E&OE

NICK RHEINBERGER: ABC Illawarra Mornings is where you are. Now, you would know that the university sector in Australia is facing some challenges when it comes to sustainable revenue in the future. Multiple institutions around the country are facing the prospect of making academic staff redundant to bring their budgets under control, but many in the NTEU, in one case, are questioning if that is the right approach and if other parts of the university business could change to keep spending under control. A large part of the sector’s funding relies on international students, and the federal government’s caps on overseas students is a big part of it. University of Wollongong interim Vice-Chancellor, Professor John Dewar, said on Tuesday the proposed overseas student caps will mean a permanent drop in university revenue, with the total job losses yet to be determined.

JOHN DEWAR: We don’t have a target in terms of job losses and a lot depends on how this first round goes, but the university is facing some serious financial headwinds mostly to do with the government’s decision to restrict the flow of international students into the country.

That was interim Vice-Chancellor, Professor John Dewar, on Tuesday. And joining me in the studio is Luke Sheehy, the CEO of Universities Australia, the peak representative body for the sector. Hello, Luke.

LUKE SHEEHY: Good day, good to be with you.

NICK RHEINBERGER: You are in town to speak with John Dewar. Why?

LUKE SHEEHY: Well, I have been in this job for just shy of 12 months, and I said that I would go and see every university in the country. And I haven’t yet been to Wollongong this year, so it was time to get here. And I have come up this morning from Canberra. So, I am delighted to be seeing you and chatting with you, but also seeing John and the team at Wollongong later today.

NICK RHEINBERGER: Now, I know you don’t want to speak about specific financial results for universities, but you are here at a time when many of our staff are going to be getting redundancy letters, about December 20. What is your message to those people facing redundancy?

LUKE SHEEHY: Well, the first thing I would say is any job loss in this great sector that I have the privilege of representing is a tragedy, and we need a strong, robust and growing university sector in this country if we are to meet the big challenges that we have. We think about some of the ambitions the government has talked about, like a Future Made in Australia or the transition to clean energy and zero emission energy and developing new industries. We need the know-how, we need skilled, talented workers to be part of that economic change, and we also need the research out of our universities to power that. We can’t do that, Nick, if we don’t have a robust financial baseline for our universities. And frankly, some of the changes that Professor Dewar has talked about, particularly relating to international students in the last 12 months, they are really undermining our financial certainty and our capacity to deliver for the country.

NICK RHEINBERGER: If we want a growing university sector, if Wollongong is a symbol, it is shrinking. So how do we get back to growth?

LUKE SHEEHY: Well, the first thing is we really need the government to think about the financial stability of the whole sector, not just Wollongong but right across the country. As I said before, going to most of the university campuses in the last 12 months, I can tell you they are in a world of pain. We know that last year alone 25 out of 39 of my members were in budget deficit and they were the year before that, and they will continue to be. And the reason why we are in a lot of pain is not just because of visa changes, but we have had a long recovery from COVID. Think about when previous Prime Minister Scott Morrison closed the borders and told international students to go home. International students aren’t like tourists. They come to Australia for three, four or five years. So, when you say no…

NICK RHEINBERGER: …to the peak studying time?

LUKE SHEEHY: Correct.

NICK RHEINBERGER: And we lose that time, we lose a couple of years.

LUKE SHEEHY: …and we lost a couple of years, which lost a lot of revenue for our sector. And we have just been on a trajectory to recover from that. And then the government, just before Christmas last year, took a sledgehammer to the student visa processing system, which effectively slowed down visa processing. And as a result, in our calculations, at around 60,000 fewer international student visas being issued in the first six months of this year, that has impacted universities right across the country who are still recovering from that COVID bite, and it’s causing pain. And I feel really sorry for our workers in higher education that are going to lose their jobs. We do not want to see anyone lose their jobs. Jobs in higher education are often highly paid, and they support not only individuals but families and communities, and particularly in regional areas it has a big impact. And I am very sorry to hear about these job losses.

