CHECK AGAINST DELIVERY

Introduction

Good afternoon everyone and thanks for joining me this afternoon to explore my most favourite topic – universities and research, and their place in Australia’s future.

What an interesting time we are in.

Delivering the annual Universities Australia address at the Press Club almost a year after the Education Minister announced the most profound changes to higher education policy in three decades, with the legislation stuck in a gridlocked Senate, with not one, but two Senate committees due to hand down their assessments in a week’s time, and with little clue as to what the final outcome might be.

But looking out of the Canberra fishbowl, it is a time of exciting and accelerating change around the world with discoveries being made on a daily basis about our universe, our planet, ourselves and our industries. Medical research is finding hitherto unknown causes and cures of life threatening disease, and according to the 2015 Intergenerational Report, a lot more of us will be living beyond 100 years, so we’ll be needing them. New processes and products are transforming long established business models and indeed even the global economic order.

The one constant is that if Australia is to keep up we need to embed a culture of innovation at every level of our economy and ensure that we can continue to produce the graduates to fill the jobs of the future, in industries that we can’t yet even imagine.

Our universities are pivotal in this effort.

Today I will explain why. I will also make some comments about the policy environment within which the higher education and research system is operating and what is, in our view, the way forward in realising the full potential of our world-renowned higher education system.

Some of you may have caught a movie some time ago called ‘127 Hours’. Set in Utah, it’s the harrowing true story about a guy, Aron Ralston who, when canyoneering, falls and is unable to move when a boulder entraps his arm between it and the rock wall.

Reflecting on this film, it’s difficult to escape the analogy with the current state of higher education policy.

With time to reflect, peppered with plenty of hallucinations, Aron concludes that the predicament he finds himself in, is the culmination of his history of decisions and experiences, relationships and failings. And the only way to freedom is (spoiler alert) to break and saw off his own arm. Which he does.

So here we find ourselves, the university sector trapped between the rock of reform necessity, and a very hard place that is the politically-charged environment that reduces contemporary higher education policy to a discouraging transactional discussion about who pays and what they get.

How do we free ourselves without painfully mutilating and dispensing with bits of our system that don’t necessarily threaten survival but are essential to full functionality?

If we are truly to put national interest in the drivers’ seat of higher education policy formulation, a new policy-making paradigm is needed. One that sees political consensus emerge from a broad-based acknowledgment that our universities are integral to the goals for achieving long-term, national well-being.

Our university history is still so young, compared with many of the nations we like to compare ourselves with. Our first university was founded in 1850 and our first PhD was awarded in 1948.

Compare this with countries like Germany and France, where there is a tradition of higher learning stretching back for over six hundred years. In some places even longer than that. Perhaps it is this history that helps to explain the cultural, community and political respect they enjoy for academic excellence and the broad acceptance of universities as pillars of economic and social prosperity.

Barry Jones recently observed that Australia must be the only country in the world where the word “academic” is treated as pejorative.

But next time you read the news, listen to the radio or watch a fascinating documentary, take note of how many academics are called on to help us make sense of the events unfolding across the globe, or to highlight health risks, or explain the ways new technology change our lives.

Under-pinning every successful nation, is a strong, properly resourced, higher education and research system that is woven into its social, cultural, and economic fabric. We must aspire to this too.

But it won’t be achieved by severing our limbs to meet short-term budget imperatives.

When addressing his new Republic on the eve of independence in one of history’s great speeches, India’s first Prime Minister, Jawaharlal Nehru, spoke of India stepping out from the old and into the new for her “… tryst with destiny”

Universities are looking longingly towards enjoying their own “tryst with destiny” – a destiny where the national interest is elevated above all else in securing a policy and funding environment that is predictable, stable and sustainable.

The story so far….

