tuition hikes outpacing inflation, all propped up by federal guarantees that let universities rake in cash without accountability. It accuses them of flouting civil rights laws through race- and gender-based admissions, peddling ideological conformity via DEI programs, and ignoring constitutional protections when it suited their activist leanings. Now, facing public backlash and looming legislation—like endowment taxes and caps on grant surcharges—these "non-profit" giants stand exposed as profiteers, not charities, their impunity crumbling under the weight of their own excesses and rottenness.

This critique of American universities offers a stark lens for Australia, where the higher education sector mirrors many of these flaws but cloaks them under a charitable facade. Australian universities should be taxed and treated as corporate entities, not charities, because their operations scream profit-driven enterprise, not public good. Take their revenue streams: in 2023, they banked billions from international students—over 160,000 from China alone—turning campuses into cash cows reliant on foreign fees rather than educational mission. Pre-Covid, this raked in AUD $12 billion annually, a dependency so acute that universities bent over backwards, lowering standards and offering residency pathways to keep the pipeline flowing. The University of Sydney's $1 billion surplus in 2022, alongside Melbourne's $600 million and Monash's $300 million, isn't the mark of a struggling charity—it's the hallmark of a corporate juggernaut, hoarding wealth while pleading poverty, ging vice chancellors, multi-million dollar salaries.

Their governance tells the same story. A 2025 National Tertiary Education Union report found corporate heavyweights—like Big Four accounting firms and mining execs—dominate university councils, holding up to half the seats at some institutions, while academics and students get a measly 25 percent. This isn't a charitable trust; it's a boardroom steering a business toward profit, not learning. Wage theft, too, is rampant—over $400 million nationally, with Sydney University alone owing $23 million to 15,000 underpaid staff. Vice-chancellors, meanwhile, pocket over $1 million each, outstripping the Prime Minister's pay. Contrast this with PhD students, the research backbone, scraping by on $33,511 stipends—below minimum wage—while international counterparts pay $60,000 in tuition for no benefits. This isn't benevolence; it's exploitation dressed up as education.

The charitable label also dodges accountability. In the U.S., proposed taxes on endowments and grant caps aim to claw back revenue from institutions that act like corporations while hiding behind tax-exempt status. Australia's universities, with their surpluses and corporate governance, deserve the same scrutiny. They're not redistributing wealth to the public good—they're stockpiling it, investing in real estate and consultants (Sydney spent $12.3 million on the latter while shorting staff). If they were taxed as businesses, that revenue could fund public services, not executive bonuses or shiny new buildings. The American Greatness piece notes how U.S. universities' "not-for-profit" claim unravels when their research, 70 percent of which happens at elite schools, relies on international fees—a distorted model Australia echoes. Here, too, research is subsidised by student cash, not charitable intent, yet they dodge the tax burden corporations face.

Critics might argue universities need tax breaks to fund education and research, but that falls flat when surpluses soar and casual staff—doing most of the teaching—face precarious contracts and burnout. The Wethersfield analogy discussed in another article at the blog today by Richard Miller, fits here: just as unchecked migration replaced locals, unchecked university greed replaces public service with profit-chasing, all while locals (students, staff, taxpayers) foot the bill. Charity status implies sacrifice for society, not multimillion-dollar windfalls and corporate cosplay.

Australian universities have outgrown their humble origins—they're global enterprises now, and it's time their tax status matched their reality. Tax them like the corporations they are, and let the revenue serve the nation, not the ivory tower.