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DANIEL:

From Schwartz Media. I'm Daniel James. This is 7am.

When Bill Shorten finally gave up his hopes of ever becoming Prime Minister, one door closed and another much more lucrative door opened.

In his new role as Vice Chancellor of the University of Canberra, he could earn up to three times as much as the PM.

His appointment comes amid a fight about the exorbitant salaries Australian vice Chancellors receive and at a time when his own government's new cap on international students raises big questions about funding shortfalls in higher education.

Today national correspondent for The Saturday Paper, Mike Seccombe, on how much Vice Chancellors earn and how they justify it.

It's Wednesday, September 18.

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DANIEL:

Mike, in his new role as the Vice Chancellor of the University of Canberra is rumoured that Bill Shorten may receive a hefty pay rise. How much money are we talking about exactly?

MIKE:

Well, we don't know the exact figure yet. They're still negotiating that. But his predecessor, Patty Nixon, earned just over $1 million. If you consider Shorten tried twice to become Prime Minister and lost both times. Well now he's going to be earning more than the Prime Minister, quite a lot more than the Prime Minister.

Anthony Albanese gets an annual wage of $670,500 and Shorten as a minister would earn a bit less than that. I forget the exact number. But essentially Shorten stands to roughly treble his earnings.

DANIEL:

So $1 million, of course, is nothing to sneeze at.

MIKE:

No, no indeed. I wish I had it.

DANIEL:

Is Patty Nixon just an exception or as is the case for all other university chancellors?

MIKE:

Well, might seem overly generous to some, especially when you consider that the University of Canberra is currently ranked 403rd in the world, this is not a particularly prestigious institution and still, you know, $1 million salary, but that's actually about par for the course for Vice Chancellor paychecks in Australia. In 2023, the average vice chancellor pay was just over one million. The highest pay was for the Vice Chancellor of the University of Melbourne, which was just shy of 1.5 million. At least you could say in the case of University of Melbourne, they came in 13th in the world rankings and have a very big student body. So there is that, I suppose.

DANIEL:

There's a bit of the dark arts about what Vice Chancellors actually do. In my mind anyway, and what warrants their million dollar salaries?

MIKE:

Well, it's a good question. I actually looked up a couple of university websites, you know, and just Googled. What does the Vice Chancellor do? University of Sydney had a little thing that said, and I'm quoting “The Vice Chancellor leads the university and determines its overall direction in close consultation with the Chancellor and other fellows of the Senate, senior leaders and the academic board”. So, so in other words, this sort of chairman of the board, I guess you'd say, but they actually do more than, you know, set broad direction.

I spoke to one vice chancellor who couldn't be named so they could speak freely., And they said they actually spend a lot of their time hunting for money was the way it was put hunting for money on behalf of the university, which means, you know, schmoozing business, lobbying government, that sort of thing.

And that role, I think, has changed.

In the late 1990s, early 2000s as government funding was withdrawn. The internal structures of universities changed a bit. So, you know, those boards and Senates, I think the universities have various names for them, but essentially they fulfil the same function as a board of directors in a private company. Well, it used to be the case that those boards had lots of internal appointees. And what's changed is that there are increasingly fewer of those and many more external appointees over the years. So a lot of those people come from the corporate world.

The thing is, of course, that those people, you know, coming from the c-suites of large private businesses and financial institutions are used to use huge paychecks, you know, well over $1 million. The CEO of the Commonwealth Bank, for example, earned $7.3 million in 2023.

And so my point here is that when someone coming from that world enters the remuneration committee for a university, they think that giving $1 million to a Vice Chancellor is actually pretty cheap. You know, and when one Vice Chancellor gets $1 million, it then sets a benchmark for others to ask for the same, if not more. I mean, that's essentially human nature.

So, you know, a lot of money, but in their defence that anonymous VC that I spoke to highlighted that, you know, senior departmental secretaries in government earn salaries similar to Vice Chancellors. And that's true.

The head of the Department of Prime Minister and Cabinet, for example, receives just over $1 million. The head of Treasury receives just under $1 million. I think there's a dozen or more other senior bureaucrats who pocket more than 900,000.