Australia has an outstanding higher education system. Professor Peter Coaldrake from Queensland University of Technology describes it as “world class, a mantle that was hard earned through considered investment…”

In 2013, there were nearly one million Australian students enrolled and since 1986 we have educated over 1.5 million international students. While not wanting to get into a debate about the merits of international rankings, the Australian system is ranked by the ARWU as one of the most successful in the world with 19 of our universities ranked in the top 500 based on research excellence. We enjoy a global reputation for quality and, according to Universitas 21, ours is also one of, if not the, most efficient systems in the world.

We have produced more than our fair share of Nobel prize winners (15), and our spectacular research breakthroughs are changing lives and communities for the better all around the world (think influenza and Gardasil vaccines, and the high-efficiency solar cell).

Our universities are making remarkable discoveries all the time – University of Queensland’s Nanopatch, Monash’s electric skin for home health monitoring, UniSA and NASA’s fuel cells for zero gravity, University of Wollongong’s BioPen delivering live cells directly to an injury to speed up healing – to name a few.

Our universities are the pioneers in international education that other countries seek to emulate and earn the country more than $16 billion in export earnings making it the fourth largest export earner for the country and our largest services export earner.

Forgive me for labouring the metaphor but despite most appendages remaining intact so far, the sector wears the nicks, scars, cuts, and grazes inflicted upon it by years of stop-start funding reflecting frequently-changing political priorities, policy restlessness and an operating environment impossible to predict from one budget to the next. Despite the confusion, instability and unpredictability this already creates, there is a risk that this volatility will only get worse as the polity wrestles with competing spending priorities in an environment of declining revenues.

It hasn’t all been down side of course. Many of the changes in recent years have been very well-received by the sector and there can be no denying the extraordinary commitments made by governments on both sides of politics at various times to higher education and research.

Expenditure on science, research and innovation has grown over the last two decades and the indexation formula for Government funding for teaching and research has modified to more closely reflect the true cost of delivery. Though disappointingly, this is set to be reversed.

There was the introduction by the previous Government of the demand-driven system so that postcode and background would no longer serve as an impediment to those with the ability and desire to pursue a university education.

So, while there have been many positive initiatives, they have tended to be short lived as governments change, political priorities shift, and the search for ways to fund the new policy favourites inevitably shines the spotlight on the universities and research budget lines. It is impossible to imagine that any industry would tolerate this level of insecurity and uncertainty so why is it “OK” for the sector that is arguably the most inextricably linked to the long-term fortunes of our nation?

We presently face funding cliffs in research and research infrastructure because we haven’t valued it sufficiently to provide an on-going commitment. Last minute withdrawals of planned investment in research excellence programs and those helping to meet their associated costs, together with the endless tweaking of funding rates for student places, and the substantial reductions currently in prospect, make planning near on impossible.

Reducing the system’s exposure to the consequences of erratic and unpredictable policy-making is the first of two key reasons why we have given qualified support for the Government’s proposals for university fee deregulation. To be in greater charge of one’s own destiny and for universities to be able to plan beyond one 6 month period to the next, is surely not an unreasonable ask for multi-million, and in some cases, billion dollar enterprises seeking to deliver the programmes and quality that its students, employers and the community expect.

The other reason, simply put, is that the existing funding model is not working. Try as we might, it is impossible to shoe-horn contemporary higher education trends into outdated policy structures.

Why is this?

In 1980 I enrolled at university with about 330,000 others and almost all of the university’s revenue came from government. Back then just 6 per cent of the population had a university degree. If I’d enrolled in 2013 I would have joined almost one million others when almost 25 per cent of the population had a university degree. In response to this growth, the government contribution to university revenue has dropped from around 90 per cent in 1981 to around 42 per cent today with student fees (both domestic and international), commercial activities, and philanthropic donations making up the remainder needed to pay our researchers and academic staff, provide student services, build infrastructure and run these very large institutions with thousands of staff and students.

Opening up universities to everyone with the desire and requisite ability – a policy that enjoys bi-partisan support – was a great reform that should not be reversed.

