This is the fourth installment in a five-part series by Richard Blythe looking at the status of the modern public university. Parts 2 and 3 traced the barrier at the door and the machine that keeps it there. This part is about a different kind of loss — a reservoir the sector spent decades filling, being drained at the very moment the nation says it is parched.
Access other articles in the series:
- Part 1: Public in Name Only: How We Privatised the Public University – While Quoting the Man Who Warned Us.
- Part 2: The Public University – the bill and the locked door
- Part 3: The Public University – everything except the key
- Part 4: The Public University: Draining the Dam
- Part 5: The Public University: What we’re for
Opinion
Every Australian knows the sight of a dam running low: the pale tide-mark stranded high on the wall, the cracked mud, the dead trees surfacing where the water has pulled back. It happens without a sound — no crisis, no alarm, just a waterline that is lower each time you look. Hold that image, because it is the truest picture of what is happening to the thing that funds Australian research, and more broadly to the sector.
Start with a number most people have never seen. In 2024, Australian universities spent $16.4 billion on research. More than half of it — around $8.6 billion — came not from government, but from what the accounts blandly call “general university funds,” drawn overwhelmingly from what universities earn teaching international students.
Look closer at a single institution and you can see the cross-subsidy at work: Western Sydney University, in one year, poured 24 cents of every dollar an international student paid straight back into teaching, research and services for domestic students. This is not a rort. It is a structure that governments built by never paying the full cost of the research they take credit for.
Competitive research grants rose 157% in real terms over two decades, while the money for the actual cost of doing that research grew just 45%.
The gap was filled, quietly, by the international student. That is the dam — a reservoir of capability the sector filled itself, over decades, without being asked.
To justify the cuts, the government reaches for a single word — “unsustainable.” But that word is made to carry three different problems at once, and only one of them belongs to the universities.
- There was a genuine integrity problem — but it sat with a slice of dodgy private colleges and visa-factory operators, not the universities.
- There was a genuine concentration problem — at a handful of institutions international enrolments approached half the student body, and in some disciplines, reliance on a single source country ran past 50%. That is a real financial risk, and a fair criticism of those institutions.
- And there was a housing-and-migration argument that has nothing to do with either.
The honest response would have been to use the powers government already holds — over funding, quality and compliance — in a proportionate way: shut the grifters down, and press the over-exposed few to diversify. Those powers were sufficient. They were the right tools, aimed at the real problems.
Instead, the government reached past them for a sector-wide cap that falls hardest on universities that were neither gaming visas nor dangerously concentrated — and tied their very permission to grow to whether they build student housing. That is the tell. A government using its proper levers would have fixed integrity with compliance and concentration with pressure to diversify.
A government reaching for something else — direct control over how large each university may be, and how it might be run, leveraged to deliver a housing headline — has stepped outside its role as funder and regulator and into managing the sector itself.
Integrity and prudence were the reasons given. Control, for ends that have nothing to do with education, was the thing taken.
Now weigh what is actually in the dam, because this is the part that should stop a government cold. By the world's own measure, Australia's universities are the most successful sector this country has. Nine of the top hundred universities on Earth are Australian — from a nation of twenty-seven million, funded near the bottom of the OECD, and every one of them public.
Per head of population, that puts Australia ahead of the United Kingdom and streets ahead of the United States; per public dollar, it is arguably the most efficient producer of world-class universities anywhere.
The rest of the world buys standing like this with private billions and vast endowments; Australia built it on a public promise and a revenue stream the sector raised itself — by careful custodianship, over forty years; each generation handing the reservoir on, fuller than it found it.
That standing is not a tap you can turn back on. Research capacity is a lagging indicator of decades of stability. Lose a discipline's critical mass, and it takes a generation to rebuild. A mid-career researcher who leaves for Boston or Singapore builds her lab there, not here, and does not come back. Drain the dam and you do not get it back by refilling the hose in a better political season. You get cracked mud for a generation.
And the lever that does all this should never have been on a minister's desk. A minister can now decide, more or less at will, how many international students a university may enrol — pulled today in the name of housing, but available tomorrow for any reason, or none. A future minister who found universities a convenient target could throttle that intake and strand the sector overnight, through no reform anyone voted for. As with the fee settings, building the machine does not arm this minister; it arms the office, for good hands and bad alike.
Which brings us to the question this whole part is built around, and it is not rhetorical. Why is the government throwing away this resource?
To answer it, you have to see the trap the sector has been in for 50 years. Twice now, a government has thrown the system open in the name of access — the very equity ambition this government says it holds. Whitlam abolished fees in 1974; the demand-driven system that grew out of the Bradley review uncapped places from 2012. Both were right in spirit, and both hit the same wall: an open, high-participation system is extraordinarily expensive, and each time, rather than fund it, government recoiled and reached for the student's pocket — first HECS, then, when demand-driven funding blew the budget, Job-Ready Graduates. That is the doom-loop: open the doors for equity, discover the cost, send the bill to the student. The Accord's 80% target is the third turn of the same wheel — the same generous ambition, facing the same unfunded bill.
And here is what the government seems not to see: the sector already found the way out. Locked out of adequate public funding, universities built an international education business — by head of population and by standing, arguably the most successful public system in the world — and used the surplus to do what the public purse would not: fund the research, cross-subsidise the teaching, carry the equity mission.
It was not flawless, as the concentration at a few institutions showed. But it was genuine, and it meant the open system could be funded without a fresh bill to the taxpayer or the student. The honest response to an imperfect solution is to improve it. Instead the government is demolishing it.
And demolition does not make the cost disappear — it only decides who pays it next, and there are only two answers, neither of which the government can want. Either the taxpayer and the student pick up the bill the international student was quietly covering — higher fees, higher public outlays, the very burden the whole system was designed to avoid — or the money is simply not found, and the world-beating system slides backwards, failing the country and the next generation it was built to serve. And that second path feeds itself: standing falls, the students and partners who chose us on that standing go elsewhere, the revenue falls further, the standing falls again — a downward spiral, and a vast, unforced loss of national capability and tens of billions in annual revenue. That is the real charge. Through political interference, the government is turning a national income into a national debt — a resource the sector built to fund the country’s ambitions, converted into a bill loaded onto ordinary taxpayers and the next generation, or into the quiet decline of a sector that ranks among the best in the world.
By the government's own account, it needs what is in the dam: the Accord's 80% target and its equity uplift require exactly the research capacity and the funding headroom the international stream provides.
The choice between the reservoir and the ambition is a false one — the government could protect the stream, keep the standing, and use the room that buys to close the funding gap the Accord itself identifies. Instead it is draining the dam to manage a headline, in the same season it declares the nation thirsty.
You do not have to reverse a single one of the Accord's ambitions to see the incoherence. You only have to stand at the wall and watch the water go down.
So we have named the barrier, the machine, and the waste. What remains is the only question that matters: what is the public university actually for — and how do we build something that protects it, for the generation whose future depends on the answer? That is where we will end.
Professor Richard Blythe is PVC of the Faculty of Humanities at Curtin University