So, you know, my Vice Chancellor was was making the point that it's not enormous in the scheme of things. But their bigger point was that that was a and the word they used was furphy. That's distracting from the real issue with universities, which is that they're grossly underfunded by government and they're not wrong about that. You know, right now, universities have far bigger problems on their hands with money than just the paychecks of Vice Chancellors.

DANIEL:

Coming up after the break, will Bill Shorten fight his old colleagues on university funding when he takes on his new job?

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DANIEL:

Mike, Bill Shorten is going to be the Vice Chancellor of the University of Canberra and he's going in at a time when there's a lot of criticism about the huge pay packets that Vice Chancellors receive. But you've been speaking with people who say that masks a much more significant problem. Can you tell me about that?

MIKE:

Yeah, sure. Well, the heart of the problem is that the universities have, in the absence of other funding, have come to rely on the revenue from the fees paid by international students. You know, to compensate what government isn't giving them. And of course, now the government is talking about cutting that revenue stream as well by by capping the number of overseas students that can come to Australia.

The head of Universities Australia, Professor David Lloyd, talked to the National Press Club about this about a week ago. And, you know, he said the stark and frightening reality was that two thirds of publicly funded universities in Australia were in deficit in 2022 and 2023.

Audio excerpt — David Lloyd:

“The Albanese Government and the Peter Dutton led Coalition are now outdoing one another in a rush to reduce the number of overseas students studying at Australia's universities.”

And, you know, he made a very strong case. Universities were hammered during the Covid period when the Morrison government pushed overseas students to leave Australia and denied universities access to the Job Keeper income support scheme.

So they suffered badly from that. And now, of course, just as they're recovering, both the major parties are engaged in this poll driven attack was what Lloyd call it, making international students, you know, scapegoats to blame the housing crisis on.

But really, you know, the problem began long before the pandemic. I think the pandemic just brought it into sharp focus.

In the decades to 2007 under the Howard Government. Public investment in universities in Australia fell 7% and across the rest of the OECD there was an average increase of 48%, so you know, you can see a big difference there.

Audio excerpt — Kevin Rudd:

“For us friends. And this movement, the Labor movement. Education is the engine room of the economy.”

MIKE:

Then of course in 2007 Labor won power and it came in promising an education revolution and warning that Australia's prosperity would hit a wall unless the quality and funding of education was raised substantially.

Audio excerpt — Kevin Rudd:

“What do we mean by an education revolution? Let me take you through it.”

MIKE:

And, you know, from 2008 the enrolments of students from lower socioeconomic backgrounds rose by two thirds. Enrolments of Indigenous students and those with disabilities more than doubled. Enrolments from regional and remote areas jumped 50% and spending as a share of gross domestic product also went up.

So, Labor's promised revolution, you know, it was in part realised, but it didn't last. By 2020, when the Coalition parties were again in power, the share of GDP being spent on higher education was lower than it had been in 2008.

DANIEL:

So it's an obvious question Mike. What has been the impact of these successive cuts to universities and how they operate?

MIKE:

Well, to start with, academic staff are increasingly employed under very tenuous conditions with casual or fixed term contracts now the dominant form of employment.

As of June one this year also there had been confirmed underpayments of staff at 30 public universities, totalling around $203 million dollars. So, you know, we're talking big, big bucks here in essentially wage theft. So, you know, that's a pretty big deal for university staff.

The NTEU which is the academics union, is currently advocating for a cap on executive salaries and improved working conditions for tertiary staff.

On top of this, we're already seeing impacts from Labor's cuts to student numbers, even though the legislation imposing caps is yet to pass, the former Minister for Home Affairs, Claire O'Neill, last December issued a directive which effectively slowed the granting of visas to potential overseas students dramatically.

According to Universities Australia, visa numbers are down 23%, which is equivalent to almost 60,000 students. And their suggestion is that that the way things are going, there's going to be big job losses. They have nominated a figure of about 14,000 jobs in the sector that could be lost. And bear in mind, this is one of Australia's major export industries. You know, it's up there with coal and iron ore. It's a huge international money earner for Australia.

And you know, essentially during Covid, Morrison told international students “go home”. And the way Lloyd puts it is what Albanese is now doing is telling the international students, “stay home”, you know, so the chances are this could get ugly.

