WEBVTT - The consulting firms reshaping our universities

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<v Speaker 1>From Schwartz Media. I'm Daniel James. This is seven AM.

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<v Speaker 1>A quiet transformation is underway at Australian universities. Behind closed doors,

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<v Speaker 1>powerful consulting firms are helping to reshape higher education, cutting courses,

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<v Speaker 1>centralizing power and outsourcing staff. One firm in particular, Nouscroup,

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<v Speaker 1>is now embedded in some of the country's most prestigious institutions.

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<v Speaker 1>At the Australian National University, its role in a two

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<v Speaker 1>hundred and fifty million dollars restructure has been concealed even

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<v Speaker 1>from Parliament, raising concerns about transparency and accountability. Today, senior

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<v Speaker 1>reporter for the Saturday Paper, Rick Morton on how consultants

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<v Speaker 1>gain control of the university sector and what it could

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<v Speaker 1>mean for the future of higher education. It's Monday, June sixteenth, Rick.

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<v Speaker 1>Universities as a sector have been sounding the alarm for

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<v Speaker 1>a long time. The government policy, including funding counts and

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<v Speaker 1>student caps, has been having a big impact on their

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<v Speaker 1>ability to function. So can you give me some examples

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<v Speaker 1>of how consultants fit into that. How are universities using them?

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<v Speaker 2>So consultants appear to be coming in and great example

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<v Speaker 2>of that is one I covered recently at a University

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<v Speaker 2>of Technology Sydney where KPMG were brought in. But we're

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<v Speaker 2>essentially told go and look at individual research output from

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<v Speaker 2>individual researchers and produce a master list of those who

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<v Speaker 2>are not contributing enough profit to the university, which, as

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<v Speaker 2>it was put to me, would probably contravene the enterprise

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<v Speaker 2>bargaining agreement at that university because you can't you could

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<v Speaker 2>performance manage someone for not meeting expectations. You can't make

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<v Speaker 2>redundancies based on performance. That's not how this is meant

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<v Speaker 2>to work. And so the consultants, of course took a

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<v Speaker 2>particular corporate view across the board. They're looking at profit

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<v Speaker 2>and loss, they're looking at ways to rationalize centralized services.

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<v Speaker 2>But the actual structure of the university is incredibly special

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<v Speaker 2>for a reason. It's meant to be a kind of

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<v Speaker 2>a distributed network of knowledge centers, faculties, people who are

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<v Speaker 2>learned in their field, who contribute to the life of

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<v Speaker 2>the university and who are cooperative in the way that

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<v Speaker 2>university is run. And increasingly, particularly with consultants like the

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<v Speaker 2>NOUS group, which is one that will come to in

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<v Speaker 2>quite a bit of detail, the advice is centralize all

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<v Speaker 2>of your functions and to the degree possible handicap what

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<v Speaker 2>it is the faculties and the academic staff are able

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<v Speaker 2>to do and the say they have over the future

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<v Speaker 2>of this institution, which would make it a lot more

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<v Speaker 2>like a corporation and a lot less like a university.

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<v Speaker 1>Now, there are a number of consultancy groups involved in

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<v Speaker 1>all of this, but you did mention Nowscroup, which is

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<v Speaker 1>a global consulting firm and they do a lot of

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<v Speaker 1>work with the Australian National University. So what did you

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<v Speaker 1>find out of the role they are playing there? Now?

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<v Speaker 2>This is fascinating and I particularly there it in on

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<v Speaker 2>them because I think they've had the most astounding growth

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<v Speaker 2>off the back of their participation in higher education advisory services.

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<v Speaker 2>And of course this story was first being told through

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<v Speaker 2>the Austrained Financial Review of former colleague of mine, Julie

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<v Speaker 2>Her who's a fantastic reporter, was looking at misgivings, I

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<v Speaker 2>guess is one way of saying it. Early on within

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<v Speaker 2>the tenure of the new vice chancellor there, Professor Genevieve

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<v Speaker 2>Bell and her chancellor, Julie Bishop. Now Genevieve Bell had

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<v Speaker 2>announces his kind of two hundred and fifty million dollar

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<v Speaker 2>restructure at the A and U because they said that

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<v Speaker 2>they were running out of money structurally and they were

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<v Speaker 2>going to be six hundred to something job losses. But

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<v Speaker 2>what they didn't do is tell anyone that they were

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<v Speaker 2>using the Nouse Group's advice or paying them for that advice.

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<v Speaker 2>In fact, they were incredibly tricky with how they disclosed

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<v Speaker 2>any mention at all that they were using external consultants

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<v Speaker 2>to advise on this enormous restructure.

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<v Speaker 1>How wisepread is the use of consultants across the Australian

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<v Speaker 1>university sector. I mean they're everywhere.

