Purpose of the Bill

The purpose of the Education Legislation Amendment (2021 Measures No. 1) Bill 2021 (the Bill) is to:

• amend the Australian Research Council Act 2001 (ARC Act) to apply indexation to the appropriation amounts for approved research programs for the three financial years starting 1 July 2020 to 1 July 2022 and to insert a funding cap for the financial year starting on 1 July 2023; and
• amend the Higher Education Support Act 2003 (HESA) to give effect to the Mid-Year Economic and Fiscal Outlook (MYEFO) 2020–21 commitment to move the University of Notre Dame Australia (UNDA) from Table B to Table A of HESA.[1]

Background

The Australian Research Council

The Australian Research Council (ARC) is an independent Commonwealth body established by the ARC Act in 2001. Its purpose is to:

… grow knowledge and innovation for the benefit of the Australian community through funding the highest quality research, assessing the quality, engagement and impact of research and providing advice on research matters.[2]

The ARC is the Government’s main source of advice on investment in Australian research and also provides research evaluation through Excellence in Research Australia (ERA).[3] The ARC administers funding for basic and applied research in all disciplines through the National Competitive Grants Program (NCGP), although most medical research is funded separately and administered by the National Health and Medical Research Council (NHMRC). The NCGP comprises two programs, the:

• Discovery Program which provides support for fundamental research undertaken by individuals and small teams; and
• the Linkage Program which encourages research ‘links’ between university-based researchers and industry, business and other partners nationally and internationally, to stimulate research impact.[4]

Grants are awarded competitively through a peer assessment process.[5]

The budget provides the funding for the NCGP as a special appropriation under the ARC Act.[6] The ARC Act specifies the annual funding cap for approved research.[7] The Explanatory Memorandum states that ‘the amendments are essential as the ARC Act is the legislative basis that supports the financial operations of the ARC research programs through special appropriation mechanisms which must occur each financial year’.[8] From 1 January 2016, funding has been indexed by the Consumer Price Index (CPI).[9]

The University of Notre Dame Australia

The UNDA is a private Catholic university based in Freemantle, Western Australia (WA), with additional campuses in Broome and Sydney, and clinical schools in Sydney, Melbourne, and regional New South Wales.[10]

Teaching

A relatively small institution compared with most other Australian universities, UNDA’s 11,727 students represented only 0.7 per cent of the approximately 1.6 million total students in Australian higher education 2019.[11] Its courses are substantially focused on health and education, with over 60 per cent of students studying in these fields, as shown in Table 1 below.

Table 1: All UNDA students by broad field of education, 2019

Source: Parliamentary Library calculations and Department of Education, Skills and Employment (DESE), ‘2019 Section 2 All students’, Table 2.8, DESE website, created 8 September 2020.

Notes:

1. The data takes into account the coding of Combined Courses to two fields of education. As a consequence, counting both fields of education for Combined Courses means that the totals may be less than the sum of all broad fields of education.

2. Percentages do not sum to 100 due to rounding and the effect of the coding of combined courses.

UNDA is well regarded by its students, with 88 per cent of undergraduate students rating the quality of their overall education experience positively, according to the Australian Government’s 2019 Student Experience Survey report.[12] Small institution size is positively correlated with high student satisfaction, with other small universities, the University of Divinity (93 per cent) and Bond University (87 per cent), making up the top three highly rated universities, along with UNDA.[13]

Employers are generally satisfied with Australian university graduates, with overall satisfaction ratings ranging between 95 and 76 per cent, based on combined results from 2017, 2018 and 2019 employer surveys.[14] UNDA is towards the top of this range, with 87 per cent employer satisfaction.[15]

Despite generally high levels of employer satisfaction, in 2020, labour market outcomes for graduates of most universities declined.[16] In 2020, four months after completion of an undergraduate university degree, 69 per cent of graduates were employed full-time (as a proportion of those available for full-time work), compared with 73 per cent in 2019.[17] UNDA graduates achieved slightly better than average outcomes, with 74 per cent employed full-time in 2020, compared with 77 per cent in 2019.[18] In addition to university teaching and other support such as careers advice, these outcomes are shaped by factors such as the composition of the student population, course offerings, and variations in regional labour markets.[19]

Research

Based on limited publicly available information, the UNDA appears to currently be less research intensive than many Australian universities. The ARC’s ERA assesses the quality of research at Australian universities, using five ratings for research quality:

• 5: well above world standard
• 4: above world standard
• 3: world standard
• 2: below world standard and
• 1: well below world standard.[20]

Most research assessed through ERA is rated well above world standard (36 per cent) or above world standard (30 per cent).[21] A diminishing proportion is rated at world standard (24 per cent), below world standard (9 per cent) and well below world standard (1 per cent).[22] The UNDA’s latest ERA results by field of research, shown in Table 2 below, show only medical and health sciences research at the UNDA achieved a world standard rating.

Table 2: UNDA Excellence in Research for Australia Results, 2018

Source: Australian Research Council (ARC), State of Australian University Research 2018–19, ARC, Canberra, 2019.

