Big Eight university vice-chancellors, overpaid and under-prepped, cut jobs

by | Jul 15, 2020 | Business

Australia’s university vice-chancellors last year spent many hundreds of millions of dollars on “professional services”. Now that the over-reliance on overseas student has exposed the university sector and put thousands of academic jobs at risk, more detail should be provided on those “services” reports Callum Foote.

Michael West Media has analysed the recently released financial reports of the Big Eight universities, with the exception of ANU, which hasn’t yet tabled its report in parliament. The ANU declined to reveal its report for this investigation.

Over the past decade, Australia’s university system has undergone an incredible transformation. The most significant change has been the near trebling of fees that have come from international students, up from $10.7 billion in 2009-10 to $29.9 billion last year.

This increase has not been spread evenly across all universities. The larger, more prestigious institutions have overwhelmingly been the recipients.

The University of Sydney tops the list in percentage terms, with a 339% increase, which equates to just over $1 billion in international fees and charges in 2019 alone. Yet in dollar terms, Monash University comes out on top, declaring revenue from overseas students at a whopping $1.13 billion, a 248% jump. 

At the other end of the scale are the universities of Wollongong, Adelaide and Western Australia, all of which bring in less than $300 million annually from international students.

In tandem with this increase in overseas revenue, the total revenue of universities has grown by 85% over the past decade.

Predictably, institutions with higher growth in revenue from overseas students have also seen a corresponding growth in total revenue with the universities of Monash, Sydney and NSW all growing by approximately 100%. 

Overpaid university bosses cry poor as their foreign-student riches evaporate

Executive pay

Meanwhile, the salaries of Australian university executives have been growing steadily. A 2019 study found that they take home far more than their UK counterparts.

Duncan Maskell

Michael West Media’s investigation also found that over the past decade total executive remuneration has stayed roughly the same for the larger institutions while smaller universities have caught up. 

Margaret Gardner

Monash University has seen the largest growth of executive pay from $3 million to $11.4 million, at 275% rise.

Executive pay at the sandstone universities of Melbourne and Sydney has grown less than 5% overall while UNSW’s executive pay has decreased by 4% overall.

Michael Spence

Yet these figures belie the growth in the pay of the top executives, who have steadily been claiming a larger proportion of the pie.

This is especially the case for the most senior executives – the vice-chancellors. Overall, their pay has increased by 53% in the past decade. 

In 2009 only two vice-chancellors made more than $1 million annually. Now, with the exception of the University of Wollongong’s Paul Wellings, who just misses out, every other vice-chancellor made the $1 million cut. 

Topping the list is the University of Sydney’s Michael Spence, on $1.6 million. The University of Melbourne’s Duncan Maskell follows closely at $1.59 million, then UNSW’s Ian Jacobs ($1.3 million) and Monash University’s Margaret Gardner ($1.29 million).

Ian Jacobs

CONSULTANTS

Unfortunately, the full extent of expenditure on consultants by the Group of Eight is unclear. While some universities break down some figures, the main feature is the general lack of overall transparency, which has been noted for some time. 

Monash provides a full breakdown, while the University of Sydney provides some detail about the $166.7 million spent on “consultants and contractors”. A spokesperson said that $25.2 million went to the Big Four (PwC, Deloitte, EY and KPMG), $32.8 million was spent on “recruitment and labour hire”, while $45.8 million went on unspecified “other labour and services”, with each individual contract worth less than $300,000. The University of Sydney intends to find at least $52 million in savings from consultant and contractor expenditure to meet their current $470 million revenue shortfall.

While the figures given by the University of Sydney are vague, they give a hint as to the potential breakdown of the $192 million the University of NSW spends on “contract services (including consultants)” and the staggering $290 million spent by the University of Melbourne on “contracted and professional services”.

Hidden in all this accounting jargon is the fact that three universities spend more than $600 million a year on professional services of which the university community and the taxpayer have very little oversight.

Australian universities are now in a very difficult position due to the massive drop in overseas student revenue, which has led to significant conflict because of the flow-on effect which has led to academic job losses.

The second part of this investigation will take a look at the corporate funding of university research and consultants.  

University of Wollongong ‘six weeks away’ from disaster unless staff accept large pay cuts, job losses

ABOUT THE AUTHOR

Callum Foote

Callum Foote

Callum Foote is our Revolving Doors editor exposing the links between the highest level of business and government. These links provide well-resourced private interests with significant influence over Australia's policymaking process. Callum has studied the impact of corporate influence over policy decisions and the impact this has for popular interests. He believes that the more awareness this phenomenon receives the more accountable our representatives will be.

13 Comments

  1. Avatar

    Is that figure of $300 000 from international student fees correct for Uni of Wollongong?

    • Avatar

      So, that would be 200 international students roughly (could be more or less by a bit depending on majors). That isnt even close to the numbers. I’d suggest that might be their postgrad numbers, but their undergrad?

      • Avatar

        You both are right. The number is $300 million! My apologies I have edited the story.

