WEBVTT - The powerful firms reshaping our universities

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<v Speaker 1>I'm Daniel James and you're listening to seven AM. One

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<v Speaker 1>of Australia's most prestigious universities is now at the center

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<v Speaker 1>of three investigations and could be about to face a fourth.

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<v Speaker 1>Last year A and You Vice Chancellor Genevieve Bell resigned

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<v Speaker 1>after pressure over a massive restructure and the hidden role

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<v Speaker 1>consultants played in shaping it. Now two inquiries are looking

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<v Speaker 1>at whether the change is meant to save two hundred

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<v Speaker 1>and fifty million dollars were ever justified. A separate investigation

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<v Speaker 1>is looking into bullying allegations against former chancellor Julie Bishop,

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<v Speaker 1>and Bella herself has been suspended from an ongoing role

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<v Speaker 1>as Distinguished Professor, accused of serious misconduct. It comes as

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<v Speaker 1>powerful firms of reshaping higher education. A recent four Corners

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<v Speaker 1>investigation found Australian unis are spending roughly one point eight

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<v Speaker 1>billion dollars a year on consultants and contractors. Today, we're

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<v Speaker 1>bringing you episode from twenty twenty five. The senior reporter

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<v Speaker 1>for the Saturday Paper, Rick Morton, examines how consultants came

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<v Speaker 1>to shape Australian unis and what that's meant for higher education.

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<v Speaker 1>It's Sunday, April nineteen. This episode first eve in June

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<v Speaker 1>of twenty twenty five. Rick universities as a sector have

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<v Speaker 1>been sounding the alarm for a long time. The government policy,

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<v Speaker 1>including funding cauts and student caps, has been having a

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<v Speaker 1>big impact on their ability to function. So can you

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<v Speaker 1>give me some examples of how consultants fit into that?

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<v Speaker 1>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 can

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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>particularly 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 and 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>Yeah, 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 about the role they are playing there?

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<v Speaker 3>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 Australian Financial Review. A former colleague of mind, 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>announce 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 structure 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 widespread is the use of consultants across the Australian

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

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<v Speaker 2>I mean KPMG was paid eight and a half million

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<v Speaker 2>dollars for Business Advisory, which is consulting at the University

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<v Speaker 2>of Melbourne. Deloitte was another one and a half grief

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<v Speaker 2>of the university has paid now I think it was

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<v Speaker 2>almost two and a half million over the last sixteen months.

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<v Speaker 2>And then lots of boutique ones that are even like

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<v Speaker 2>a tier below now, so they're absolutely everywhere. And the

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<v Speaker 2>irony is that universities themselves offered have their own consulting output,

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<v Speaker 2>but they won't use them because they're worried to push

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<v Speaker 2>back from staff and letting their plans kind of leak

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<v Speaker 2>out into the public. The way the system has been

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<v Speaker 2>built up, there's so much money flashing around that to

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<v Speaker 2>the extent that a firm wants to give you the

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<v Speaker 2>tough advice, they're only prepared to do so if they

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<v Speaker 2>think they can still keep getting work. I mean, that's

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<v Speaker 2>just the sad reality is that you're not necessarily going

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

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

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<v Speaker 2>Rick.

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

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<v Speaker 1>front of Center Estimates to ask about the real structures

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

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

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<v Speaker 1>now Scroup for the very structure.

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<v Speaker 3>Thank you question, Thank you chaan. Just finally, is it

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<v Speaker 3>correct that you've engaged in our scroup and what work

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<v Speaker 3>are they doing? Is it related to finding savings or

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<v Speaker 3>what's the scope of that work.

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<v Speaker 2>There was one example where the chief operating Officer, Jonathan Churchill,

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

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<v Speaker 2>Soma sev. We have paid now I sort the fifty

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<v Speaker 2>thousand dollars.

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<v Speaker 3>So far this year, okay, seven, fifty fifty to fifty yeah, okay, yeah, you're.

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<v Speaker 2>Not with NUS. That's the question. Very easy to understand

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<v Speaker 2>how much was his contract worth? And what he said

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

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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 NOUS.

