We appreciate the opportunity to comment on these proposals that, if implemented in their current form, would have far reaching consequences for the shape and quality of Australia’s higher education system.

This submission complements those made by individual universities and university groupings that reflect their own particular circumstances and shared perspectives. We commend these to you.

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All members of Universities Australia oppose the reduction in investment in universities and measures that would restrict student access on the basis of affordability. Members also recommend excising performance funding from the Bill pending work being done design and rationale. A majority of our members oppose the Bill in its entirety.

If passed:

•  students will pay more to get less;
•  universities will be weakened at the very time Australia needs them most to assist in making a successful transition to an economy based on advanced skills, new ideas and innovation;
•  the measures will have a negative impact on education quality and diversity; and
•  red-tape, government bureaucracy and administrative costs will increase.

Should the Committee be inclined to recommend proceeding with the Bill, we strongly recommend that the ‘efficiency dividend’ be removed and the clauses that relate to performance funding be subjected to further analysis and discussion.

These two elements are the primary focus of our submission.

The cuts to university funding combined with increases in students fees mean that students will be paying more to get less. This constitutes a double hit on students, increasing the fees they pay—already high by international standards —and decreasing the funding for the courses, learning opportunities and student services that are critical to the quality of their education.

The proposed reduction of $1 billion in university funding would come at a time when competing nations are investing heavily in higher education and research as a way of safeguarding their economies against profound economic, industrial and social upheaval.

UA members are not-for-profit, nation-building enterprises.

They play a critical role in equipping Australia for the new economy by building national resilience. Our universities will be responsible for producing the next generation of graduates with the flexible, adaptable, high-level skills needed to navigate Australia through the transition to a profoundly different economy. Through world-leading research, universities also contribute to the innovation and new products, ideas and breakthroughs needed to solve our thorniest problems and create new industrial opportunities.

Further reducing investment in higher education and research runs counter to the Government’s National Innovation and Science Agenda (NISA) and its policy premise that recognises the imperative of innovation, science and research for maintaining and enhancing Australia’s global competitive position.

Universities understand the challenge for Government in juggling priorities for public expenditure and acknowledge the need to address budget repair. In this context, however, the Committee should in turn acknowledge the substantial contribution that universities and their students have already made to the budget repair effort in recent years.

Since 2011–12, $3.9 billion in net budget savings from the sector have been made. This does not include the loss of another $3.7 billion from the sector as a result of the Government’s proposal to abolish the last remaining capital works program—the Education Investment Fund (EIF)—that provides funds for the building and renewal of university facilities, including classrooms, lecture theatres, laboratories, libraries and student study spaces.

Reducing the level of investment also denies the Australian community the commensurate return on that investment, particularly in relation to jobs and economic growth that extends well beyond the higher education sector. Australia’s international education success—grounded in the high quality and reputation of the Australian system—is a key element. Valued at more than $22 billion, international education is Australia’s third largest export and too important to put at risk.

It also risks the quality and diversity of education and support services offered to students. An efficiency dividend puts at risk some of the most financially challenging aspects of universities’ operations. These are typically student support services, smaller courses (including languages), smaller (often regional) campuses, and community outreach and support. While these may be a net cost to universities, these operations are important in delivering the public good mission of universities.

The Bill provides for Government funding to be further reduced for institutions that do not meet yet-to-be determined ‘performance’ measures.

Universities are demonstrably committed to continuous improvement in meeting the needs of their students and will support a scheme that further assists them do this. However, we believe that it is premature to introduce legislation on a scheme that addresses an under-articulated ‘problem’ and that has not benefitted from a process of broad consultation and analysis. Attrition rates have not changed markedly in recent years, retention is on par with the rest of the developed world and student satisfaction continues to climb. This is in large part a reflection of the robust performance and accountability framework that is already in place.

Together with the funding cuts, an inadequately conceived performance funding system has the potential to condemn the sector to a downward spiral that would hit hardest the institutions that serve the most disadvantaged students and communities in the country.

Given the potential for unintended consequences, and the immaturity of the proposal, performance funding should be removed from the Bill until a workable system is developed.

Despite our serious concerns regarding the central elements of the Bill, it is important to acknowledge that the Bill includes a number of elements that the sector has been calling for some time:

•  Extending the demand-driven system to sub-Bachelor programs – improving and diversifying entry pathways will widen access to higher education.
•  Enshrining the flagship equity program, HEPPP, in legislation will help to assure the program’s future: proposed changes to its structure will improve its effectiveness.
•  Making Commonwealth subsidies available for work experience in industry units will support employers, universities and students develop and pursue work-integrated learning, leading to improvements in graduate work-readiness.

Recommendations

That the Committee, at a minimum:

• oppose the proposed efficiency dividend;
• oppose the changes that affect student affordability;
• remove provisions for performance funding so they can be properly considered, scrutinised and analysed through a considered and consultative process;
• ensure feasible timeframes for smooth implementation; and
• consider the positive elements of the Bill and how they might best be delivered:
  a. extension of the demand-driven system to sub-Bachelor places; and
  b. legislative protection for HEPPP and changes to the program.