University cost cutting

Job axe to fall at UWA

ABC NEWS |     11 December 2015


The University of Western Australia (UWA) will lay off 300 staff as part of sweeping cuts aimed at reducing costs. The university will slash 100 academic positions and 200 professional positions early next year.  Fifty new academic positions will be created to enhance the university’s “capability and impact in areas of comparative advantage”.



 UWA Vice Chancellor Professor Paul Johnson said in a statement that 2015 had been a challenging year for the Australian higher education sector:

UWA, like many universities, has a budget challenge.

As highlighted during the recent fee deregulation debate, there remains a long-standing under-funding of Australian universities amid a climate of greater competition at home and abroad.

We need to confront these financial challenges head on, which means changing how the university operates.”

University staff were told of the planned redundancies on 11 December 2015.

University ‘in good financial shape’: union

National Tertiary Education Union WA secretary Gabe Gooding said the union is “outraged” and that there is no justification for sacking 300 staff when the university made a $90 million operational surplus in 2014.

This is yet another poor decision of an ideologically-driven vice-chancellor who is becoming increasingly known for making bad decisions.

In the four years of his tenure he has effectively trashed the reputation of what was one of the country’s most formidable institutions.

The vice-chancellor told staff that he planned to significantly increase the intake of international students, but with fewer staff to teach them, this can only be interpreted as cynical exercise in treating international students as cash cows.

The worst thing of course is a couple of weeks to Christmas, and of the thousands of UWA staff none of them are going to know whether they are in that 300 or not.

The university has not finalised which roles would be made redundant, the statement said.

It expects the redundancy process to be completed by the end of next year.

The university recorded a $90 million net result in 2014, down from $125 million in 2013.


UWA’s planned sacking of 300 staff unjustified and cynical


La Trobe cuts economics

The Australian     |   27 June 2014


La Trobe University is planning to cut about 69 academic positions in its business, economic and law faculty with economics, accounting, management and marketing the worst hit.

La-Trobe_Logo_x2Academic staff in economics will be cut by almost two-thirds to just 10 under a proposed restructure circulated to staff .

The Australian reports that academic staff positions in accounting will be cut in half from something currently over 30, though about eight new positions will be created.  La Trobe wasn’t able to confirm the exact number of jobs that will be lost in economics, but economics professor Harry Clarke has posted on his blog that proposed cuts will reduce academic positions from 28 to 10.

This includes three professorial positions being scrapped with room for only one ongoing professor in the new structure.

The number of associate professors will be cut back from five to just two. In economics La Trobe has already announced that its stand-alone economics degree will be dropped in 2015.

The cuts are part of La Trobe vice chancellor John Dewar’s widespread cost-cutting restructure of the university in which 350 jobs are expected to be shed in a bid to save money for future investment in research and teaching.

Melbourne confirms 540 jobs to go

ABC News | 5 June 2014


The University of Melbourne plans to cut 540 administrative jobs (15% of the non-academic workforce) by January 2016 as part of a $70 million savings program. The job cuts do not include academic staff.


uni melb logoThe university delivered the news to staff members at meeting earlier today. The university’s vice chancellor, Professor Glyn Davis, issued a statement after the meeting:

It was not an easy message to deliver, or receive, that the university has to undertake this reduction in the total number of professional staff.  We are hopeful we can minimise the impact on staff through natural attrition as the university had a turnover of 635 professional staff last year, and 580 the previous year.

We will focus on reducing the total number of casual and fixed term staff where we can and offer minimal redundancies.

Davis has ascribed the need for the cuts in part to the previous government’s funding cuts, which cost the university $40 million a year, as well as a blowout in the bureaucracy because of his 2010 strategy to shift more administrative responsibility down to the faculties. He defended the strategy but said in hindsight the university should have acted earlier to improve efficiency.

Davis has warned has warned the university will lose up to $70 million a year more in Abbott government cuts, forcing a hike in student fees of an average of $1730 per student simply to cover those cuts .

The structural changes are a part of the university’s Business Improvement Program.

As part of the cuts some academic support services will be either centralised or automated.

The university says it plans to dedicate 80% of the $70 million in planned savings to teaching, learning and research.  It has also flagged plans to hire up to 300 academic staff because of the changes.

Old and new cuts put uni jobs at risk, says Melbourne University VC Glyn Davis
Melbourne University staff to protest against up to 500 job cuts

Quelle surprise (2): Go8 takes a contrary view on fee deregulation

The Australian    |    5 June 2014


Go8 logo newAustralia’s elite universities have broken ranks with the higher education peak body, saying bungled reforms under Labor make Education Minister Christopher Pyne’s unpopular changes “necessary” and “inevitable”.


Mike Gallagher, executive director of the Group of Eight universities, says the Abbott government had no “realistic policy Michael Gallagheralternatives” to its proposed budget reforms, which will see funding rates cut, student fees deregulated, a real interest applied to student loans and universities exposed to private sector competition.  Although he stopped short of declaring them to be divinely inspired, Gallagher told a Brisbane conference that the reforms are “necessary”:

They are logical, coherent, sustainable, equitable and inevitable.

The government has been reeling under widespread criticism of its proposals, student protests and confusion over policy detail.

But Gallagher said  the higher education reforms are ”not quite as radical as the demonisers of competitive markets in education allege” and depicted critics of the budget reforms as supporters of “socially regressive subsidies from general taxpayers to more advantaged segments of the community”.

fred hilmerMeanwhile Fred Hilmer, head of the University of NSW and a long time and strident proponent of fee deregulation, slammed Universities Australia modelling, which showed fees soaring, saying it was based on a “fundamental misunderstanding of the way the system works and does not represent the view of UNSW”.  Hilmer said that “it is up to universities, not Canberra, to decide what fees should apply to which courses”.

