Chapter 5Strengthening TEQSA
5.1As discussed in Chapter 2, the Tertiary Education Quality and Standards Agency (TEQSA) currently has three core functions: managing applications to become or to continue being higher education providers; responsibility for ensuring compliance with the Standards for Higher Education (ThresholdStandards); and the responsibility for enforcement where non-compliance with the Threshold Standards is identified.
5.2In response to the committee's terms of reference on the adequacy of the powers available to TEQSA to perform its role in identifying and addressing corporate governance issues at Australian higher education providers, this chapter will focus on the arguments for and against TEQSA having increased powers. It then concludes by exploring the views of members of university communities on the channels for, and the effectiveness of, complaints.
Is there a systemic problem that requires a sector-wide solution?
5.3The scale and breadth of the issues that have been presented to this inquiry—and initiated the focus on governance in the university sector—are contested by universities. While many institutions accepted that there have been issues uncovered, they argued that these are at the institutional level, and as such, do not require sweeping change across the entire sector.
5.4The University Chancellors Council (UCC) conceded that there have been failures in recent years, but this is not a reflection of the sector as a whole:
Over the last few years, there has been some breakdowns in management systems that has led to poor outcomes for staff at an institutional level. Robust systems of governance, while an antidote to failure in process, are not infallible and UCC is committed to continuous improvement in governance systems.
5.5Independent Higher Education Australia (IHEA) were also confident that any issues that may be revealed by this inquiry would not be systemic, and therefore any proposals to address whatever those issues are should be limited to the individual institutions:
IHEA recommends that issues that are identified through this Inquiry, and any recommendations that are made to address these issues, are not applied on a sector wide basis but are targeted to address the specific source of the concerns.
5.6However, the University of Technology Sydney (UTS) accepted there have been issues across the sector that have led to calls for increased oversight and the need for change:
We acknowledge there have been areas where the sector, including UTS, may not have met public expectations of what it takes to be a good employer and to provide an environment that is safe for our students and staff. … wherever possible we have aimed to proactively address these issues and take preventative steps to avoid further harm. In particular though we wish to draw the Committee's attention to how university governance and its oversight of university management has operated to identify and oversee the need to change. We welcome any recommendations that improve this.
5.7Regarding its investigations into non-compliance with workplace laws, the Fair Work Ombudsman (FWO) was highly critical in its assessment of the scale of governance issues it found in the sector:
In the initial stages of our investigative work with universities it became apparent that non-compliance at individual institutions was not isolated, and nor were the underlying causes. Our review of university governance processes regarding compliance with workplace laws revealed significant sector-wide weakness and systemic issues. Inadequate governance and a lack of senior management oversight emerged as the underpinning element of the common issues and themes of non-compliance the FWO has identified.
5.8Similarly, and as discussed in Chapter 1 of this report, the Australian Universities Accord Interim Report (Accord Interim Report) found that the current governance arrangements 'do not always translate into effective oversight and support for staff and students, and that this is a systemic challenge'.
Universities' perspectives on the need to enhance or expand TEQSA's powers
5.9Most universities were of the view that TEQSA's powers and responsibilities are sufficiently broad and do not require significant amendment. Several institutions pointed to the extensive governance arrangements provided by the combination of TEQSA, Commonwealth and state legislation, and internal governance frameworks, and argued that there are no gaps in the overall framework.
5.10For example, the Queensland University of Technology submitted that:
…TEQSA is adequately equipped with extensive powers to properly regulate university governance, and especially in concert with the many other regulatory oversight mechanisms established by the Commonwealth and state and territory governments.
5.11Murdoch University submitted that 'there is no systematic failure of governance at Australian universities', and that the suggestion 'is bandied about too loosely'. Its submission also stated that any gaps in TEQSA's powers, are filled by other Commonwealth or state regulation:
Where there might seem to be gaps, these are ably filled by other Federal and State institutions and laws.
To extend TEQSA's powers would serve only to install another level of reporting requirements on an already an over-burdened sector.
5.12Charles Sturt University contended that the regulatory framework applied to it is appropriate given that universities are not government agencies:
We contend that TEQSA's powers on these matters are appropriate for the current regulatory and legislative framework and can adapt to meet evolving expectations of government and the community – provided those expectations are realistic and support the principle that universities are autonomous, self-governing institutions, not government agencies. We urge the Committee to recognise this truth …
5.13The Australian Catholic University (ACU) also emphasised that Australian universities are 'autonomous institutions with their own distinct missions', and that this should underpin the regulatory settings they must comply with.
5.14The University of Southern Queensland (USQ) was also of the view that TEQSA has 'all the powers it needs to carry out the function for which it was established'. USQ argued that the agency should not be tasked with extended powers in areas where it lacks expertise:
… we do not believe that its powers should be extended to expressly include financial and operational oversight of university processes beyond its current orientation. TEQSA has not been established or staffed with the appropriate skill sets, systems, policies, knowledge or processes for what would amount in essence to financial powers best left to the Auditor-General, Fair Work Commission or myriad other more specialised Commonwealth government agencies.
5.15The Australian National University (ANU) was similarly cautious about expanding TEQSA's responsibilities to areas it has not traditionally been responsible for:
ANU recommends caution before expanding TEQSA's areas of responsibility, particularly where that may require a significant broadening away from TEQSA's current core areas. This could be counterproductive and weaken TEQSA's effectiveness, and also lead to duplication and overlap unless other legislative requirements are simultaneously adjusted or streamlined.
