August 1, 2016

Driving Innovation, Fairness and Excellence in Australian Higher Education

The experience of the past three years, 2013 to 2016, shows the great difficulty for implementing major changes to higher education funding and regulation as a single package.

The need for change is driven by the impact of making university an integrated part of the education system, accessible by any Australian with the aspiration for university study and the capacity to gain from it combined with expectations for change in how higher education is delivered over the coming decade.

The way ahead is to concentrate on achievable, useful changes where each can be considered and its impact assessed.  Changes should be directed at ensuring an effective Australian university system that meets the needs of all Australians for well-educated graduates and valuable research.

The Government’s fiscal challenge remains clear.  Expenditure on universities and students will be examined as much as other areas.  However, without the necessary resources from Government, students and business, universities will struggle to continue to deliver excellence in teaching and learning and research.  A major cut to funding is not a useful way ahead.

In contrast to many areas of Government expenditure, investment in education, including higher education, is about improving longer-term economic and social outcomes, with a return to Government revenue.

Recent graduate outcomes confirm that graduates remain better positioned than those without a degree while showing the impact of slow economic growth and sluggish employment opportunities.  Studies of graduates over the longer term confirm the advantage and suggest that the opportunities for each individual following a degree are better than if they had not undertaken it.

The IRU proposed seven actions consistent with three objectives to guide changes for the medium term.


  • demand driven funding as the core funding mechanism for supporting all aspirants to gain the higher education that they need including where they opt for an initial ‘sub-bachelor’ degree;
  • base university revenue sufficient to maintain universities’ core capabilities to deliver student learning outcomes and research to meet future needs; and
  • a focus on allowing universities to opt in to changes with long term significance, testing out changes and encouraging incremental take up.


  1. A commitment to support each Australian achieve their potential with an initial expansion of sub-degree places, targeting regions of under attainment.
  2. Maintenance of an effective HEPP program with sufficient funding that it encourages universities to focus on enrolling students from all backgrounds and rewards those who do so best.
  3. Targeted support for universities with ‘outer metropolitan’ and ‘regional’ bases to support the effective Australia wide access to university education and research without propping up failing aspects of a university.
  4. Further exploration of mechanisms that encourage universities to develop some areas of high achievement, without constructing complex interventionist approval mechanisms.
  5. Extending and improving information about student and graduate outcomes.
  6. Reworking of the standard Commonwealth Grant Scheme (CGS) and student payments based on:
  • fewer, clearly distinct, funding bands driven by an assessment of the reasonable resource standards targeted at future requirements to deliver expected learning outcomes;
  • simplified student charges in which no student pays any more than the current highest charge;
  • a factor addressing student background, to reward enrolment of a diverse student population; and
  • consideration of an additional factor targeting student outcomes against university level targets tied to accessing higher levels of revenue from Government and student combined.
  1. Adjust HELP repayment arrangements in ways that speed up repayment but which do not affect the core elements of HECS-HELP.