'Milked that cow more than we should have': Schmidt's grim warning to ANU students

Professor Schmidt, who is finishing after eight years at the ANU's helm, said the university was getting around $40 million less a year than it was receiving before the pandemic, and was running out of options to manage the shortfall.

"We actually have a lot less money for domestic students than we had in 2019," he said. "It ultimately means we either just massify our classes even further or cross subsidise ... from other sources."

"ANU is doing the latter but there's a limit of how long we can do it. At some point, I'm afraid we're going to have to go and do what everyone else has done, and just treat our domestic students less well."

Professor Schmidt said the grim prospect was a function of decisions made by successive governments about higher education funding.

"The country spends more money on private K through 12 [kindergarten to Year 12] students than it does on its university system. It seems a bit odd relative to what the rest of the world is doing," the ANU vice-chancellor said.

He said government policies had forced the university system to a level of "brutal efficiency where we scale up, we massify, we try to pop people out with degrees ... for the lowest possible cost as fast as we can".

This approach had gone too far, he said: "My own view is that we probably have milked that cow more than we should have".

In a swipe at the previous government over its decision to carve universities out of the $89 billion JobKeeper program during the pandemic, Professor Schmidt said that during the outbreak, "I was sitting there looking at my balance sheet and seeing ... loss of dollars beyond anything I could have imagined six months earlier, being told literally that our rivers run with gold by the treasurer at the time ... It's not very fun".

The education leader cautioned that the country had become dangerously reliant on revenue from international students to finance research.

"We don't think too much about research except for whenever we need to save some money," and the approach for the past 20 years had been to use money raised from the foreign student market to pay for it.

Professor Schmidt said that no other developed country in the world would think it acceptable to rely on international students to fund its sovereign research capability.

"I don't you're going to have people [in other countries] saying, 'oh, why didn't we think of that?' They would say it's bonkers," he said.

He called for a re-think of how the country funds research and lifelong learning, including greater direct investment by government and a more strategic and coordinated approach to allocating grants.

"Those sovereign [research] capabilities are absolutely essential for a secure and prosperous future [for] Australia [but] right now [the government] just spreads it like vegemite across the sector whether its a Commonwealth priority or not. I think that's just got to stop," the ANU head said.

Professor Schmidt admitted that post-graduate courses were "not cheap" and the government should provide subsidies tightly targeted to the less well-off to enable them to undertake everything from vocational training to short courses and masters degrees.

"If that keeps them in employment for an extra five to seven years the Treasury benefit there is millions of dollars," he said.

The second half of Professor Schmidt's tenure was blighted by a series of costly disasters and crises, including smoke inundation and a destructive hail storm that hit the main campus in January 2020 and, soon after, the outbreak of COVID-19.

Reflecting on that period, the ANU head said the effect of the pandemic had been "bone crushing in its scale".

It was fortunate, he said, that in the preceding four years he had made progress in getting most of what he had planned to do at vice-chancellor underway.

"[It was] just as well, because January 2020, the pandemic and then the financial constraints on universities now ... that's just put a big, big brake on any new reform," he said.

Repair from the hail storm are still ongoing and are not expected to be completed for another two years.

Professor Schmidt admitted he had made mistakes as vice-chancellor, particularly his move to reduce the size of the university in 2019.

"It was a really bad time to downsize the university just before COVID. Knowing that COVID was coming, I definitely would not have started shrinking the university when we're running a ginormous surplus, because that has created a huge issue for the university," he said.

Like other universities, ANU has had to grapple with the issue of sexual violence on campus and has been criticised over aspects of its response to date.

But Professor Schmidt listed action being taken to tackle the problem, including the development of a Student Safety and Wellbeing Plan and a review of the university's Sexual Violence Prevention Strategy as among major achievements, along with the introduction of 26 weeks of paid parental leave, equal gender representation at senior management levels and a 10-fold increase in the appointment of indigenous academics.

Under his leadership, the university was also involved in a bruising industrial dispute with its staff that resulted in the first strike in 24 years before agreement on the biggest pay offer in the higher education sector.

While there is plenty left to be completed, Professor Schmidt said the time was right to leave the top job.

"I was spending my time protecting what I had already done," he said. "At that point, you know, you're tired. It's time to give the baton to fresh legs."

He will return to research in astronomy, the field in which he won a Nobel Prize in 2011, and insists he will remain at ANU.

"I'm not going anywhere. I know this is a very weird concept for Australians. This is the way we do it in the northern hemisphere. You go and do your service as vice-chancellor and then go back and be part of the group and live with the mistakes you've made," Professor Schmidt said.

His successor, anthropologist and technologist Genevieve Bell, will commence in the role in January.