There is declining trust in Australian unis. Federal government policy is a big part of the problem

As we head towards the federal election, both sides of politics are making a point of criticising universities and questioning their role in the community.

Opposition Leader Peter Dutton has accused unis of focusing on “woke” issues that “just aren’t cutting it around kitchen tables”.

The Albanese government has also accused universities of being out of touch. A Labor-chaired Senate committee has just set up an inquiry into university governance, pointing to “an extraordinary range” of issues, including executive pay.

Both the Coalition and Labor want to clamp down on international student numbers, arguing they drive up city rents and threaten the integrity of Australian higher education.

The criticism goes beyond politics. Recent media coverage called the sector a “mess” and asked “is a university degree still worth it?”

No wonder newsletter Future Campus says the “hottest topic” in Australian higher education is whether universities have lost their social licence.

What is social licence?

A social licence means a community has given tacit permission for an organisation to operate. It goes beyond simple laws or regulations, and extends to the idea that a community implicitly trusts and has confidence in an organisation.

A social licence means businesses, in particular, should not ignore their responsibility to provide a social benefit to their communities. This needs to go beyond providing commodities or generating profits.

It may be a bit of stretch to compare universities with multinational corporations. But they have come under scrutiny for systemic underpayment of staff, “excessive” vice-chancellor and senior executive salaries and a structural over-reliance on international student income.

In December 2024, a state parliament review expressed concern the University of Tasmania was prioritising “commercial over community interests in its core functions”.

At the same time, Australian surveys show declining levels of public trust in universities and community concerns that profits take precedence over education.

Governments have played a role

So there are many reasons to ask how well our universities benefit the national community, beyond their economic outputs.

But while our politicians readily line up to express concern, it is highly disingenuous to only blame universities for their standing in the community.

The situation politicians now lament is the result of a long-term, bipartisan political project, prosecuted by successive federal governments.

As a 2023 Australia Institute report found, federal government funding for universities (excluding HECS/HELP) has fallen from 0.9% of GDP in 1995 to 0.6% of GDP in 2021. Both Coalition and Labor governments have sought to reduce the sector’s costs to the budget.

Over a similar period, enrolments tripled.

Read more: Tumult and transformation: the story of Australian universities over the past 30 years

Behaving like businesses

To compensate for this funding loss, universities have been coaxed into behaving more like businesses.

The federal policy settings have shown them the way to go.

Teaching foreign students is more profitable than teaching domestic students, research collaborations with business and industry are more profitable than collaboration with communities. Increasingly, in the search for new income sources, commercial, rather than academic, considerations have driven institutional decisions.

In a competitive market, the interests of individual institutions rather than those of the nation inevitably prevail.

There has been a succession of redundancies and knowledge, learning and personnel have been lost. The losses have wound back generations of accrued cultural and educational capital for the nation.

It is no surprise public confidence in universities’ utility and legitimacy has diminished.

The most significant problem

This is not to say universities are blameless. University leaders and academics acknowledge there has been a loss of public confidence. There is also acknowledgement some of the damage is due to internal issues – such as governance failures.

But the most significant problem is the corrosive effect of several decades of commercialisation, underpinned by a political disregard for the sector’s contribution to the public good.

If political leaders are serious about arresting the erosion of our universities’ social licence, it would be helpful if they stopped behaving as if it has nothing to do with them.

Graeme Turner’s book, Broken: Universities, politics and the public good, will be published by Monash University Press in July as part of its In the National Interest series.