The nation, and particularly the Australian government and opposition, need to start looking at the Victorian situation differently to the rest of the country.
An illustration of a minister not understanding the difference between Victoria and the rest of Australia is Education Minister Jason Clare.
Victoria is able to remain solvent because the credit rating agencies turn a blind eye to Victorian spending, and it’s deep desire to spend money to help its ALP supportive unions led by the CFMEU (prior to administration) and key public service unions.
But Victoria has hidden strengths including its low cost abundant gas which remains in the ground to keep inner city “green” seats for the ALP.
But another strength is its university and medical research facilities. Former federal governments, led by the Coalition, sharply cut back on university funding. Australian universities overcame the Canberra created problem via big increases in highly profitable overseas students.
Most of the big Australian universities use those profits to fund medical, science and engineering courses plus research. But the Melbourne city universities managed their overseas students better than most others because they also created student accommodation complexes, insulating the rest of the community from student rental pressure.
Clare is very much entrenched in Western Sydney and sees that student rents in areas around his electorate plus the Sydney CBD have skyrocketed and impacted the whole Sydney market, increasing community rent stress. When he goes to Sydney’s State of Origin opponent, Brisbane, he sees similar student forces escalating community rents.
But thanks to some wonderful research by The Australian’s Education writer, Natasha Bita, we see that Melbourne is totally different to Sydney and Brisbane (plus Perth).
The cost of Melbourne’s student rental accommodation between both 2019 and 2024 and between 2023 and 2024 rose less than any other capital city, with the possible exception of Adelaide. Indeed, in 2024 student rents rose dramatically less than the rest of Melbourne.
Clare’s overseas student cuts make accommodation rent sense in capitals like Sydney Brisbane and Perth but are not only unnecessary in Melbourne but will cause that city far more damage than any other Australian capital.
Melbourne has accommodation specifically design for students, creating an integrated student community separate from the rest of the city’s rental pressures.
If Clare’s student cuts take place in Melbourne, these totally integrated student complexes will see a cocktail of single parents and social housing creating a social/racial cocktail which will create community clashes and damage a carefully planned accommodation system that works. It also currently provides labour to the rest of the CBD.
At the same time, the large profits from overseas students which help fund one of Australia’s best medical research complex’s will be slashed.
Victorian Premier Jacinta Allan does not appear to understand Victoria’s overall financial mess, but with the help of former Victorian Premier John Brumby and Education Minister Ben Carroll, she does fully understand the impact of the blows Claire is proposing to inflict on Melbourne and Victoria.
When Canberra politicians make decisions without knowledge of what is happening in particular states, the premiers in those states have a history of finding a way around Canberra’s isolation and an individual minister’s electorate problems.
And so Allan has gone to India and put out the student welcome mat and may set up a campus in India to funnel students into Melbourne’s universities in sufficient numbers to avoid devastating damage to Melbourne and the state. Meanwhile, Carroll is in China – another key student market.
There is a second education issue where Clare is involved in controversy, but this time, in my view, he is acting in the national interest. But again, he has not grasped the desperation of Victoria’s finances.
One of the reasons (but certainly not the only one) why there is so much domestic violence around the country is that in many states too many young people – and particularly boys – come out of the education system unable to read or write properly which isolates them from many areas of employment and the community.
Clare, Victoria’s Carroll and most state education ministers now understand that failure to use phonics (matching the sounds of spoken English to letters or groups of letters) in early student years has contributed to this disaster and a reversal is required.
But Victoria hasn’t got the money to embrace the full Clare program, and all the other states are moving with Victoria in the same blocking direction. It’s not an easy problem to solve, but a smart minister would see these two situations as offering a way to find a pragmatic solution.
Victoria is rated AA+ with a stable outlook by Fitch, AA with a stable outlook by S&P, and Aa2 with a stable outlook by Moody’s.
The top universities themselves, not helping by allowing their campuses to sacrifice freedom of speech, become anti-Semitic and gradually move themselves towards being akin to Australian offshoots of Hamas and Hezbollah. Bad decisions of their boards and management on this front have contributed to the mess.
The Coalition has no sympathy for the universities, and many believe the only way to restore proper university management is to reduce student numbers and foster rural universities that have not fallen into the same management traps.
I can understand this point of view, but there are better ways to achieve it, at least in Melbourne.
Chalmers the stock picker makes a bad call
The Future Fund has thrived by having the independence to make its own financial calls. The Treasurer wants to trash this with his own risky bets.
‘Howzat for a holiday’ asks Cummins in new tourism ad
Forget Lara Bingle and her bikini. Pat Cummins and a cricket ball are front and centre of a new Australian tourism ad campaign.