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Believing and disbelieving

28 February 2015

“B-E-L-I-E-V-E.” It’s popped up in plaques across the Professor’s Walk outside the Baillieu Library, it’s on the front page of envelopes sent to every staff and student, it’s the shiny writing on the wall of alumni dinners hosted in Beijing, Shanghai, San Francisco and Los Angeles, it’s even ascended in several metre-high letters across the South Lawn. What does it mean? Believe is the slogan of the University’s recent campaign to reach out for $5,000,000 in philanthropic donations by January 2017. According to Vice-Principal Sue Cunningham, the Campaign will aid the University’s “long-established mission of educating tomorrow’s leaders, finding answers to the world’s grand challenges through research, and enriching the wider community.” Twenty per cent of donations will be spent on scholarships, 14 per cent “to affiliated colleges and associates”, 40 per cent to research, 16 per cent to community projects and 10 per cent to “unrestricted gifts”, which means areas the donor has not specified that they want their money to be allocated.

Half a year from the deadline, the campaign has already reached $4,000,000. It is the biggest fundraising campaign in the University’s 160 year history and the Australian higher education system as a whole. A culture of universities being financially dependent on donors has existed in the U.S for decades, which is why the Believe Campaign has been viewed by some as a symptom of the University’s complex reaction to declining government funding .

In the mid 1970s – under Whitlam’s premiership – government funding accounted for 90 per cent of universities’ incomes. Since then, access to universities has widened, jobs increasingly require university qualifications, more institutions have received the imprimtur ‘University’, and Federal government funding has dwindled, presently account for only 23 per cent of a University of Melbourne’s revenue pool. The Group of Eight – a coalition of Australia’s research-heavy universities and of which the University of Melbourne is a member, have long argued that should adopt policies to make universities financially autonomous and self-sustaining. This attitude was enshrined in the University of Melbourne’s recent 2015-2020 Strategic Plan Growing Esteem, which states that the University aims to “reduce reliance on government funding, and build a more diverse and sustainable revenue base.”

However, as treatments to funding cuts go, the $5 million that the University plans to raise through the Believe Campaign is just the spoonful of sugar that accompanies the much fouler-tasting medicine. In the past year, Glyn Davis has become one of the most outspoken advocates of fee deregulation. He has written articles and delivered public lectures arguing that the decline in federal government funding for teaching makes allowing universities to set their own tuition fees the only viable option. Opponents of fee deregulation allege it will intensify social stratification, worsen the gender pay gap and split Australia’s tertiary education into a two tiered system, in which elite universities prosper as less prestigious and regional universities become low-cost alternatives that struggle to compete.

Even more controversially, in late 2013, to an audience of University of Melbourne staff, Vice Chancellor Glyn Davis unveiled the Business Improvement Program (BIP). The BIP consists of cutting 505 professional (non-academic) jobs by January 1st 2016 and reorganising student services to be increasingly automated and centralised.

The BIP was architectured by a management consultancy firm called Booz and Co (now Strategy&), with whom the University entered a $23 million contract. According to the BIP Co-ordinating Group, the committee responsible for administering the BIP, convened by Vice Principal Ian Marshman: “Once fully implemented, savings… of $70m per annum will be realised.”

However, despite the emphasis on cost efficiency, the BIP Co-ordinating Group stress that the BIP is more than “a simple cost-cutting exercise”. Eighty per cent of savings raised will be returned to faculties “for reinvestment in core academic activities…teaching, research and engagement.” Furthermore, the University intends for the BIP to eventually finance 300 new academic jobs.

What does this mean for student services? Despite some efforts of University management to keep students and staff consulted as the BIP is carried out, the document outlining the full framework of the BIP is kept from public view by a password-protected website and not all the proceedings are known. Farrago interviewed Alex Mcaulay, Vice-President of professional staff at the Melbourne University branch of the National Tertiary Education Union (NTEU) on the BIP. It was explained that one of the biggest complaints that both students and staff have made against how the BIP has been conducted is that administrative positions were cut before adequate replacements to the often vital roles that they performed were introduced. Cutting administrative staff from 3,568 to 3,028 means 15 per cent of roles formerly performed by those staff must either be shifted onto academics, added to the workloads of other administrative staff, cut completely, automated or streamlined into the University’s new central service system that is shared between faculties. “A significant change underway is to place all services together in one location as a single hub for students” Provost Margaret Sheil (a member of the BIP Co-ordinating Group) explained in an email sent to all students last year. Part of this change involved setting up a single online inquiry management system. There is a widespread attitude across the campus that centralizing the inquiry system has furthered lengthened delays in services like applying to enrol and seeking other forms of administrative assistance. The University’s disability support programs will also be altered so that instead of there being disability coordinators for separate faculties they will be concentrated in a single contact point. It has also become known that the number of library staff will be reduced although the exact numbers have not been released.