Proportionate regulation
5.16Universities and peak bodies representing numerous institutions were consistent in calling for proportionate regulation in an already comprehensively regulated sector. For example, IHEA warned of the consequences of increasing the regulatory burden on institutions:
However, as an already highly regulated sector, IHEA cautions against additional regulation of higher education providers. Over−regulation costs providers time and money, which can lead to finding savings elsewhere within the organisation. This may lead to redundancies and come at the cost of innovation and greater use of technology, which impacts students.
5.17Monash University was of the view that the powers and responsibilities of TEQSA, alongside its internal governance framework and establishing state legislation, provided a proportionate governance regime:
The authorities and powers of the [TEQSA] contained in the TEQSA Act and related acts and standards, together with TEQSA's proportionate, risk-based approach and practices and the State legislation establishing public universities, create a comprehensive regime to assure the quality of governance within the higher education sector.
5.18The ACU recommended that any regulatory arrangements should 'seek to promote administrative efficiency and minimise undue regulatory burden or complexity'.
5.19The need for regulation to be proportionate and to take into account numerous other governance arrangements was also emphasised by the University of Adelaide. Its submission suggested that any changes must be reflective of current arrangements and the actual risk:
… changes to TEQSA's powers be assessed against the sensible requirements set out in Part 2 of the TEQSA Act. That is, any proposed change should meet the regulatory principles of necessity, be reflective of risk, and be proportionate in their impost. In our view, careful consideration of how to ensure a seamless and optimal interplay between obligations under State and Federal legal and regulatory obligations is pertinent.
5.20This view was echoed by Flinders University:
Any change to the Higher Education Threshold Standards, or TEQSA's powers to perform its role, should be carefully considered and weighed against the administrative compliance burden placed on universities.
5.21UCC cautioned that overregulation could 'limit innovation and academic freedom, both of which are essential components of the higher education sector':
… we acknowledge the broader importance of maintaining a balance between regulatory oversight and institutional autonomy. It is essential that universities retain the flexibility to determine their own strategies and leadership structures to effectively fulfil their educational missions.
5.22The UCC's submission also made clear their perspective that TEQSA's powers are strong, sufficient and carry appropriate penalties for non-compliance:
The consequences for noncompliance are significant, with TEQSA having strong powers over Australian universities. The view of the UCC is that the roles and powers of TEQSA are sufficient in the context of legislative and regulatory frameworks for university governance.
5.23While maintaining that TEQSA has the appropriate powers and frameworks to carry out its role to ensure compliance with the Threshold Standards, IHEA accepted that there was scope for 'fine-tuning' its oversight:
… as outlined in this submission, IHEA believes that TEQSA has the frameworks and powers to adequately undertake its role. However, there may be opportunities for TEQSA to supplement this work with specific and fine-tuned actions on issues they have less direct control over, such as compliance with workplace relations laws.
This would be more appropriate and specific and effective action than recommending additional, blunt regulation for all provider types.
5.24UTS was of a similar view that the scale and breadth of TEQSA's powers were appropriate, but could nevertheless be enhanced:
It is the view of UTS that the existing powers of TEQSA are sufficiently broad and encompassing for the purposes of assuring the quality of the higher education sector. To the extent that there are questions about the emphasis or priorities of TEQSA, a Statement of Ministerial Expectations could be considered to guide governance and other priorities for the regulator and the sector (such an approach has been adopted in the case of the Australian Skills Quality Authority).
Staff and student perspectives
5.25Regarding how the sector is regulated, many student and staff representative bodies were of the view that regulation should support the broader education and research functions of universities, as well as their financial viability. Forexample, academic staff at RMIT University submitted that governance is 'fixated on financial priorities reducing education to a commercial enterprise and undermining its purpose'. Instead, it argued that government oversight should go beyond financial governance and oversee the management of a university from a more holistic perspective:
A university's mission to deliver quality education and research 'in the national interest' should embrace social, civic, cultural, and political aspirations—not just economic ones …
The adequacy of TEQSA's powers, central to this inquiry, must be assessed through this lens. Governance failures in Australian higher education—marked by financial is management, lack of transparency, and exploitative employment practices—harm both staff and students. Addressing these issues requires stronger oversight, inclusive decision-making, and a genuine commitment to accountability at all levels.
5.26Dr Farida Akhtar's submission discussed the implications when governance quality is compromised, as well as the positive consequences of well governed institutions, for the students, as well as the institution:
Governance that prioritizes profit over quality education/research places unsustainable pressure on frontline academics—staff who hold teaching and research or teaching and service roles. This pressure erodes work work-life balance, negatively impacts mental health, and productivity, and hinders career progression… Failure to confront these issues fosters a toxic workplace culture, which ultimately undermines the university’s core mission and values.
When incoming students join institutions governed by principles of quality, fairness, and transparency, they become part of a culture grounded in trust, excellence, and collective pride. Strong governance directly contributes to a robust education system, enhances research quality, and supports effective teaching—ultimately strengthening the university's reputation on both national and global stages.
