Western Australia merger ‘could pay for itself 16 times over’

The mooted merger of three Perth universities would cost A$522 million (£275 million) while returning between A$2.8 billion and A$8.1 billion in benefits, according to the 219-page final report from a “rapid cost benefit analysis” by consultants Deloitte.

The blending of the University of Western Australia (UWA) with Curtin and Murdoch universities would produce Australia’s biggest higher education institution with the most domestic enrolments, second-most international enrolments and third-highest net assets of any university in the country.

It would have more staff than most of the research-intensive Group of Eight (Go8) universities and a better “profit” margin than all but one, posting a surplus of about 10 per cent. But it would also have the highest ratio of students to academic staff, the lowest share of research income per academic and easily the lowest average earnings from each international student.

The report compares the relative merits of mergers of UWA with Murdoch, Curtin or both. It says the “more significant” merger of all three institutions delivers the largest benefit-cost ratio of between 5.3 and 15.5, depending how many years are required to “break even”.

The report later clarifies that a three-way merger produces the highest “absolute” benefit. The simpler union of Murdoch and UWA would produce the highest benefit-cost-ratio of up to 27, but the overall payoff would be smaller because the two-way merger would cost – based on “conservative” assumptions – a mere A$175 million in “net present value” terms.

The three-way merger carries “greater execution risk”, the report concedes, while adding that “good planning can mitigate these risks”.

Deloitte’s analysis was published by the Western Australian state government on 11 October, along with the findings from a 2023 university review and a 2025 feasibility study headed by former parliamentarian Alannah MacTiernan. The government had kept the three reports under wraps for between 10 months and three years.

All three recommend continued consideration of a merger. MacTiernan commended the government for its “insight and courage”, explaining that “mergers are never easy and always deeply contested. However, the vision that our state could build strength and prosperity…by building Australia’s leading university is worth championing.”

The government plans to develop a “business case” to “further interrogate the benefits and costs” of a three-way merger, including the potential for it to be “self-funded” by the universities. The project will be undertaken by the Department of the Premier and Cabinet, with input from a steering committee of prominent Western Australians.

One of them, former state chief scientist Peter Klinken, strongly backed a merger of all four Perth public universities – including Edith Cowan University, which has been omitted from the current proposal – during testimony to a 2021 hearing of state parliament’s Education and Health Standing Committee.

“Australia has 43 universities for a country of 25 million people,” Klinken told the committee. “That is extraordinary and not viable. We will see, in the not too distant future, some of these universities closing. Universities here in Perth have been so focused on internecine warfare that they feel the competition is local, not global.”

Klinken cited the standings of the universities of Copenhagen, Manchester and Paris-Saclay, all of which feature in the top 50 of the Academic Ranking of World Universities after being created or expanded through mergers in recent decades, as evidence of the “great marketing” potential of his proposal.

The National Tertiary Education Union’s representative on the steering committee, Western Australian secretary Scott Fitzgerald, said the union would use “everything at our disposal” to fight the merger. “It’s highly concerning that the committee’s work is centred on a business case,” he said.

“Public universities exist to serve students, staff and the wider community. Any decision about their future should be through that focus, not a simplistic approach that puts profits over people.”

The union says its survey of 936 university staff, conducted between July and September, found that 69 per cent opposed a merger, with 19 per cent undecided and just 12 per cent supportive. Opposition was strongest at Curtin, with respondents particularly worried about disruption, job losses, the size and complexity of the proposed institution and the nature of its governance.

The state government has promised that there will be no staff job losses for the first two years of the new institution’s existence, if the merger goes ahead, although “a small number of highly paid executive-level appointments…are not covered by this guarantee”. No final decision will be made to merge before the completed business case has been “considered by government”, it says.

john.ross@timeshighereducation.com