Behind the corporate takeover of universities

Solidarity looks at the impact of several decades of neo-liberal shock therapy on Australian universities—and how to drive it back

Universities today are run like corporations to serve the needs of big business, eroding the quality of our education, and forcing staff to pay through job cuts and casualisation.

The cutbacks being demanded at Sydney University and ANU in Canberra are only the most recent attacks in several decades of neo-liberal reform.

But the campaigns against the cuts, and the mobilisation of hundreds of staff and students to fight them, are a chance to turn back the neo-liberal tide. To do this, activists need to understand what has happened to our universities and the agenda of successive governments and Vice Chancellors that we are fighting.

Privatisation, corporatisation, deregulation: welcome to the corporate takeover of universities

Role of universities

We have to start with the role that universities play under capitalism.

Universities play a crucial role providing an educated workforce to suit the needs of a modern capitalist economy. Skills Australia, a government advisory body, estimates that by 2025 a third of all jobs in Australia will require at least a Bachelor’s degree.

Julia Gillard says Labor’s target is for 40 per cent of 25-34 year-olds to go to university. Compare this to 1900 when only 0.07 per cent of the population went through tertiary education.

Minister for Higher Education Chris Evans recently explained that: “one of the reasons we’re opening up universities is to provide productivity growth and make sure we’ve got people who can take up those high skilled jobs.”

The expansion of access to higher education is of course a good thing—it should be available to everyone. But universities are being expanded not for students’ benefit or the pursuit of knowledge, but to meet the needs of capitalism.

The growing need for an educated workforce has gone hand in hand with the development of capitalism. Businesses operate under conditions of competition, each trying to out do each other in profits. Nation states need a mass of workers who can do cutting edge research and develop the latest technology.

Industry’s need for increasingly highly skilled graduates in business, IT, engineering and science underlies the enromous expansion of the university system since the 1950s.

This saw university enrolments shoot up across the world. In Australia, university enrolment increased 887 per cent between 1955 and 1975. The Whitlam Government abolished fees in 1974, encouraging more people into higher education.

The neo-liberal turn

But the long post-war boom ended in the mid-1970s when recession hit—a stark reminder that capitalism is an unstable system. Business was desperate for a way to restore profits. Governments across the world responded by embracing neo-liberalism, cutting back government spending on education and welfare in order to reduce taxes on big business.

This was accompanied by an ideological shift away from government intervention into the economy towards the idea that leaving everything to the free market was the best way to run society.

For universities this meant continual funding cuts, increases in student fees designed to implement a “user pays” market arrangement, forcing universities to compete to attract students and extra funding from corporations and attacks on university staff through casualisation and job cuts.

The Fraser government cut education spending after it came to power in 1975. But it was the Hawke-Keating Labor government of the 1980s that introduced wide-ranging neo-liberal reforms to the university sector. This was part of a wider economic rationalist agenda that saw cuts to the corporate tax rate, relaxation of trade barriers and wage cuts.

The first student fee, an “administration charge” of $250 a student paid at enrolment was introduced in 1986. Then came the infamous “Dawkins reforms” in 1989 centralising universities and introducing HECS fees designed to cover 20 per cent of teaching costs.

John Howard’s 1996 “horror budget” cut a whopping $1.7 billon out of university funding, increased HECS fees to squeeze $800 million more out of students and allowed people to buy their way into courses through full up-front fees. HECS fees were raised again in 2005.

Universities were forced to “diversify” their income sources—code for shifting the burden of funding universities onto students through exorbitant fees for international and postgraduate students, and looking to corporate donors.

Today Australian students finish an undergraduate degree with roughly $14,000 in debt. A 2004 study showed international students paid $5 billion into the Australian university system.

At the same time only 16 per cent of students receive Youth Allowance, so that most students have to juggle work and full-time study.

In 1981, 89 per cent of university funding came from the federal government. By 2010 it was just 40.5 per cent. In the same period the corporate tax rate dropped from 49 per cent to 30 per cent.

