Study Says Australian University Chiefs Earn Big, But Questions the Effectiveness

Students walk around Sydney University in Sydney, Australia, on April 6, 2016. Brendon Thorne/Getty Images

University vice-chancellors in Australia are paid large salaries, but results are better than those of overseas counterparts.

That’s the conclusion of a study by the Australia Institute, which compared local universities against those in the Nordic countries (Denmark, Finland, Iceland, Norway and Sweden).

The top jobs at both the University of Melbourne and UNSW Sydney pay $1,507,000. By way of comparison, that’s more than Prime Minister Anthony Albanese ($607,500) and Opposition Leader Peter Dutton ($432,250) combined.

In 2023, average remuneration for the Group of Eight (Go8) sandstone universities’ vice-chancellors reached nearly $1.3 million per year, more than quadrupling since 1985.

The Australia Institute looked at the pay of vice-chancellors and the world rankings of the universities they head, and compared both against the Nordic countries because they have a similar number of universities that rank in the top 100 and also in the top 200.

Australia’s total population is also similar to the combined population of the Nordic countries.

They found Nordic vice-chancellors (known there as “rectors”) earn far less than their Australian counterparts.

A comparison of vice-chancellor remuneration and university rankings among Australian universities and those in Nordic countries. Courtesy of the Australia Institute.

Australia’s lowest-paid vice-chancellor, the recently retired Brian Schmidt of the Australian National University, is paid significantly more than the highest-paid equivalent at a Nordic university—Rector Henrik C. Wegener of the University of Copenhagen.

And that’s despite the fact that Schmidt, a Nobel Prize-winning physicist, negotiated a reduction in his pay in 2021.

“The pay for rectors of top-ranking Nordic universities is around the equivalent of $300,000 Australian dollars,” the report notes.

A graph showing how vice-chancellors' remuneration has increased over time, compared to that of Australian workers and the level of student assistance. Courtesy of the Australia Institute.

From 1985 to 2023, adjusting for inflation, income support for students grew by less than 20 percent, while average full-time earnings grew by nearly 40 percent. Meanwhile, the remuneration of Go8 vice-chancellors grew by 320 percent.

While the salaries paid in Australia are often justified as being necessary to attract top talent, the Institute points out that Nordic universities are ranked no better than their local counterparts (though with the caveat that such systems have their flaws).

“The Nordic countries show how universities can have high rankings without excessive vice-chancellor remuneration,” the Institute says.

Nor does having a leader earning over $1 million automatically translate to better student outcomes.

“While Australian students are taking longer and longer to repay their debts, students in the Nordic countries attend university for free,” the Institute also noted.

“In Australia, PhD candidates receive a tax-free stipend of $33,511; a higher stipend is possible but rarely paid in practice. This is substantially less than the full-time minimum wage, which is about $47,800, or about $41,700 after taxes.

“To make matters worse, if an Australian PhD candidate goes part-time, they must start paying tax on their paltry stipends. Unsurprisingly, PhD enrolments among domestic students have been declining.

“In Finland, Sweden, Norway, and Denmark, PhD students receive about double or more than students in Australia. Even Iceland, the Nordic country with the least generous PhD pay, the salary is roughly in line with the Australian full-time minimum wage,” the report says.

The government could ease the burden on students by reducing the cost of university education, raising student welfare payments, and abolishing junior rates for adults, it suggests, while vice-chancellors’ earnings could be reined in by making federal funding conditional on capping remuneration to only two or three times more than lecturer salaries.

“A vice-chancellor’s remuneration is nearly 15 times larger than the pay for an average worker and more than 84 times more than Youth Allowance,” the Institute says. “It’s time to fix it.”

Overregulation Will Limit University Growth: Former VC

The former Vice Chancellor of Macquarie University Steven Schwartz has stated tertiary institutions are underperforming, but the solution is not more government regulation.

“Domestic student enrolments are dropping, public confidence is eroding, and the sector is drowning in compliance burdens. The government’s response? More oversight, more watchdogs, more red tape,” he wrote in an opinion piece.

The federal government has just introduced a proposed law to mandate university administrators deal with sexual violence and safety on campus or face fines. At the same time, a new ombudsman will be set up to monitor the progress of these initiatives.

Last year, the government set quotas for enrolments and revived the Australian Tertiary Education Commission to oversee policy implementation.

“This is the government way, after all,” Schwartz wrote. “If a problem exists, create a committee; if it persists, establish an agency; and if it thrives, bury it under so much red tape that no one can tell where the problem ends, and bureaucracy begins.”

“Universities don’t need more watchdogs, agencies, or commissions. They need Councils that are strong, informed, and capable of making tough decisions. They need the freedom to compete and innovate, and, above all, universities need to stop being treated like wayward children in need of constant supervision.”

The Group of Eight consists of the eight largest, oldest, and most prestigious Australian universities. It was established in 1999 and is similar to the Ivy League in the United States, it maintains its own office and secretariat.

The Epoch Times contacted the Group of Eight to respond to the Australia Institute’s commentary on its vice-chancellors’ salaries.

Its members are:

• University of Melbourne
• Australian National University
• University of Sydney
• University of Queensland
• University of Western Australia
• University of Adelaide
• Monash University
• University of New South Wales Sydney