Universities: The Rotten Kernel of the Great Australian Collapse, By Professor X
Australia has long prided itself on world-class universities, places that produced Nobel laureates, drove innovation, and trained generations of professionals. In 2026, that reputation is in tatters. The sector isn't just struggling; it's rotten to the core, hollowed out by decades of bad policy, corporate greed, and an addiction to Asian international-student cash. Far from being engines of national progress, many universities have become high-volume degree factories that accelerate the broader collapse of affordability, quality of life, and economic coherence, while aiding mass immigration and its discontents such as an accommodation crisis.
The Senate inquiry into university governance laid it bare last year: a "culture of consequence-free, rotten failure." Staff wage theft, junket trips for executives, opaque decision-making, and councils stacked with corporate mates rather than educators. Vice-chancellors earn more than state premiers, some topping $1.7 million, while casual academics (now almost two-thirds of teaching staff) scrape by on insecure contracts. Senior ranks have ballooned 287% since the mid-90s, while junior academics and actual teachers barely keep pace. The result? Bloated administration, falling academic standards, and local students who feel abandoned.
At the heart of this rot is the funding model. Federal governments — both sides — have systematically underfunded public universities, forcing them to chase full-fee-paying international students to survive. In 2025–26, international enrolments hovered around 833,000–1 million headcount, generating billions in revenue. Universities became dependent on this income stream — sometimes 40–50% of total revenue — turning education into an export commodity. The trade-off was predictable: lower entry standards in some courses, pressure to pass students to keep the fees flowing, and a quiet erosion of academic rigour. Critics call it a migration backdoor dressed up as education.
This dependency has turbocharged the housing crisis. International students make up roughly 6% of the national rental market, yet in inner-city university precincts the concentration is far higher. Thousands compete for the same limited stock of apartments and share houses, pushing rents higher in precisely the suburbs young Australians need most. Purpose-built student accommodation is growing slowly but nowhere near fast enough (only about 8,000 new beds expected by 2026 against a need for 80,000+). The result? Locals priced out, students crammed into substandard or illegal setups, and universities blamed for fuelling a crisis they helped create.
The Macrobusiness.com.au lens is even sharper: universities have become "poorly run black holes" that reward executive excess while delivering diminishing returns for the nation. Record international fees roll in, yet one in four institutions still cries poor and slashes courses or jobs. Why? Because the money funds empire-building — flashy buildings, marketing armies, and seven-figure salaries — rather than core teaching and research. The system rewards volume over quality, turning campuses into Asian immigration mills where genuine education is secondary to visa pathways and permanent residency points.
The broader collapse follows logically. Over-reliance on a volatile export leaves universities exposed to geopolitical shifts, visa rule changes, or global competition (Canada and the US have tightened their own intakes). Domestic students pay higher fees for degraded teaching experiences. Research suffers as casualised staff juggle insecure workloads. Regional campuses wither while capital-city giants chase overseas dollars. And society pays the price: a generation of graduates with debt but questionable skills, a housing market tilted against young families, and a national economy hooked on a single, fragile revenue stream.
None of this is inevitable. A properly funded public university system — low-cost for citizens, focused on knowledge rather than profit — could still exist. But that would require governments to reject neoliberal dogma, stop treating education as a cash cow, and invest seriously in domestic capacity. Until then, Australian universities will remain the rotten kernel at the heart of a much larger collapse: one where affordability, opportunity, and trust erode faster than any lecture hall can rebuild them.
https://billmitchell.org/blog/?p=62789
https://www.macrobusiness.com.au/2026/01/universities-kernel-of-great-australian-collapse/
