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Deregulation – where to from here?

Date

Ian Young

Students protest at the ANU in May. Vice-Chancellor Ian Young says the question for those who oppose  reform  is what they would do instead?

Students protest at the ANU in May. Vice-Chancellor Ian Young says the question for those who oppose reform is what they would do instead?

Following the announcements of the proposed major changes to the higher education landscape in the federal budget, the sector has seen much debate, student protests, speculation about fees in an uncapped system and lack of certainty about where this might ultimately land.

We are, however, moving from sector debate to real action when legislation finally is introduced into Parliament.

The government’s two working parties led by Peter Shergold and John Dewar will soon report to government, providing essential advice for the drafting of legislation.

The positions of the major sector groups are becoming clearer - both the Go8 and the ATN support deregulation while Universities Australia “does not oppose deregulation”.

All groups, however, have reservations about details including the real rate of interest on HELP debts, the magnitude of the cut to Commonwealth Grant Scheme (CGS) funding and the cut to Research Training Scheme funding.

The real action now will be focused on the Senate and particularly, the cross-benchers. In the present political climate the minister will certainly have a challenging time steering the package through such an unpredictable Senate.

The debate has all been about what would happen if the package is passed by the Senate. Little has been said about what happens if the package is not passed? Well - nothing will happen; we’ll just go pack to “normal”. Maybe, but “normal” may not be a very attractive place.

It is worth remembering why we are having this debate and why, the sector is now generally in favour of deregulation, although the enthusiasm does vary by institution.

We are here because our higher education system is unsustainable. Over the last five years the total number of Australian students at universities has grown by about 127,000.

The sector has grown far more quickly than predicted by the Bradley Review and we are rapidly approaching the 40 per cent participation target set by Bradley. We should all celebrate this achievement. But such growth comes at a cost - a cost to the taxpayer. In 2007 the cost to government of the CGS was $5.9 billion by 2012 this figure had increased to $9.5 billion and is predicted to rise to $12.8 billion by 2017.

The total HELP loan liability held by government in 2013 was approximately $30 billion, it is predicted to grow to $55 billion by 2017. Although these total costs to government have been growing at a significant rate the funding per student to universities has been falling.

In fact, this is the one constant in the Australian higher education system. Funding per student, in constant 2013 dollars, had decreased by 14 per cent over the 17-year period since 1996.

This situation ensures everyone is unhappy. Universities, expanding rapidly, are doing so with fewer dollars per student.

Governments looking at their ever-increasing higher education costs can’t understand why vice-chancellors are so “ungrateful”.

Under significant budget pressure the previous Labor government cut deeply into both education and research. These cuts totalled $3.5 billion.The presently proposed cuts to CGS amount to approximately $2.8 billion over the forward estimates. The lifeline offered to universities is deregulation!

Critics of my support for deregulation have fired back with the taunt that when I went to university it was free (or at least the taxpayer paid). This is true, but at that time less than 10 per cent of school leavers went to university.

Today the reality is that almost 40 per cent of Australian school leavers go to university and it appears the taxpayer is not prepared to meet the cost of the ever-increasing bill. I make this assertion because higher education has never been an election issue.

Voters (taxpayers) get excited about health, schools, immigration but not universities. Universities Australia, in a move I strongly supported, ran a $5 million public awareness campaign in 2013. It did not stop the cuts and higher education did not become an election issue.

If the government’s package does not pass the Senate then I have grave concerns for the future.

I see a future of continued reduction in funding per student, greater cuts to research and our universities decaying into mediocrity. We will also see an end to the Future Fellows program, standing our best and brightest mid-career academic staff with no career certainty.

The National Collaborative Research Infrastructure Scheme will also end, meaning major research facilities across the country will close.

As I said, “business as normal” may not be an attractive place. The real question for those who oppose the reform package, both in the community and the Senate, is what they would do instead?

When I have raised this question the answer I have got is that government should fund higher education properly. I agree, it should, but after 20 years of being ignored by the voters, I find it hard to believe anything will change in the immediate future.

There are no easy answers here if we want a world-class higher education system.

Professor Ian Young  is vice-chancellor of the Australian National University

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