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COVID-19 has thrown the higher education sector in Australia into deep crisis. As Australia closed its borders, universities were among the first exposed to the economic shock. Their deep dependence on full-fee-paying international students means they have been among the hardest-hit industries in the country. Making matters worse, apart from token spending, universities have so far been left out of the Coalition government’s newfound largesse. La Trobe University’s response is emblematic of senior management’s strategy. The vice-chancellor led by announcing he would cut his pay by 20 percent, as a precursor to “sharing the pain” across the staff body. Last Friday, La Trobe signaled in an all-staff email that “variations to the Collective Agreement” were under “national negotiation” with the National Tertiary Education Union (NTEU). Then, they announced that “nonessential casual academics,” who, alongside other insecure staff members, form the majority of the university’s workforce, would be terminated on May 1. Other universities are already cutting “soft expenses” — meaning, casual staff. The convulsions in the sector have ricocheted within the NTEU. A decision taken by the union’s national executive, signaling a willingness to trade general reductions in pay rates to protect jobs, provoked anger among the rank and file. A number of branches, including at the University of Sydney, RMIT University, and Monash University, passed motions decrying the rebuke to grassroots democracy as well as the lack of a fighting political and industrial campaign. The mood on the ground among many casual and permanent staff is combative. Over eight hundred NTEU members have signed a letter calling on the union to refuse concessions over jobs, wages, and conditions, and to demand more rank-and-file say over union strategy. But to build on this will to fight, we must properly understand the roots of the crisis.

The Neoliberal University in Crisis More than thirty years of bipartisan deregulation and funding cuts to higher education, as well as the introduction of ever-growing fees, have made Australian universities deeply dependent on the lucrative international market, in the form of overseas student enrollments. Underfunded regional institutions, such as Federation University and Central Queensland University, face the real prospect of collapse. Richer institutions are more secure, a legacy of a deliberate strategy to invest in assets rather than staff and students. But they won’t escape unscathed. Australia’s five multibillion-dollar universities (Melbourne, Sydney, Queensland, New South Wales, and Monash Universities) have long traded on their lofty reputations overseas, charging full-fee-paying international students many tens of thousands of dollars for an education. Now that this revenue has been cut off, universities are left starved of the funding they need to function. This year alone the University of Melbourne (a $2.66 billion institution) has estimated losses of $500 million. But despite their vast shortfall, universities won’t qualify for the JobKeeper wage subsidy program. To be eligible for JobKeeper, a small to medium business must have lost 30 percent of its revenue. A big business (with a turnover of $1 billion or more) must have lost 50 percent of its revenue. Charities, on the other hand, need only to have lost 15 percent. Universities are officially registered as charities (due to their nonprofit status) — but the government’s policy treats them as big businesses, leaving them to fend for themselves. This contradiction exposes the strange hybridity of the Australian neoliberal university. On the one hand, university assets are publicly owned. All “profit” is supposed to be reinvested in the institution itself. On the other hand, federal policy forces universities to compete against each other for funding, both public and private. The result is gratuitous waste — million-dollar marketing and promotion budgets go hand in hand with a millionaire executive class whose managerial techniques are transplanted from the private sector. This is cited to justify bonus pay and obscene travel expenses. In this sense, the current pandemic is not the culprit, but a catalyst accelerating contradictions implanted in the tertiary sector four decades ago.

Birth Pangs Australia’s universities haven’t always been this way. Prior to World War II, undertaking research required Australian academics to travel to the mother country — Great Britain. It was only after the war that Labor and Liberal governments perceived a need to develop Australia’s own cultural and intellectual assets, leading them to invest in universities. This culminated with the introduction of free tertiary education under the Gough Whitlam government. It was the high point of the modern mass university in Australia: an academic education was no longer the domain of a tiny, mostly upper-class elite. As Australia’s manufacturing exports declined throughout the 1970s, demand grew in the 1980s to address the terms of the trade crisis. At the same time, a new breed of “economic rationalists” began to populate the Canberra bureaucracy. Politics, culture, and society were no longer seen as the democratic subjects of state power, to be valued in and for themselves, but as obstacles to the rationalization of the economy. The Australian Labor Party (ALP) initiated the neoliberalization of higher education. Deregulation was declared necessary to avert Australia’s reversion into a “Banana Republic,” and so universities were reframed as an untapped export commodity. For fifty years, governments had invested in Australia’s higher education system. When economic rationalists looked at this “comparative advantage,” they saw untapped profits. As a result, universities expanded during the 1980s — but not due to sustained public funding. Instead, education was commoditized and marketed to the growing middle classes of Asia. Public funding of universities steeply declined: still constituting about 90 percent of the universities’ total funding in the late 1980s, today that figure has dropped to just 40 percent. Under the old neocolonialist Colombo Plan, overseas students had received a subsidy to study in Australia, but the ALP reversed this in 1986 by deregulating international student fees. From then on, universities were allowed to charge international students as much as the market would allow. A boom resulted as international students, mostly from regional neighbors like Indonesia and later China, purchased an education in Australia at great cost. This has only picked up pace since then. In 1990, there were just 24,990 international students studying in Australia. By 2018, that number had risen to 876,400, a growth sustained by double-digit increases year after year. In the neoliberal era, the Australian economy came to depend on exports to its rapidly growing neighbors, China and India. Today higher education is Australia’s third-largest export, worth AUS$34.9 billion (US$24.7 billion), behind only iron ore and coal. Even before COVID-19, this made universities vulnerable. The crisis that engulfed the so-called Asian Miracle economies in 1997 created a temporary panic — but the recovery was swift enough that the neoliberal model did not enter a legitimation crisis.