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<v Speaker 2>They are literally everywhere. I mean KPMG was paid eight

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<v Speaker 2>and a half million dollars for business advisory, which is

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<v Speaker 2>consulting at the University of Melbourne. Deloitte was another one

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<v Speaker 2>and a half grooth of the university has paid now

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<v Speaker 2>I think it was almost two and a half million

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<v Speaker 2>over the last sixteen months. And then lots of boutique

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<v Speaker 2>ones that are even like a tier below now. So

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<v Speaker 2>they're absolutely everywhere. And the irony is that universities themselves

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<v Speaker 2>offered have their own consulting output, but they won't use

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<v Speaker 2>them because they're worried to push back from staff and

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<v Speaker 2>letting their plans kind of leak out into the public.

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<v Speaker 2>The way the system has been built up, there's so

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<v Speaker 2>much money sloshing around that to the extent that a

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<v Speaker 2>firm wants to give you the tough advice, they're only

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<v Speaker 2>prepared to do so if they think they can still

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<v Speaker 2>keep getting work. I mean, that's just the sad reality

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<v Speaker 2>is that you're not necessarily going to be told anything

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<v Speaker 2>you don't want to hear.

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<v Speaker 1>Coming up after the break, David Pocock takes on unibosses Rick.

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<v Speaker 1>Late last year, the A and you were brought in

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<v Speaker 1>front of Center Estimates to ask about the restructures you

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<v Speaker 1>mentioned earlier, and David Pocock was trying to get to

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<v Speaker 1>the bottom of how much the UNI had paid now

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<v Speaker 1>Scroup for the very structure. Thank you, Thank you cha.

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<v Speaker 3>Just finally, is it correct that you've engaged in our

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<v Speaker 3>scroup and what what work are they doing? Is it

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<v Speaker 3>related to finding savings or what's the scope of that work.

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<v Speaker 2>There was one example where the chief Operating Office that

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<v Speaker 2>Jonathan Churchill was asked how much is this contract worth? Yeah,

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<v Speaker 2>thank you, senator, We have paid now sort of the

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<v Speaker 2>fifty thousand dollars so far this year, okay.

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<v Speaker 3>Seven fifteen, fifty fifty Okay, yeah, you're not.

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<v Speaker 2>With now that's the question, very easy to understand. How

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<v Speaker 2>much was this tract worth? And what he said was

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<v Speaker 2>we have paid to date fifty thousand dollars to NAS.

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<v Speaker 2>That wasn't the question, and there also wasn't correct as

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<v Speaker 2>a standalone answer. And if he had been asked how

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<v Speaker 2>much he'd been paid, because the invoices at that point

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<v Speaker 2>were about four hundred and fifty thousand dollars to NUS.

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<v Speaker 2>Now we now know when he asked this question on

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<v Speaker 2>November seven last year, that a contract for NOUS had

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<v Speaker 2>been signed and set in motion a month before, and

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<v Speaker 2>that that contract was worth eight hundred and thirty seven

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<v Speaker 2>thousand dollars. Genevieve Bell was also asked have you used

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<v Speaker 2>NOUS to advise on the restructure, and the answer she

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<v Speaker 2>gave was, I would argue deliberately obtuse.

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<v Speaker 4>I initially engaged the NOWS group a number of months ago, Senator,

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<v Speaker 4>to help think about how to look at the role

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<v Speaker 4>and the changing role of universities in a global landscape.

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<v Speaker 4>I was interested in what were the ways that universities

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<v Speaker 4>thoughttrategically and what was a global survey really.

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<v Speaker 2>And what she said was I brought them in early

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<v Speaker 2>on in my tenure when I got the VC job

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<v Speaker 2>to advise on the university's position in relation to other

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<v Speaker 2>universities and how we're tracking. Now that makes it sound

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<v Speaker 2>like that's not involved in the restructure.

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<v Speaker 1>That's not true.

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<v Speaker 2>And of course we now know subsequent to that fact

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<v Speaker 2>that within seventeen days of the Vice Chancellor starting the job,

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<v Speaker 2>she had authorized the pursuit of these consulting firms for

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<v Speaker 2>enormous restructure at the A ANDU. When it was subsequently

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<v Speaker 2>emerged that David Pocock had been misled, he was furious

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<v Speaker 2>and he put out a statement in April this year

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<v Speaker 2>essentially saying that he was appalling and that he takes

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<v Speaker 2>this incredibly seriously. And the conclusion he reached was that

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<v Speaker 2>he had been misled by these officials because they didn't

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<v Speaker 2>want to answer the question. And of course after that

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<v Speaker 2>there were also a bunch of questions on notice, which

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<v Speaker 2>through the Parliamentary Estimate system, you can take a question

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<v Speaker 2>on notice, you can take it away, you can use

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<v Speaker 2>all your resources at your institution, your department, whatever it is,

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<v Speaker 2>and answer the question properly and come back and tell

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<v Speaker 2>the Senate the truth. And it is an offense to

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<v Speaker 2>mislead the Senate. There were several questions on notice that

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<v Speaker 2>printed outright mistruths about the use of Nouw's consulting and

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<v Speaker 2>about the value of those contracts. They had to be

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<v Speaker 2>recalled and corrected. The question that remains is how did

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<v Speaker 2>that happen? Who's signed off on those questions on notice responses?

