The Australian University system is the international student ‘fee-paying’ market – in the order of $5,000,000,000 per annum by 2004. Australia’s share of the international student market is disproportionately high by international standards.

The Australian Department of Foreign Affairs and Trade estimated that the Australian higher education sector accounted for some 12% of all education in countries with an English speaking base in 2004. This extraordinary success was essentially the product of three factors:

1. Early penetration of Australian universities into the emerging Asian market for education
2. The good international reputation established by the traditional universities
3. Opportunistic fortune

The opportunistic elements of the success led to an over-confidence in fast-money schemes based upon fee-paying international students. It also led to numerous accusations of declining educational standards in Australian universities and a culture of ‘fee-for-degree’.

The Australian Broadcasting Commission's (ABC's) flagship current affairs television program '4 Corners' highlighted this problem in 2005, stating:
"And as foreign students have flooded in, universities have become mired in allegations about falling standards, soft marking, plagiarism and backdoor immigration..."

This was particularly evident in postgraduate coursework programs (particularly Master’s coursework degrees) which had significant appeal to the burgeoning Asian markets.

Governance

With a larger proportion of university turnover derived from non-Government funds, the role of university vice chancellors moved from one of academic administration to strategic management. However, university governance structures remained largely unchanged from their 19th Century origins. All Australian universities have a governance system composed of a vice-chancellor (chief executive officer); chancellor (non-executive head) and university council (governing body). However, unlike a corporate entity board, the university council members have neither financial nor vested specific interests in the performance of the organization (although the state government is represented in each university council, representing the state government legislative role in the system).