The neoliberal destruction of Australia’s higher education system

Today, I am fully engaged in work commitments and so we have a guest blogger in the guise of Dr Scott Baum, who will soon be joining us at the Centre of Full Employment and Equity (CofFEE) at the University of Newcastle as a senior research fellow. Scott has been one of my regular research colleagues over a long period of time and we currently hold ARC grant funding together to explore regional disparities as a result of the COVID-19 pandemic. Scott indicated that he would like to contribute occasionally and that provides some diversity of voice although the focus remains on advancing our understanding of Modern Monetary Theory (MMT) and its applications. Today he provides analysis of how lost the Australian tertiary education system has become in this neoliberal period. While focused on the Australian situation, the analysis unfortunately has relevance to higher education systems in most countries.

We should be up-in-arms about many things in Australian higher education, but reducing student ‘debt’ isn’t one of them

The recently re-elected federal Labor government in Australia has, as part of its election promises, vowed to reduce tertiary/university student debt by 20 per cent.

The vast majority of domestic tertiary students in Australia take advantage the Higher Eduction Contribution Scheme (HECS), a scheme first introduced in 1989 by the Australian Labor Party.

The contemporary program is known as the HECS /HELP-the Higher Education Loan Program.

I wrote about the background to the scheme in this post – Education should be a nation-building investment not a tax on graduates (May 29, 2023).

The basic idea is that students are expected to contribute to their tertiary education via the payment of a fee, which they can choose to pay up front or defer via the HECS-HELP program.

When a student accumulates a HECS-HELP debt they repay the debt via the taxation system once their income reaches a predetermined threshold.

The loans are interest-free, although the amount of debt is increased each year according to the Consumer Price Index or the Wage Price Index, whichever is lower.

The government’s pre-election promise was couched in terms of providing cost-of-living relief for young Australian students and workers.

A Federal government press release – Albanese Labor Government to cut a further 20 per cent off all student loans debt (November 3, 2024) – noted that these cuts amounted to around $16 billion AUD or around $5,520 AUD per debt holder on average.

Apparently, the government shouldn’t be giving students a ‘gift’ using taxpayer dollars

Unsurprisingly, many are up in arms about the government ‘wasting’ $16 billion in ‘tax payers’ money.

In a press release titled-Labor’s student debt cut is a fairness fail for Australians (November 3, 2024)-the federal opposition labeled the promise as:

… a fairness fail for Australians.

In usual fashion they wheeled out social media comments from so-called expert economic commentators to back up their view:

For example:

1. “[H]anding $16bn to graduates is a reverse Robin Hood: it’s a tax cut targeted to the big end of town, with money going from the less well off to the better off.”

2. “Worse still, that $16bn does nothing for the nation’s future …”

This ‘expert’, a former Treasury official turned private consultant, didn’t get the memo that education is a public good.

What is worse, is given their vintage, this particular commentator probably attended university when it was free.

Another so-called expert economist quoted in that press release opined:

This is an abominable idea that gives precious tax dollars to rich Australians.

While another said:

…this is just transferring their debt to all taxpayers.

You get the idea.

They are trying to make us believe that this move constitutes a misallocation of taxpayer funds, benefiting university graduates at the expense of non-graduates.

These are cheap and easy shots that demonise tertiary students and graduates.

They are misinformed about how government financing works.

For a basic introduction to the inherent in this thinking, see – Taxpayers do not fund anything (April 19, 2010).

And they miss the point that the provision of higher education is a public good that provides benefits that extend well beyond those who receive a tertiary education.

If anything, the government should be going further by wiping student debt entirely and making tertiary education free.

Doing so would, as I pointed out in this blog post – What is responsible government spending? (April 4, 2024) – be part of what a responsible government should be doing.

The real problem: the neo-liberal downfall of higher education institutions

The egregious issue facing the Australian public shouldn’t be the government reducing student debt.

Rather, we should be outraged how universities have lost their way.

The report-card for universities is a litany of fails.

These failures haven’t just happened overnight, but have been the result of decades of restructuring and change packaged up as neo-liberal efficiency goals.

We read in this journal article published in The Australian Universities’ Review on January 1, 2019 – Neoliberalism and new public management in an Australian university: The invisibility of our take-over (behind a paywall) – that:

The higher education sector in Australia is operating in an ideological context where the ideas of managerialism and neoliberalism combine to create a discourse shaping the lives of both workers and students.

The impacts are spread throughout the institutions and are increasingly entrenched.

Consider this:

• Vice-Chancellors once provided true academic leadership. Now they are seen as heads of corporate entities and use the title of president or CEO and think they are worth the vast and obscene sums they are paid.
• When I was a university student there was a bursar, who was responsible for the financial affairs of the institution. Now we have Chief Financial Officers.
• Universities make new senior executive appointments who sweep in and change things because obviously the ‘old’ ways of doing teaching or research were inefficient and need ‘fixing’ so as to meet some five year plan or vision.
• There are whole university structures referred to as ‘corporate services’ implying that there are employees who exist to carry out functions for the university corporation.
• Along with this rise in corporate services, has been the rise of what anthropologist David Graeber describes in his 2018 book – Bullshit Jobs: A Theory – as jobs that include “Box tickers, who create the appearance that something useful is being done when it is not, e.g., survey administrators, in-house magazine journalists, corporate compliance officers, academic administration.”
• Throughout academic departments in Australian universities are turned into business units with KPIs and staff are performance managed via meaningless annual appraisals.
• The “student experience” has become a product marketed aggressively, especially to international students.

