Universities Need Cash Now


Tuesday night’s budget speech was absolutely silent on higher education. The Treasurer focused instead on unveiling a Vocational Education and Training (VET) funding package to reduce skill shortages in key areas. The Rudd Government has apparently abandoned its much vaunted education revolution as far as universities are concerned. This year’s Budget follows on from a measly $1.5 billion allocation in last year’s budget — which only added up to 25 per cent of the funding increase recommended by the Bradley Review in 2008.

The only significant new funding to universities in the 2010 Budget is a $37.9 million grant to the Australian National University for the construction of facilities for the Australian National Institute for Public Policy, the National Security College and the Australian Centre on China in the World.

Most recurrent funds will only begin to be disbursed in 2011–2012 as new measures around the deregulation of undergraduate places take their effect on the Commonwealth Grants Scheme (pdf).

The newly negotiated Interim Agreements that will begin the transition to "mission-based compacts" funding actually abolish a number of significant grants and funding schemes for universities. Leaving the bulk of reforms until after the next federal election will mean that students and university staff are left hanging.

This failure to fund higher education in the short term is not acceptable in view of Rudd’s education revolution rhetoric. This is doubly so in view of the pressures the Rudd Government has placed on the sector thus far.

Since taking office in 2007, Rudd, Carr and Gillard have demanded that universities find places for 40 per cent of the nation’s youth by 2035. Universities have obliged, some already over-enrolling by more than the allowed 10 per cent. Campuses are already cramped and under-staffed, with far too high an administrative burden forced onto over-worked academic staff. Much of the teaching grunt work has devolved to exploited casuals.

With the Rudd Government telling the sector to wait until 2012, it looks a lot like what they want is results first, funding later. In 2010, government income support will be widened to cover all enrolled students and caps on student numbers will be totally abolished. Universities knew this situation was coming — and did all they could to avert it in the lead up to the Budget.

The peak body for Australian Universities, Universities Australia, last month unveiled a report (pdf) produced by consulting firm KPMG Econtech, which stated that an investment of $5 billion over three years — in line with the Government’s own Bradley Review recommendations — would return an increase in GDP of 6.4 per cent by 2040. This investment would return benefits quickly, too: the report indicates a $13 billion return by 2014. According to Universities Australia, failure to fund universities now is just short-sighted.

In fact, failure to deliver funds fast enough might damage the industry irreparably before the long-awaited education revolution can actually get started. After 13 years of starvation rations funding, the sector is lagging well behind other OECD nations. Commonwealth support falls embarrassingly short of the true cost of teaching, and has done so for almost two decades.

Universities are by necessity using a variety of dirty tricks to make up the funding shortfall. They compete for lucrative research students, whose research brings in high-dollar-value completion funding. International students pay high fees which in turn cross-subsidise the teaching of their domestic student classmates. The latest trick is to move graduate-entry courses into so-called "professional doctorates" thereby allowing universities to circumvent federal government prohibitions on domestic undergraduate full-fee places. It is government hobbling of the sector that has led to the penny-pinching managerialism and labour exploitation that now characterises study and work in Australian universities.

Lucrative international students are already leaving the sector, fed up with arbitrary and selective changes to immigration laws. They’re not being replaced either, due to bad publicity and a poor government response to violence against international students. This is not an industry capable of both a massive increase in enrolments and the required maintenance of standards. The Rudd Government’s promises of funding in two years are irrelevant to an industry already cutting corners to make ends meet. Added to this, the pressure to comply with a new regulatory authority (TEQSA) and increased incentive to over-enrol make the delay look irreponsible.

They might make for good soundbites in an election year but now is not the time for income tax cuts and reining in spending. Investment in higher education — especially with ambitious participation targets like the 20 per cent low socio-economic status target — is surely more important than a budget surplus. The benefit to the taxpayer of a stronger, better-funded higher education sector, especially to those low-income taxpayers who received the tax cuts, will be more enduring and more fairly distributed than a few dollars saved now.

Launched in 2004, New Matilda is one of Australia's oldest online independent publications. It's focus is on investigative journalism and analysis, with occasional smart arsery thrown in for reasons of sanity. New Matilda is owned and edited by Walkley Award and Human Rights Award winning journalist Chris Graham.