  2. Avatar

    If that isn’t my very favourite octo-dad, the refulgently richly remunerated, Michael Spence.

    Let it be written in history, all decent profs say, the rot started with John Dawkins. Since then, it’s been a seamless baton change, from one LibLab Education (and Prime) Minister to the next. Yes, that does include St Julia.

  3. Avatar

    And yet the HoS asked us to take on additional teaching so more courses could be offered without changing our existing workload, and said that additional remuneration wouldn’t be forthcoming.

    • Avatar

      I had no idea! Do you have any other info on this?

      • Avatar

        I have the email sent to the School (ie. including post-docs) asking for people to teach new on-line courses “with your manager’s permission” but acknowledging that additional remuneration wasn’t likely. I don’t blame the HoS, and I am sure managers would say they’d be happy for us to take on (more) teaching—but they would still require us to meet our existing commitments and deadlines to commercial research work. I was already helping out teaching a course for a lecturer while also working full-time for contract research, which meant I was helping teach in my spare time: weekends, public holidays, evenings… =/

  4. Avatar

    We staged a campaign against the Monash VC’s salary back in 2011-2012 (https://lotswife.com.au/mates-rates-vc-ed-byrnes-1million-salary/)

    The Monash Executive Boys Club got very uncomfortable for having these figures broadcast and called into question…so much so that they even abolished the student representative position on the University Council after one of our campaign members got elected to it!

  5. Avatar

    Michael, you have have an excellent team of research specialists that are able to probe into the disgraceful waste of money on gormless professional consultants that have no justification for the fees demanded from their client Universities.
    This madness of farming out decisions to fat-cat consultants by the big eight University Vice Chancellors, tells me these high academic appointed Vice Chancellors have lost the purpose for their appointment. These types have become blind to their scattering of money that is not their own, in the like manner of irresponsible drunken sailors.
    The Big 4 consultancies prey on the over-promoted high placed persons that have since lost or just ignore their power to sensibly reason, as well as lost the respect for the money they receive at great cost to many lesser others.

    The vacuous pomposity demonstrated by the incumbent high-status seeking excessively remunerated top level appointees in Australia’s inclement (harsh and unmerciful) corporate sector or in the same manner as the aforementioned high academia incumbents, these over-blown corporate styled eclectics and such others, are no more worthier than were Australia’s Big 5 Corporate Banking Boardroom CEO’s when they were strutting about the top end of town ignoring or were oblivious to the fact that the bank in which they are or were em-placed… was stealthily engaged in filching the accounts of their trusting customers.
    One must ask oneself if this style of mischievous high executive-level performance is now considered as an acceptable form of behaviour in Australia’s society of big business?

    How is it that one man can responsibly earn a Million (or, plus many more thousands of dollars per annum) or, if just the 1 Million, pans out to around $506-00 per hour of one’s workplace attendance..That is if one is busily active for each of the 38 hours per each week of the 52 weeks per calendar year?
    While not taking into consideration their “inconclusively arrived at decision” to expend a great many millions of dollars…As per the aforementioned 8 Vice Chancellors, that seemingly scattered other people’s money about in the vicinity of the aforementioned Big 4 in the gay abandon of a very wealthy overly pompous aristocrat that had inherited one’s wealth from back during the immoral slave trading era, or, is indeed a CEO of one of today’s Big 5 Banks.
    (As had been revealed, or as good as been confirmed, via the recent Royal Commission into Australia’s Financial Sector.)

  6. Avatar

    While I agree that University finances definitely do deserve this scrutiny, I also think there is really significant element missing here: the acknowledgement that Universities have had to replace money the Government has withdrawn. In the 1990s, about 85% of the Universities’ funding came from the Government. Now its only about 35%, and this at a time that research has become more expensive. This hole has been filled with international student fees. It makes me uncomfortable but we need to be clear why this has happened.

  7. Avatar

    I see in the USA groups are promoting you only pay for your degree once you start in the industry your degree is related too. Should be interesting to see it happen here – https://www.youtube.com/watch?v=9PN22EBdqo0&t=3s

  8. Avatar

    How job cuts are performed at universities, and many other public institutions, is a function of both corporatisation and a ver bad culture of self-serving agendas. Here’s how it goes –
    VC announces the need for job losses, stating there will be an open and transparent process and redundancies will be governed by performance against some set of metrics.
    VC then handballs to DVCR, Deans and other senior managers who will never be in danger, with HR to plug loopholes. This is when all transparency and performance-based evaluation ceases.
    Secret lists are drawn up indicating the low hanging fruit of people (regardless of performance) who’s contract they can wait to expire, plus people who they want to shed because their own agendas, while protecting “their people”. They then delay process so as to maximise contract expirations (while ensuring their own folk are extended), then disestablish all other positions and open application for a reduced number of positions. They install whoever they want saying it was a fair, competitive process. It’s clearly not when you see who survived – poor teachers, low publishers, etc., and most of those would have received massive redundancy payouts. Ah risk management.

  9. Avatar

    Another great article, Callum. Looking forward to seeing the next installment!

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