Research by the university staff union, the NTEU, showed that Australian government spending at 0.7 per cent of GDP was well below the average of 1 per cent for the OECD club of rich nations, based on 2008 funding levels.

Gillard, despite her rhetoric of an “Education Revolution”, has failed to reverse this decline. Labor has increased funding to universities, but is also increasing the number of students by a further 50,000.

Together with this they have deregulated student places, allowing universities to enrol as many students as they can and giving them funding for the extra students.

As a result of the funding crisis, the quality of teaching at universities has declined. Between 1990 and 2010 the ratio of students to staff rose from less than 14:1 to over 20:1. This has led to overcrowded lecture theatres, bigger tutorial sizes and less teaching time.

According to the NTEU, “[Union] Members continually tell of tutorial sizes growing from a maximum of 15 two decades ago, to more like 25 to 30 or in some cases 40 in 2011.”

University staff have also suffered, with a growing number on insecure casual contracts.

Data taken from UniSuper, the university staff super fund, showed there were 67,000 casual academic staff teaching at Australian universities in June 2010, indicating 60 per cent of the academic workforce is casually employed, and as much as 50 per cent of teaching conducted at universities is done by casual academic staff.

Corporate management

University management have increasingly adopted a corporate outlook as they seek to push their institution up the international rankings, market themselves to international full-fee paying students and chase corporate funding.

The current efforts to slash staff and cut spending at universities across the country confirm this. One of the richest institutions in the country, Sydney University, is demanding 7.5 per cent cuts across its departments in order to fund an elaborate building programme.

But the cuts are just as much about corporate restructuring as they are about making immediate savings. The university is pushing to move some staff onto cheaper teaching-only positions.

It has also drastically increased student numbers as a result of deregulation, meaning more staff will be required to teach courses. But shedding permanent staff will allow it to replace them with casuals on worse conditions.

Restructuring has changed the academic focus of universities as well.

Until the 1990s Australian universities performed more “pure” research, but the Hawke and Keating governments set out to re-focus them toward “industry” research.

They introduced the Cooperative Research Centres (CRC) program. These provided research scholarships co-ordinated between several universities and corporate partners. The establishment of CRCs signaled closer co-operation between businesses and universities.

A recent example is CO2CRC, which is researching the heavily criticised carbon sequestration technology. Its partners include BHP Billiton, BP, Brown Coal Innovation Australia, Shell, Rio Tinto and various other climate criminals. It services grants to UNSW, UQ and the University of Melbourne.


In the aftermath of the global economic crisis, governments around the world are implementing austerity programs by cutting spending on health, education and welfare. In response a new wave of student struggles has echoed around the globe.

British students rose in protest in 2010 against hikes in student fees to £9000 a year and the abolition of the Education Maintenance Allowance paid to poorer students to allow them to stay in education.

Before the crisis Greek students and staff elected their own university heads. Last year the government moved to bring in unelected managers with corporate links, a stepping-stone to privatisation. Hundreds of universities were occupied, staff stopped the exams, and unionists from across the education sector joined them in the fight.

Last year Chilean students occupied over 700 schools to protest what they call “educational apartheid”. Their universities are completely privatised and a competitive voucher system pits universities against each other, entrenching inequality. Hundreds of thousands of people demonstrated, and the Chilean Trade Union Congress called a general strike in August.

Tens of thousands of Quebecois students have struck and marched, blockading the ports in Montreal against a 75 per cent fee hike over five years.

Yet there is more than enough money for education and public services if governments got serious about taxing corporations and the rich.

Restoring the mining tax to its original level would raise an extra $60 billion over its first eight years—almost as much per year as the government currently spends on universities in total, $8 billion.

But winning this kind of change means standing up to the powerful vested interests that Labor has not been prepared to challenge.

The fight against cutbacks at Sydney University, ANU and other campuses across Australia can be the start of building the kind of movement able to take up that challenge.


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