Ch 3 Aftermath: the woes of public and private universities (1989)

Don Watts’ 1987 euphoria, by 1989 must have seemed a distant memory. Setting up Bond University in reality, as it turned out, was a lot more difficult than its promise, which was extremely ambitious:

A degree from Harvard opens doors. In just a few years a degree from Bond University will do the same.[1]

“The fanfare has been too loud”, said the editor of the Higher Education Supplement, when by March 1989 Bond had to relinquish all hope of offering undergraduate science due to lack of equipment and infrastructure.[2]A report in May showed that Bond University’s business plan included an ambitious intention to break even within four years, but it was having (what Watts considered to be) short-term difficulties meeting its operating costs and was arranging an $80 million bridging loan before securing a $200 million, 14-year loan just to be able to run the university.[3] Attracting students was not as straightforward as Watts had hoped either, and by May – despite years of claims that the taxpayer should not be funding the education of the privileged – Watts denigrated his friend Dawkins’ policy about private universities and was forced to claim that AUSTUDY was a civic right.[4] Watts had in fact always claimed that income-support, not free education, was the real benefit that assured equity of access to higher education.[5] He had wanted to expand it to also include the privileged, because a lack of student independence was sometimes “destroying otherwise happy families”.[6] But at Bond, it was a difficult position to hold, as the public and the Commonwealth seemed determined that a private university should receive no public benefit at all.

The events of 1989 must surely have severely tested Watts’ faith in a privatised, free-market higher education system. By August, funding for the next year was confirmed and Bond University “promised to pay its bills”.[7] This is more than the university’s namesake, Alan Bond, would do, after the revelation of debts of more than $1.6 billion in October 1989, one of many precursors to Bond Corp’s ultimate collapse and Alan Bond’s eventual imprisonment.[8] While the university certainly did better than the man, it would still be some time before Bond University could extricate itself from financial difficulties. Its immediate situation in late 1989 saw Watts needing to ask the Queensland government for a short term loan in September, brazening out suspicions that he had contributed to the political demise of the former premier (ousted by political coup) who had been unwilling to provide a loan earlier in the year, when Watts had gone to see him with Alan Bond.[9] Watts, feeling that Bond himself might be an impediment, decided to see the new Premier without him to talk about the loan.[10]Bond University scraped through what must have been an excessively stressful year for Watts. It changed its advertising for the 1990 student intake, removing all mention of Harvard, concentrating instead on a niche of students wishing to intensify their study and graduate earlier.[11]Watts resigned from Bond University in 1990, shortly after being labelled “Captain of the Titanic” for having told ABC television that all was fine at Bond.[12]

While Bond University “made such a floundering, blustering start” in 1989, according to the Supplement, “it is still considerably ahead of other suggested private tertiary institutions”.[13] A tiny private institution called the William E Simon University, planned to offer an expensive MBA to no more than 25 students per year, was approved for NSW in 1989 but was the subject of much controversy due to the strength of feeling about giving public funds to private institutions, since Simon’s university status would make it exempt from tax.[14] An attempt at a collaborative university, Tasman University, was to also focus on selling MBAs and undergraduate business education (though Tasman also planned on selling its own entrance exam for $1000).[15] Both failed in a short time, due to competition from public universities’ partially-privatised business schools.[16]A private Catholic university was planned for Western Australia, with the then State minister for Education, Carmen Lawrence, opposing the Labor ban on providing public assistance to privatisation.[17] While it took some time, Notre Dame University was eventually opened in Western Australia and gradually in other states as well.[18]

While the private universities struggled financially, the public universities were pulling in two opposite directions. In one direction, they questioned Dawkins’ reforms and the marketisation of the system. In an article entitled, “If the users pay, just what are they buying?”, Supplement editor, Christopher Dawson, relayed concerns by a University of Queensland professor that the process of commodification changes the nature of the would-be commodity – in this case, so that it loses its value:

In insisting on productivity within the academy, on doing research, on gaining more and larger grants, and on producing more publications, are we now guilty of a commoditisation of knowledge or of the techniques of securing it? Are we encouraging a competitive production of goods, regardless of the quality of the product and at the expense of other activities that might also be undertaken within the university? She asked.[19]

Privatisation – as the Australian Vice Chancellors Committee showed when they were initially reluctant to admit Bond to its ranks – had the potential to change and devalue the character of the university and of the knowledge within it. Since the value of university knowledge had been traditionally based on its freedom from financial, political and sectarian interests, privatisation threatened what many felt to be what was actually valuable about university-based knowledge. The Supplement quoted:

In supporting a policy that dictates to us the boundaries of inquiry and of knowledge, we lose the right to be ‘the university’.[20]

Pulling in the other direction, institutions also scrambled to comply with Dawkins’ policies, and to source as much external funding as possible. The deregulation of postgraduate coursework at the end of 1987, for example, was resulting in extremely rapid growth of new postgraduate courses.[21] The contradictions of the decade are evident in this headline:

Postgrad courses condemned as ‘bogus and market-driven’.[22]

Quality could be defined by the market – if it was any good, the market would “purchase” it. And yet, as implied in this headline, the market could also undermine quality. It is no wonder universities start to appear a little schizophrenic.

