It might surprise most Australians to know that Australia’s Vice-Chancellors – the ‘CEOs’ of the today’s corporatised university sector – are among the highest paid in the world.

This was not always the case. In 1985, Vice-Chancellors were already paid quite generously, over $300,000 per year in today’s terms (all salary figures are adjusted for inflation to 2024 dollars). At this time remuneration for Vice-Chancellors was partially regulated through the Academic Salaries Tribunal. In the late 1980s, the Hawke government implemented the ‘Dawkins Revolution’, a range of reforms to the higher education system which included replacement of free university education with HECS and the deregulation of Vice-Chancellor salaries. By 1995, remuneration for Vice-Chancellors in the Group of Eight (Go8) universities had more than doubled, to about $660,000.

By 2023, generosity had become absurdity, and remuneration for Go8 Vice-Chancellors reached nearly $1.3 million per year, more than quadrupling since 1985.

This exorbitant remuneration for Vice-Chancellors is not however improving the learning experience of students. There is no strong relationship between Vice-Chancellor pay and student satisfaction – and if anything those universities with higher paid vice-chancellors are more likely to have lower student satisfaction.

Notably, the four universities with the highest student ratings of the quality of their educational experience, also pay their Vice-Chancellors less than the average across the sector, and the three universities paying their Vice-Chancellors the most, have very low levels of student satisfaction.

The increase in Vice Chancellor pay since 1985 is also out of step with the rest of the workforce – their pay grew over eight times faster than the earnings for average Australian workers.

Students and young people increasingly bear the costs of Australia’s broken higher education system, yet the wages and income support they receive remain inadequate.

While university education was free in 1985, university is now, for many, more expensive than ever. Undergraduate degrees in popular fields such as social science and commerce now cost around $50,000. Average HECS debts have more than doubled in less than 20 years, and the time taken to repay the debts also continues to rise.

Unlike Vice-Chancellor pay, income support for students has remained barebones. From 1985 to 2023, adjusting for inflation, income support for students grew by less than 20%, while average full-time earnings grew nearly 40% while Go8 Vice-Chancellor remuneration grew 320%.

Unsurprisingly, record-high percentages of full-time students aged 20-24 are both working and studying, with the proportion juggling full-time work and full-time study doubling from one in fourteen (7%) in the 1990s to one in seven (14.8%) in 2023.

Even worse, these working students have likely experienced slower wage growth than other workers, as earnings in industries that commonly employ students, such as hospitality and retail, have grown particularly sluggishly. Compounding this issue, workers under the age of 21 can be paid less than other adults, with an 18-year-old earning as little as about two-thirds of minimum wages. The ACTU has called for an end to junior rates for adults, however the Government is yet to act.

The Albanese Government has however started some positive changes to the broken higher education system. They have change the indexation of HECS debts so that they go up by the lowest of either inflation or wage growth, instituted a one-off reduction in existing student debts, and a put in place new system for setting student fees (though the details of this system remain unclear).

The Government has also announced the creation of a national expert governance council, which is likely to include rules for executive remuneration including for Vice-Chancellors. While this is a step in the right direction, reporting suggests that this body will only be able to issue guidance rather than binding rules.

Decades of government decisions have created a broken higher education system; new government decisions can fix it.

Bolder action is needed to reign in Vice-Chancellor remuneration, such as making federal funding conditional on capping remuneration to only two or three times more than lecturer salaries.

Additionally, the system’s undue burden on young people and students can be relieved by reducing the cost of university education, raising student welfare payments, and abolishing junior rates for adults.

Our current system is deeply unfair, a Vice-Chancellor’s remuneration is nearly 15 times larger than the pay for an average worker and more than 84 times more than Youth Allowance, it’s time to fix it.