NICK RHEINBERGER: And I know we rely on international students, but no doubt you would have seen The Australia Institute looking at how much of a contribution our domestic students make via HECS to our budget bottom line. In many cases more than many parts of the resources sector, you know, congratulations. Is that sustainable….the sort of debts that we are putting on our domestic students?

LUKE SHEEHY: Well, we have been welcoming the government’s recent announcements. They have made two announcements in the last 12 months. One, as recently as this last weekend, is to change the rates at which students pay, change the indexation or the interest that is applied to those student loans. And that is a good thing. But what we also want to do is to make sure that the fees that the government sets for university students, not universities but the government itself sets the fees, are lower and more affordable. If we want to double the number of university students in this country, we have got to make sure it is a fair and affordable system for student fees. So, the changes to HECS are good, particularly for people who are young, people who are really suffering under the cost-of-living pressures at the moment. If they can pay a little bit less on their HECS because they raise the amount before they have to start repaying it under this new proposal, that is a good thing.

NICK RHEINBERGER: Are they paying less? They are just postponing until they are earning more. We are not actually lowering the amount they are paying. We are just waiting a bit longer before you start.

LUKE SHEEHY: Well, that’s true, but what is important to recognise is that it is more take-home pay, because they will take less out of their pay packet each time. And that is not a bad thing. There is obviously lots more we can do, and it is unfinished business. We want to make sure universities are cheap, affordable and a great proposition for young Australians and all Australians that want to get the skills they need to succeed in our economy. But I would say if we can keep going with this discussion with the government, especially around making the student fees itself lower, that would be a great win for students and a great win for the country.

NICK RHEINBERGER: When I had my first crack at university in the eighties, it was free. And there are still other countries around the world that recognise that the knowledge economy is so important to the wider economy that university is free. Can we not get back to that or has the horse bolted?

LUKE SHEEHY: Well, one of the reasons, Nick, the Hawke government introduced HECS and that was a long time ago now and I, unfortunately, did not get to go for free. I wish I did, but it was a way that we could rapidly expand the university sector, and we saw hundreds of thousands of more Australians being able to go to university because the government had a more sustainable financing model, because it funded the universities. But there was a student contribution that came back to support that growth. What I would say now, fast forward nearly 40-something years, is that we want to make sure that the system is still affordable. There have been a number of changes to what students pay mandated by successive Commonwealth governments. And we think it needs some serious change. We have been talking about it for a number of years. The Morrison government brought in this package called Job Ready Graduates. It changed the amount that students pay for different disciplines, but it also cut what we get in direct funding for really critically important areas like science, technology, engineering and maths and other critical health science areas. And we have been saying this is no good, we want to fix it. And we are glad that the government is making some noise about fixing that in the years ahead. We want them to do it as soon as possible.

NICK RHEINBERGER: If you had your hands on the levers, what would you change? There are two big things here – the contribution domestic students make and the caps on international students. What is sustainable for both of those?

LUKE SHEEHY: I think we have got to have a pretty fair dinkum discussion around what it costs for our universities to deliver our mission, which is to educate Australians, develop research that is good for the country and good for our economy, that drives productivity and does all those things that we need to do is an important part of a knowledge economy. We think the funding system is not fit for purpose. We want to make sure that it is adequately funding our core mission. So, that would be my first priority. And it is my priority when I talk to Commonwealth ministers from day to day.

NICK RHEINBERGER: Is that what your job entails mostly being based out of Canberra?…

LUKE SHEEHY: That is right…

NICK RHEINBERGER: …lobbying for all your member universities? 

LUKE SHEEHY: I am very proud to do it because it is a wonderful sector that serves the country so well and the universities will be the key to our future success for it to grow, new opportunities for the country and to make sure we have a strong pipeline of secure jobs and really important things that support our communities. We are talking about that today as well. I am meeting some of the finalists of our Shaping Australia Awards and some of those finalists have come from the University of Wollongong. And I am looking at some really interesting projects where they are supporting community-based infrastructure as well as research that is going to benefit Australia into the future.

NICK RHEINBERGER: Glad you could join us. Thanks for coming in Luke.

LUKE SHEEHY: Good to be with you.

ENDS