A Commentary on the Proposed Merger of The University of Adelaide and University of South Australia

Merger Issues

Mergers worldwide — such as the California State University System 50 years ago — are often introduced in response to a crisis of rapid population growth and huge unmet demand in a particular State or region. That is not the situation in South Australia, where the school leaver population has been largely flat and unmet demand is mostly already soaked up.

The California University System grouped existing tertiary institutions by levels of student aptitude, with University of California (UC) to serve the top 10% of school leavers, California State University (CSU) focussed on the middle 50–90% cohort, and a third (newly-created community colleges) to serve the lowest tier (including students without school completions, adult entrants, etc). We no longer consider that a single number (such as an ATAR) is the only way to admit students to university or to judge the suitability of a student to take a particular degree; indeed we recognize the benefits of having students from diverse backgrounds complete degrees such as medicine.  However, South Australian universities have developed programs and cultures that emphasise different skillsets and outcomes.  The University of South Australia has an emphasis on degrees that lead to specific vocations, whereas the University of Adelaide has more generic degrees that might lead to entrepreneurial or research careers.

Merging the two universities would disrupt and destabilise these missions, each of which is important.  It is possible that the result would be unappealing to some of our top students, who seek the environment offered by a research intensive university; they would go interstate to a Go8 university.

Of course, combining university back service provision into a single service system would not require a university merger to bring it off, if the universities were to agree to introduce it. But where a combined service model has been discussed in the past across two universities, cost estimates are usually found to be prohibitive (as differing systems hardware across the universities all need replacing) and this prevents implementation.

Where it has been tried elsewhere, the geographical separation of the campuses inevitably renders a remote service provider inadequate, and soon drives each campus back to local provision in core functions. It is thus not a model that is likely to prove wise to implement.

Merger Objectives

So what is the objective of all this? The whole argument seems based on achieving “growth” and “scale”—not an objective suited to a State where school-leaver demographics are flat. In SA there are not thousands of able students currently missing out on a university place: UniAdel already takes most of the ATAR 70+ cohort and completely dominates the ATAR 95+ cohort. A merger would no doubt assist UniSA with the challenge of stemming its medium-term enrolment decline, strengthening its staff profile and improving its rankings position; but it would not assist UniAdel.

In this regard, tables of student preferences can give a misleading impression. The size of a raw First Preference pool means little: in some fields—such as Medicine, Dentistry or Vet Science where places are limited by external restrictions, UniAdel can take few of the First Preferences that apply. What a correct reading of student data shows is that UniAdel enrolment figures mirror the State’s fairly flat school leaver population, while UniSA appears to be taking more of a static pool—meaning inevitably, they must be taking applicants with decreasing scores.

Tables projecting numbers post-merger often assume a simple aggregation would occur, ignoring the exodus many merged universities experience as their culture and character change. Once a merged UniAdel loses its international ranking position and Go8 membership through merger, it would lose its best students to Go8 universities interstate, and its finest research staff and research groups would also seek to depart. In mergers elsewhere the staff attrition typically continues for 8–10 years until a new identity is forged and accepted and an appropriate new cohort grown.

Merger Costs

Merger costs are reasonably well-known from previous attempts at whole-of-university mergers. In brief, the merger costs are enormous, and a strong deterrent to proceeding. A UniAdel/UniSA merger in Year 1 now would be likely cost in excess of $200 million and rise in later years. Three pivotal costs would be overpowering:

  1. UniSA staff have one of the most expensive EBs in Australia. Unless it were proposed all UniSA staff take a pay cut, lifting the 4,000 UniAdel staff to UniSA levels would immediately create a recurrent and expanding salary expenditure gap, likely $20 million p.a. in the first year of the merger, indexed and continuing.
  1. UniSA does not use the same enterprise systems as UniAdel, and establishing a common service provision would involve one university entirely replacing its technology hardware, contracts, and technical skills, likely to be $20 million in the first year.
  1. UniSA students are resourced at around 60% $ per EFTSL less than UniAdel students, in part because their staff:student ratio (1:22) is much poorer than UniAdel’s (1:13). Unless it is proposed UniAdel learning modes and student experience are to be drastically downgraded, lifting UniSA students to the UniAdel learning modes and experience would greatly enlarge the expenditure gap. The full cost of unifying the student resource base would exceed $100 million p.a.

International Rankings

Nowhere in recent SA merger proposals are international rankings sensibly discussed. An oft made claim that a merged UniAdel/UniSA would “immediately rank No. 2 nationally in terms of enrolment and turnover” makes no sense, as a university’s rank is not a measure of enrolment numbers. 

Where whole-of-university mergers have worked (e.g., University of Manchester, UK), two well-ranked universities are combined to collectively produce a better ranking. But in the key international ranking (the ARWU 2022) UniAdel is in the 101–150 range, while UniSA is not in the top 500.

In Conclusion

Reopening the previous debates about mergers, while perhaps aspirational for UniSA, would undermine UniAdel in many of its endeavours. The real challenge for UniAdel is: can it stay at its present size and resource a world-class university? 

Notably, UWA and ANU both manage to do so, as do many world-class universities of our size abroad. That is where the focus should be. Merger proposals are a distraction, and their outcome would not justify the expense and risks involved.

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