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University of Melbourne to axe 220 jobs

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.

16 comments to University of Melbourne to axe 220 jobs

  • Uncle Milton

    Harry, your first sentence is right. If wealthy Melbourne is feeling the strain, who isn’t? Although, ironically, their wealth has exposed them to the downs of the stock market; an exposure not felt by universities without endowments. I suspect you are dead right about about the capital works program. If they took their investment gains and built expensive buildings, on the assumption that the gains would continue unabated to fund the completion of the buildings, leaving nothing in the reserve fund for operational expenses like salaries, that was the height of financial folly.

    Glyn Davis no doubt wants to leave his mark as a Great Vice Chancellor. Revolutionising undergraduate and professional education, monumental buildings everywhere, taking over the VCA – he was well on his way. It’s too bad the money ran out before the vision could be fully realised.

  • Sinclair Davidson

    Happens to all socialists, they run out of other peoples’ money.

  • harry – its only a 3% jobcut and with NO forced redundancies – lots of non uni employed people would like those odds.

    What if it was the endowment funds that had enabled most of those 220 jobs anyway – why shouldn’t they go when it stops?

    I wouldn’t wait for the Core Economics analysis – wasn’t it Bob Officer and the Business School who were the “rainmakers” with the endowment funds? Much easier for economists to predict the past with a modest degree of accuracy. And I’m not clear that they have lost much of the basic principle of the endowment funds anyway – just the income stream. Maybe the Business School had advised shifting to cash just before the GFC and things aren’t all that bad.

    and harry maybe you can warn sinclair that those commos at RMIT are next

  • conrad

    “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”
    .
    It seems unlikely — surely they have excess demand almost everywhere, and if that wasn’t the case, they could just drop their TERs a bit (which already happened in some places due to the MM I believe).
    .
    “harry – its only a 3% jobcut and with NO forced redundancies ”
    .
    I don’t think “only” is the right word. 3% across the board is huge, and no doubt all that will happen unless they reduce students numbers (which is what they want to do anyway) is that the 3% of work done by those people will be done more inefficiently by others.

  • BRY

    Do you believe any of Glyn’s hype? In hindsight, were the cuts to the Arts faculty, and their impact, only ‘minor’? Peter Singer is brave enough to actually speak out, but not many other staff are. I wonder why?

    And if a teaching institution with enormous class sizes has a choice between quality teaching, and more nice looking buildings, what responsible manager would opt for the buildings?

    Finally, what do you mean no forced redundancies? You don’t need to tell academic staff their job is to be cut. The Deans pressure the heads of departments, and they target individuals. Regardless of your teaching/research performance, you will get a chat about how your new office is going to be a small, unheated cupboard, somewhere in the basement…

  • Uncle Milton

    Peter Singer is untouchable. He’s not going to get fired for speaking out. He wouldn’t get fired if he shouted “Death to Glyn Davis!” in Grattan Street and burnt him in effigy. And if he did, he could go back to Princeton full time. The University of Melbourne needs Peter Singer a lot more than he needs the University of Melbourne.

  • hc

    I am surprised that people have become fearful of authority in universities. They are fearful of speaking out. Academics in some respects have much greater freedom than those in private firms but in other respects they have less. Moreover, it is not only foolish VCs who like to throw their weight behind proposals that they refuse to publicly defend. It is also the university bureaucracy. Monash University is bad in this latter respect.

  • conrad

    “I am surprised that people have become fearful of authority in universities.”

    I’m not. People worry about their jobs and promotions, and many of the old freedoms have been traded away in enterprise bargaining over the years. In addition, many people are so used to bullying from management and their ass-kissing yes-men, that even once you get a good management team, people are just habituated to being paranoid. The down side of all this is that everyone is happy to put up with all the crazy money-wasting decisions that get made. It’s why people think starting campuses in South Africa and Singapore is a good idea — no-one is willing to tell them it’s not.

  • To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves and abhors, is sinful and tyrannical. I’m tired of subsidizing third-rate left-wing academics and staff. Good riddance.

  • hc

    I have to say Sukrit that I find your views appalling beyond belief. There are many views I disagree with in universities but I have enough doubt about the supreme relevance of my own views not to seek to suppress the views of others using a budget. The way to deal with views you disagree with is to argue against them – not to squash them by making sure they will not be heard.

    BTW where are the third rate left wing academics? Who are they?

  • Uncle Milton

    I presume Harry that you don’t mean to imply that you would seek to suppress contrary views if you had no doubts about your own.

    In fact, in my experience, it is people who have the most doubts about their own views who are most likely to want to suppress others. It is their way of handling their insecurities. On the other hand, people who are in no doubt that they are right are perfectly happy to have others express contrary views, because they believe that, eventually, correct ideas will beat incorrect ideas, because they are, well, correct.

  • I only ask that you afford your intellectual opponents the courtesy of debating them fairly. Academics steal tax money to support their lifestyle and then claim it’s a fair debate, even though the free-market side (Centre for Independent Studies) relies only on voluntary contributions.

    There are far too many academics in this country, most of whom propagate socialism at the taxpayer’s expense. We need to cut down on this parasitic class.

    If you love Karl Marx, John Maynard Keynes and Paul Krugman, don’t ask others to subsidize that choice. Likewise, I don’t expect you subsidize the free-market academics who adore Adam Smith, Milton Friedman or F.A. Hayek. Ideas should stand or fall on their merits.

  • BTW where are the third rate left wing academics? Who are they?

    Australia is a backwater of intellectual ideas. America leads the world, then it’s Britain. Don’t take this personally, we all do what we can.

  • Uncle Milton

    I recall when the ANU economics department was wall-to-wall free market types. Swan, Sieper, Milne, Trivedi, Cornes, etc etc – they were everywhere. It was the most influential economics department in the land. Their students went out and populated Australian universities and are still there.

  • conrad

    Have you had a fight with your girlfriend today Sukrit?

  • gyumi

    For me, I’m proud to announce that I leafleted the information night last week of the Melbourne University law school, giving out information about how the degrees aren’t worth it.

    I think there’s no question that basically humanities at University is a ruse by governments to temporarily keep the dole queue’s down by hiding people at university with useless courses.