None of this fits easily with fellow Go8 vice-chancellor Glyn Davis’s  acknowledgement that student fees at Melbourne University will need to rise by up to 61% in some courses to manage federal budget cuts.  Price hikes of a similar scale are predicted for Sydney University.

The government is claiming that graduates would pay $3 to $5 a week extra in loan repayments under the proposal to charge compound interest on student loans. Depends on how much the loan is, really, and its term, which is what the UA modelling is a shot at showing.

Micro – economic reform of the Australian higher education industry: Implications of the Abbott Government’s Budget of 13 May 2014

VU to cut 300 more jobs

5 May 2014


Victoria University seeks to reposition itself as the “university of opportunity”  as it cuts 300 jobs – 13% of its workforce- in an effort to cut costs by $50 million by 2016.


VU 2

The university’s vice-chancellor Peter Dawkins said about 200  professional staff  and 100 academic staff would be cut.

VU has struggled since student places were uncapped in 2012 and its traditional Western Melbourne student cohort were offered places at the more prestigious institutions, such as Melbourne and RMIT.

Dawkins says the university needs to brace itself for further competition, with the federal government looking likely to deregulate the higher education sector and allow private colleges to access government subsidies for undergraduate students.

The university council has endorsed a “refreshed strategic plan”, designating itself  as the “university of opportunity”, so as to better position it for the “new competitive tertiary marketplace”.

A key part of the strategy is to create what are being dubbed “career start” degrees in business, sports management and health sciences that build in extra teaching support for the pool of lower-ATAR students or second language students that VU is increasingly offering places to. At the same time it is seeking to attract stronger academic students into “flagship” courses in finance, science, psychology and bioscience. It is also want to make it easier for students to transfer credit between different qualifications such as diplomas and degrees.

A plan to become Australia’s sports university is a “major confirmation” of the university’s direction, Dawkins said.

We are convinced that we are already on the right track, having the largest number of students enrolled in sports-related higher education courses in Australia and having a strong focus on industry partnerships and work-integrated learning in our critical industry sectors.

Dawkins said the university is aiming for a “sustainable future” through a range of measures, including minimising red tape and reducing staff numbers. He said the university needed to find $40 million to $50 million of “recurrent savings” by 2016.


Australian unis fall in ranking

The Australian    |     6 March 2014                                

The Guardian     |    6 March 2014


Australia’s leading universities have tumbled in the Times Higher Education World Reputation Rankings.


THE 2014
The Australian

All Australian universities lost ground in 2014, with Melbourne now the only institution in the top 50 after the Australian National University and Sydney University both tumbled into the 61-70 bracket (from 42 and 49 respectively).

Queensland University is now in the 81-90 bracket, while the University of New South Wales is in the 91-100 grouping.  Monash dropped out of the top 100 altogether.

Still, with five universities in the top 100, Australia is equal fourth with Japan on the country table behind the United States (with a massive 46 ranked institutions), the United Kingdom (10) and Germany (six).

Melbourne University vice-chancellor Glyn Davis said Australian institutions had been “slipping steadily” since 2012:

This fall reflects both diminished Australian investment in higher education and the steady rise of many institutions from our Asian neighbours and beyond as they benefit from sustained public commitment to new knowledge and great universities.

This is not just about reputation.  Education is the nation’s largest services export.  (As) other industries are closing, Australia needs, more than ever, a vibrant and internationally esteemed higher-education system.

Universities Australia chief executive Belinda Robinson said international rankings are “imperfect”.  She said funding cuts of $2.3 billion last year alone made world news, which would have resulted in negative perceptions of the Australian system and institutions and it’s no surprise that Australia’s reputation has taken a hit.

Times Higher Education rankings editor Phil Baty said Australia’s poor performance could be due to the May 2013 budget cuts announced in the middle of the survey period.

Labor’s 2013/14 budget included $2.3bn worth of cuts from universities via an efficiency dividend, converting student scholarships to loans and scrapping discounts for early Higher Education Contribution Scheme (HECS) payments.

Baty thinks the cuts, when implemented, could affect Australian universities’ actual performance, further harming their brand reputation in years to come.

The prestige index is based on an opinion poll of invited senior, published academics from 133 countries.

It looks at reputation only, whereas the Times’s world rankings, released every October, uses 13 objective performance indicators.

Lilydale – for sale

Real Commercial       |     3 March   2014

Swinburne University has put its now closed Lilydale campus on the market.   The university advises:

Expressions of interest are being sought for the property on the basis of its current zoning of Public Use – Education.The University’s preferred outcome is to identify a user for part or all of the site for ongoing educational purposes, consistent with the underlying zoning and utilising the existing facilities.

Alternatively, it will make a pretty good housing estate overlooking that lake.


For sale3

Landmark Education Facility on Massive Site
40 Melba Avenue, Lilydale, Vic 3140
23.00ha (56.83 acres)

Lilydale 4 sale
Click image

For Sale by Expressions of Interest closing Thursday 10th April.

  • Site Area: 23ha*, for sale as a whole or in part
  • Zoned Public Use – Education
  • Substantial purpose-built improvements including 100 bed student accommodation village
  • Multiple access points to site
  • Elevated site with views over Lilydale Lake and Dandenong Ranges
  • Potential for future re-zoning to allow a variety of uses (subject to approval of relevant authorities)
  • Major mixed use development proposed on adjacent site.