But in balking at advice provided by the 2008 Bradley review to increase per student funding for teaching and learning by the 10 per cent to address persistent, historical under-investment, the dye was cast for demand for high quality university education, outstripping the financial capacity of the system to pay for it.

We cannot escape the fact that this expansion of opportunity and deserved increase in access to university education has left both major parties feeling uncomfortable about the escalating cost imposed on the taxpayer. This is despite the disturbing fact that Australia currently sits at 30 out of 31 OECD countries for the public spend on tertiary education as a proportion of GDP.

Cuts to revenue mean larger classes, the abolition of less popular courses, campus closures, less student support and services, degraded facilities, less community engagement, and greater employment insecurity.

These are the things that get caught between the rock and the hard place. These are the limbs that get severed for the sake of survival.

Without a new approach, we also create a stronger incentive for universities to substitute full fee-paying international students for domestic students, potentially further exacerbating an already worrying level of exposure of the system (contributing up to 30 per cent to university budgets) to the highly volatile, and intensely competitive, international education market. Professor Glyn Davis recently posed the question, “… is it reasonable to ask the families of our region to fund Australian universities because Australian taxpayers will not?”

The choices are not easy.

We don’t suggest that the Government’s Bill as it currently stands is perfect. Which is why we have been seeking a number of amendments. Our views are well known, particularly in relation to providing assurance around affordability for both students and taxpayers, and we are strongly opposed to the magnitude of the proposed 20 per cent cut to funding. But it does provide, through the prospect of fee-deregulation, the means by which a sustainable university system can continue to perform amongst the world’s best while preserving and promoting the public university values of:

• equity;
• admission on merit;
• intellectual inquiry;
• student support;
• community engagement;
• academic freedom; and
• strong academic governance.

These are the values upon which the system is built and I think all of us would consider worthy of retention.

Reflecting on comments by those who dismiss the sector’s conditional support as being motivated by avarice, perhaps this is the appropriate point to pause and remind ourselves that our universities are not-for-profit (but they are not for loss either). They are not duty-bound to create shareholder value, or to make profits and distribute dividends. The revenue they receive goes into classrooms, science labs, libraries, student support programmes, great teachers, brilliant research and, on behalf of us all, pushing the frontiers of our knowledge and understanding.

Stephen Parker, Vice Chancellor of the University of Canberra speaks eloquently on this point observing that “Universities are here to make the world a better place: as their direct purpose, not a byproduct.”

Where to from here…?

The widely acknowledged challenges to the future of higher education in Australia must be addressed. We have been struggling with funding uncertainty now for two years. The more we delay addressing these hard issues, the louder the message is, that those laudable pronouncements on the critical importance of higher education, science and research, to Australia’s future are more rhetorical flourish than signposts pointing to a credible, new policy future.

Do any of you remember nerf balls? They’re described by their maker as foam-based weaponry, safe for indoor play. The higher education community has grown weary of being kicked about the Parliament like a nerf ball with the fingers of our university leaders tightly crossed hoping that nothing of value gets smashed.

As we have been doing for some time, we continue to call on Senators to resist the tempting political prizes that polarity affords and negotiate in good faith with Government to craft and secure a policy outcome that is fair and durable, and of which they can be proud. After all, the Government has indicated on more than one occasion that it is prepared and willing to compromise.

Regardless of what happens in the coming weeks, we must keep going with purpose and determination, in developing a higher education policy framework anchored in principles of institutional autonomy, quality, accessibility, affordability and sustainability.

The key elements of our ‘tryst with destiny’ are obtaining commitments to:

• universities having access to the level of resources needed to fund high quality education and research while being accountable for public income
• the preservation of the income contingent loans scheme and programmes to ensure that disadvantage does not compromise access;
• long-term investment certainty for research and research infrastructure to underpin Australia’s innovation system;
• the preservation of institutional autonomy for all university education and research affairs; and
• maintaining and enhancing the international competitiveness of Australia’s higher education and research system.

