In recent months, Australian universities have faced increasing scrutiny over their role in the economy, particularly regarding their growing emphasis on financial sustainability.

This shift, driven by the imposition of commercial accounting standards and financial reporting, has transformed universities into public corporations, and even public enterprises, which are assessed under financial performance metrics similar to those of private businesses.

Although these measures were initially driven by the accounting standards bodies to improve transparency, efficiency and public accountability, they have ultimately compromised universities’ capacity to accomplish their traditional missions.

Many leaders, academics, and stakeholders in the sector and the community wish to return to the fundamental values of scholarship, community engagement, and knowledge creation; however, they increasingly feel constrained by the terminology of corporate finance, such as operating margins, gross and net earnings, return on investment and key performance indicators, which are not really appropriate for educational institutions.

The financialisation of universities: A pathway to growth?

Most Australian universities have been established and incorporated through state or territory legislation as statutory public corporations, with the Australian National University created under Commonwealth legislation. Universities have long been recognised as public bodies, holding both deductible gift recipient status for tax purposes and charitable status for the advancement of education. During the 1990s, the introduction of accrual accounting frameworks and the influence of new public management reshaped their governance and operations, aligning them more closely with commercial and managerial practices.

Since the adoption of accrual accounting and........

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