The sandstone buildings of the universities in Sydney, Melbourne, Brisbane, Adelaide, Perth, and Canberra stand tall among the best in the world. Sports arenas and rugby fields which represent the spirit of the Australian way of life are the distinguishing features of our university campuses. Ever since private companies such as Quacquarelli Symonds began global ranking of universities around 2004, Australian universities have ranked among the top 50 -100 universities in the world. Depending on the benchmarks used by these private sector rating agencies, most of the forty-one universities of Australia figured in the list of world’s top 1,000 universities. For a country of 26 million people, this is no mean feat.

The edifice of Australia’s socio-economic influence and knowledge power in the global community is our universities and the recognition of their excellence in research and knowledge transfer. The alumni of our universities are the ambassadors of Australia who represent us on the world stage.

How did Australian universities become the best in the world? Our universities scored high marks when assessed against international benchmarks, such as research capabilities, academic excellence, and internationally recognized qualifications of the faculty, including their research work and publications. The university infrastructures, alumni’s professional status in the world, their engagement with the respective alma maters and employability of fresh graduates are also significant considerations.

The long journey of creating these academic centres of excellence and research goes back to the 1850s when the federal and state governments set out to create the world’s best higher education institutions in Australia.  Our founding fathers had a vision of developing these institutions by attracting brilliant minds from within Australia and overseas and funded the development of the sandstone structures into centres of academic excellence.

However, from the early 2000s, as Australia’s commodity boom took off on the back of China’s ferocious appetite for resources such as iron ore and coal, the government funding for universities was drastically reduced. The government saw tremendous opportunities to sell Australian university placements to the Asian markets of major commodity trading partners led by China. Since the 1850s, the federal government has funded the entire operations of Australian universities. Funding has progressively reduced since the 1980s, and as of 2019 federal government funding for Australian universities stands less than 30% of their requirements. Consequently, universities are required to raise the remaining 70% of the capital needed to fund operations from other sources—mostly from full fee-paying international students.

Thus, started the commoditization of Australian university placements in the international market. Along with other commodities such as iron ore and coal, university education was marketed heavily to China and India. Consequently, our universities hired expensive marketing managers and offshore agents to trade Australian ‘university placement commodities’. Many of these marketing managers were previously employed by political leaders who were in state and federal levels cabinets. The power and rewards of these marketing managers rose within the universities. But it also dealt a savage blow to the funding of academics and research. Between 2005 and 2018, the number of university marketing and public relations staff rose faster than the number of academics in the universities. The irony in all the of this education trading is that these marketing managers and offshore agents knew little about the product they marketed—the university’s academic excellence and its faculty standards. Several immigration agents quickly transformed themselves into new avatars as Australian education consultants.

The university commodity trading was not about attracting the brilliant minds that would contribute towards the universities’ academic and intellectual quest for diversity and free-thinking. Instead, it was all about facilitating a student visa to Australia against payment of the first instalment fees for the selected course work. Of course, these student visas also enabled the students to legally work up to 20 hours per week in Australia while undertaking their studies. 

In 2019, this university education commodity trade secured an export revenue of more than AUD 37 billion, placed third behind the export income earnings of iron ore and coal. Approximately 700,000 international students were working in casual jobs and earning an average of AUD 12 per hour. Consequently, several businesses avoided paying the mandatory minimum wage of $24 if they had employed Australian residents who are protected by the law of the land. China was by far the most significant source of fee-paying students for universities with an export income of around AUD 12 billion, followed by India with AUD 5.5 billion, and Nepal contributing AUD 2.6 billion. Unlike China and India, Nepal is not among the top ten bi-lateral trading partners of Australia.

Critics argue that this export income does not consider the offshore marketing and agents commission expenses incurred by the universities.  Besides, they say that the students’ labour accounts for more than 20% of the casual employment in Australia, and such causal wages earned from within Australia contributes towards the so-called ‘export income of AUD 37 billion’.

Marketing managers of universities and their offshore agents had a bumper year of remuneration and commissions in 2019, while academic faculty and research staff were shocked about the intellectual paucity of the majority of the ‘international student market’ passing out of the universities. Distinguished professors noted that ‘Australian universities are simply admitting too many Chinese students, and too many of them can’t comfortably express themselves in English. Anyone who spends four years and six figures on an Australian university degree should at least graduate fluent in English. It’s our responsibility to be sure that they do’.

Everything was hunky-dory until COVID-19 pathogen erupted early this year from the Wuhan city in China. Along with mining commodity traders, Australian university education traders suddenly faced revenue losses of more than AUD 7 billion from the Chinese market. Media reports revealed that the University of Melbourne is the most affected, as it critically depends on Chinese market revenues to reach its target of around AUD 2.8 billion in 2020. Residential colleges like Ormond College of the University of Melbourne coerced fee- paying domestic students to vacate the colleges and stood them down from their casual employments within the university campus. Focussed solely on the revenue streams from education trade with China and India, these colleges did not bother to secure the job keeper allowance of the Federal government for their domestic students. 

As the federal government closed Australian borders with China, marketing managers of Australian universities were quick to act. They offered payments of up to $7000 for every student travelling from China to enable them to transit through countries like Thailand and stay back in those transit points for fourteen days to work around the Australian government ban on travellers from China. A classic traders’ tactic to get the money flowing, never considering the health and safety of students transiting through countries where the pandemic was about to spread, and the possibility of spreading the virus in Australian communities after their arrival. While universities’ marketing managers sought to appease their international commodity markets, their resident colleges were busy protecting their cash positions. They advised the domestic students who were encouraged to vacate the colleges that they would not receive refunds of advance amounts collected for boarding and lodging.

As Prof Salvatore Babones told the ABC ‘the actions of universities [to offer incentives to Chinese studies to work around the federal government restrictions] were morally indefensible’.

The looming crisis of commoditizing our university education over the last two decades accentuated what we have lost, and what we have taken for granted, as Australia’s highly ranked centres of excellence. The commoditization of Australian universities was a political experiment—it sought to emulate the application of universal ‘commodity market economy’ principles to university education. But suddenly, when we are out of the comfort zones of export income certainties and have entered the dark dystopian valleys of uncertainty, research and scientific knowledge have become critical to our economy.

We did not value our research and knowledge-based economy. In pursuit of export trading dollars, and we abandoned the dialectical ingenuity of our knowledge hubs and the very notion of social economy. Education is a fundamental right of Australian citizens, and it is the responsibility of the government to nurture our universities and safeguard Australia’s social economy, and its way of life.  Universities, research centres and other embedded institutions such as residential colleges should be managed by academics and management experts who should re-define the purpose of university education for Australia. We must de-familiarize with the ideas of education commodity trading and cash flow driven trading economy applied to universities. Knowledge, research capabilities, free-thinking and diversity, are the soft-powers of Australia that make us uniquely different from the rest of the world, and  Government must de-commoditize Australian universities and develop them as pillars of our soft power in the world.

Rajeev Sunu
Rajeev Sunu is a visiting faculty to the Institute of Management in Christ University, Bangalore and Asian Institute of Technology Bangkok. Earlier, he worked for Utilux Australia, Trust Power New Zealand, Vodafone Australia, France Telecom and Tata group of companies.