Australian state brushes aside transparency recommendations

New South Wales sidesteps call for more reporting of universities’ foreign fee fix

February 1, 2021
Magnifying glass

The government of Australia’s biggest state says it will “carefully consider” a parliamentary committee’s report calling on it to boost the auditor-general’s scrutiny of universities’ dependence on income from international students.

However, the state’s surprisingly concise higher education strategy – released days after the report – contains no reference to fiscal oversight despite highlighting the importance of the sector’s “financial sustainability”.

The 140-page report, from the New South Wales (NSW) Legislative Council’s education portfolio committee, criticises the “cargo cultism” of over-reliance on international revenue and says universities should abandon the “edifice complex” bankrolled by foreign students’ fees.

In a foreword, committee chair Mark Latham criticises the state’s richest tertiary institutions for “abandoning prudent financial risk management in pursuit of…overbuilt mini-city campus buildings”.

Mr Latham attacks “empire-building” at the University of Sydney and UNSW Sydney, where income from Chinese students accounted for almost 30 per cent of their revenue and left their business model “reliant on the goodwill of the Chinese government”.

He says that while universities were primarily federally funded, state governments should exploit their “leverage” as universities’ owners, legislators and now “bankers” – after the NSW government guaranteed up to A$750 million (£418 million) of universities’ commercial loans – to exert more control.

The report’s 39 recommendations include giving the NSW auditor-general a “broader brief and stronger investigative capacity” over university financial and staffing management – “especially regarding reliance on international student income and the salaries paid to vice-chancellors and senior administrators”.

Mr Latham says the committee’s inquiry is “timely” given delays in finalising a state plan for higher education, which the government had been developing for more than five months. “I trust this report and its recommendations will assist the government in finalising the much-needed NSW Higher Education Strategy,” he says.

But the strategy, which was released six days later and occupies just one page, contains no reference to the auditor-general’s powers or university transparency. It also overlooks other recommendations in the report, such as prioritising support for non-profit “country university centres”.

Skills and tertiary education minister Geoff Lee would not be drawn on whether the auditor-general’s reporting powers would be upgraded, but he said the government would “carefully consider the committee’s report and its recommendations”.

The auditor-general’s office reports to the Legislative Assembly, the NSW parliament’s lower house. Boosting its powers would require an act of parliament – something normally initiated by the government of the day.

Mr Latham is a controversial figure in Australian public life. A former federal Labor leader who has since joined the anti-immigration One Nation party, he campaigns against political correctness and identity politics and was an early supporter of Donald Trump’s presidential bid.

Fellow committee member David Shoebridge, of the Greens, said many of the report’s recommendations reflected “the bias of the chair and government members rather than any rational conclusions from the evidence”. But he supported recommendations for greater transparency.

“There is no doubt that the heavy reliance on overseas students as a primary funding source leaves universities extremely exposed in the current crisis,” Mr Shoebridge said in a dissenting report.

University of Sydney sociologist Salvatore Babones has also campaigned for greater transparency around universities’ financial reliance on international students.

In a 2019 report, Dr Babones said Australian universities should “follow US and UK best practice in transparently reporting detailed student numbers by country, level of study and field of study”.

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