Having gazed up out of the canyon to the brilliant blue sky above and pondered the means by which we can extricate ourselves from entrapment, we agree that freedom will require four things.

First, we stay the distance. Persistence and perseverance are the key words here. While sinking into a despondent funk might hold a certain appeal, this is not an indulgence we can afford. Should the legislation fail, new beginning provides the opportunity to regroup, recast and rethink. One of the great things that has been achieved from the Government’s relentless and tenacious pursuit of its changes, has been to light the wick of public debate on higher education and research. And while it may flicker and wane, we will ensure that it keeps burning until the sector and the community is satisfied that Australia’s higher education system is positioned as well as it possibly can be in serving our students, our community and our nation long into the future.

Secondly, we need to recapture the excitement embedded in education and inject it back into our policy-making. My son Henry is 16 and just started in Year 11. At the beginning of term, he bounded through the front door filled with excitement to show me his new ‘awesome’ calculator and text books. He was clearly bewitched by the complicated looking formulas, yet-to-be-learnt and applied scientific theories, historical lessons of an Australia he’d never known, the books that would take him on journeys unplanned and unimagined. I was struck by the entrancing, soaring beauty of his anticipation of learning new things, of taking an exciting step into the world of almost-adults, and the whiff of possibilities and promise in unlocking the tantalising secrets of ‘the future’.

Surely this excited enthusiasm is what characterises education and distinguishes it from other social and economic endeavours. This is what drives and motivates all of those with a passionate belief, including those in politics, in the role of our universities in transforming lives, paving the way for the knowledge economy to come, making discoveries and research breakthroughs, creating the jobs of the future and producing the graduates to fill them.

In her opening comments this morning, our Chair, Professor Sandra Harding, urged us all “to re-engage with the excitement, the enchantment of higher education” and to ‘shape a future grounded in the enormity of higher education and research and its transformative power.”

Too often, along the policy-making road, both within and external to universities, the lustre dims as time and economic imperatives overwhelm, and passion and purpose slowly but inexorably are ground away as we count and we count, but forget why it is we are counting.

So thirdly, perhaps we need to take a step back and think about the Australia we want for ourselves and our children, and the responsibility and place of our universities in taking us there.

As the opener on what we want for Australia, it’s hard to go past the vision articulated in UA’s 2013 policy statement for a ‘Smarter Australia’:

“An optimistic country that knows that its future rests as much on its citizens education and inventiveness as on what it can grow, make, or extract from the ground.”

I believe most Australians want a university system that contributes to the artistic, intellectual, social and recreational fabric of the communities they serve.

In research, we want our universities to tackle the thorniest challenges, solve the most intractable problems, make sense of complex conundrums and most exciting of all, push the boundaries of what we know, pointing to how this knowledge can be adapted, adopted and applied to improve the quality of all our lives.

But something fundamental about the deeper meaning and importance of higher education has been brutalised on the decades-long funding battle-ground, and lost in contemporary debates. This morning, our Chair urged us to move beyond this battleground.

This is not to say that economic and financial imperatives are not important. They are very important. Without a strong budget position, the nation suffers and the individual cannot enjoy the quality of life or be afforded the opportunities that they would like and expect. There is no shortage of places in history and the world to demonstrate the fallacy of publicly-funded nirvana.

These discordant and divisive societies cost their citizens dearly, because someone, ultimately, has to pay.

But the economy is a means to an end. When policy is driven too enthusiastically by short-term economic imperatives, we falter in our ability to distinguish between ‘cost’ and long-term, human capital ‘investment’ and to account for the deeper meaning and purpose of universities’ endeavours.

Universities are so much more than budget dragging, degree factories and/or free bespoke research service providers to industry. In the three and a half years that I have been involved in this sector, despite high participation rates in university education, I have been struck by the reductionist character of the public discussion that imperils the realisation of the full nation building potential of our most critical intellectual enterprises.

