The decision of the wealthy University of Melbourne to axe 220 jobs shows the strains that the Australian university sector is under. One wonders whether part of the claimed income losses that forced this move are due to Glyn Davis’s forced introduction of the Melbourne Model which has deterred some first year enrollments. The claimed reductions in endowment income sound like capital losses to me rather than income though it is certainly the case that the GFC will have had an impact. One wonders too whether the obviously ambitious capital works program – it dominates this university’s skyline – was incautious.
I am surprised that Economics and Commerce is recognised in The Age as one of the areas where budget cuts will need to be made. I thought this area, at Melbourne, was a virtual money machine!
I am unconvinced that employment decisions in a university should be contingent on the stock market fortunes of that university’s endowment fund. I also think that all Australian universities have their survival prospects to a greater or less extent linked to full fee-paying international students. The University of Melbourne has performed brilliantly well in this overseas market but there is a vulnerability to demand shifts that will become more severe if the Aussi dollar strengthens.
To this point there is a stoney silence on what is going on at Melbourne from their team of bloggers at Core Economics. Eventually these brave souls will say something. There is a characteristically lucid discussion by Robert Merkel at LP. I’ll update as more information comes to hand.