The Scan # 144 20 December 2013


Christmas (2)
Click to enlarge

Our best wishes for a joyful festive season and a happy and prosperous year in 2014


TAFE grants rescinded

TAFEs have slammed the government’s decision to shut them out of a competitive capital grants fund, reneging on $76 million awarded by the previous government.

TDA-logo219 December 2013 | The grants, to TAFEs in the Sunshine Coast, Central Queensland and NSW North Coast, would have supported three of the 12 projects approved by the Education Investment Fund’s advisory board…..[ READ MORE ]…

Mid year cuts

The changes to policy and funding announced in relation to higher education included in the Mid-Year Fiscal and Economic Outlook result in net reduction of just over $200m in funding over Budget 2013the next four years.

19 December 2013 | The largest cut relates to the cessation of the regional priorities round of the Education Investment Fund (EIF). While this will save the government $187.5m over the next three years and relates to monies that have yet to be allocated, it will reduce the capacity of regional universities and TAFE institutes to invest in much needed capital infrastructure….[ READ MORE ]…

Gardner appointed V-C at Monash

Monash University Council has appointed Professor Margaret Gardner AO as the ninth Vice-Chancellor of Monash University, and the first woman to serve in the role.

Professor Margaret Gardner17 December 2013 | Professor Gardner will commence on 1 September 2014, succeeding Professor Edward Byrne, who will become President and Principal at King’s College London. Professor Gardner is currently Vice-Chancellor and President of RMIT University. She previously held a range of senior academic roles, including serving as Deputy Vice-Chancellor (Academic) at The University of Queensland. .…[READ MORE ]….

Increased financial support leads to fewer deferrals

Analysis by the Australian Council for Educational Research (ACER) reveals that, while there has been a competitionsubstantial decline in the proportion of university deferrals in Victoria since student financial support has been increased, location and socioeconomic status continue to play a role in restricting access to higher education.

17 December 2013 | In the latest ACER Joining the Dots research briefing, Principal Research Fellows Drs Sheldon Rothman and Daniel Edwards use data from Victoria’s annual post-school transitions survey to explore the extent to which deferral rates have changed since 2008, and the influence policy changes to financial support may have had on deferral decisions.…[ READ MORE ]….

Poor trainers prompt national standards call


Almost half of Australia’s training providers could be misleading customers with ”disturbing” online marketing practices.

regulatory-jigsaw17 December 2013    |   The Australian Skills Quality Authority (ASQA) says some registered organisations are promising iPads on enrolment, advanced diplomas in two weeks and guarantees not to fail. Victoria is home to 46 of the 191 suspect websites.One of the most widespread problems identified is the advertising of fast-tracked certificates and qualifications, such as a forklift licence in just two hours..…[ READ MORE ]….


Higher ATAR makes university science places harder to get into

An analysis of Victorian ATAR results from the past five years shows gaining entry into top undergraduate science degrees is getting harder.

ATAR 116 December 2013 | ATARs have risen despite an increasing number of places in many courses. The analysis revealed science-related courses have accounted for 15 of the top 20 degrees in which the final cutoff scores have increased most from 2009 to 2013. The biggest increase was for computer science at Monash University, which required 70 in 2009 but demanded almost 85 this year..…[ READ MORE ]….

National TAFE inquiry gets go ahead

The Senate’s Education and Employment References Committee will hold a wide-ranging inquiry into TAFE.tafe-image

16 December 2013 | It will probe issues including funding, affordability, accessibility, and linkages to secondary and higher education. The inquiry is to specifically consider any public information provided to the 2013 House of Representatives inquiry by the Standing Committee on Education and Employment on the role of the technical and further education system and its operation….[ READ MORE ]….

Commonwealth plots uni takeover

The Commonwealth government is planning to end the historical role of state governments in the establishment and governance of universities.uni-syd-pic

16 December 2013 | Education minister ­Christopher Pyne is in talks with the NSW government about the Commonwealth assuming control over the governance of the state’s 10 universities, which would be the first stage of a national takeover…..[ READ MORE ]….

VET employment outcomes steady

Employment outcomes for graduates have remained steady over the past year with 78.2% employed after training.

NCVER Insight16 December 2013    |     NCVER’s  Student Outcomes 2013, which provides an annual national scorecard on Australia’s training system, shows that 83.4% of graduates undertook their training for employment-related reasons, of which 81.1% were employed after training.  Satisfaction with training remains high, with 87% of all graduates satisfied with the overall quality of their training….[ READ MORE ]….


Review of demand driven system

19 December 2013 | Submissions to the review of the demand driven system initiated by education minister Christopher Pyne closed on 16 December 2013. University sector submissions support its retention and an extension to sub-bachelor places to create pathways for less academically prepared students.



Menzies“It is not yet adequately understood that a university education is not, and certainly should not be, the perquisite of a privileged few. We must become a more and more educated democracy if we are to raise our spiritual, intellectual, and material living standards… The new charter for the universities, as I believe it to be, should serve to open many doors and to give opportunity and advantage to many students.”

-Sir Robert Menzies, 28 November 1957, quoted in the Swinburne University submission


Federation University

Federation University – a merger between the University of Ballarat and Monash University’s Gippsland campus – comes into being on 1 January 2013. This “seasonal greeting” recounts the journey to this point. Let’s wish them well.


The Scan in 2013


In 2013, over 700 items were posted on The Scan (down from about 900 in 2012). The continuing ructions in the VET sector featured heavily in 2013 (Once was TAFE , a leading post in 2012, wasn’t too far off the pace in 2013, either), as did regulatory issues in both the VET and higher education sectors. You would have expected in an election year that politics and policy would rate highly: but it was the paucity of new policy, for either VET or higher education, that was notable BEFORE the election, although Christopher Pyne has had a bit to say since. With both a national commission of audit and a formal review of the higher education demand driven system to report in early 2014, next year’s budget (probably delivered on Tuesday 13 May 2014) should be full of interest.