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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 now scroup 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>thought strategically and what was a global survey really And

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<v Speaker 4>that's what.

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<v Speaker 2>She said was I brought them in early on in

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<v Speaker 2>my tenure when I got the VC job to advise

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

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<v Speaker 2>how we're tracking. Now, that makes it sound like that's

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<v Speaker 2>not involved in the restructure. That's not true. And of

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

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

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

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

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

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

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

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

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

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

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

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

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<v Speaker 2>you can take it away, you can use all your

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

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

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

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

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<v Speaker 2>outright mistruths about the use of now Consulting and about

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

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

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<v Speaker 2>Who's signed off on those questions? I noticed responses. The

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

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

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<v Speaker 2>they might have otherwise been happy to accept. The answers

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

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<v Speaker 2>Why are you paying now 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>So a lot of secrecy and uncertainty around us all this,

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

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

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

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<v Speaker 1>the university council have a sense of how to make

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<v Speaker 1>savings or where to spend money, or how to structure

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<v Speaker 1>their business. 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 somebody around

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<v Speaker 2>a million dollars on average in Australia to do these

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<v Speaker 2>jobs because we're told they demand an incredibly astute and

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<v Speaker 2>sensitive skill set, which is to manage the academic output

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<v Speaker 2>and the rankings and the quality of the institution with

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<v Speaker 2>the business of running such a large organization. But university

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<v Speaker 2>councils have even fewer oversight mechanisms than a corporate board.

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

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<v Speaker 2>no publicly used ASX meeting for these council members the VC,

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

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

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<v Speaker 2>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 were already overworked

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

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<v Speaker 2>just keep the wheels turning on these places that have

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<v Speaker 2>been gutted, and you know, they tend to get gutted

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

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

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<v Speaker 2>And of course university vcs didn't want to make these

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<v Speaker 2>decisions on their own because they're so much political blowback

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<v Speaker 2>within the organization, so they'd get these consultants in. But

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<v Speaker 2>of course, now ever, I'm very cranky that they're using

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<v Speaker 2>these consultants. So you've got Griffith University now just hiring

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<v Speaker 2>the consultants as full time employees. You know, someone told

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<v Speaker 2>me to look at the vice Chancellor's office at Griffith

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<v Speaker 2>and there's two employees there who were hired directly from

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<v Speaker 2>NAUS who are principal consultants who are now directing transformation

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<v Speaker 2>within the vice Chancellor's office. So it's pretty grim. I mean,

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<v Speaker 2>what does it look like in the future. We just

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<v Speaker 2>keep cutting And now some themselves a quite seplicity in

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<v Speaker 2>their report where they interviewed the chief operating officers. They

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<v Speaker 2>literally said that the academy's up for grats. That's how

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<v Speaker 2>they phrased it's up for grats, which tells you everything

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<v Speaker 2>you need to know I think about the way they

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<v Speaker 2>see this.

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

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<v Speaker 2>Thanks, I appreciate it.

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<v Speaker 1>Seven am. We'll be back tomorrow with an episode on

0:12:31.720 --> 0:12:34.120
<v Speaker 1>the Around Wall and how it's created not just a

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<v Speaker 1>humanitarian and economic crisis, but an environmental catastrophe as well.

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<v Speaker 5>What happened was that Israel struck for fuel depots and

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<v Speaker 5>refineries and Tehran, resulting in massive fires, sending plumes of

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<v Speaker 5>toxic smoke over the city, which led to these horrifying

0:12:52.559 --> 0:12:57.040
<v Speaker 5>scenes of black rain, effectively acid rain on steroids, you

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<v Speaker 5>know as the oil mixed with a lot of the

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<v Speaker 5>FOD that comes from burning oil, especially sulfur and nitrous oxide,

0:13:04.520 --> 0:13:09.400
<v Speaker 5>but all these other really nasty heavy metals, other combustion products.

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<v Speaker 5>An alphabet soup of toxins.

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<v Speaker 1>I'm Daniel Giants, Thanks for listening.