Luke Sheehy, CEO, Universities Australia

By any measure, the most recent gross domestic product figures, released in December, don’t make for easy reading. The weaker-than-expected GDP gain of 0.8 per cent for the year landed Australia in its worst economic slump since the 1990s recession, outside the COVID-19 pandemic.

The latest figures paint a bleak picture for any government, not least one seeking to reassure the electorate of its economic credentials so close to a federal election set to be fought over cost-of-living more than any other issue. Australians are feeling the pinch, and both sides of politics know it.

How much of this is actually the fault of the current government is up for debate and there will be no attempt to sail in those complex and choppy waters here. What isn’t without question is that Australia has a serious productivity problem and that is what’s hurting our economy most.

It’s important to acknowledge that this isn’t a new issue, and certainly not one entirely of the current government’s making. The last decade, through which both major parties have held office, has been a slog. Productivity growth has fallen to a 60-year low in this period.

This is problematic because productivity is what drives growth in the economy and right now, the economy is barely growing. It’s true that Australia has experienced 12 quarters of consecutive economic growth coming out of the pandemic, including a 0.3 per cent gain in the September quarter. But we are walking an incredibly narrow road between growth and recession and have been for some time.

If it wasn’t for migration, the economic needle would barely move. This is widely acknowledged, yet both the government and the opposition seem hell-bent on cutting migration to manage perceived domestic political pressures.

International students are in the crosshairs more than others, having been positioned as cannon fodder in the political battle over housing. Never mind these talented people accounting for half of Australia’s tepid 1.5 per cent economic growth in 2023. Without them, we would have come dangerously close to recession.

This all begs the question – are the votes our major parties are chasing at the ballot box worth sabotaging the economy for? At a time when international students are largely the difference between boom and bust, this seems incredibly self-defeating.

Our country is best served by good policy over politics and what we need now more than ever is strong economic management underpinned by a productivity-driven growth agenda to get our economy moving in the right direction again. Education, particularly higher education, should be at the centre of this plan, receiving equal attention to other areas, such as tax and regulation, that are critical to lifting productivity.

We need to acknowledge that universities have and will always matter to Australia’s future. What seems to be perennially lost in the higher education debate, which tends to always be more ideological in nature than based in pragmatism, is that Australia wouldn’t be the safe, successful and prosperous nation it is today without our universities and everything they do on behalf of all Australians.

Our economy is $185 billion bigger thanks to the university-educated workforce. Skilled graduates work in almost every sector of the economy, typically earning higher wages and enjoying more secure work prospects. These benefits extend to the wider community through higher tax contributions, the creation of new jobs and increased investment.

It’s also the research and development work university researchers do every day to drive our nation forward, particularly through the development of new technologies to make Australia’s transition to a cleaner, greener energy future possible and to ensure our sovereign capability is up to scratch.

The recent review of Australia’s higher education sector made clear we need more of what our universities do, not less, if we are to successfully navigate an increasingly complex economic and geopolitical environment and make the most of the challenges and opportunities that come with it.

That means educating almost a million more university students each year by 2050 to ensure Australia has the skilled workforce it needs for the future. Our economy stands to gain $240 billion if we can achieve this necessary uplift in tertiary education attainment.

It also means supporting the work of our researchers to deliver national priorities and add much-needed complexity to our economy through the creation of new industries. We simply won’t ever realise Labor’s future made in Australia agenda or the Coalition’s nuclear energy future without universities and all that they bring to the table.

With our productivity lagging, our economy on the nose and our future at stake, the decisions made by the next federal government will determine Australia’s future. Ahead of the next election, the major parties have an opportunity to take politics and ideology out of higher education and focus on the national interest that flows from it.

It’s time to stop taking universities for granted and put them at the centre of a productivity-driven growth agenda to get Australia back on track. Bold and ambitious support for higher education is essential in any economic plan for the future. The return on investment is a stronger, more prosperous Australia where no one is left behind. That should be above politics.

Link to The Australian article can be viewed here.