5.27The Council of Australian Postgraduate Associations (CAPA) and National Aboriginal and Torres Strait Islander Postgraduate Association (NATSIPA) recommended that TEQSA's powers should be expanded to ensure that post graduate student representatives are mandated on corporate governance bodies, rather than being limited to academic governance:
… CAPA and NATSIPA recommend that the TEQSA Higher Education Standards section 6.1 be amended to include student participation, and specifically postgraduate and HDR participation in university corporate governance. Moreover, CAPA and NATSIPA recommend that TEQSA's powers be expanded to be able to recommend to the university legislatures, to appoint students to the governing bodies of universities.
5.28Other submitters, while acknowledging that TEQSA has powers which appear comprehensive, argued that it is reliant on information provided by the universities themselves:
In theory, TEQSA's governance oversight appears comprehensive. In practice, however, it relies heavily on university management's 'good faith' in providing accurate and complete information—an assumption that is fundamentally flawed. TEQSA presumes it can independently assess the integrity of university governing bodies, yet evidence suggests that university leadership, particularly within the Chancellery, actively filters and censors critical reports before they reach the Senate or Council.
5.29Dr Terri MacDonald, Director of Public Policy and Strategic Research at the National Tertiary Education Union (NTEU) echoed concerns around self‑reporting by universities as the primary method of TEQSA's oversight:
They're requiring self-reporting from universities so that's the first issue because universities always give themselves a pass mark—and actually sometimes with stars! … It is good that ANU has been reported to TEQSA by the minister and we do certainly endorse that. We are certainly hopeful that there will be some meaningful findings, but, having said that, we are conscious that it is self-reporting.
5.30A former law academic from James Cook University, Mr Simon Walker, described the difficulties in regulating the higher education sector:
Australian public universities are created by state legislation such as the James Cook University Act 1997 (Qld) (JCU Act) but are largely funded and regulated by the Commonwealth. The mismatch between these coupled with underlying institutional complexity leads to a lack of oversight.
…
Private, for-profit entities have regulators armed with wide-reaching investigative and prosecutorial powers. This includes the ACCC, ASIC, and the ATO. TEQSA, in comparison, has a narrowly-confined ambit to investigate issues involving accreditation.
TEQSA's perspective on its powers
Gaps in the Threshold Standards coverage of governance risks
5.31While TEQSA assesses providers against the Threshold Standards, it has identified gaps in Threshold Standards' coverage of governance risks. These include:
Governing body composition: the Threshold Standards require that governing body members are fit and proper persons, include independent members, and meet certain residency requirements, but do not contain particular provisions about the skills, qualifications, experience or other characteristics of members of a governing body.
Executive remuneration and employment practices: the Threshold Standards do not address provider employment arrangements, remuneration structures, or the use of external consultants.
Governance transparency: the Threshold Standards do not mandate specific transparency or disclosure requirements in relation to provider governance.
5.32Furthermore, in TEQSA's view there is a lack of specificity in some of the governance requirements under the Threshold Standards, which means they are too broad to be an effective compliance and enforcement mechanism.
5.33In addition, the Threshold Standards lack specific, enforceable obligations that would enable direct enforcement, meaning that cannot create binding legislative instruments, such as enforceable codes, to address systemic risks.
5.34Despite the view of some universities that TEQSA's powers are sufficient, TEQSA's submission sets out in detail its belief that 'its ability to address the governance risks relevant to this inquiry is constrained'. TEQSA's submission identified where it thinks its capacity to regulate effectively could be improved:
(1)responding to acute provider risks
(2)responding to systemic risks
(3)monitoring systemic risks.
Acute risks
5.35Acute risks are defined by TEQSA as 'immediate, high-impact failures that threaten students, institutional stability or sector integrity'. TEQSA has identified three opportunities to strengthen its regulatory powers:
Establish suspension powers: Introduce provisions for suspending provider registration or course accreditation, with a specific legislative intention that these powers may be used to address acute risks of the kind described above.
Establish explicit legislative triggers: Define clear statutory grounds for suspending, cancelling, shortening or imposing conditions on provider registration, by reference to a broader range of matters that better reflect the objects of the TEQSA Act.
Strengthen the basic principles of regulation: Amend the basic principles of regulation to prioritise student protection, provider accountability and Australia's reputation for high-quality education.
Systemic risks
5.36TEQSA defines systemic risks as those 'risks and issues that emerge across multiple providers pose a broad risk to students and the integrity, quality and reputation of Australian higher education. These risks often stem from structural weaknesses in governance, compliance gaps or external pressures/events that affect multiple providers simultaneously'.
Recent examples of systemic risks include:
Risks to student and staff, wellbeing and safety: Arising from campus protests and encampments related to the recent events in the Middle East, and ineffective responses to gender-based violence.
Failures in workplace compliance: The underpayment of university staff and failure to comply with fundamental workplace obligations.
Lack financial accountability for the expenditure of public money: University governance structures are failing to meet the public's expectations for use of public funds.
5.37In response to these risks, TEQSA has identified two possible remedies to assist it in responding to systemic risks:
Introduce a legislative instrument such as an enforceable code: This could provide a structured mechanism for TEQSA to set clear compliance obligations, which fall from the Threshold Standards, while allowing flexibility to regulate a diverse and evolving sector.
Establish explicit enforcement provisions for systemic risks: This may enable TEQSA to issue infringement notices, require production of information, obtain warrants and pursue civil penalties for governance failures. Consideration could also be given to introducing provisions allowing TEQSA to issue compliance notices to support these enforcement arrangements.
