Open letter to the Federal Minister of Education, the Hon Jason Clare
Public Universities Australia welcomes and commend your work on the recently released University Accord.
Your official media release proposes that one of the priorities for the Accord will be:
4. Governance, accountability and community
· Enhance regulatory and workplace relations settings to support universities to meet their obligations to both staff and students.
· Explore the contribution that higher education makes to the Australian community, national security, and sovereign capability.
We wish, however, to raise the related issues of vice-chancellors’ salaries and unaccountable governance in our public universities. These issues are presently absent from your list of priorities and yet constitute a core concern if we are to radically strengthen and enhance the future of Australian public universities.
At a recent Senate Estimates hearing by the Education and Employment Legislation Committee, the Deputy Leader of the Australian Greens, Senator the Hon. Mehreen Faruqi noted that the average salary for vice-chancellors at Australia’s public universities is currently AU$1 million a year, ‘excluding perks’. Suggesting that such salaries should be capped, Senator Faruqi asked the Federal Assistant Minister for Education, the Hon Anthony Chisholm, whether he thought it ‘fair that a vast majority of staff at universities are overworked and underpaid while vice-chancellors pocket these humongous … salaries’. Public Universities Australia agrees with Senator Faruqi’s suggestion and offers its support to the Federal Minister for Education, the Hon. Jason Clare, to further discuss and consider the issue.
Recently, the Fair Work Ombudsman Sandra Parker stated that wage underpayment had become a systemic issue in Australia’s public tertiary education sector, further claiming that the high level of casual staff at universities is a significant concern. A March Federal Senate inquiry into wage theft revealed that half the nation’s 36 public universities had been implicated in the underpayment of staff. Meanwhile, Australian vice-chancellors take home more in one week than a casual employee earns in a year. Vice-chancellors are hugely over-rewarded compared to any academic staff who deliver the research and teaching on which every university depends. Among the highest paid in the world, Australian vice-chancellors earn significantly more than their counterparts in prestigious English universities such as Cambridge and Oxford.
Furthermore, although they are public servants, Australian vice-chancellors earn considerably more than even the highest paid state and federal public servants. Male vice-chancellors, who comprise the majority, also earn more than female vice-chancellors. The average salary of a vice-chancellor in Australia is twice that of the Australian Prime Minister and three to four times that of the Federal Minister for Education.
Such significant wage disparities between professional and academic staff and university executives demonstrate that Australia is an outlier internationally. No continental European university assumes that its managers should be paid more than a public servant salary. Overall, not even US universities operate similarly. This begs the critical question of why this is the case in Australia. With the exception of the four private and three international universities operating in Australia, the remaining 37 are public institutions and listed charities that are required by State and Federal legislation to provide for the public good.
The high salaries commanded by vice-chancellors would warrant an expectation of outstanding managerial performance. However, there is little to no correlation between such salaries and university standards, as determined by international ranking systems. If there were, we could reasonably expect most Australian universities to be ranked alongside, or above, Oxford, Cambridge, or their US Ivy League counterparts.
Moreover, it is not just vice-chancellors who currently command such disproportionate salaries – it is now the norm for most senior managers within Australian public universities. Arguably, such excessive expenditures harm the very goal of universities since money spent on management is diverted from education and research activities. Indeed, Australian academics lament that they do not feel understood or supported by the ever-growing and constantly changing managerial apparatus of the institutions they serve.
Although such high managerial salaries remain a relatively small portion of total university budgets, they provide a significant signal and indicator of how power is distributed within universities. Indeed, the salary differential between senior management and the rest of the academic community both expresses and enforces a view of an organisational hierarchy that places the roles of executive deans, deputy vice-chancellors, and indeed, vice-chancellors as simply ‘above and beyond’ the academic teaching and research staff who undertake the work of delivering the educational and research outcomes of universities.
Much of this can be attributed to the mindset of the current type of university governing bodies, generally called university councils, whose role is to appoint and oversee vice-chancellors. As our own research has revealed, university councils are composed of a majority of business leaders, retired politicians, and some community members with no experience within the university sector, who nonetheless set vice-chancellors’ salary levels by benchmarking them against relatively comparable positions in other corporate sectors. The voices of the small and shrinking proportions of academic and university community members on university councils are often silenced. As a result, core academic values are sidelined during decision-making. Central to the calculus of business-dominated university councils is income generation and the achievement of a surplus, often duly rewarded by a performance-related salary bonus awarded to vice-chancellors who make decisions that are often financially successful but pedagogically and intellectually disastrous.
Therefore, while high vice-chancellor salaries may remain acceptable amongst those with influence in some quarters, such as in industry, the apparent overpayment is arguably against the ethos and purpose of a public university and a de facto signal of mismanagement. As a result, the more profound critique of vice-chancellors and senior managerial salaries is that they point to poor use of public resources whilst they preside over reduced success in delivering on the core mission of Australian public universities: high-quality education, independence of research, and trusted contributions to public discourse answerable to the citizenry as a whole.
Public Universities Australia proposes a few immediate and readily achievable solutions.
- Governance reform. First, Public Universities Australia suggests a radical restructure of university governance is required to ensure proper oversight and accountability. As a result, the composition of university councils ought to be reversed, in line with the standard practice in the rest of the world, with a majority of members drawn from the academic and university community and a minority of figures with financial and corporate expertise to enrich the councils’ professional expertise and rigour.
- Salary capping. Second, vice-chancellors’ salaries should be capped at 1.5 the salary of a full professor. Equally, other senior managerial positions ought to be capped accordingly. Against the common refrain that higher salaries are necessary to attract the most outstanding talents, it is clear that the current practice is not in line with more successful and higher-ranked institutions in the rest of the world. For example, the rector magnificus at the University of Amsterdam receives no more than a full professors’ salary as the equivalent of its vice-chancellor.
- Salary transparency. Third, in August 2021, the University Chancellors Council released a voluntary code to benchmark the salaries of university vice-chancellors and promised to benchmark senior executive salaries in public universities. The code states that ‘transparency is an important part of good practice remuneration ensuring that decision bodies, processes and outcomes are openly explained and presented to all stakeholders.’ The total remuneration of vice-chancellors, including all bonuses, should be made fully public in their annual reports.
- Stipulated academic values. Finally, and perhaps more fundamentally, coveting enormous personal wealth cannot and should not be the primary driver of public university leadership recruitment. For universities to deliver on their public functions, university managers need instead to fully subscribe to centuries-old academic values and an ethos of public service. In a recent recommendation to the Tasmanian Parliament, Public Universities Australia suggested stipulating seven core academic values that should be written into all university policies and procedures. We believe that the accountability that such values would engender would be more liable to improve the operation of universities than the continued inflation of vice-chancellors’ salaries.
If Australian public universities are to be world-class and continue delivering on their public functions and objectives, they must renounce a pseudo-corporate experiment that, after more than two decades, has objectively produced a higher education system in desperate need of reorientation. Unsustainable levels of casualisation, wage theft and obscenely inflated vice-chancellor and managerial salaries have become the norm. Clearly, Australia can and should do better. This must not be the future of Australian public universities.
Public Universities Australia
Academics for Public Universities (APU)
Australian Association of University Professors (AAUP)
Casualised, Unemployed & Precarious Uni Workers (CUPUW)
Council of Australian Postgraduate Associations (CAPA)
National Aboriginal & Torres Strait Islander Postgraduate Association (NATSIPA)
National Union of Students (NUS)