It is clear that the list of things that the University Council and management are prepared to do to make university funding more sustainable includes cutting university services, encouraging ministers to uncap student fees, slashing low-income, administrative jobs and running enormous fundraising campaigns like Believe. While no-one denies sustainable funding is something universities should strive for, these options become more questionable when considered against the backdrop of areas of massive expenditure in the university’s budget that have not been considered as alternative savings measures. Namely, the inflated salaries of top-ranking academic and administrative staff and the eyebrow-raisingly high amounts spent on marketing.

The NTEU, Graduate Student Association and a number of student and staff-run organisations opposing the BIP have long attacked progressive increases to Vice-Chancellors’ salary packages. In the heat of 2014 demonstrations against fee deregulation Socialist Alternative clipped a banner to the fence of Glyn Davis’s on-campus house that read “He earns over $1,000,000 a year and wants fee increases for students” and “look behind you that’s your Vice-Chancellor’s tennis court.” The Vice-Chancellor’s annual salary in 2014 was $1,055,000. It may seem like a cheap shot to argue the BIP must be unnecessary if the VC can afford to be paid this amount. However, analysis of other bloated incomes in the top section of the University staff reveals there are numerous employees with incomes that could fill the annual wages of multiple low-paid administrative staff who have already or are going to lose their jobs-and the issue becomes a legitimate flaw in the logic of the BIP rather than a just a propaganda weapon.

According to Alex Mcaulay “The university is only obliged to provide the incomes of its highest salary earners, which is over a million, but it’s clear Glyn Davis has brought in lots of people from the corporate sector that wouldn’t be coming if they weren’t getting pretty juicy salary packages.” One of the few available peepholes into the annual incomes of the higher-ranking staff is the Careers at Melbourne page, in which places for Marketing and Communications Managers with salaries well over $100,000 are frequently advertised. Although it is not one of the NTEU’s official policies, an article in the union’s journal, the Australian Universities’ Review, offered a solution to the problem of the wages of top-level administrators continuously bloating and in the process pushing out bottom-level staff to make the financial space. The solution was “pay-ratios”. “Administrative salaries could not exceed, for example, ten times that of the lowest paid full-time academic staff member. This would not cap administrative salaries, but it would prevent inequities from growing to unacceptable levels” Viviane Callier wrote.

The University of Melbourne’s communications are another area that could have been trimmed before the 505 administrative jobs were cut. According to the University’s annual reports, advertising, marketing and promotional expenses totalled $13,001,000 in 2014. This is the consolidated amount, which means it includes subsidiaries and other semi-autonomous bodies controlled by the University like the Ian Potter Museum, University of Melbourne Sport or MU Student Union Limited. The NTEU have queried why such a large amount is being spent on improving the University’s public image instead of employing the administrators that make its support services, research projects and teaching curricula more efficient.

The NTEU argues that the University distorting the figures in their explanations for why cutting jobs is a financial necessity. The NTEU allege that “the University is in a strong financial situation”. In 2014, the University reported a surplus of $5.7 million. A Victorian Auditor-General report issued in December confirms this figure is false and should have been closer to $230 million. The Auditor-General’s report backed up the NTEU claims that the university calculated its surplus through erroneous treatment of grant-incomes. “The University treats grant income as a ‘reciprocal transfer’ and thereby only recognising it as grants income when expended. In the interim the unspent grant income is treated as a liability and thereby reduces the operating surplus. In other words they never really count research grants as income because they are written off as they are spent.”

Regardless of where you stand on the issue, it is very clear that the federal government’s continuing agenda of transforming the originally public nature of Australian universities into private, U.S-style degree factories. In this environment, the University of Melbourne has changed its colours with chameleon-like swiftness. Although, very few university councils have joined their students and staff in opposing the government’s push for financially independent universities that are funded through their students and alumni rather than taxpayers, it is questionable why the University of Melbourne has been the most efficient in this metamorphosis. No other universities have committed to the same level of historically large fundraising and although many universities have restructured their workforce in response to the cuts, the BIP ranks as one of the most severe.


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