Monitoring risks
5.38TEQSA's submission also sets out clearly what limitations constrain its ability to monitor systemic risks, because its current legislative framework focuses on compliance at an institutional level, rather than having a sector-wide oversight perspective:
TEQSA's ability to identify and track these risks is limited by its current legislative framework, which primarily focuses on assuring individual provider compliance rather than sector-wide oversight. Section 60 of the TEQSA Act provides for thematic assessments, but its scope is limited to the quality of education provided by higher education providers, or systemic issues relating to courses of study that lead to one or more higher education awards. This limitation restricts TEQSA's ability to systematically review governance-related risks that emerge across multiple providers and which are not related to particular courses of study.
5.39TEQSA also cited access to accurate and timely data as a key limitation in addressing and coordinating responses to emerging risks:
Another limitation for TEQSA, unrelated to powers within the Act, is the limited ability to access accurate, up-to-date data. Delays in data submission, data being held across different systems and issues with data quality contributes to delays in identifying and responding to emerging sector-wide risks and working efficiently with other bodies to effectively respond and determine whether regulatory responses are effective in mitigating these risks.
TEQSA's enforcement powers
5.40The Minister for Education described TEQSA's powers as a sledgehammer or a feather, 'and not much in-between'.
5.41This is a statement that many submitters, including TEQSA itself, concurred with. A widely shared view is that TEQSA's powers to enforce any regulatory action it applies, are limited.
5.42TEQSA views the current design of its enforcement powers as complex and resource intensive and involving multiple steps. It also limits its ability to take direct enforcement action against systemic governance failures unless a separate statutory breach has occurred.
5.43While offering procedural fairness, TEQSA notes that this multi-step process 'often delays regulatory enforcement and limits TEQSA's ability to address systemic, emerging or urgent risks'. Unlike other regulators, TEQSA is also unable to pursue direct penalties or enforcement measures without court involvement.
5.44In addition, TEQSA lacks early enforcement powers that would help it to address governance failures before they lead to major issues.
5.45Specific limitations identified by TEQSA include:
its inability to immediately suspend a provider's registration in response to acute risks;
a lack of a clear statutory basis for addressing acute risks where they arise;
a disconnect between TEQSA's regulatory powers and public interest matters such as those in the objects of the Tertiary Education Quality and Standards Agency Act 2011 (TEQSA Act);
an inability to directly enforce adherence to the Threshold Standards by seeking penalties for non-compliance or using enforcement powers such as warrants to investigate acute non-compliance risks;
a limited ability to identify and track systemic risks due to the TEQSA Act's primary focus on assuring individual provider compliance rather than sector-wide oversight;
narrow information collection powers, which limits early identification of systemic risks and/or detailed and systematic reviews of those risks; and
a limited ability to access accurate and up-to-date data.
5.46The Australia Institute argued that the issues TEQSA faces with regulating the sector are not its powers but rather are set in its purpose and design. In the view of the Australia Institute, TEQSA has been 'designed as the regulator of an artificial "market" for higher education'.
5.47According to the Australia Institute, the difficulty for TEQSA is that it doesn't have as much regulatory authority or enforcement powers as regulators of privately owned companies:
For example, while it is illegal for a privately owned company to make false and misleading claims about its products, universities claim that they are not covered by Australian consumer protection laws because universities are not engaged in 'trade or commerce'… TEQSA does not have the powers of the ACCC, but students paying $80,000 for a degree require at least as much protection as those buying an $800 TV.
5.48This view was echoed by the NTEU who sympathised with TEQSA's difficulties in enforcing regulatory directions:
…their powers are extremely limited, so it's a very long road for TEQSA to take the university to court and to go through this huge process to try to enforce something. I don't think TEQSA should be blamed for the fact that they just have a very, very limited menu of options for when it comes to trying to get the universities in line. They just don't have many powers that they can fall back on.
5.49A sessional academic, with experience across eight different universities, emphasised the need for TEQSA to have powers which can consider the educational quality of the services on offer by an institution:
TEQSA must be empowered with enhanced investigative and enforcement capabilities to address these systemic issues effectively. This should include specific powers to investigate classification of teaching activities, monitor workload allocations, and ensure transparent handling of staff complaints regarding academic integrity. Without such reforms, universities may continue to prioritise cost-cutting measures over educational quality and staff wellbeing, ultimately compromising Australia's international reputation for academic excellence.
5.50Dr Shumi Akhtar, an Associate Professor from the University of Sydney, envisaged a role for TEQSA in mandating 'transparency and accountability standards, including the publication of governing body meeting minutes, key decisions and University Senate's independence and composition to function well'.
5.51However, the UCC's submission argues that TEQSA's powers are strong, sufficient and carry appropriate penalties for non-compliance:
The consequences for noncompliance are significant, with TEQSA having strong powers over Australian universities. The view of the UCC is that the roles and powers of TEQSA are sufficient in the context of legislative and regulatory frameworks for university governance.
Complaints processes
5.52One of the central issues raised in the inquiry was how to effectively lodge complaints about universities. Depending on the nature of that complaint there are a number of different bodies that can receive complaints.
TEQSA
5.53The body with primary regulatory responsibility for universities is TEQSA, which is responsible for investigating concerns about a serious systemic risk to students, or to the quality or reputation of Australia's higher education sector. According to its website, TEQSA can investigate complaints, student wellbeing and safety, admission practices, and the quality of teaching and learning.
