Opinion Editorial: Go8 and University Funding

21 Apr 2016

Australian Financial Review

By Vicki Thomson

The storm of media and political niggling over the past few weeks about Universities, their quality, their cost, their entry transparency and their funding is to be expected.

It’s what happens when public policy errors are made, left to fester without any well-thought-through restoration to reality for years, then become political fodder  in an election year between two major parties who not only should know better, but who are as equally to blame.  It’s what happens when tactical considerations of policy and funding continually usurp strategic considerations.

And of course it’s always easy to take a swipe at Universities who just happen to be in the unwinnable middle of the debate - getting on with driving an $18bn international education industry, educating over a million domestic students and producing world class research while the political class dithers, argues and prevaricates.

Now we have a Federal Budget within days and a looming Federal election, and our sector knows that neither is likely to assist its current issues. 

Let’s get that money question out of the way immediately. Australian Universities are public institutions in which we significantly underinvest in comparison to other western nations. For a government enamoured of OECD statistics it is worth noting that for the latest available figures Australia finished 27 out of 32 countries for public investment in tertiary education at 0.9% of GDP. This is only three-quarters of the OECD average of 1.2% of GDP and has us trailing the Slovak Republic, Mexico and Spain.

In Australia universities deal with two major parties who have cut our funding. Since 2012 almost $1 billion has been removed by both major parties from research funding programs.  A further $262 million over three years was removed from the Sustainable Research Excellence fund in last year’s Federal Budget. A further 20 per cent cut to university funding remains in the Government’s forward estimates and it will be extremely  challenging to equitably fund these cuts from changes to student  fees and payment terms alone.

But regardless of what is in or out of the Budget the fact is higher education is sitting in a policy vacuum from both sides of politics.  We have a distorted funding model whereby students cross subsidise research in the absence of required Government funding. We have a demand driven system, supported by both sides of politics as a measure to address issues of equity and access. Its success has now created an impossible policy problem for whomever is in government – it requires either significant additional funding or a walk back from universal access.  And most galling is we have a system whereby quality is now being questioned.  

Frankly it’s a mess and all of this is against that backdrop of a Government which says the nation must be more innovative and an Opposition which has given us little clue as to its policy direction except some vague back to the future suggestions that have already been shown not to work.

So what needs to be done and why? Higher education policy igher educaityon needs to address the distorted funding model as a matter of urgency. Education and research are an investment in our nation’s future. The Prime Minister says so often and our sector contributes some $160 billion in knowledge and technology, or about 10% of GDP. This is more than Australia’s entire mining sector.

Yet the policy vacuum remains. Time is running out, and it is an old political adage that if you don’t fill the space someone else will.

If the Government had released its higher education policy “options paper” which has been much alluded to in meetings with the sector, the recent debate over fees, costs, and transparency of entry would have had structure and context, and some much needed direction.

Universities can only do so much. We are rising to the challenge of increasing the value of our knowledge and education and we stand ready to do even more. We can show this is an economic issue not just localised to universities. We can explain that the large student loan debts are not just from universities but because non university private providers were included in another dubious policy direction. We can explain, as we did last week, that we do value entry requirement transparency and what the Go8 is doing to ensure that is occurring.

But the fact remains that in an increasingly competitive world the stand out success of our universities is under threat from poor policy and a complacency.  Surely both students and universities deserve more than this on-going policy vacuum. It may yet happen. The Minister shows every sign of being genuine in his desire to “fix” the sector’s problems but why it is taking so long for anything tangible to be sighted remains a serious concern.