When is a government university not a government university – apparently when it is Swinburne!

by

Most universities in Australia are 100% state government owned. They are established under state legislation, like Swinburne University. And Swinburne has a campus in Lilydale in Victoria that it has closed down and is looking to sell. A local group wants the State government to take over the campus for a ‘nominal price’ of $1. The state government response, as stated in the Australian, is:

However a spokeswoman for minister Hall said the government could not compulsorily acquire the site.

I agree. The state government cannot compulsorily acquire the site – because they already own it. It ‘belongs’ to Swinburne only because the state government allows it to ‘belong’ to Swinburne. Indeed, this is obvious in the next bit reported in the Australia.

“Any government body cannot sell a site to a training provider at less than its market value, therefore it’s impossible for the Victorian government to simply acquire Lilydale as suggested in this letter,” she said.

Yes – any government body, like Swinburne, has to dispose of assets in a clear and fair manner. But this does not make it ‘impossible’ for the Victorian government to acquire the site for $1. Indeed, they can acquire it for $0. It is an internal transfer within the state government, not an external sale.

Now there may be incentive reasons why the state government does not want o take over the campus.

Mr Dempster warned that if governments were able to compulsorily acquire campuses it would discourage universities and TAFEs from investing in regional and outer metropolitan areas.

And there may be political reasons. For example, the campus may not be viable and the last thing the state government would want is to try and keep an unviable campus operating in a sensitive outer suburban electorate. . But to say that the state government can’t legally take control of the campus! Yes minister, pull the other one!

7 Responses to "When is a government university not a government university – apparently when it is Swinburne!"
  1. Hi Sinclair
    I guess it depends on the definition of ownership, but I will use a standard economic definition as the party that has residual rights of control. And this must be the state government as it controls the university (through its control of Council which is created under state government legislation). The state may choose not to exercise its power (so that a state university may be treated similarly to an independent statutory authority) but it is still state government owned and controlled.

    Another way to think about it – could the state government sell Swinburne (or RMIT or Monash) if it chose to do so? The answer must be yes. The state government has legal control of the assets and can use them or dispose of them as it sees fit (subject to its own legislation which it can amend through parliament).

    Happy for a lawyer to say that I am wrong and point me to the case law.

    (Damn Sinc – does that mean you and I are public servants?)

  2. This is a complex question to which I have never been able to find a good answer. Universities are created to be legally separate from government, with the government appointing only a minority of council members. Their assets are not to my understanding on state government balance sheets (I have been told that they are not in Victoria’s). Public university statutes give the minister veto power over the sale of some assets, but no power to sell them (they could change the statute, but then they could sell anyone’s assets by passing a law). Sometimes universities use Crown land under favourable terms, but if the Lilydale site is owned by Swinburne in fee simple I think the government would need to use its compulsory acquisition powers to get it.

  3. Heh – we’re not employed under the public service act, so I suspect not. Although many people have that impression and the impression that universities are akin to high schools in their ownership and employment features.

    I agree the mechanism whereby the council is appointed is via the State government – but it isn’t clear to me that the State government has the residual rights of control. Certainly if the State government does have residual rights, it shouldn’t.

    I have long argued that alumni should have the residual rights (i.e. graduates should vote for the council) but few people like that idea. Especially elected politicians who tell me that a voting process couldn’t be trusted (love the irony of that). The other issue of interest (to me anyway) is how the state government would have acquired RMIT – originally incorporated under the Corporations Law.

    • Sinc – The ‘university’ in Victorian acts is defined to include the staff, the students, the Council, and the graduates. So I think there is at least an arguable case that if the university had to be wound up, the alumni should share in whatever assets were remaining. Given the minimal financial contribution state governments have made to universities in the last 40 years I’m not sure that they have a better claim on the assets.

      For reasons we have discussed previously, I am less convinced that alumni would make better choices for Council members than the current process.

      • I don’t think much about universities being wound up, but I do worry about management at the strategic level. There is far too much time and effort expended on things that make no tangible contribution to either teaching and/or research. A change in the governance structure (process actually) would lead to better outcomes.

  4. This discussion seems to be unnecessarily complicated. I think if you look into the deeds of association of Universities you will find they are not ‘owned’ by state governments.

%d bloggers like this:
PageLines