National Student Ombudsman
5.54The National Student Ombudsman (NSO) is an independent service for students to resolve complaints about their higher education provider. The NSO can receive and investigate complaints about a broad range of issues, including:
student safety and welfare, including gender-based violence
racism
course administration, such as timeliness and accuracy of information provided to students
teaching provision and facilities, such as sufficiency of staffing to meet educational, academic and administrative needs of students
disciplinary processes, such as procedures to address misconduct
reasonable adjustments for students with disability or experiencing special circumstances.
Higher education providers
5.55All higher education providers are required to have policies and procedures in place to resolve grievances. The policies must be made publicly available, such as on a website, student portal or in a student handbook, and must outline how the institution will review, assess and respond to a range of academic and non‑academic complaints.
Fair Work Ombudsman
5.56The Fair Work Ombudsman's (FWO) role is to 'promote and monitor compliance with workplace laws'. As such it is the appropriate body to:
investigate breaches of the Fair Work Act and recovering underpayments
take appropriate enforcement action, including litigation
enforce certain orders made by the Commission.
5.57As outlined in Chapter 1, the FWO decided to include universities as a compliance and enforcement priority in 2022–23, as a result of concerns about widespread underpayments, as well as poor governance and management oversight in Australian universities. The process discovered that a significant number of universities had underpaid staff.
5.58The FWO expressed its disappointment in the scale of non-compliance with workplace laws across the university sector:
The scale of non-compliance has been particularly disappointing given the university sector's social licence, receipt of substantial taxpayer support, and because existing governance structures have regrettably not, in our experience, ensured workplace compliance. This has had a hefty financial and wellbeing impact on university staff.
5.59The FWO also stressed that the benefits of productive and harmonious workplace culture extend beyond financial considerations:
Compliance with workplace laws ultimately supports improved culture, institutional reputations and, importantly, improved outcomes for not just affected staff but student bodies and the broader Australian community.
Experience of complaints processes
5.60While almost all of the universities referred to the complaints processes in their institution as an element of the regulatory framework they work within, there was no discussion, or breakdown of the nature, number, or outcomes of complaints.
5.61Conversely, many submitters and witnesses discussed complaints processes, with several arguing they are inadequate. During the committee's hearing in Canberra, the President of the Australian National University Students' Association, Mr William Burfoot expressed his view on the adequacy of the complaints process at the institutional level:
There are complaint mechanisms, but they are woefully inadequate to capture the volume of issues that students are experiencing. When it comes to the matter you've raised, a student would be forced to submit a complaint through a generic email address or through the generic university complaints process.
5.62Ms Ashlyn Horton, National President of the National Union of Students, also made the point that the complaints processes within universities are run by the universities themselves, which casts doubt on their independence or accuracy:
I will just very quickly add that these complaint mechanisms at the ANU, and at all other universities, are run by the university itself. Inherently, that's not right. These mechanisms used to be run through our student unions. The class surveys that you do at the end of every semester also used to be run through the unions. Now, they are run through the university. So, at the end of the day, the universities will reveal the data that they want to, not an accurate depiction of what students feel.
5.63Sydney University Postgraduate Representative Association (SUPRA) submitted about their members' experience of the types of complaints that are being lodged, and the how the process works in practice:
SUPRA is aware that for many years, coursework students at the University of Sydney have complained about: a decline in the quality of teaching in some courses; cuts to units of study and degrees without student consultation; limited assessment feedback; reduced consultation hours with lecturers and tutors; as well as extensive delays in administrative decisions, appeals, complaints, and academic integrity breach or misconduct allegation resolutions.
5.64SUPRA continued that despite postgraduates' experience of underpayment, they 'are unlikely to log complaints due to job insecurity'.
5.65The University of Melbourne Student Union (UMSU) cited the Higher Education Standards Framework, which sets out the obligations for providers to provide complaint mechanisms:
Current and prospective students have access to mechanisms that are capable of resolving grievances about any aspect of their experience with the higher education provider, its agents or related parties.
There are policies and processes that deliver timely resolution of formal complaints and appeals against academic and administrative decisions without charge or at reasonable cost to students, and these are applied consistently, fairly and without reprisal.
If a formal complaint or appeal is upheld, any action required is initiated promptly.
5.66UMSU argued that the processes for complaints from students are subject to 'ongoing barriers to student access to and timely resolution of student appeals at the University'. UMSU's submission said that in its view there is a practice in the University to consider appeals 'on the papers' which 'deprives students of the opportunity to appear and further ventilate their concerns before a formally constituted panel of senior academic staff'. This in turn:
… reflects poorly on the overall governance of the University as it serves to curb avenues for students to resolve serious grievances or appeal university decisions which have onerous consequences for the student.
5.67Public Universities Australia was scathing in its assessment of governance in universities. Its view centred on the lack of accountability of university managers, and the power imbalance between staff, students and the senior administration of institutions:
The unaccountability of university managers is a fundamental problem besetting Australian universities.
… university managers at all levels are unaccountable to the academic collegiate including students, and answer only to their managers above. Governance failures and any transgressions a university manager may make…
5.68This contrasted with the consequences for staff who question governance decisions:
Any academic who may question governance determinations or object to abuses and excesses or make any public complaint risks termination of their employment and, by extension, of their entire careers, and this has befallen dozens of academics without any effective intervention or protection; existing employment arbitration is not effective, and even legal action is problematic and unnecessarily expensive and protracted. University managers are immune to consequences for any improbity or professional failure.
