From where I sit - Risky business is a busted flush

In our household, which is made up of one journalist and one journalist-turned-academic, we have been saying for months: "Wait until the fallout from universities' failed investments is made public."

Sure enough, the Australian higher education sector is now on the slippery slope, with the University of Melbourne leading the slide to the murky puddle at the bottom.

Melbourne has announced that because of its financial losses, it will cut 220 full-time academic and administrative jobs.

One hundred of those will be voluntary redundancies, and the rest will be delivered thanks to bans on hiring new staff, renewing contracts or replacing workers who leave.

In true weasel-word style, an email to staff from Glyn Davis, vice-chancellor of Melbourne, described the cuts as an "economic-response programme", The Age newspaper reported.

Speaking on ABC Radio, Professor Davis admitted that Melbourne lost A$191 million (£95.5 million) last year, but stressed that "nothing inside the university" had changed. Hello? Doesn't fewer staff mean anything? Or were those people sitting around twiddling their thumbs? It is my experience that academic and administrative staff are run off their feet. Where is the slack?

Professor Davis insisted that "nobody will be asked to leave" - their contracts won't be renewed, that's all.

I know what that feels like, and I can tell you, Professor, there's not much difference between it and being asked to leave. Either way, you're out of a job.

You can bet that Melbourne is not the only Australian university in this predicament - most, and possibly all, are likely to be in the same boat. Melbourne is just the first one brave enough to put its hand up and admit that it has stuffed up its finances.

Only, it hasn't said that, not really. Like everyone else, it is blaming the financial crisis and even government policies. No one can admit that the blame lies with bad advice, greedy investors prepared to risk other people's money and the stupid idea that universities should operate as businesses (that is, take risks).

Monash University recently announced that it had "exercised its sunset clause" on a A$300 million deal with the property developer Rino Grollo's Equiset company, to provide more student accommodation (which would have appealed mainly to international students) and a new law building.

In a statement, Monash also blames the "global financial crisis", which had "placed significant... constraints on the commercial feasibility of components of the approved project".

The private tertiary sector is also in dire straits, with two more institutions going into receivership in late July, leaving international students out of pocket through lost deposits and tuition fees.

Add to this the racially motivated assaults on Indian students by gangs of thugs, and you have an industry in deep do-do. Professor Davis remarked that "across the sector the early indications are of a very dramatic fall in the number of applications from India" - although not at Melbourne, he added, where they tend to be long-term postgraduates.

How is it that the universities, which are supposed to teach and do research, have instead become high-risk, high-growth-chasing investors? They have become gamblers - and you know what happens to them: sooner or later, they lose.