Australia’s cuts are not a lobbying failure

A week before Christmas, Australia received tidings of rather less than great joy from its education minister, Simon Birmingham. A significant cut in government funding is to be made to universities over the coming three years, and increasing payment burdens are to be placed on students.

It might be tempting to see this as a failure by higher education peak bodies to influence government policy. For over four years, Universities Australia and the various tertiary education groups lobbied relentlessly against such a cut, eloquently trumpeting the sector’s value, its economic contribution as the nation’s third-largest export industry and its critical role in preparing young people for an innovation-driven, knowledge-led world.

In the end, they won a battle or two but lost the war. The government responded to their urging to refrain from making further cuts to research funding, and to reverse its decision to end the Higher Education Participation and Partnerships Program, set up in 2010 to promote student equity and participation. But the sector lost on the key financial questions: the federal government will freeze funding for university places at 2017 levels, cut postgraduate course provision by 3,000 places, place a lifetime limit on the amount that students can borrow from the income-contingent loan scheme (HELP) and make graduates repay their loans sooner.

Nevertheless, to lay blame for the outcome on the sector bodies would be hardly fair. There were three larger factors at work. First, there was the spiralling cost of the higher education sector itself. Government expenditure on universities had been expanding beyond projections since 2012, when the removal of enrolment caps allowed unregulated growth of student numbers and HELP debts. Unavoidably, something had to be done to contain costs, and both Birmingham and his predecessor, Christopher Pyne, were tasked with ensuring that the sector contributed to the national programme of “budget repair”. Until 2017, government funding for student places increased annually to keep pace with the consumer price index, so a freeze will save the government A$2.2 billion (£1.3 billion) over the three-year budget period, while the HELP changes will contain the rapidly expanding national student debt.

Second, there were the minor parties that hold the balance of power in the Senate and that would need to be appeased by any proposed education legislation. For nearly four years, varying proposals to embrace the changeable and often conflicting demands of senators from parties such as Team Xenophon, One Nation, Family First, Palmer United or the Motoring Enthusiast Party were repeatedly defeated. In the end, Birmingham had little choice but to sidestep Parliament and limit his announcements to changes that he could make using ministerial powers, without legislation.

Finally, there was the emotive climate, in which almost any national policy debate is quickly reduced to a din of slogans. In 2014, the flamboyant Pyne surprised the sector with a sweeping reform plan, in which higher education fees would be deregulated and HELP loans expanded to private and preparatory colleges. The Pyne proposal offered creative possibilities: the opportunity for the sector to diversify as public universities specialised and private colleges flourished. No doubt fees in heavily cross-subsidised programmes such as medicine and dentistry would have risen to more realistic levels, but the freedom to compete in low-cost, high-demand fields such as business would likely have caused some fees to drop.

Vice-chancellors, once they had overcome their initial astonishment, supported the reforms almost unanimously. But discourse on Pyne’s plan was soon drowned out by a heated campaign from students’ unions and the Labor opposition, raising fears that “A$100,000 degrees” and crippling tuition debts would be the reform’s sole certain outcome. In 2015, after two defeats in the Senate, the new minister, Birmingham, defused tensions by taking deregulation off the agenda, offering an even-handed and rational discussion paper on higher education reform, and pledging to consult and listen carefully to all involved. Yet when his modified package reached the Senate last May, it too was ultimately defeated.

Ominously, while limited largely to stemming costs, Birmingham’s pre-Christmas announcement has far-reaching consequences. To contain their expenditure below the new income cap, some universities will be tempted to offer fewer places in expensive courses, even though those might be in urgently needed fields such as engineering or nursing. Others – especially regional universities – will be forced to curtail further plans to grow student numbers, jeopardising programmes that lift participation among remote and disadvantaged groups. Inevitably, the freeze will see a university’s flexibility to determine its enrolment diminish gradually: in essence, it spells the demise of Australia’s demand-driven system.

Thus, a major reform will have been implemented by default. Tragically lost is the sense that any comprehensive vision for higher education policy in Australia can be debated rationally. To be sure, proposals for broad policy change continue to emerge. Glyn Davis, vice-chancellor of the University of Melbourne, has recently published a book, The Australian Idea of a University, lamenting the enduring sameness of Australia’s universities. He advocates an all-embracing Australian Tertiary Education Commission, akin in its powers to Hong Kong’s University Grants Committee, which has achieved a system differentiation unknown in Australia. A new approach to government fee-setting is also needed, he argues, based on actual course costs and ending the complex cross-subsidies that are the legacy of a long-lived environment of regulated fees.

But with so divided a Senate and so emotive a climate, from where will come an education minister with the capacity to bring off such coherent change?

Warren Bebbington is a professorial fellow at the University of Melbourne. Until last April, he was vice-chancellor and president of the University of Adelaide.