5.69Dr George Morgan, an Adjunct Associate Professor at Western Sydney University, and academic of 36 years, concurred and said that in his experience 'university managers can, and often do, take decisions that undermine rather than enhance the quality of education and research, and they do so with relative impunity'.
5.70Dr Morgan also submitted that while the channel for students to complain has improved with the introduction of the NSO, there is still no mechanism for staff to complain about university governance:
The recently introduced Office of National Student Ombudsman is most welcome, but a similar body is needed to hear the complaints of staff whistleblowers: those best placed to identify mismanagement but fearful of doing so.
5.71Professor Gerd Schröder-Turk, an academic at Murdoch University, expressed his concern over general governance and oversight of universities, and identified the lack of process for universities to receive or manage complaints from within the university community as an issue:
University governance organs ignoring concerns expressed to it by members of the university community or governance organs not having appropriate processes in place to receive and deal with concerns or complaints expressed to them.
5.72Mr Simon Walker also discussed the systems for staff and students to submit complaints within universities. Mr Walker emphasised the point that 'a healthy governance system encourages whistleblowing and bona fide complaints by staff and students'.
5.73However, Mr Walker contended that is not how complaints mechanisms operate in universities:
… there is a systemic issue in university grievance mechanisms: an endemic conflict of interest. Universities lack truly independent channels for complaints, especially when the complaint implicates high-ranking officials or long-tenured staff.
5.74The consequences of this are that situations arise that severely impact the culture of the organisation, and the trust that staff have in management to fairly assess and manage their complaints:
… when serious complaints (for example, about bullying, harassment, or ethical breaches) are mishandled in this way, it deters others from coming forward. Staff fear that using official channels will just mark them for reprisal, rather than fix the issue. This breeds a culture of silence and impunity, where problems fester and trust in leadership further erodes.
5.75Mr Walker similarly makes the point expressed by other submitters, that while there is an independent body in the form of the NSO that can manage complaints from students, there is no such body for university staff:
Compounding the issue is the absence of independent oversight in university complaint processes. While there is the recently established National Student Ombudsman (NSO), there are no equivalent bodies for complaints flowing from other university stakeholders such as staff, student associations, professional bodies, employers, alumni, research collaborators, industry partners, and community organisations.
5.76To resolve the lack of independence, Mr Walker recommended that TEQSA have a role in investigating complaints about senior university staff:
The TEQSA Act (or other legislation) could be amended to allow for serious complaints of misconduct by senior university staff to be referred for investigation without the individual concerned suffering direct reprisal from raising a matter internally.
5.77The Australian Association of University Professors (AAUP) described a typical complaint process in a university, which it said at first glance seems appropriate, however the final decision, and the transparency of the complaint process are in the hands of the university governance officials:
It is common for internal investigations to be conducted into concerns and complaints made by academics against university governance officials, and similarly for investigations to be conducted on instruction of a governance official against an academic.
In such investigations, those involved are formally disallowed from speaking with colleagues, or anyone in fact, about the matters under investigation. External consultants are usually engaged, presumably to create the impression of impartiality, but final decisions from these investigations almost always fall to the university's governance officials. As mentioned above, the actual reports resulting from these investigations are never made available for those involved, so that the reasoning for decision making is entirely opaque, while the integrity of the reports themselves is doubtful.
5.78AAUP recommended that all complaints be reported to TEQSA, with the identification of the relevant governance officials included:
Because abuse of governance positions is so rife in universities, the reports should also contain a full listing of all complaints made against governance officials, together with statements summarising the outcomes of each complaint made. In this way, the regulatory authority would be able to readily identify individual governance officials who are especially problematic.
Committee view
5.79As is evident throughout different parts of this report, there has been a striking gap in the perceptions of university management, and the rest of the university community when it comes to governance.
5.80This gap in perceptions doesn't appear to be a new phenomenon. Professor Mary O'Kane AC, described being struck (during the University Accord process) by the difference between the views of staff and students and those with responsibility for university governance on issues like student safety and underpayments:
There were a lot of themes, but those were the big ones, and what struck us as odd was they were raised with us by students, staff and stakeholders. They were constant themes. And, of course, the Fair Work Commission was briefing us on the underpayments in a very significant way. But, when we met with those charged with governance, it didn't seem to be such a big issue. They didn't deny it, but it wasn't a strong focus …
5.81Across all the themes in this report—accountability and transparency, executive remuneration, the powers of the Tertiary Education Quality and Standards Agency (TEQSA)—universities maintained that the current systems, processes, and policies are largely sufficient and do not require wholesale intervention or amendment.
5.82This is in stark contrast to the many submitters outside of the management branch of universities who provided their accounts of poor governance at many institutions, which have led to 'systemwide and systemic breaches of workplace standards', poor accountability for decisions and a loss of public faith in the higher education sector.
5.83Where there has been acknowledgement of things going wrong, universities, and those representing them, have argued that these cases are isolated to individual institutions, and as such, do not require intervention at a systemic level. 'There is no systematic failure of governance at Australian universities' as one university submitted.
5.84Many universities also sought to point out that universities are 'autonomous, self-governing institutions, not government agencies', and that the regulatory burden placed upon them should reflect this.
5.85While supportive of some of the points made by universities, especially in regard to ensuring regulation is proportionate and risk-based, the committee cannot agree that there are no areas that require sector-wide improvement or enhancement.