One vice-chancellor, for example, who embodied both these directions, was David Penington at Melbourne University.[23] Marginson and Considine describe Penington as having “taken up the fight” against Dawkins, to preserve traditional knowledge, early on.[24] But in January 1989, Penington was in the Higher Education Supplement as the focus of the staff union’s anger over his pro-privatisation behaviour, offering externally sponsored chairs and selling half of the Melbourne Graduate School of Management to private interests.[25]It was this school, especially, Marginson says, that prevented the success of the Tasman University proposal.[26]The stand Marginson and Considine are talking about happened in March 1989, when Penington was the centre of a verbal scuffle with the directors of Colleges, after he suggested that the Sandstone universities were better positioned to conduct research.[27]

This scuffle over who should do research was actually about funding, of course, and in the process Penington had also criticised the capabilities of the head of the Australian Research Council, Don Aitkin, suggesting “government should find a new role for Professor Aitkin, more appropriate to his abilities”.[28] It was in fact this issue – the transfer of recurrent funds from universities to the Australian Research Council for competitive reallocation – rather than Dawkins or commodification generally, that caused Penington to rebel. Aitkin’s brief to mould Australian research to a “national needs” model was described by Penington as like Greek legend Procrustes “who trimmed or stretched his guests to fit his bed”.[29] On 25^th July 1989, Penington, along with some other vice-chancellors, formed a rebel splinter group from the Australian Vice Chancellor’s Committee, known as the “Tuesday Group” – a group that Bob Bessant hoped would evolve into a lobby group independent of both the Vice-chancellors and the salary-focused unions.[30] Openly described as a piece of Melodrama in Canberra,[31] Penington assumed a heroic stance, saying that:

Some of my vice-chancellor colleagues feel it is dangerous to be critical of the Government.[32]

Penington’s focus was on the quality of knowledge produced for the benefit of the community:

Research policies controlled from Canberra, he says, run the risk of being short-term and politically motivated. Had the Dawkins policies been in place during the polio epidemics, research funds would have gone into creating better iron lungs. The discovery of the Salk and Sabine vaccines which eradicated polio were the result of simple curiosity. It is impossible, he says, to dictate creativity.[33]

Academics at ex-colleges (especially) denounced Penington and the Tuesday group as “elitist”, claiming they sought a return to the “dark ages” – a past where “universities were the preserve of the elite”.[34]

Penington was concerned about the problem the Australian Research Council had sought to address in the first place: research funds spread too far and too thinly. But now, because of Dawkins’ other reforms – the end of the binary system – the Research Council was seen to be exacerbating the problem. Combined with the “national needs” model, Penington feared for curiosity-driven research. Curiosity-driven research would be very expensive to fund universally in a very large higher education sector, leading to the suggestion that some curiosity-driven research should be funded in specific and admittedly elite corners of the sector. Penington was not alone in claiming that free inquiry and curiosity-driven research is important to civil society, also leading to important applied discoveries – like the polio vaccines – that but for serendipity, would not have been found.[35] But, this tradition, as observed by Eric Ashby, had long shown that this type of research required leisure – meaning the staff assigned to do it need to be trusted enough to be granted sufficient research time for serendipitous discovery to be possible.[36] This would obviously be more expensive than targeted research projects. As Dawkins sought to equalise the sector, making universities out of colleges through amalgamation or by changing their status, the officially classified “university” sector increased, as did the pool of potential researchers and institutions seeking funding. The most obviously efficient and fair way, from Dawkins’ perspective, to fund these, was to ask all institutions to compete for funding through the Australian Research Council, with selection based on relevance to the needs of the nation.[37]

From Penington’s perspective this had severe problems. Firstly, “national needs” were often understood economically, not in terms of contribution to civil society, meaning the outcomes of research were only narrowly understood. Furthermore, this system would encourage a focus on research that would have outcomes achievable in a designated, fundable, period of time.[38] Systematically rewarding such short-term outcomes would, Penington argued, fundamentally and potentially irrevocably shift the character of university-based knowledge.[39] Even if academics did not apparently deserve the privileges attached to curiosity-driven research, such research is necessary to the community, he said.[40] But privilege was not the point. Accepting that the Commonwealth and State governments could not be expected to fully fund curiosity-driven research by every academic in the (now) massive university sector, Penington argued that those universities who had a substantial tradition of academic curiosity and free inquiry would be best positioned to be granted the special task of continuing to do so. Elite, yes – but certainly safer than shifting the character of knowledge. No wonder he felt heroic. But opposition to his stand was not only from Canberra. Having finally gained university status, ex-colleges were hardly likely to look warmly on the proposition that a new layer be created on what was almost certainly “above” them.[41] Penington saw this as Dawkins’ “Henry VIII” type plan to conquer the system while it squabbles amongst itself, scrambling for scraps.[42]