The big-business corporate model that Australian universities have embraced over the past two decades has been an unmitigated disaster for the nation, turning once-proud public institutions into revenue-chasing enterprises that prioritise profit over education, research integrity, and societal benefit. The Macrobusiness piece by Leith van Onselen (March 18, 2026) nails the core indictment: universities have morphed into "revenue-driven corporations," engineering a system that exploded full-fee-paying international student numbers — tripling enrolments since 2005 — through a toxic cocktail of relaxed visa rules, generous work and permanent residency pathways, and deliberately lowered admission and teaching standards.
This wasn't accidental. Successive federal governments (bipartisan failure here) slashed per-student public funding in real terms, forcing unis to hunt for cash elsewhere. International fees became the golden goose: overseas students pay double or more what domestics do (often $40,000+ annually vs. subsidised locals), turning education export into Australia's fourth-largest services export. Vice-chancellors, behaving like CEOs, built sprawling bureaucracies, awarded themselves seven-figure salaries, and chased growth metrics. The result? A sector hooked on a volatile "morphine drip" of foreign revenue, as University of Canberra VC Bill Shorten aptly called it in his March 2026 Aitkin Lecture.
The fallout has been catastrophic. Quality suffered as standards dropped to fill seats — concerns over academic integrity, grade inflation, and "soft" entry for high-paying internationals became widespread. Domestic students faced overcrowded classes, casualised staff (with wage theft scandals), and ballooning HECS debts in a system where funding per head declined. Research output stagnated or slipped in global rankings (Australia's universities slumped in the 2026 QS tables, with many Group of Eight institutions falling). Financial fragility was exposed during COVID border closures, leading to mass job cuts despite earlier surpluses.
Worse, the model supercharged migration pressures without adequate infrastructure. The surge in international arrivals — hundreds of thousands annually — fed into urban housing shortages, rental crises in student-heavy suburbs, and strained transport/services. While studies debate the exact rental impact (some claim internationals occupy only 4-6% of the private market, others note concentrations in inner cities pushing local prices), the optics were toxic: young Australians priced out while unis banked billions. Politicians scapegoated students, imposing caps (270,000 new enrolments in 2025, easing slightly to 295,000 in 2026 with strings attached), but the damage to Australia's reputation as a welcoming education destination lingers.
If universities insist on playing big business — aggressively marketing degrees like commodities, prioritising revenue streams over national priorities, and operating with corporate governance detached from public accountability — then it's time they paid like big business. Tax them accordingly.
A modest corporate-style levy on university revenues (or profits/surpluses) would force accountability. Bill Shorten's recent proposal for a 1% levy on broader corporate profits to fund a sovereign education wealth fund (~$5 billion/year) highlights the hypocrisy: businesses benefit from skilled graduates yet offload funding burdens. Why not extend that logic directly to unis? Impose a dedicated export-services tax on international fee income, ring-fenced for domestic scholarships, infrastructure, or regional campuses. Or treat excessive surpluses as taxable windfalls, clawing back funds when executive pay balloons while casual staff go unpaid.
The alternative — continuing the status quo — means more volatility, declining standards, and eroded public trust. Universities were never meant to be profit-maximising corporations; they exist to serve the common good through knowledge creation, critical inquiry, and equitable access. When they abandon that mission for market logic, society pays the price in diminished human capital, social cohesion fractures, and economic dependency on fickle global flows.
Ending the era of the big-business university requires structural reform: restore meaningful public funding, cap executive excess, prioritise domestic needs, and — if they want to keep chasing corporate riches — make them contribute like any other big player. Tax the model that failed Australia, or watch the sector's wreckage deepen. The choice is clear.
https://www.macrobusiness.com.au/2026/03/ending-the-era-of-the-big-business-university/