Australian public universities have undergone extensive policy reforms since the 1980s, driven by neoliberal ideologies that emphasise free markets, competition, efficiency, and reduced state intervention. These reforms have redefined universities’ identity as corporatised organisations with commercial agendas, prioritising revenue generation over knowledge generation (Parker et al., 2023). Traditional values of inclusivity, social cohesion, and social mobility have been challenged, with excellence redefined in terms of research output, innovative teaching approaches, world rankings, business partnerships, and attracting fee-paying students.
The impact was felt when the COVID-19 pandemic exposed these risks to public universities, as they experienced a drop in international student enrollments and funding challenges. Staffing was significantly affected, with limited government support (Guthrie et al., 2022). This has prompted questions about the future strategies of university managements. We highlight the vulnerability of Australian universities to crises and emphasise the need for reimagining them as democratic and purposeful institutions (Martin-Sardesai et al., 2021). We call for a reevaluation of the relationship between a university’s mission, its stakeholders, and those responsible for its administration, emphasising the importance of public consultation and engagement in shaping the future of higher education (Guthrie et al., 2022).
A shift in culture
Governments around the world have implemented policies aligned with New Public Management (NPM) in public service delivery, such as privatisation, contracting out, selling public assets, and reducing income taxes. They argue that these policies align with market principles and improve efficiency. This has led to a shift in university culture towards accounting, economising, and marketisation, prioritising skills over theoretical knowledge. NPM has also influenced the organisational structure of universities, with corporate practices and entities being favored.
In Australia, public universities have adopted a user-pays philosophy, market-driven pricing, and cost minimisation. The Australian higher education system (AHES) follows a centralised policy, with public universities receiving funding from the Federal Government. The Minister of Education and Training regulates the number of universities and controls the number of students in each undergraduate course. Local students pay a higher education contribution fee, while universities can set fees for international students. International student fees play a crucial role in the funding strategy of Australian public universities, subsidising operations, teaching, and research expenses.
Financial gains over resilience
Funding for higher education as a percentage of GDP has been declining, and the government grants only a portion of the sector’s total expenditures. Despite financial challenges, the number of students studying in Australia has been increasing, particularly international students from countries like China and India. Australia has a high proportion of international students compared to other countries. The management of Australian public universities has focused on short-term profit optimisation, prioritising financial gains over long-term adaptability and resilience. This has left the sector vulnerable to external shocks, such as the COVID-19 pandemic and strained relations with China. The COVID-19 pandemic had a significant impact on Australia’s higher education system (AHES). The government implemented border closures and universities transitioned to online teaching, leading to the postponement or cancellation of campus events. The Federal Government did not provide additional financial support to universities during the pandemic.
The literature suggests that universities have willingly embraced the commodification of education and the adoption of accounting practices to align with government policies and VC’s business ambitions (Martin-Sardesai et al., 2017; Martin-Sardesai, 2016). The proliferation of quantified metrics has become an end in itself, overshadowing broader societal values and objectives (Martin-Sardesai et al., 2021). Overall, numbers and quantified metrics have become influential in shaping university processes and outcomes, emphasising commercialisation and performance over broader societal goals. In investigating the mechanisms behind this shift, identify that Australian public universities have undergone extensive policy reforms since the 1980s, driven by neoliberal ideologies that emphasise free markets, competition, efficiency, and reduced state intervention.
The emphasis is on the numbers
These reforms aim to transform universities into autonomous and entrepreneurial knowledge organisations, aligning them with the global knowledge economy. The implementation of these policies is supported by accountingisation, which emphasises performance measures and accountability.
These reforms have led to the privatisation, marketisation, and internationalisation of universities, following the principles of neoliberal economics. Traditional values of inclusivity, social cohesion, and social mobility have been challenged, with excellence redefined in terms of research output, innovative teaching approaches, world rankings, business partnerships, and attracting fee-paying students. The neoliberal agenda prioritises skills, applied knowledge, and productivity, dismissing humanistic, critical, and theoretical knowledge as irrelevant. Universities are seen as tools for training productive workers to support the knowledge economy and generate research impacts.
