Australian reforms ‘not in interests of universities or government’

Australian vice-chancellors are supporting proposed fee and subsidy changes only because the government has been “dangling the prospect” of extra research funding in next month’s federal budget, a former adviser to the governing Liberal Party has speculated.

But a research funding top-up has been described as being unlikely, even though the proposed changes could jeopardise some institutions’ university status – particularly in the regional areas the package is supposed to favour.

Australian National University policy expert Andrew Norton told a Senate committee that few vice-chancellors would “seriously believe” that the new funding arrangements, outlined in the government’s Job-ready Graduates legislation, were in their interests. And Professor Norton, who has been an adviser to three Liberal ministers, predicted that the package would backfire on the government.

“The reality is that the Labor Party can’t live with this and will try and repeal it if they get back into office,” he said. “A future Liberal minister will probably decide it’s a mess and want to get rid of it. Why go through all this disruption and trauma for something that won’t last?”

He told the committee that he “wouldn’t be placing any bets” on additional higher education funding in the October budget because the government had already resisted significantly boosting outlays on universities three times this year.

But extra funding would be in the government’s interests, he said. “A lot of people who vote in the mid-2020s are going to be pretty disappointed if they don’t get a place in university,” he said.

Professor Norton said regional universities were particularly jeopardised because the reforms did not take account of their relatively high average costs. “They will struggle to finance their undergraduate teaching,” he told the committee.

He said he had calculated that regional universities were already losing money on courses in six out of 19 fields, and under the proposals that would rise to 11 fields. They included common offerings at every university, such as business.

And regional universities arguably faced even greater danger because the new funding rates would not allow for cross-subsidies for research. This left country institutions at risk of not meeting newly imposed research activity thresholds that determine university status.

Under the “worst-case scenario”, such institutions would become university colleges. The loss of reputation would make it harder to attract students, while previous graduates would feel that their degrees had been devalued. “It would be politically extremely unwise to go down this path, as well as unfair to the institutions and individuals involved,” Professor Norton said.

Education finance expert and former public servant Mark Warburton told the committee that universities would not be better off under the legislation. “The immediate impact of the bill is to cut funding to student places by 6 per cent,” he said.

“That’s being done at a time when they are already experiencing major reductions in revenue because of what’s happened to the international student fee market. There are people being sacked left, right and centre, and this is just the beginning of it. Some very serious decisions need to be made down the track about what is going to happen to research programmes.”

Mr Warburton dismissed the government’s claim that its reforms would generate an extra 100,000 university places. “That’s a political promise running out 10 years. Based on my experience in the public sector, it’s not worth very much.”

john.ross@timeshighereducation.com