Comment & analysis

Policy directions in higher education

In this commentary for the ACPET Journal for Private Education, Brendan Sheehan looks to the higher education policy horizon under the newly elected Coalition government.

signposts2It has been clear for some time that general budget pressures, and the ballooning cost of higher education, would bring the gaze of policymakers, post-election, to the efficacy of a demand-driven system — whatever the hue of the government.

The post-election gaze is unlikely to stop at the demand-driven system, and will certainly take in the architecture of the entire system, including the place of non-university higher education provision, which has a small but growing role in provision.

Over the six years of the Labor Rudd/Gillard government, there was explosive growth in higher education participation, and funding, fuelled by the phase out of enrolment caps during the period 2010–2012. In announcing its last set of funding cuts in April 2013, the Gillard government claimed that student numbers had increased by 34% or an extra 146,000 students (more recently, it has been reported as 190,000 extra students) and funding had increased by 50% since 2007. That was on an upward trajectory, with enrolments projected to increase by another 100,000 students, and expenditure by another couple of billion dollars, by 2016.

In order to meet the target of 40% of 25-34 year olds having a bachelor degree by 2025, it is estimated that there will need to be at least about another 300,000 students in higher education by 2025 (with some estimates suggesting up to 500,000 additional students).

The requirements of meeting that projected growth is enough to cause any minister to contemplate the need for change.



ACPET_Journal_JUNE13_WEB-Cover-imageACPET Journal for Private Higher Education

The Journal for Private Higher Education is a biannual peer-reviewed journal for scholarly articles on the theory and practice of higher education in the context of the private sector. It provides up-to-date perspectives of benefit to educators, scholars, students, practitioners, policy-makers and consultants. The December 2013 issue (volume 2 , issue 2) is now online.



The first 100 days

An off centre perspective on the state of the polity

This commentary is by someone we haven’t actually noticed before – Andrew P Street of The Vine, which is a Tony Abbottlifestyle blog targetting young people (18 to 35 years old). Street’s forthright lack of “even handedness” is disarmingly fresh – you can have no doubts where he stands in the political spectrum.

Back before the election I wrote a piece explaining the looming Abbott victory was possibly the best thing for the Left in Australia.

Part of my argument was that if Labor had pulled off a skin-of-the-teeth victory they’d have been forced further to the Right, there’d have been even more desperate finagling of independent support and virulent in-fighting as the party imploded, and the only thing that could possibly give the party a short, sharp reminder of its origins as the party of the people would be a kick back to opposition.

Since then, things have been, let’s be honest, ghastly.



UA Conference 2014


Inside a cooperative university

David Matthews of The Times Higher Education Supplement reports on the University of Mondragon (Spain), which is fighting to preserve its teaching mission, industry-focused research and mutual governance model.

An educational idyll: on the lush campuses in the Basque mountains, students say they encounter a different ethos. One says: ‘We are like a family. We all work together’
An educational idyll: on the lush campuses in the Basque mountains, students say they encounter a different ethos. One says: ‘We are like a family. We all work together’

10December 2013 | Mondragon is jointly owned by its academic and administrative staff. To become a fully fledged member, employees have to work there for at least two years, and then pay €12,000 (£10,300), which buys a slice of the university’s capital that can be withdrawn upon retirement.However, it is unlikely that anyone employed by the university expects to earn enough to build a personal art collection or buy membership to an exclusive private members’ club: no one at Mondragon may earn more than three times the salary of the lowest-paid worker.



The year in music

Jonathon Alley of Stack Magazine sums up the past 12 months of “tunes, ascensions and triumphs”.

17 year old New Zealand singer Lorde was the debut artist of the year – this You Tube clip has been viewed 116 million times, so you might have seen it.



Life & stuff

Bah! Humbug?

19 December 2013

It was cool and wettish in Melbourne but November 2013 was a hot month for planet Earth.

The US National Oceanic and Atmospheric Administration reports that last month set a heat record. It says it was the warmest November on record, across Earth, since record-keeping began in 1880.

It says average global temperature, for water and land surfaces combined, was 56.6 degrees (13.7 Celsius). That’s 0.78 degrees Celsius above the 20th century average.

It was the 37th consecutive November with above-average temperatures. The last below-average November was in 1976.

It was also the 345th straight month with above-average temperatures. That’s almost 29 years.

Here’s a message from Santa, courtesy of Greenpeace.


Is there something interesting near where you live and/or work? Got an interesting story? Got an event coming up? Tell us about it!


Selling HECS debt not such a great idea

The Australian     |     19 December 2013


Selling off student debt would be “pointless” at best and costly at worst, modelling for peak body Universities Australia has found.

The report by consultants ACIL Allen says privatising the HECS debt is a “marginal proposition” that could cost the government $6.5 billion while putting educational policy evelopment on ice.

Selling HECS debt is, from a public policy perspective, neutral at best and a bad idea at worst.  Any apparent improvement in the government’s budget position … would be entirely illusionary.

The government’s national commission of audit is considering the sale of HECS revenue streams to private investors in the form of bonds or securities.  Britain has already privatised small tranches of student debt and plans to sell off the remainder to finance an expansion in university places.

The report found that universities and students would not be affected if the government sold off the debt but guaranteed investors fixed repayment streams, effectively covering the cost of loan defaults.

The government could obtain about $19bn this way, the report found.

“But it would be a fairly pointless transaction, as it would be no better or worse off financially,” it said.

