June 8, 2017

Students should not pay more for less: The IRU submission on the Higher Education Support Legislation Amendment Bill 2017

Part One: Overview

The IRU opposes the Government’s Higher Education Package whose fundamental outcome would be to lessen universities’ capacities to educate the students they enrol and undertake research.

The package will harm education and research outcomes through:

• an ‘efficiency dividend’ cutting the net income from the Commonwealth Grant Scheme and Student Contributions by 2.8%, at a saving for the Commonwealth of 10% off the Commonwealth Grant Scheme (Table One);
• requiring students to pay an additional 7.5% in fees despite the inevitable cuts in services required by the efficiency dividend. Students would be asked to pay more for less; and
• a further 7.5% of the Commonwealth Grant Scheme put at risk every year for each university according to a performance mechanism and metrics that have yet to be described. The quantum at risk is such that it would have catastrophic consequences for individual universities and their enrolled students.

Governments of both sides have supported growth in the number of students, as universities respond to the need for more and more people to have post school qualifications but they have been unwilling to support the quality of that education through a reasonable university resource standard.

Universities have consistently argued that the revenue available for each student severely constrains how well they can educate students. Year by year the effective value of funding is intentionally eroded through the indexation mechanism. Universities do not need an additional efficiency measure when the index has imposed one annually since 1997.

Universities have achieved significant structural change in how they use revenue, tightly constraining recurrent costs, notably staffing, to avoid running down into institutions incapable of meeting future demands. Rather, through determined planning, IRU members ensure future capability, investing in new resources and striving to be at the lead of new education delivery.

The main elements of the package will hinder IRU members doing this, not enhance their capabilities.

The contrast with school funding could not be clearer. The Government focus for schools is to increase funding per student to achieve a reasonable per student resource. Perversely, the proposal is to cut Commonwealth Grant Scheme funding for university students by ten percent – literally to decimate it.  These two measures are philosophically incoherent.

There are major uncertainties in the package, where the Bill would set up significant funding mechanisms whose main elements are not known and whose general approach remains untested.  The lead cases are:

• the creation of vouchers for post graduate non research courses that seeks to marry a selection of voucher holders based on centrally determined workforce needs with an otherwise fee based, open market, for such courses; and
• the 7.5% performance funding element for the Commonwealth Grant Scheme.

Neither scheme should be legislated when only the broad intent is known but no detail.

IRU Recommendation

The IRU recommends that the Senate reject the Government’s Higher Education Support Legislation Amendment Bill 2017.

Structure of the submission

Part Two of the IRU submission addresses the failure of the Government argument that universities can sustain a drop in revenue without harm to education outcomes.

Part Three considers each measure in the Government Package aligned to the schedules of the Higher Education Support Legislation Amendment Bill 2017.

Read full submission attached.