Did Universities Fake a Money Crisis to Cut Jobs?

Several Australian universities cut hundreds of jobs over the past two years, saying they didn't have enough money to keep paying staff. But a New South Wales government inquiry found that some universities may have made their money problems look worse than they really were. The inquiry looked at six universities and found they appeared to go too far in cutting staff and programs. Now, questions are being raised about whether the job cuts were truly necessary.

One of the people who lost his job is Dr. Adam Lucas, a researcher at the University of Wollongong, known as UOW. He spent decades teaching students to support their conclusions with solid evidence, so he was frustrated when UOW refused to show him the financial model used to justify cutting his position. 'We saw the outputs, but we never saw the model, and we were never given the chance to test whether the numbers actually added up,' he said. He pointed out that if a student submitted work like that, they would fail.

After trying and failing to challenge the figures, Dr. Lucas accepted a voluntary redundancy — meaning he agreed to leave in exchange for a payout. He said it quickly became clear that nothing he said would change the outcome. 'It soon became clear to me that it didn't make any difference what I said. So at that point I figured, okay, the number's up,' he said. UOW said staff were told what data was used, but detailed figures were kept private to protect personal information.

The inquiry investigated UOW and five other universities: the University of Technology Sydney, Macquarie University, the University of Newcastle, Charles Sturt University, and Western Sydney University. It found these universities appeared to overstate their financial troubles and went too far with job cuts. Universities had blamed the cuts on falling numbers of international students and changes to government policy. The inquiry accepted that conditions were difficult, but questioned whether the financial data used to justify the cuts was accurate.

One striking example came from Macquarie University, where internal documents obtained by the teachers' union showed the university's own modeling included a 'no workplace change' option. That option could have still met the university's $55 million savings target without cutting any jobs. However, management chose the full-redundancy option, with internal notes asking: 'Why not go all the way?' Macquarie said the no-cuts option was only a hypothetical idea and was never a real plan.

The head of the inquiry, politician Sarah Kaine, called some of the universities' financial arguments 'faux crisis narratives,' meaning she believed the crises were exaggerated or not entirely real. She said university councils failed to properly question the financial information given to them by senior managers. She was also critical of outside consultants hired by the universities, saying they were 'at best complicit in the crisis' while also making money from the very reform programs they helped design. The teachers' union said its members who challenged the cuts had been proven right.

Dr. Lucas's case shows how the cuts affected real people beyond just losing a job. He ran science, technology, and environmental humanities programs at UOW, designing and teaching core subjects and supervising research students. He said the model used to decide which areas to cut relied on data from just one year — 2024 — when he happened to be on long-service leave. UOW disputed this, saying the review used three years of data and that his area was found to be unviable across all measures.

The cuts also hurt students who were enrolled in programs that were later discontinued. Some students had paid for a degree they could no longer complete after courses were cut. 'They'd entered uni, they'd paid for a degree that they could no longer complete,' Dr. Lucas said. UOW said about 140 students were significantly affected, but that most were able to adjust their study plans and stay at the university.

The inquiry recommended that universities be banned from publicly using their own adjusted financial figures when those figures differ from their official audited accounts. The teachers' union wants all six universities to publish the financial models and consultant reports used to justify their restructures. 'If your financial case is strong enough to dismantle part of a university it should be strong enough to survive daylight,' said union secretary Vince Caughley. Dr. Lucas wants the university's model to be independently reviewed and the decisions about cutting programs to be reopened.

Separately, the New South Wales corruption watchdog ICAC has been investigating UOW's $3.8 million contract with a consulting firm called KordaMentha. The investigation looked at the hiring process for the contract and the relationship between the firm and the university's former acting vice-chancellor. ICAC has not yet released its findings. The state government has until December to formally respond to the parliamentary inquiry's report.