The advantages for investors were also unclear, given that government bonds with similar conditions were already plentiful.

The alternative – to pass on the repayment risk – would attract “a highly discounted upfront payment” as investors guarded against loss. Modelling suggested this could be as low as $12.8bn for an asset worth $19.3bn.

Such an arrangement would also hamstring educational policy, the report found, with investors lobbying the government to charge interest, lower the repayment threshold or increase the repayment rate.

Privatisation of HECS debt
Is securitisation an ugly word?

Policy directions in higher education

ACPET     |     15 December 2013

ACPET_Journal_JUNE13_WEB-Cover-imageIn this commentary for the ACPET Journal for Private Education, Brendan Sheehan looks to the higher education policy horizon under the newly elected Coalition government.  On the face of it, he writes,  education generally is an area in which little immediate change would be anticipated, with the major parties going to the election on broadly bipartisan platforms.  But no sooner had the ink dried on Christopher Pyne’s commission as minister for education than he was canvassing a range of interesting propositions around concerning equity, quality and the demand driven system and the sale of HECs debt.   The simple fact of the National Commission of Audit and the Review of the Demand Driven System, both of which are to report in early 2014, portends likely far reaching changes in policies and programs for the higher education sector.   The 2014 Budget on 13 May 2014 ought to be full of interest, in the Chinese curse sense,in a range of areas of government spending.   At the time of the writing of this commentary (early November), Pyne had yet to have a go at his backflip on schools funding, an exercise which makes the observation that “Abbott intends to pursue an orderly and methodical approach to government” seem altogether wrong headed.   That’s the risk with crystal ball gazing.

 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Former prime minister Paul Keating’s declaration that “when you change the government, you change the country” is like most truisms: it is difficult to argue with at a general level but it is actually a gross oversimplification. By definition, voters want to change the country, at least to the extent of changing the government. But there is an enduring, even disarming, thread of continuity in Australian public policy over the past century and more:

  •  the federation project very nearly foundered in the 1890s over the issue of water rights to the various colonies from the Murray Darling Basin
  • protection of Australian manufacturing industry was the issue that defined the first parliaments
  • the first major piece of legislation introduced into the Commonwealth parliament in 1901 was the Immigration Restriction Bill
  • Australian foreign policy has always been shaped by the need to nurture a great and powerful friend
  • one of the major social policy initiatives of the Fisher Labor government in 1912 was a baby bonus of £5 payable to mothers of European extraction – think “one for mum, one for dad and one for the country” and multiply by two.

Still, the recent election of the Abbott government portends significant changes in policy direction in a number of areas, the most notable associated with climate change issues. On the face of it, education generally is an area in which little immediate change would be anticipated, with the major parties going to the election on broadly bipartisan platforms.

In the specific area of higher education, Tony Abbott set out in February 2013  “seven policy pillars“, the first and foremost of which was “stability”. Abbott told the Universities Australia conference:

…. we will be a stable and consultative government. If we put in place a policy or a programme, we will see it through. If we have to change it, we will consult beforehand rather than impose it unilaterally and argue about it afterwards. We understand the value of stability and certainty, even to universities.

Unfortunately for universities, that stability and certainty locked in $3.8 billion in funding cuts, including a so-called “efficiency dividend”, effected by the Gillard government in its final year.

Unfortunately also for non-university higher education providers (NUHEPs), stability and certainty would mean that there is no likelihood in the foreseeable future of the policy and funding frameworks of higher education being reworked to accommodate a greater role for them through, for example, the extension of Commonwealth subsidies to private higher education students.

However, no sooner had the ink dried on Christopher Pyne’s appointment as Minister for Education than he set hares running with public musings about the need to review the demand-driven system whereby all students enrolled by a university attract a Commonwealth subsidy.  He declared that you would have to be “living in a bubble if you think that there is not an issue in universities about whether there are quality issues about the extraordinary number of students being enrolled”.

In a sense, this merely continued the bipartisan approach: Pyne’s immediate predecessor, Labor’s Kim Carr, had expressed similar public views during his short tenure.

With ministers in other portfolios exercising their newfound authority, Prime Minister Abbott brought public musings to an end and imposed a cone of silence, requiring that all interviews be “coordinated” through his office.  While it has been widely commented upon, such a degree of central coordination and control is not at all unusual in contemporary media management arrangements and shows that Abbott intends to pursue an orderly and methodical approach to government.

First things first. The Commission of Audit is to report in January and March 2014 in order to inform the development of the Coalition government’s first budget in May 2014. The commission is charged with closely scrutinising all lines of expenditure and making recommendations about priorities, savings, and efficiencies.

It is not at all helpful for that process to have ministers unilaterally ruling things in and/or out. Abbott is starting with a largely clean slate on the budget, apart from a few signature policies such as abolishing the carbon tax and introducing paid parental leave, and understandably he wants to keep it that way, leaving room to move once the commission has reported. If the government is to take contentious decisions, as it certainly will, it wants to be “impelled” by the circumstances (“there is no alternative”), with the authority and justification of the commission’s report behind it.

During the election period, the Coalition argued that Australia faced a budget emergency. The problem was apparently not so much now as “going forward”. The river of gold flowing into Treasury coffers during the decade-long resources boom was spent by governments of both persuasions and was locked in, even as the river dries up and our terms of trade deteriorate. On top of that are recent big ticket areas of expenditure in the offing, including disability care, schools funding, defence capability, parental leave, and transport and other infrastructure. These commitments generally extend beyond the forward estimates period (beyond 2016, after the next election) and are therefore unfunded. The money is yet to be found for such programs. There are also the implications of an ageing population given the rising social costs of looking after the baby boomers in their retirement with fewer overall taxpayers. This will be exacerbated at the other end of the scale by the long-term trend of younger people entering the workforce later as they pursue education and training.