Traditional values challenged
While universities are public institutions, they are increasingly required to adopt accounting practices and performance measures, influenced by New Public Management (NPM) principles. NPM has shifted power relations within universities and introduced numerical forms of power, leading to changes in academics’ practices and thinking. However, these reforms pose risks to the higher education sector, potentially eroding its critical voice, legitimacy, and transparency. The focus on improvement, efficiency, and standards needs to be balanced with a language of education rooted in ethics, moral obligations, and values. Overall, the reforms in Australian public universities reflect a larger global trend towards corporatisation and commercialisation, impacting the core values and purpose of higher education (Parker et al., 2023).
We are a warning to others
Our research has examined the changes in the higher education system of a country over four decades, focusing on its commercialisation and internationalisation. It discussed the influence of neoliberal philosophies and New Public Management (NPM) practices on universities. We identify the central role of accountingisation and marketisation in this transformation, suggesting it has occurred gradually and covertly. Governments have implemented policies to position higher education as a source of intellectual property and skills to enhance global competitiveness. We highlight the impact of external pressures on universities, including government regulations, professional norms, and market mechanisms. Universities have redefined their identity as corporatised organisations with commercial agendas, prioritising revenue generation over knowledge generation.
While acknowledging the risk associated with the commercialisation of universities, particularly in light of the COVID-19 pandemic, we criticise the reliance on international student revenues and call for a reconsideration of university strategies and government support. The Australian case serves as a warning for other countries facing similar challenges. We also suggest the need for a shift away from performance-based metrics and a focus on ethics, values, and societal impact in education. We raise questions about alternative strategies, the role of stakeholders, and the responsibility for university reform. Ultimately, we call for a reevaluation of the relationship between a university’s mission, its stakeholders, and those responsible for its administration, emphasising the importance of public consultation and engagement in shaping the future of higher education.
Ann Sardesai has recently taken up the position of an associate professor of accounting at Prince Sultan University, Riyadh, Saudi Arabia. Lee D. Parker is a research professor in accounting, the University of Glasgow, Scotland, UK. James Guthrie, AM, FCPA, is an emeritus professor in the Accounting and Corporate Governance Department at Macquarie University, Sydney, Australia.
Australian public universities don’t work in a free market environment. Accreditation is tightly controlled, with only one for-profit corporate university in Australia. Those who think the current universities are some sort of neoliberal nirvana, should look at proposals for privatization of degree awarding. Under that approach, students undertaking most degree programs would not attend university. They would instead study at a private for-profit college, much like the private vocational education providers. The liberalization of vocational student loans, where billions of dollars were wasted, & criminals pedaled education scams, shows what can go wrong with this approach.
This article, with its important literature references, is perfectly splendid! It should be brought to the attention of every Vice Chancellor. And even better every university council! At the same time they could read Tim Moore’s article in the Saturday Paper for 26 August last.
The truly shocking revelations here, are analysed with entirely appropriate reference to the evils of neoliberalism, New Public Management and the obsession with metrics which do no more than bring the issues into the “intellectual” domain of politicians with no understanding of the purpose, value, or nature of universities.
t is not unique to Australia and it is not new. It has been analysed by distingished experts and reported for instance in issues of the New York Review of Books (Delbanco, 29 March 2007), the Monthly (Simons, March 2010), Quadrant (Max Cordern 49(11)) and Australian Literary Review (Shergold 4 May 2011).
Thank you!
The utterly stupid and irresponsible intervention by Ministers into recomendations for research grants, the ignorant privileging of “job ready” subjects to which Margaret Simons drew atttention more recently should have been sufficient to have the politicians in question immediately relieved of their portfolios.
How would those same politicians deal with the excellent advocacy for the use of anthropological techniques to identify what the problems really were in a host of banks and numerous other enterprises as advanced in “Anthro-Vision” by Gillian Tett of the Financial Times.
The critical problems identified go well beyond universities to the entire knowledge economy. They threaten the future of the country which demands innovation, rigorous research and superior teaching, in every sibject with any inteellectual underpinning.