5.86The evidence received from universities in relation to the powers of TEQSA displayed similar characteristics, where most submissions were stridently of the view that TEQSA's powers are adequate and appropriate, especially given the other regulatory or legislative frameworks universities are subjected to.
Transparency and accountability
5.87The committee received substantial evidence that discussed whether the transparency and accountability obligations on universities were appropriate, fit-for-purpose, and operated effectively in practice.
5.88Universities recognised that there are concerns from government, regulators, staff, and students concerning accountability and transparency in the operation and decision making at universities. Staff and students submitted that they have little effective representation on governance bodies, and that governance processes are opaque and governing bodies act without any accountability or effective scrutiny.
5.89The committee considers these issues to be at the heart of the lack of trust in institutions across Australia, and heard various options to remedy both the operational and cultural issues that inhibit transparency and accountability. Common themes were increasing and strengthening staff and student representation and mechanisms to ensure greater openness and transparency of governing bodies' decision making.
5.90The committee supports all efforts to return trust in decision making within the higher education sector.
5.91The committee recommends that universities improve the transparency and accountability of their governing bodies, including by:
publishing all minutes of council meetings in their entirety, on university websites, while ensuring that personal or legally protected information is appropriately withheld;
publicly disclosing details of all spending on consultants, including the purpose of each consultancy and the extent to which the capacity exists to perform that function within the institution;
maintaining a publicly disclosed conflict-of-interest register for university council members and senior university executives. Where senior executives receive remuneration for external roles, mitigation actions to manage any perceived or real conflicts-of-interest (which could include the offsetting of salaries) should be both agreed and disclosed on the public register;
publishing annual remuneration reports in-line with requirements for public companies including role-specific salaries of senior university executives; and
publicly reporting on the composition of governing bodies, including the proportion of elected members and those with public and higher education sector experience, and that there be transparency over the appointment process for non-elected positions.
5.92The committee recommends that the Tertiary Education Quality and Standards Agency's (TEQSA) regulatory mechanisms to enforce these transparency and accountability practices are considered alongside the current process to modernise and strengthen TEQSA's powers.
5.93The committee recommends that universities adopt best-practice and meaningful consultation for major change proposals, including involvement from staff and students prior to decisions being made.
Executive remuneration
5.94The issue of executive remuneration in the sector was one of the most controversial topics in both public commentary, and in evidence received throughout the inquiry.
5.95The committee notes that Australian university vice-chancellors are 'among the highest paid in the world', with salaries more than quadrupling since 1985.
5.96The committee also notes that these remuneration increases have taken place at the same time as casualisation in the sector has increased dramatically. As highlighted by the NTEU, underpayments in the sector have reached $265million and have affected more than 150 000 workers across 30 institutions.
5.97The committee heard from university management representatives that the high salaries paid to vice-chancellors, and many other senior executives, were justified, and indeed necessary, to attract the global talent and expertise required to run highly complex institutions.
5.98Whilst the committee accepts the importance of universities being able to remain competitive for global talent, the overwhelming volume of evidence received was strongly of the view that universities paying over 300 executives across the country more than the premier or chief ministers of their state was excessive, and out of step with community expectations of public institutions and international comparisons.
5.99The issue was further magnified by the numerous change proposals and restructuring exercises that are taking place in many institutions, resulting in involuntary redundancies, reductions in the numbers of courses available to students, and in some cases the closure of entire schools within universities.
5.100While the committee heard evidence that most institutions do benchmark their salaries—and that the salaries, and other financial incentives, are set by university councils with separate remuneration committees—there remain concerns that these safeguards do not ensure appropriate independence and transparency of the processes undertaken, given their role as public institutions established for the public good.
5.101While the committee is cognisant of the various proposals it has received around capping or limiting salaries, the committee is of the view that the lack of trust in the process is at the centre of the issue. To this end, the committee acknowledges the recent proposal by the University Chancellors Council that proposed the development of 'a new advisory framework for Vice-Chancellor remuneration, to be supported by the Commonwealth Remuneration Tribunal', and makes the following recommendation:
5.102The committee recommends that the Australian Government work with the Remuneration Tribunal and states and territories to devise a mechanism or framework of classification structures and remuneration ranges to determine vice-chancellors' and senior executives' remuneration. University councils would retain responsibility for setting the vice-chancellors' and senior executives' remuneration, within the appropriate classification and remuneration range.
Governing body composition and training
5.103The correct proportion of elected and appointed members of university governing bodies was highly contested in the committee's evidence. The committee heard arguments that proportions and numbers should be specified and applied across the sector, and other views that the balance should be determined by each institution depending on their circumstances.
5.104The committee supports introducing mechanisms that ensure an appropriate balance between those who work and study in the institution, and those who bring specific expertise to advance the purpose of the university and its governance. The committee believes there is merit in a minimum representation of two staff and two student representatives on each body.
5.105The committee is very supportive of measures being introduced that support and strengthen the skills and effectiveness of governing bodies and their members more broadly.
5.106The committee also supports measures that would ensure that those who serve on university governing bodies are equipped with knowledge of the university sector, and their role as public institutions established for the public good. In the committee's view, providing for a majority of members with relevant experience and knowledge of higher education, and/or the broader public sector would help achieve this.
5.107The committee is of the view that the Expert Council on University Governance is the appropriate body to consider and consult on these matters and provide advice to Commonwealth and state governments applicable across the sector.
