It was a pivotal day for Australian higher education on 22 December 2023. The deadline for the Universities Accord’s final report to government, it also marked the last day on the job for the world’s only serving university chief with a Nobel prize.

In a personal  to the accord, Australian National University (ANU) vice-chancellor Brian Schmidt had offered “three big ideas” for the reviewers. As he prepared to leave office, he was “reasonably confident” that one or two would be adopted.

His overriding wish was for an “optimised” rather than monochrome sector. “I’m hoping they will create a system which will have some more dynamism in it, and allow universities to proudly do different missions,” he said.

“But it requires…faith by the government that universities will do what’s right if they’re given a sensible set of incentives. Right now, I’m not sure that trust is there. But it needs to be there if you’re going to get us optimised.”

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Trust could be restored through the tertiary education commission that Professor Schmidt expected to be among the accord’s recommendations. “I think that’s the way we’re going to mitigate some of the regulatory burden we’ve been seeing,” he said. But much rested on whether safeguarding universities’ autonomy was “baked in” to the new commission’s riding instructions – and whether future governments maintained “fidelity” to that vision.

“If it is genuinely expert-led [it] is a means by which we could get…oversight without fouling the waters too much. However, if it is politicised and becomes an instrument of pain on the sector, then it will be absolutely terrible.”

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Professor Schmidt said the previous government’s interference in Australian Research Council grants had illustrated the threat. “There has always been…an understanding that ministers don’t override specific grants in research, because it’s not the way democracies roll. Yet people started doing it.”

Professor Schmidt said a commission might help to deliver the first of his big ideas: a more integrated tertiary system with better student interflow between vocational and higher education. While he was unsure whether both sectors would be brought under federal control, as suggested in his submission, the accord offered “a pretty good jump in the right direction”.

He said he was more “hopeful” than assured about the prospects for another of his big ideas: a fully funded core sovereign research capability. “Universities plan on 10- to 20-year planning cycles, not on three-year election cycles. That long-term growth of research to serve the nation and serve it well – that’s something we need to see happen over time,” he said.

“It’s a big call [and] we need both sides of parliament to do it. The government is going to have to invest more money, one way or another, or we’re going to lose our sovereign capability and become – quite frankly – very vulnerable from a security [and] economic perspective.”

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Professor Schmidt said that while universities had demonstrated their proficiency in “optimising”, they had “optimised down kind of a blind alley. We have managed to keep research up [while the] government [was] decreasing funding. We’ve done that by going out and getting the largest export market in the world, driving our universities up to huge sizes, driving costs down. But we’ve gone down a one-way road and it’s a dead end. In the next 10 or 15 years, we’re not going to keep on being able to do that.”

In the shorter term, he said, he was “optimistic” that the government would reform competitive research grants so that they covered research overheads. “That’s almost a zero-cost thing for them to do. As I’ve said multiple times, [it is] crazy not to do that.”

Professor Schmidt credited much of ANU’s success to the unique National Institutes grant it received as a federally funded institution. Worth more than A$200 million (£106 million) a year, the grant helps ANU rank alongside the large research-intensive institutions, which earn well over A$500 million each from international education, often by enrolling more foreigners than ANU’s entire student body.

He said National Institutes funding enabled ANU to maintain “cutting-edge” research, particularly in humanities fields where combined income from fees and teaching grants was substantially lower than per-student funding at most high schools. The National Institutes grant also bankrolled the university’s ability to maintain low-margin programmes such as languages and to provide a campus-based residential experience as default.

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Professor Schmidt said Canberra should consider National Institutes grants for all universities. “Imagine a mission-dependent block grant like ANU gets. You will get more bang from that than anything else. That’s how I would do it if I were king. But I’m not king.”

john.ross@timeshighereducation.com