The former government faced these dilemmas in framing its final budget, of how to reconcile a large and growing revenue shortfall with big spending promises. As one commentator put it:

Labor … tried to pursue a sort of “low tax” social democracy. Australia has tried more than any other country to target assistance, promoting equity with very low taxes, but I think we are now seeing the limits of that strategy. We can have decent services or very low taxes — not both.  The ongoing deficit is a sign of Australia’s low tax base.

 The Abbott government has since compounded its own declared emergency with a range of revenue and expenditure measures such as scrapping taxes, changing superannuation arrangements, and bankrolling the Reserve Bank to the tune of $8.8 billion which means that the budget task (returning the budget to balance/surplus over time) has become more difficult. The Budget bottom line has deteriorated at least 30% since the election, with the 2013/14 budget deficit headed south of $40 billion rather that the $30 billion projected in the pre-election economic statement.

One can imagine what the Commission of Audit is going to say about all this – and it won’t be along the lines of proposing tax increases: revenue does not come within the scope of its terms of reference.

It could be argued, and undoubtedly will be by some, that the higher education sector — in reality, the university part of the sector — has already contributed to the budget task through the nearly $4 billion in savings that have been extracted over the current forward estimates period (the next four years).  The National Tertiary Education Union estimates that the savings measures of $2.8 billion announced earlier this year will reduce Commonwealth funding for each student place by $600 between 2012 and 2015.

However, that argument is not at all likely to insulate the sector from further “savings” and “efficiencies”.  One respected commentator, Peter van Onselen (both an academic and a journalist), expects the Coalition government to take the axe to higher education funding in the manner that the Howard government did in its first budget (over the period 1996 to 2001). In that period, Commonwealth outlays on higher education declined from 56.7% of the total to 43.8%, with a commensurate rise in student contributions and fees).

quote marks It has been clear for some time that general budget pressures, and the ballooning cost of higher education, would bring the gaze of policymakers, post-election, to the efficacy of a demand-driven system — whatever the hue of the government.   

 The post-election gaze is unlikely to stop at the demand-driven system, and will certainly take in the architecture of the entire system, including the place of non-university higher education provision, which has a small but growing role in provision.

 Over the six years of the Labor Rudd/Gillard government, there was explosive growth in higher education participation, and funding, fuelled by the phase out of enrolment caps during the period 2010–2012. In announcing its last set of funding cuts in April 2013, the Gillard government claimed that student numbers had increased by 34% or an extra 146,000 students (more recently, it has been reported as 190,000 extra students) and funding had increased by 50% since 2007.  That was on an upward trajectory, with enrolments projected to increase by another 100,000 students, and expenditure by another couple of billion dollars, by 2016.

 In order to meet the target of 40% of 25-34 year olds having a bachelor degree by 2025, it is estimated that there will need to be at least about another 300,000 students in higher education by 2025 (with some estimates suggesting up to 500,000 additional students).

 The requirements of meeting that projected growth is enough to cause any minister to contemplate the need for change.

The growth in participation in higher education has sparked a debate about entry standards, with a report by the Australian Council of Educational Research analysing university admission data Australian Tertiary Admission Rank (ATAR) entry scores — which are used to determine university placements by ranking academic performance relative to every other Year 12 student — showing that ATARs are on average are declining.

Why this should have come as a surprise to anybody is, itself, a surprise. The main aims of the higher education reforms arising out of the Bradley Review process were to:

  1.           increase higher education attainment in the general population and
  2.           increase higher participation by poorly represented population groups (primarily low SES, disadvantaged, regional, and Indigenous people).

The overall effect must be that, on average, a lower ATAR than had hitherto been necessary (or no ATAR at all) will get more applicants into a university course than had previously been the case (though not into any university course at any university).

However, Christopher Pyne has declared that he will not be bound by the former government’s higher education policies, including its targets.

Pyne’s concerns are widely, although nowhere near universally, shared in the sector. There are no definitive data as to whether the average decline in ATARs for university entry has been accompanied by a decline in quality.

Nevertheless, there is a direct correlation between ATAR and risk of dropping out, with analysis by Andrew Norton at the Grattan Institute showing that school leavers who enter university with an ATAR of 90 or above have a 90% chance of completing their degree, and completion rates fall in a corresponding line with lower ATARs. On average, students with ATARs below 60 drop out at a rate of one in three, and those with ATARs below 50 drop out at the rate of 50%.  Norton strongly supports retention of the demand-driven system on the grounds of both equity and efficiency, as do vice-chancellors of universities that have significantly grown their student numbers (and Universities Australia has urged caution on this).

The quality argument has been led by the Group of Eight (Go8) universities, the research-intensive universities at the elite end of the spectrum. They have argued that direct entry to university for school leavers should be restricted to those with an ATAR of 60 or more, with a minimum 70 for teachingAccording to the Go8, this would save $750 million over four years, and that amount could be used to partially offset recent cuts and be partiallyreinvested in an improved system of pathway courses to provide access to higher education for students who do not meet the academic preparation benchmark straight from school.

Greg Craven, Vice-Chancellor of Australian Catholic University, has said that “it is an endearing eccentricity of the ‘university quality’ debate that it is about the quality of the students, not the universities. In fact, it’s about money.”

