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Universities and the pandemic

Summary:
As I foreshadowed a while ago, the financial effects of the pandemic have been reflected in an agreement for university staff to take temporary pay cuts in order to save the jobs of casual workers. Lots of people are unhappy about this, but it’s hard to see an alternative, and the deal seems to be the best that can be reached, with the requirement that senior management take the biggest cuts and (I think) the cuts for academic staff being scaled to protect the lowest paid. The primary cause of all this is the big reduction in overseas student numbers arising from travel restrictions and the pandemic. But the more immediate cause is the federal governments decision to exclude universities from the JobKeeper scheme, even though they would qualify under the loss of revenue . This

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As I foreshadowed a while ago, the financial effects of the pandemic have been reflected in an agreement for university staff to take temporary pay cuts in order to save the jobs of casual workers. Lots of people are unhappy about this, but it’s hard to see an alternative, and the deal seems to be the best that can be reached, with the requirement that senior management take the biggest cuts and (I think) the cuts for academic staff being scaled to protect the lowest paid.

The primary cause of all this is the big reduction in overseas student numbers arising from travel restrictions and the pandemic. But the more immediate cause is the federal governments decision to exclude universities from the JobKeeper scheme, even though they would qualify under the loss of revenue .

This decision is due in large measure to the government’s culture war hostility to the university sector. It’s disappointing to see them pursue this kind of vendetta at a time when we ought to be looking for national unity. But given that this is the case, there is no serious alternative for universities but to share the pain as evenly as possible.

The fundamental problem is the quasi-NGO (quango) status of universities. Even though they are mostly funded by the federal government, universities are (mostly) organized as independent statutory bodies under state legislation. As a result, they engage in wasteful competition among themselves. Indeed, the ACCC watches for signs of anti-competitive behavior, a concept that would immediately be recognised as nonsensical in the case of schools and universities.

Education is a fundamental responsibility of government, and universities ought to be organized as a unified national system, with the responsibility of providing education to all students who can benefit from it. If that were the case, the government would have had to meet the gap in funding just as has happened in public transport and other services where revenue has fallen.

Coming back to the cuts, the NTEU-universities deal ought to be a model for the economy as a whole in important respects. Dealing with the pandemic is going to be hugely costly, and those at the top of the income distribution, in both private and public sectors, should bear most of that cost.

John Quiggin
He is an Australian economist, a Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a former member of the Board of the Climate Change Authority of the Australian Government.

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