Universities do not exist for themselves, they provide the means to enrich and satisfy our social, cultural, scientific, economic and societal aspirations. As Margaret Gardner, Monash University’s Vice Chancellor remarked to me the other day, universities mend our bodies, open our minds, and build the futures we can’t yet imagine. They equip the country, through our graduates, with the means for securing true prosperity, in every sense.

Finally, if good politics comes from good policy, good policy comes from good process. The three Ps of policy success.

I don’t plan to embark on a discourse of the elements of good policy making, Gary Banks this morning covered the territory with great alacrity.

But I would like to emphasise one element that touches on the previous point and that is the need for all of us to work harder on bringing the broader community into our confidence when contemplating substantial change affecting great swathes of the population and the country as a whole.

This is easier said than done and let’s face it, who isn’t calling for a new public ‘conversation’ on any number of topics at present? And having been involved both within and external to government in policy making across many difficult and contentious matters for the best part of 25 years, I also well understand how good policy can get killed off before a properly-informed debate can get out of the starter’s gate. For a variety of reasons, primarily associated with the speed at which everything now operates, compounded by the insatiable and voracious appetite for new angles, if not new stories, publicly informed policy making is more difficult today than it has ever been. But we must keep trying and inject some fresh thinking into how we go about it.

Good policy does not require everyone to agree but acceptance generally comes from the public having confidence that the process has been well-informed and an expectation that implementation will operate as intended.

Simon McKeon was recently reported speaking passionately about the urgent need to foster a culture of innovation and the need for a “credible discussion” on the topic if we are to have a hope of coping with the “megatrends” howling their way around the globe threatening the bottom lines of our companies and our nation. We must have this discussion and universities must be a part of it.

The Intergenerational Report focused on the importance of lifting productivity, and innovation to improve economic growth and our standard of living.

Later this afternoon at our Conference, we will unveil a tangible example of how universities can work with business to promote workforce participation and productivity.

Together with our partners, the Chief Scientist, the Business Council of Australia, the Australian Industry Group, the Australian Chamber of Commerce and Industry and the Australian Collaborative Education Network, we will announce a National Work Integrated Learning Strategy. It is a detailed and practical plan for universities, government and business working together to develop a workforce with the knowledge, skills and productivity required to meet future labour market needs.

Conclusion

Let me conclude. It may come as a surprise to you but within Universities Australia, there is not always agreement on every issue. I’m not sure this is so different to other sectors but in higher education it’s what makes the sector thrive and flourish. Productive tensions between institutions, and within them – particularly between collegial processes and managerial approaches – is what drives innovation and improvement, and helps to sharpen analysis, direction and values.

But most universities agree that higher education needs attention. If that means more public debate, then this, is what we must do and Universities Australia is well-positioned to facilitate this discussion.

We and our members, will not be cowed, nor will we apologise for, or step back from, asserting the rightful place of universities and research in a modern and prosperous Australia.

And we will keep calling for a political consensus that can only emerge out of strong engagement, broad consultation and a commitment to a higher education and research system that measures up as one of the best in the world, and one that all of us – including those who have never have set foot in a university – can celebrate and be proud of.

In borrowing again from the timing of that great independence speech, we too are close to midnight, looking forward to stepping out from the old, and into the new, to enjoy our own ‘tryst with destiny.’

We can emerge from between the rock and hard place without destroying part of ourselves in the process by coming together to properly cement our knowledge infrastructure in a culture that values education, innovation, ideas and research, and acknowledges these as the touchstones that differentiate progressive and successful nations from the rest.

Oh and the really happy ending? Aron lives happily with his family, working in a mountaineering shop in Aspen, Colorado. If you happen to be there, pop in and say hi. You’ll recognise him. He’s the one with one arm, a cool head, a focussed mind and who, in the most harrowing of circumstances, pledged and subsequently redeemed, his own ‘tryst with destiny.