Craven’s correct: of course, it’s about money. His own university has doubled in enrolments since 2009 and, under current settings, is set to grow about another 25% by 2015.  Inevitably, that results in less money going to the older universities — which are growing at nowhere near that rate — and, in a budget constrained environment, it has served to divert public funding from other university activities such as research.  The negative impact of budget savings has fallen on research funding, and, so the research intensive universities claim, disproportionately on them.

However, the Go8 has now moved away from a rather crude, self-serving formulation of “what about us?”, to one of equity. There is a point to that perspective.

Sue Willis and Catharine Burnheim of Monash University have suggested that some of the money being spent on enrolling more low-ATAR students into degrees would be better spent on pathway programs and vocational education and training.  Data show that low-ATAR students, who are selected on the basis of their performance in pathway programs, perform strongly and in a wider range of fields than they would otherwise be able to access:

 Admitting under-prepared students with low ATARs not only increases their risk of non-completion, it restricts their choices.  Lower ATAR students admitted directly to bachelor degrees are being selected on the basis of their current preparation, rather than their potential for university study, while graduates of pathway programs have a chance to prepare for a wider range of disciplines, and demonstrate their aptitude for tertiary study.

The Coalition government will not simply restore the caps and return to the highly centralised student place allocation system of the past. Both the Minister for Education and the Prime Minister have ruled that out. Rather, the approach is most likely to be what is obliquely referred to as a “re-calibration” — the caps you have when you don’t have caps. It will most likely be around some form of minimum ATAR.

A recent proposal by Glyn Davis, vice-chancellor of the University of Melbourne (one of the Go8) is that the appropriate cap is on funding rather than on student places, with the universities being broadly free to set their own goals and their student profile, allocating funding between postgraduate and pre-degree places, as well as undergraduate places (only undergraduate places are uncapped). However, as Curtin University (not a G08 member) academic ,Tim Pitman, observed “ ‘(deciding) student profiles’ sounds better than ‘restricting access’ and ‘within the funding envelope’ certainly sounds more agreeable than ‘cutting higher education funding’ but they amount to the same thing.” Quite.

Still, it is one of the options, and it accords with the sentiment of Abbott’s seven pillars, which include not seeking to “micro-manage universities” (although the Howard government most certainly did as much micro-managing as the Rudd/Gillard governments).

It appears almost certain that the form and level of fees — both the government subsidy for students in Commonwealth supported places and the student contribution (what is usually referred to as the Higher Education Contribution Scheme, or HECS) — will come into the Commission of Audit’s considerations.

Minister Pyne himself briefly emerged from the cone of silence to indicate that the Commission of Audit should consider “securitising” HECS debt — that is, selling off the debt to investors, in one form or another.

Although Pyne referred to the sale of student debt in England as some sort of a precedent, he did not mention that it had not exactly been a booming success there.  Two previous attempts have realised relatively small proceeds (a couple of billion pounds against a book value in excess of 40 billion pounds). To be attractive to investors, whatever the short-term boost to the balance sheet, it would have to be on such conditions (involving discounts, higher interest rates, guarantees, and the like) as to impose significant medium- to long-term costs to individuals and government.

The same conditions would apply in Australia. To be attractive to investors, the sale of the debt would have to be at a discount — say $12-15 billion for the $23 billion book value of the debt — and involve other sweeteners, such as an increase in the HECS interest rate to something approximating market rates. As economist Joshua Gans explains it, such a sale would be a mere accounting trick that does not make sense in terms of prudent financial management.

Whether as an alternative to securitisation or as part of a securitisation package, significant changes to HECS (HELP) seem certain. These could include the introduction of a real interest rate (perhaps something higher than CPI but lower than market rates), a lower repayment threshold (currently HECS debtors begin repaying when their income exceeds $51,000), methods to collect repayments from expatriates (bilateral agreements with the UK and New Zealand, to start with), and recovery of HECS debts from deceased estates.  A proponent of such reforms in the past has been former education minister, Amanda Vanstone — a member of the Commission of Audit.

The Business Council of Australia (BCA) has also set out its own proposals for higher education reform. The BCA’s agenda includes deregulating university fees, an issue that is strongly championed by the Go8 universities and largely (though not universally) opposed by the rest.

Indeed, Go8 chair Fred Hilmer, perhaps the strongest champion of fee deregulation, has taken it a step further, proposing that the public subsidy be withdrawn altogether for some high demand disciplines such as law and business in return for universities being able to charge higher fees. This has been done elsewhere. Although when in opposition the British Conservative Party promised not to interfere with fees, in government they promptly trebled them and withdrew the public subsidies from all but the STEM fields of study (science, technology, engineering, and mathematics, regarded as core disciplines). Hilmer’s proposal could be taken to its logical extension by “privatising” the student loan as well, supporting it by a public subsidy along US lines. Doing so would fix the growing public HECS burden, albeit at the cost of creating a hybrid system difficult to administer.

Withdrawing the public subsidy for non-STEM disciplines would at least “correct”, in what I would call a perverse sort of way, an inequity in Australian higher education where, with a couple of minor exceptions, only university undergraduate courses attract a public subsidy.  The increasing number of students taking higher education courses at NUHEPs — public and private — get nothing. This places the latter at a distinct competitive disadvantage relative to universities. It significantly disadvantages students undertaking unsubsidised higher education at NUHEPs, many of whom have had an unconventional pathway to higher education as against students undertaking subsidised higher education at a university.