DANIEL:

So Universities Australia is saying thousands of jobs will be lost because of a policy announced by the Government Bill Shorten's a part of. He will be a Vice Chancellor in a few months, likely earning more than $1 million or so a year, how is he going to navigate all that?

MIKE:

That's a very good question. If I might start with the observation that he doesn't have to take a million dollar salary.

Back in 2016 the Nobel Prize winning astrophysicist Brian Schmidt became VC of the Australian National University, a very prestigious organisation. He negotiated his salary down to $617,500, which was a cut of more than 300,000 on his predecessor, Ian Young. And throughout his career, Schmidt continued to be one of the lowest earning VCs over eight years, Despite the fact that, you know, ANU has a global ranking of 30.

And in a 2021 interview with The Australian Financial Review, Schmidt said, I just don't care that much about money. All my excess money I donate. It's just not that important to me. I've got enough, he said. You know, meaning I've got a Nobel Prize, I guess. Good for him.

More recently, the newly appointed Vice Chancellor of the Western Sydney University, Professor George Williams, revealed that he also had negotiated down his salary. He said that when he went in to talk money, the Chancellor was looking at a high figure and George was looking for a lower figure and they eventually negotiated it and came out somewhere in the middle. He said that his starting point when negotiating his wage was that a university was a public sector organisation. It wasn't a business. So you couldn't look for business type salaries. And he said that, you know, VC salaries were evidence of the fact that universities had lost their way, and that the sector was too inwardly focussed and it needed to reset its conversation around students and staff and the community.

So anyway, remuneration is only one of Shorten's considerations. The other one, bigger ones that put him in a very interesting position, I think is that, before he entered politics, he was a union official. He spent decades advocating for better pay and conditions for workers.

Well, for a long time, university managers have been screwing their staff and now Shorten is going to become part of that university management. So will he back the NTEU. and its fight for fair wages and better working conditions for university staff? You know? Is he going to be vociferous on the subject of wage theft by universities?

Then there's, of course, the matter of caps on the number of overseas students. If there's one subject on which almost everyone in the tertiary sector agrees, it's the caps are a dog of a policy. I mean, the Vice Chancellors say that Universities Australia says that the NTEU says that. And of course this has been Labor Party policy and Shorten is at the moment still a Labor Party senior minister. So will Shorten join the chorus of opposition or cop his big bucks and stay silent?

DANIEL:

It's a good question, Mike. Given what we know about Bill Shorten and how he's operated in his career today. What's your view about how he's going to work with government? Are we going to see him outspoken on some of these issues?

MIKE:

Well, I don't have a crystal ball here. I do think it's interesting that Shorten seems to have been a bit freed up in in his rhetoric since he's announced that he's resigning. but I suspect, you know, if he's a good operator, what he will be doing is not saying too much that will embarrass the government publicly but I would think and, I might say I would hope that behind the scenes he will be trying to bring a little more rationality to some of these policies.

DANIEL:

Mike, thanks for your time.

MIKE:

Thanks very much, Daniel.

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DANIEL:

Also in the news today.

A secret audio recording of a meeting between former Liberal leader Moira Deeming and her then boss Victorian opposition leader John Pesutto has been heard in federal court.

In the recording, Mr Pesutto tells Ms Deeming he has serious concerns about her attendance at the “Let Women Speak” rally, which was attended by international anti-trans-rights activist Kellie-Jay Keen and gatecrashed by Victorian neo-nazis.

He says Deeming’s attendance was causing him to be “clobbered” on social media for the perception the Victorian liberal party was in “lock step” with Nazi protests.

Deeming is suing Pesutto for defamation. She claims he tarred her with the “nazi brush” in a “campaign of destruction”. The trial is expected to continue for two weeks.

AND

WeightWatchers has confirmed it will have to cut staff positions from its Australian operations as it discontinues in-person events and focuses instead on its app.

While the company did not specify how many jobs would be lost, a recent company report said it had 176 staff in Australia.

The announcement follows news in January that weight loss drug, Ozempic’s parent company Novo Nordisk is valued at more than $500 billion, making it Europe’s most valuable company.

I’m Daniel James, this is 7am. Thanks for listening.

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