June 21, 2020

Expansion for university places major step ahead – but watch out for the unintended consequences

The Innovative Research Universities (IRU) group has supported the Government’s plan to meet growing demand for university education through additional university places.

Responding to changes outlined by Minister for Education Dan Tehan at a Press Club speech on Friday (19 June 2020), the IRU said Australia needs its higher education system to be working to best effect over the coming years as we seek to emerge economically and socially strong from the COVID-19 pandemic.

The Government plan addresses some but not all the COVID-19 consequences.

The changes force universities to provide courses with less revenue per student than currently. Each university will have to look carefully at how it can continue such courses.

The big risk of these reforms is that the conflict between student incentives and university incentives could lead to a mismatch. The combined revenue from Government and student for some courses the Government wants to expand, such as engineering and maths, will fall. The revenue for others targeted for big increases in student charges will rise – making these more attractive to universities.

It is a rare person who switches from accounting to social work for the money.

Previous experiments with lower charges have not been successful in generating a change in demand. Nor have similar structures in VET funding always worked as expected. These changes are larger and thus may have greater impact.

The Package includes notable elements to stimulate university education in the IRU heartland outside the major inner-city centres. This will be enabled through a renewed funding system that targets growth at regions least well supported with university places. The revamp to the main equity program, and the scholarship for outer regional students should further encourage take up. These are welcome initiatives following the work of the Napthine review and showing the Minister’s deep commitment to improvement.

The focus on education further cuts the link with research despite the sector’s commitment to both and the Government’s strengthened requirement that a university must involve high levels of both. The research systems are also under pressure due to loss of revenue to support them. They require financial support to ensure future capability across the breadth of human knowledge.

IRU Executive Director Conor King said:

“The IRU supports the Government’s effort to meet the growth in future demand. We have long pointed to the coming rise in the school leaver cohort, and now we have COVID-19 created demand for education. Opening up growth is a major step forward.

“The problem is the unintended consequences from the needed revamp of the funding and charging rates for different courses. There is a risk that it will become uneconomical for universities to provide some reduced-price courses that are currently run on small margins and we may have more students applying for courses that are being cut back.

“The IRU is concerned the changes were designed for universities in good financial health. The package does not recognise the multi-billion dollar hit to universities caused by COVID-19. The capacity to respond to the incentives the package creates will be limited through the drag of COVID deficits into future years.”