5.108The committee supports universities ensuring equal treatment of elected staff and students on governing bodies, including speaking rights, access to relevant documents and rights to sit on sub-committees.
5.109The committee recommends that universities set and implement a minimum proportion of members with public administration and higher education expertise on university governing bodies.
5.110The committee recommends that universities set and implement a minimum proportion of elected representatives (staff, undergraduate and postgraduate students) on governing bodies.
5.111The committee recommends that universities ensure equal and respectful treatment of elected staff and students on governing bodies. While university governing bodies need to retain responsibility for engaging and consulting with members of their community, including students and staff, they should support elected representatives to consult with their communities as needed.
5.112The committee recommends that universities adopt a best-practice model for the induction and continuous professional development of nominated and elected council members, and facilitate governance training for these members where appropriate.
TEQSA's powers
5.113A feature of the evidence presented to the committee was that while the governance obligations placed on universities by TEQSA appear comprehensive, it is a system that relies on self-reporting.TEQSA currently has limited tools to investigate potential non-compliance issues, and to enforce any remedial actions it deems necessary.
5.114In terms of the Threshold Standards, which are what universities are assessed against, TEQSA has identified gaps in the Standards, and recognises that their design makes it difficult to ensure effective compliance.
5.115Some of the gaps are in areas very pertinent to issues covered in this inquiry and report. As such, the committee corroborates TEQSA's requests to both fill those gaps—by increasing focus on the areas that TEQSA has identified—and to amend some of the Threshold Standards to ensure that TEQSA is able to address governance risks.
5.116The measures TEQSA seeks to include in the Threshold Standards include provisions that address the following:
Governing body member requirements: to ensure that members have the appropriate skills and experience required to sit as members of a university governing body;
Executive remuneration and employment practices: to include guidance for universities around appropriate remuneration, and employment practices of governing body executive members, as well as criteria on the appropriate circumstances to engage consultants;
Governance transparency: to mandate the use of best practice in transparency and disclosure requirements of governing bodies.
A sledgehammer or a feather
5.117TEQSA's limited suite of powers to enforce compliance was highlighted by the Minister for Education and by many participants in the inquiry.
5.118TEQSA highlighted deficiencies in its powers to identify, monitor and address acute and systemic risks in the sector. Many submitters agreed that TEQSA has a 'very, very limited menu of options for when it comes to trying to get the universities in line', and that it must be empowered with enhanced investigative and enforcement capabilities to address systemic issues effectively.
5.119In response, TEQSA has proposed that an 'enforceable code' be established to 'provide a structured mechanism for TEQSA to set clear compliance obligations'. Alongside the introduction of a code, TEQSA requested that it be empowered with 'explicit enforcement provisions' to address systemic risks. These could include the powers to 'issue infringement notices, require production of information, obtain warrants and pursue civil penalties for governance failures'. The committee supports expanding the suite of options for TEQSA to enforce its regulatory directions, and identify and address systemic issues.
5.120The committee is concerned that if these governance failures are not addressed, universities risk undermining their public missions, diminishing the international standing of Australian higher education and failing in their obligations as publicly funded institutions. With this in mind the committee makes the following recommendations to address the gaps identified by TEQSA and other contributors to the inquiry.
5.121The committee recommends that the Australian Government, following the current consultation process being undertaken by the Department of Education, introduce legislation to provide the Tertiary Education Quality and Standards Agency with the necessary suite of powers to investigate potential breaches of the Higher Education Standards Framework (Threshold Standards) 2021 and enforce its compliance directions.
5.122Access to information is critical for any regulator to identify patterns and risks before they are realised. TEQSA submitted that it is currently beset with problems accessing data in a timely manner, thereby limiting its ability to mitigate risks. The committee supports efforts to coordinate access to, and provision of, data across the sector.
5.123The committee recommends that the Tertiary Education Quality and Standards Agency take steps to improve governance reporting requirements to enable it to identify and mitigate risk across the university sector, including public reporting on the results of its compliance processes.
5.124The committee recommends that the Tertiary Education Quality and Standards Agency work with other regulatory bodies, Commonwealth and State, to identify common data requests relating to university governance, and to work across jurisdictions to avoid duplicative reporting requirements, where possible.
Complaint processes
5.125The committee heard that while complaint processes are in place in institutions, and through the newly established National Student Ombudsman (NSO), many contributors described them as inadequate.
5.126Submitters welcomed the introduction of the NSO as an independent and empowered channel for students to lodge complaints, but there were calls for a similar avenue for staff and whistleblowers.
5.127TEQSA does have responsibility to investigate complaints where there is serious systemic risk to students, or to the quality or reputation of Australia's higher education sector. But as discussed earlier in this chapter, it appears to lack the investigative capacity to fully consider the complaints, or the powers to adequately address the complaints.
5.128As part of the Government's review of TEQSA's powers, the committee supports consideration of how complaint processes could be improved, and resourced to be a much more effective mechanism in increasing the accountability of decision making in the sector.
5.129The committee recommends that universities examine and enhance their complaints processes to ensure they are effective and accessible to all members of the university community.
5.130The committee recognises the important role universities play as autonomous, self-governing institutions. However, this autonomy must be exercised in line with the public interest and balanced with clear standards of transparency and accountability. The committee considers that the recommendations in this report will strengthen governance across the sector, restore trust between universities and their communities, and ensure that Australian universities deliver for all Australians.
Senator Marielle Smith
Chair
Senator for South Australia