These are the indicators of a failed neoliberal experiment that have lead universities down a path where their contribution to the common good gets whittled away.

Sadly, despite criticism, the slow demise continues along on its merry way.

Many enlightened academics and social commentators bemoan this shift and its impact on the public good role of universities.

In this 2022 article published by journal Social Alternatives – A Brief History of Australian Universities – the authors succinctly argue that the driving force behind university:

…governance is financial, not pedagogical or civic, and its model and performance metrics are those of business corporations.

Nothing for the common good in this!

They also note that:

… although the entire Australian public is the principal ‘stakeholder’ in universities, the concept of the university as a public service and resource has been all but destroyed.

Further, sociologist – Raewyn Connell – who was included as one of – Australian Living Legends of Research – points out in her 2015 article published in the journal International Higher Education – Australian Universities Under Neoliberal Management: The Deepening Crisis the way that:

Neoliberalism has done more than change funding arrangements.

The universities are now full of fake accountability.

At the same time, they have turned to public-relations techniques to attract potential students and donors and burnish the organization’s image.

The corporate university now projects to the world a glossy fantasy of broad lawns, relaxed students, happy staff, spacious buildings, and eternal Australian sunshine.

The cultural rationale of universities as bearers of truth, of rigorous thought, is becoming deeply compromised.

Although the policy discourse of neoliberal management in Australia is optimistic—market strategy requires it—the reality beneath the glossy advertising is a growing crisis in viability of the workforce and in the production and reproduction of an intellectual culture.

So in short a disaster!

The takehome message from these types of academic papers is that neoliberalism has not made universities more efficient or more innovative.

It has made them more fragile, more unequal, and less capable of serving the public good.

Their ability to contribute effectively to a ‘good society’ has been increasingly hamstrung.

The ideals of critical inquiry, academic freedom, and education as a civic right have been subordinated to branding exercises, market metrics, and shareholder-style governance.

Australia’s universities once played a key role in advancing democratic culture and social mobility.

Having let neoliberal logic overtake them, we have reduced these institutions to degree factories for the global elite—and warehouses of insecurity for the scholars who once gave them life.

The failures of the universities are also the government’s failure

While contemporary university governance failures like chronically underpaying casual staff and rewarding senior executives for mediocre performance, fall firmly at the feet of the institutional executives and governance processes, the path to this situation has been incentivised by a failure of government policy to recognise the broader public purpose and public good associated with a strong tertiary education sector.

Following a raft of policy manoeuvres starting with 1980s and continuing through to the present day, federal government policy has shifted the funding goal posts in the name of austerity and efficiency and firmly established universities as neo-liberal corporate structures.

Politicians seek popular support for their actions by demonising universities as wasteful entities that have become too woke and do not produce ‘job ready’ graduates.

Not surprising that in recent media articles such as this one, which is representative – There is declining trust in Australian unis. Federal government policy is a big part of the problem (February 12, 2025) – we read that:

…both sides of politics are making a point of criticising universities and questioning their role in the community.

Opposition Leader Peter Dutton has accused unis of focusing on “woke” issues that “just aren’t cutting it around kitchen tables”.

The Albanese government has also accused universities of being out of touch.

A lot of what the government criticise universities of doing or not doing has come about through the imposition of bad policy and misguided ideology by those in charge of setting the policy agenda.

Government impose senate enquiries and other investigations to deal with the issues but solutions still treat universities as corporate identities.

University executives are told they need to make their institutions more efficient, better managed or some other corporate neo-liberal terminology.

So rather than the change that is actually needed, we get, as Stephen Lake and his colleagues point out in in their 2022 journal article – A Brief History of Australian Universities – cited above:

… a continuous process of sectorial reorganisation, establishment of new bodies, and changes to funding conditions has marked the governmental responses to the various reviews, and yet none of such rapid and often radical changes has resulted in a durable and efficient system.

The upshot is that there is declining trust in Australian unis and federal government policy is a big part of the problem.

Towards a Different Future

If we want to break free from the neoliberal stranglehold on Australian universities, we need to start by challenging the economic myths that sustain it.

Chief among them is the belief that governments ‘can’t afford’ to fund higher education properly.

A fully funded public university system, staffed by secure, fairly paid academics, is entirely achievable.

The government can and should ensure education serves the public interest, not private profit.

This means:

• Ending austerity thinking in education policy.
• Guaranteeing job security and fair wages for academic and professional staff.
• Abolishing student fees, recognising that education is a public good, not a private investment.
• Investing in research and knowledge creation based on societal needs, not commercial return.

This also means rejecting the idea that universities must operate like businesses to survive.

We don’t demand that public hospitals or fire services turn a profit — we fund them because they’re essential.

The same logic should apply to higher education.

There is no fiscal reason why we cannot build a university system that is equitable, accessible, and oriented toward the public good.

The only thing standing in the way is ideology.

That is enough for today!

(c) Copyright 2025 William Mitchell. All Rights Reserved.