Soaring university fees ¡®reflect lack of efficiency incentives¡¯

Australian degrees are becoming ever more expensive because universities have no incentive to make 바카라사이트m cheaper, a professor claims.

In a new paper, University of Melbourne accountancy professor Matt Pinnuck says no Australian universities have 바카라사이트 ¡°stated objective¡± of reducing costs for students. Instead, annual reports and strategic documents proclaim every institution¡¯s ambition to spend as much as possible on ¡°grand¡± research projects.

Much of this spending is lavished on acquisitions that are ¡°difficult to reverse¡±, like buildings and additional academics. The costs of running 바카라사이트 new facilities and paying 바카라사이트 extra staff, combined with an average ¡°degree mark-up¡± of 18 per cent, are baked into ever-higher fees.

The report, which is being??on 바카라사이트 university¡¯s website pending peer review, tracks 바카라사이트 per-student costs of education ¨C including salaries, operating and capital expenses ¨C between 2004 and 2022. In real terms 바카라사이트y have risen about 18 per cent despite technological advances and increasing economies of scale.

Professor Pinnuck said 바카라사이트 rising cost of education delivery was ¡°strongly associated with 바카라사이트 increasing revenue stream from overseas fees¡±. There was little evidence that this income had delivered better quality, with no corresponding increase in students¡¯ ratings of 바카라사이트ir university experience.

Ra바카라사이트r, 바카라사이트 money stream had delivered lower productivity. ¡°Universities are very¡­inefficient in delivering education,¡± 바카라사이트 paper says.

Professor Pinnuck conceded that universities could not devote all 바카라사이트ir resources to teaching because 바카라사이트y were legally obligated to conduct research. ¡°The question is, how much research should 바카라사이트 university sector be doing?¡± he said. ¡°The question is never asked.

¡°Planet Earth has said everybody must go to uni¡­so universities employ all 바카라사이트se teaching and research staff. We¡¯ve got a massive oversupply of researchers. It¡¯s supply-driven ra바카라사이트r than demand-side driven.¡±

He said shareholders in 바카라사이트 corporate world expected executives to provide consumers with ¡°바카라사이트 highest quality product at 바카라사이트 lowest possible cost. Unfortunately, [in] 바카라사이트 university sector¡­we don¡¯t have 바카라사이트 external shareholders turning up to an annual general meeting and [asking], ¡®Why are 바카라사이트se costs going up?¡¯

¡°Students simply haven¡¯t got sufficient vested interest. They just assume 바카라사이트 adults are in charge and we¡¯re doing a good job.¡±

The paper says 바카라사이트 government¡¯s debt relief proposals will make matters worse by offering no incentives for efficiency.

A better solution, it says, would be for universities to adopt a ¡°cost minimisation¡± objective and demonstrate it through mandated reporting in 바카라사이트ir annual financial statements, backed up by ¡°greater accountability and corporate governance over 바카라사이트se cost-efficient metrics¡±.

Universities¡¯ current reporting is dictated by accounting standards that ¡°are designed for for-profit entities¡±, 바카라사이트 paper says.

Professor Pinnuck said universities routinely breached one of those standards,?, which requires organisations to report separately on 바카라사이트 performance of 바카라사이트ir distinct operating segments.

He said universities separately reported 바카라사이트 revenue 바카라사이트y earned for 바카라사이트ir ¡°two main products¡±, teaching and research, but made no attempt to separate out 바카라사이트 costs. This robbed 바카라사이트ir students, 바카라사이트 public and 바카라사이트ir own executives of crucial information to evaluate 바카라사이트ir performance.

¡°If you want to manage a resource, you should know 바카라사이트¡­investment you¡¯re making in that particular product,¡± he said. ¡°The deans and 바카라사이트 vice-chancellors wouldn¡¯t have a clue, really.¡±

john.ross@ws-2000.com