James Paterson (Victoria, Liberal Party) Share this | Link to this | Hansard source

COVID-19 has been a once-in-a-generation shock to our political and economic system, but some institutions entered this crisis nowhere near as well equipped as they should have been for events like this, despite the warnings. One thing made clear already is the overreliance of our higher-education institutions on the international-student market, in particular the Chinese-student market.

Over the last few decades our universities have bet big on the international-student dollar. Their institutions have boomed from what has been a very lucrative business, but they have become badly overexposed. It's why, after the government banned travel of non-citizens from China from 1 February, universities lobbied for the ban to be eased. It's why many of them paid students from China, to assist them in circumventing that ban by spending time in third countries before arriving in Australia. It's why they have been lobbying for extra support from taxpayers above and beyond their guaranteed funding of $18 billion per year. They even asked to be treated the same as welfare relief charities like the Salvation Army and the Red Cross for the purpose of qualifying for JobKeeper.

Universities argue they have pursued this market by necessity. They argue insufficient government funding pushed them down this path. It's a convenient story that attempts to absolve universities of responsibility for the decisions they have made, and it is a false one. As Professor Salvatore Babones pointed out last year in his excellent report for the Centre for Independent Studies, some of the largest recent increases in international-student numbers in fact came at a time when taxpayer funding for universities was surging. According to data from the Parliamentary Library, international-student numbers grew from 250,000 in 2011 to 300,000 in 2014—a period which coincided with the uncapped, demand-driven funding mechanism which saw record growth in taxpayer support for universities.

Chinese students have represented a very big proportion of these increases, particularly at some of our most elite universities. As Professor Babones noted, at seven of our major universities Chinese students represent more than 50 per cent of all international students. Some institutions such as the University of Sydney derive as much as a quarter of their revenue from international students from China alone.

Let me be clear: I am supportive of Australian universities welcoming international students to their campuses. It is a good thing for our higher-education sector to have a source of income that is not taxpayers' or domestic student fees. International students can enrich student life on campus. They do deepen our people-to-people links with our trading partners. Those who come from authoritarian societies will hopefully encounter perspectives here that they might not have otherwise, and return home more liberal-minded than if they had not studied here. All of those things are profoundly positive for Australia, and I look forward to them resuming as soon as it is safe to do so.

However, pursuit of this market should be done cautiously and prudently, and with a view to managing the risks involved. Those risks are not just financial but to crucial aspects that go to the core of universities in free societies, like academic freedom and sensitive research cooperation. Not all of our universities have managed this well in recent years. Even before the coronavirus, there were good reasons to be concerned about this dependence particularly on students from China. There was always a risk of a downturn in this market, whether due to natural economic events or as a result of deliberate policy measures introduced by a foreign government we have limited influence over.

Professor Babones' warning last year was very prescient. Sadly, it was not heeded by the universities, who mostly greeted it with silence. One university singled out in that CIS report was the University of Queensland. The report noted that it and a handful of other universities:

… enrol extraordinary and unsustainably risky numbers of Chinese students.

I was very intrigued to receive confidential documents from a whistleblower at the University of Queensland which shed some light on how UQ has found itself in this position. It is a copy of the 2019 remuneration report for senior staff at the University of Queensland. It sets out the performance indicators for the vice-chancellor, Peter Hoj, and the assessment of the senior remuneration committee of his achievements against those KPIs. One of those KPIs particularly attracted my attention. No. 12 reads, 'Continue to work towards a sound and strategic positioning in China, given its potential rise towards becoming the predominant provider of research globally and that it will continue to be a very important source of international students over at least the next five years, and likely more, barring geopolitical barriers being erected.'

The assessment of the committee of the vice-chancellor's performance against the criteria was: 'VC visited China four times in 2018 and twice in 2019. Invited to be the closing plenary speaker at the prestigious annual Beijing Forum in November 2020. The demand for UQ courses from China has continued to grow strongly, and we will likely end up with 63 per cent of commencing international students coming from China in semester 1, 2020.'