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<v Speaker 2>The fact that there has been a pattern of behavior

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<v Speaker 2>here now has led people to ask even more questions

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<v Speaker 2>that they might have otherwise been happy to accept the

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<v Speaker 2>answers to, which is, what are your motives behind this restructure?

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<v Speaker 2>Why are you paying nows? And what are you doing

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<v Speaker 2>with the advice that you're refusing to tell us about.

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<v Speaker 1>A lot of secrecy and uncertainty around all this. But

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<v Speaker 1>what we do know is that universities are spending a

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<v Speaker 1>lot on consultants, which begs the question shouldn't university management,

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<v Speaker 1>people like the vice chancellor and the people on the

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<v Speaker 1>University council have a sense of how to make savings

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<v Speaker 1>or where to spend money, or how to structure their business.

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<v Speaker 1>I mean, isn't that their job?

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<v Speaker 2>Yeah, that is their job and they should do it.

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<v Speaker 2>We have a fundamental structural problem with universities and to

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<v Speaker 2>some extent they won't be financially sustainable, while the government

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<v Speaker 2>that funds and regulates them doesn't seem to care about

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<v Speaker 2>their role in society. But vcs are paid, you know,

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<v Speaker 2>somebody around a million dollars on average in Australia to

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<v Speaker 2>do these jobs because we're told they demand an incredibly

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<v Speaker 2>astute and sensitive skill set, which is to manage the

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<v Speaker 2>academic output and the rankings and the quality of the

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<v Speaker 2>institution with the business of running such a large organization.

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<v Speaker 2>But university councils have even fewer oversight mechanisms than a

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<v Speaker 2>corporate board. There are no shareholders to whom they're accountable.

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<v Speaker 2>There is no publicly listed ASX meeting for these council members.

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<v Speaker 2>The VC, particularly at university the Australian National University, the

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<v Speaker 2>VC can only lose their job if they resign or

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<v Speaker 2>if the council recinds it.

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<v Speaker 1>So, Rick, what impact do you think all this will

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<v Speaker 1>have on the university sector. The reliance on consultancy firms,

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<v Speaker 1>the lack of funding from federal government to universities. What

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<v Speaker 1>does the future of the university sector look like At

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<v Speaker 1>the moment.

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<v Speaker 2>It's pretty grim, and you know, staff are already overworked

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<v Speaker 2>and overburdened, particularly academic and professional staff, trying to just

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<v Speaker 2>keep the wheels turning on these places that have been gutted.

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<v Speaker 2>And you know, they tend to get gutted every other

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<v Speaker 2>four years. You know, there's always a restructure happening at

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<v Speaker 2>a university at any given point in time. And of

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<v Speaker 2>course university vcs didn't want to make these decisions on

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<v Speaker 2>their own because they're so much political blowback within the organization,

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<v Speaker 2>so they get these consultants in. But of course now

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<v Speaker 2>over I'm very cranky that they're using these consultants. So

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<v Speaker 2>you've got Griffith University now just hiring the consultants as

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<v Speaker 2>full time employees. You know, someone told me to look

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<v Speaker 2>at the Vice Chancellor's office at Griffith and there's two

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<v Speaker 2>employees there who were hired directly from NAUS who are

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<v Speaker 2>principal consultants who are now directing transformation within the Vice

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<v Speaker 2>Chancellor's office. So it's pretty grim. I mean, what does

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<v Speaker 2>it look like in the future we just keep cutting.

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<v Speaker 2>And now somemselves are quite explicit in their report where

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<v Speaker 2>they interviewed the chief operating officers. They literally said that

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<v Speaker 2>the academy's up for grabs. That's how they phrased it's

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<v Speaker 2>up for graps, which tells you everything you need to know.

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<v Speaker 2>I think about the way that they.

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<v Speaker 1>See this, Rick, thank you so much for your time.

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<v Speaker 2>Thanks mate, I appreciate it.

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<v Speaker 1>Also in the news today, Prime Minister Anthony Alberinezi has

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<v Speaker 1>confirmed he'll meet face to face with Donald Trump this

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<v Speaker 1>week in a high stakes diplomatic encounter on the sidelines

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<v Speaker 1>of the g seventh Summit in Canada. The meeting comes

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<v Speaker 1>amid escalating tensions in the Middle East and growing uncertainty

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<v Speaker 1>over the Orcas submarine deal, which the Pentagon is now reviewing.

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<v Speaker 1>Albanzi says he'll use the meeting to press Australia's case

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<v Speaker 1>for a tariff exemption and to highlight the strategic benefits

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<v Speaker 1>of Orcas for the US and Israel has launched a

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<v Speaker 1>series of strikes on Iran's energy infrastructure, targeting a major

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<v Speaker 1>oil refinery in Tehran and a gas facility in the

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<v Speaker 1>country's largest production field. The attacks have sent crude oil

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<v Speaker 1>prices sharply higher and raised fears of a sustained spike

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<v Speaker 1>and fuel costs. Analysts warned that any further escalation, particularly

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<v Speaker 1>in the Strait of Hamas, could destabilize global energy markets.

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<v Speaker 1>This is being seven am. We'll be back tomorrow. Thanks

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<v Speaker 1>for listening.