The better way of correcting this inequity would be to extend at least some public subsidy for non-university degree and pre-degree courses. Over the past 18 months or so, collaborative arrangements have been established between universities and NUHEPs, resulting in the tentative emergence of a new style of integrated (or comprehensive) tertiary provider, with a strong orientation towards teaching and scholarship (the “polytechnic”, however described), using Commonwealth Supported Places, such as the Australian Polytechnic Network (APN). It remains tentative because former education minister Chris Evans, vetoed such arrangements while his successor, Chris Bowen, subsequently approved them, at least in the case of the APN. There is no indication of Minister Pyne’s attitude, but, in the current budget environment, it might be supposed that he would not be favourably disposed to see an extension of Commonwealth funding, particularly where it might be seen to support forms of education that in effect substitute for state funded VET activity (which was ostensibly Evans’ reasoning).

In areas of shared funding in Australia’s federal system, particularly concerning health education and training, issues of maintenance of effort, substitution and cost shifting often loom large and hamper service delivery. The Commission of Audit might be expected to pay some attention to them (despite its tight timelines). If the BCA’s reform agenda is any pointer to Tony Shepherd’s, thinking, as it probably does, in tertiary education there would be some strengthening of the Commonwealth’s role to create a more national approach and a more connected tertiary (higher education and VET) system. However, we live in a federation and an ambitious reform agenda of this sort will founder, in the short term, on state sensitivities. States do, after all, constitutionally “own” education and training (even higher education, including universities — but that’s another story). As a sometime state official, I am sympathetic to the argument that “if you give away everything, sooner or later you have nothing left” — and the states end up as mere agencies of the Commonwealth, but that seems to be the ineluctable trend of constitutional evolution in Australia.

Whatever the Commission of Audit recommends in this area (if it recommends anything at all) Minister Pyne would be well advised to take a longer view about the development of Australia’s tertiary sector and eschew short term budget fixes that lock out NUHEPs.

If “quality” and “standards” are the drivers of the review of the demand driven system, a reasonable approach would be to take up the proposition put by Willis and Burnheim that more resources be put into pathway, enabling, and foundation programs.

Government-supported opportunities for access to higher education at the sub-Bachelor Degree level (including Associate Degree and Other Undergraduate programs, and Enabling courses) totalled 25,482 places in 2012. This allocation of places represented just 6% of commencing undergraduate students. Enabling courses comprised two thirds (16,428) of all these government-supported access places.

The purpose of enabling courses, where participation is free and universities are paid a top-up in lieu of the student contribution, originally was stated as being “to provide a pathway to higher education for students from disadvantaged groups who do not yet have the academic preparation to enroll directly in award courses”. In 2013 the enabling loading was increased from an estimated $1,833 to $2,500 per place, and from 2014 it will increase to $3,068 per place (with the rate indexed in later years). The distribution of enabling and sub-bachelor allocated places among universities appears rather haphazard and not necessarily related to low-SES and Indigenous student enrolment shares.  Similarly, the allocation of Associate Degree places appears arbitrary. Of course, it becomes difficult to increase the number of sub-Bachelor allocated places with the cost of uncapped Bachelor places continuing to rise and with students who might benefit from such pathways being accepted directly into university undergraduate courses.

As far as I know, no Commonwealth money flows directly to NUHEPs (though some might flow through indirectly).

It turns out that there is a potential pot of money to fund an expansion of enabling/foundation programs in both the university and NUHEP sectors. The Higher Education Participation and Partnerships Program (HEPPP), aimed at assisting universities to improve access to undergraduate courses for people from low SES backgrounds, expires at the end of 2013.  The former government allocated new funding of nearly $600 million over four years, to the end of 2017, subject to passage of legislation containing the efficiency dividend.  Given the rhetoric around standards, it would be incongruous to allow the program to just expire.  The program might be redesigned somewhat to direct more funding into enabling/foundation programs, available to NUHEPs as well as universities.

In line with the recommendations of theReview of Higher Education Regulation Report, Minister Pyne has already moved to lighten the “regulatory burden” on universities. Pyne might usefully go further and initiate a reconsideration of higher education providers and institutional types.

 A concept that has some currency is that of a university college which is used in a number of countries to denote institutions that provide higher education but do not have full or independent university status, with the university college often being part of a larger university or university system.  A number of NUHEPs, have expressed interest in this concept (sometimes also referred to as a “polytechnic university”).

The rules that govern the accreditation of higher education institutions — the Higher Education Threshold Standards — carefully protect the title of “university” in any form of use — more tightly than anywhere else in the world.  Since 2007, in Australia, a “university college” is specifically defined as an institution seeking ultimate registration as a full university (within five years).  Among other things, a university college is required to provide AQF qualifications up to Masters coursework degrees in at least three broad fields of study and Research Masters and PhD or equivalent Research Doctorates in one field. It has five years to satisfy the requirements of becoming a comprehensive university (research and research training in at least three broad fields).

Ultimately, the rules that govern our system ought to reflect reality and the reality is a continuum of institutional types from “teaching intensive” to “research intensive”.

Dropping the research requirement, a university college would be a higher education teaching institution, perhaps affiliated with a comprehensive university, with its focus on scholarship rather than research in the style of a US Baccalaureate university.  Such an institution would be a convenient vehicle for collaborations and partnerships between universities, TAFEs, and private higher education providers and it would facilitate greater differentiation and diversity within the system in a number of ways.

The existence of these institutions would provide students with a wider choice of institutions — and in thin markets, perhaps provide a local choice, which is vital in terms of providing reasonable accessibility to higher education opportunities.  These institutions could also provide some relief to the Commonwealth Budget and provide students with some choice in terms of price.

The logic of the demand-driven system, as suggested by Bradley, is that Commonwealth funding follows the student regardless of the type of institution, public or private, university or NUHEP, as long as the institution satisfies accreditation and ongoing quality requirements.

Is that going to happen?  Probably not any time soon, but it is an idea whose time must surely come.