There is one other relevant KPI. No. 4 states: 'As part of ensuring the resilience of UQ's financials and greater diversity of our international-student body, make sure that we have made demonstrable progress towards ensuring stronger student flows from South-East Asia, India as well as one or more selected Latin American countries. With input from the VC, a strategy needs to be developed by the DVCEE for this.' Alas, there was less progress towards this goal, as noted by the committee: 'Whilst the DVCEE has been ramping up activity to diversify the international student intake with increased market presence from the above-mentioned geographies, we are yet to see this materialise in greater diversity in our international student cohort. Still, strong Chinese student demand by UQ increased G8 market share by 1.3 per cent to 13.5 per cent. UQ's growth was entirely due to growth in commencing Chinese students. Nationally, Chinese commencements dropped 788, comparable to UQ's growth.'

Despite his failure to achieve this KPI, the vice-chancellor was awarded a bonus of $200,000, a significant sum in anyone's language. Perhaps this is because the remuneration committee regarded the achievement of the China KPI as more significant. But far from an achievement warranting a bonus paid from student fees and taxpayer dollars, the prospect of 63 per cent of a university's foreign students coming from only one country should have been an alarm bell for the chancellor, Peter Varghese, and the governing body of the university, the UQ Senate. They should have been demanding an explanation from the vice-chancellor about why UQ was being placed in such a risky and precarious situation and a strategy to get out of it quickly.

Relying on students from China disproportionately is not the same as being reliant on any other country. The Chinese Communist Party rules China in an authoritarian way and its values are very different from ours. In the university context it does not uphold free speech, the principle of free and open academic inquiry or the right of protest for students. These non-financial risks are readily apparent at UQ. Right now, they are threatening a student, Drew Pavlou, with expulsion. He has been a prominent activist, on campus, on human rights issues and is in his own legal dispute with an honorary professor of the university, who also happens to be the consul general for the People's Republic of China in Brisbane.

In July last year the hopelessly inadequate agreement between UQ and Hanban, the CCP body responsible for Confucius Institutes abroad, was revealed by Fergus Hunter in The Sydney Morning Herald. The agreement contained no protections for academic freedom and handed incredible power to Hanban over teaching at UQ. The ABC later showed that four separate courses at UQ were Chinese government funded, including, extraordinarily, one on China's role on 'strengthening' responses to 'global security challenges', such as human rights, 'mass atrocities prevention' and 'counterterrorism'.

Following these revelations, the university belatedly promised to renegotiate its arrangements with the Confucius Institute in order to protect its autonomy. We are entitled to wonder why this weak agreement was ever put in place in the first place and whether it would have been renegotiated without this public scrutiny. We are also entitled to ask who at the university thought it was a good idea to allow a foreign government to directly fund courses for Australian university students. I note that Mr Hoj is a former senior consultant to Hanban. Given that we now know that the vice-chancellor was financially incentivised to deliver closer relations with the CCP, it is no wonder that the university has found itself in such a predicament. It begs the questions: is he the only VC in Australia to receive a bonus for exposing his university to financial and reputational risk by actively seeking dependence on the Chinese student market?

One final note for UQ: university management believe they know who the whistleblower is who provided these documents to me. I advise them to exercise great caution in taking any adverse action against any person they suspect of doing so. I have sought the advice of the Clerk of the Senate, who confirms that as these documents were provided to me for the purposes of delivering this speech they attract the protection of parliamentary privilege. The Senate has, in the past, taken a very dim view of anyone who seeks to hinder a senator in the free performance of their duties, including providing them confidential documents in the public interest. Retribution against someone for doing so can, in fact, be a contempt of the Senate.

I hope that UQ and all our universities are learning the right lessons of this crisis. The strategy that they willingly pursued against the warnings of people like Salvatore Babones has gravely damaged their institutions, both financially and reputationally. They will only emerge stronger from this period if they change their approach.