The UNDA emphasises its collaborative and translational research, with concentrations in health and medical fields, and some research activity across all its areas of teaching.[23]

The ARC assesses research engagement and impact through the Engagement and Impact Assessment (EI) using a three-point rating scale—high, medium and low.[24] Each point on the rating scale has a specific descriptor for engagement, impact and approach to impact:

• For engagement, the assessment focused on interactions between researchers and research end-users outside of academia for the mutually beneficial transfer of knowledge, technologies, methods and resources. A rating of high indicates highly effective interactions, while a medium rating is characterised by effective interactions, and a low rating means there was little or no evidence of effective interactions.
• For impact, the assessment focused on the contribution of research beyond academia. A rating of high indicates a highly significant contribution, medium indicates a significant contribution, and low indicates little or no contribution beyond academia.
• For approach to impact, the assessment focuses on mechanisms to encourage the translation of research into impacts beyond academia. A rating of high indicates highly effective and well-integrated mechanisms, medium indicates effective and integrated mechanisms, and low indicates the mechanisms are not effective and integrated.[25]  

Most fields of research were not assessed for the UNDA in 2018 due to low volume.[26] The available ratings are shown in Table 3 below.  

Table 3: UNDA Engagement and Impact Assessment Results, 2018

Source: ARC, ‘Engagement and Impact Outcomes’, ARC website, n.d.

Committee consideration

Senate Standing Committee for Selection of Bills

At its meetings of 3 and 17 February 2021, the Senate Standing Committee for Selection of Bills deferred consideration of the Bill to its next meeting.[27]

Policy position of non-government parties/independents

At the time of writing, no non-government parties/independents have commented on the specifics of the Bill.

Position of major interest groups

The UNDA has welcomed its re-categorisation to Table A.[28] Vice Chancellor Professor Francis Campbell stated:

These changes are an endorsement of Notre Dame, its contribution to the Australian Higher Education Sector, the outstanding education provided to its students, and the significant contribution its graduates make to Australian society.[29]

At the time of writing, no other major interest groups have commented on the specifics of the Bill.

Financial implications

Schedule 1

The Bill results in an additional appropriation of $855.0 million over four years from 1 July 2020.[30] This is due to the increased funding figures for three years ($53.63 million) and to the extension of the forward estimate period to include 2023–24 ($801.41 million). The additional appropriation does not affect the substance of the ARC Act nor give extra money to a Government department; it only adds to the special appropriation administered by the ARC for the purpose of funding research. The proposed changes in funding are in Table 4.

Table 4: Proposed changes in appropriation caps

Source: Australian Research Council Act, section 49; Education Legislation Amendment (2021 Measures No. 1) Bill 2021, Schedule 1.

Schedule 2

Schedule 2 of the Bill has been costed at $27.2 million over four years from 2020–21 and $133.3 million over ten years to 2029–30.[31]

Statement of Compatibility with Human Rights

As required under Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the Bill’s compatibility with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of that Act. The Government considers that the Bill is compatible.[32]

Parliamentary Joint Committee on Human Rights

At the time of writing, the Parliamentary Joint Committee on Human Rights has not considered the Bill.[33]

Key issues and provisions

Schedule 1—Research amendments

ARC funding caps for approved research programs are set under statute, allowing governments to extend funding in line with budget announcements. These funding caps are updated, usually annually, to take into account indexation by the CPI and budget decisions, and to add an additional year for the forward estimates. The ARC’s funding is currently authorised until the end of the 2022–23 financial year.[34] The proposed amendments in Schedule 1 will update the funding caps and insert a new financial year as detailed in Table 1 above.

Schedule 2—Education amendments

Eligibility for higher education funding under HESA is administered using four categories:

• Table A providers (listed in section 16-15) are eligible to access the full range of funding programs
• Table B providers (listed in section 16-20) are eligible to access a limited range of funding programs
• Table C providers (listed in section 16-22) are explicitly excluded from most funding, but can offer some student loans and
• providers approved by the Minister under section 16-25, which are not listed in HESA.[35]

Currently, the UNDA is listed in Table B. Schedule 2 of the Bill proposes to remove UNDA from Table B (item 2) and add it to Table A (item 1).

A list of current Table A and Table B providers is at Appendix 1. Eligibility for key funding programs by category is set out in the table at Appendix 2.[36]

The effect of moving the UNDA from Table B to Table A

Funding

In practice, despite being a Table B provider, the UNDA already accesses most funding available under HESA. In 2019, it reported total revenue of $189.9 million from continuing operations, 83.1 per cent ($157.9 million) from Australian Government sources.[37] In comparison, only 48.7 per cent ($17.8 billion) of all university revenue ($36.5 billion) came from the Australian Government.

The UNDA’s HESA funding is currently achieved by a combination of:

• access to the programs it is eligible for as a Table B provider, such as the Research Block Grants and Indigenous Student Success Program and
• special arrangements to access the Commonwealth Grant Scheme (CGS), set out in the Commonwealth Grant Scheme Guidelines—although the CGS is largely restricted to Table A providers, a limited number of Commonwealth supported places (CSPs) are funded through the CGS each year in areas defined in the Guidelines as ‘national priorities’, mostly to increase the supply of Health and Education graduates.[38]

Since the CGS commenced in 2005, the UNDA’s number of Commonwealth supported students has grown substantially, from 641 to 7,026.[39] Although this has been alongside substantial overall growth in the system, UNDA’s share of Commonwealth supported students has also grown, from 0.1 per cent in 2005, to 0.8 per cent in 2019.[40] The other Table B providers do not have CGS access.[41]

In 2019, the UNDA’s students comprised:

• 7,026 Commonwealth supported students (that is, students in CSPs)
• 4,174 domestic fee-paying students
• 515 other domestic students (including 153 non-award students and 367 postgraduate research students with fee offsets via the Research Training Program) and
• 222 overseas students.[42]

Therefore, Schedule 2 of the Bill will enshrine continued CGS access in legislation for the UNDA, and ensure this covers all fields of education.[43] For undergraduate students this will mean UNDA courses currently offered as full fee-paying will be subsidised through the CGS, and thus offered at lower cost to the student.[44] Subject to some limited exceptions, Table A providers are required to enrol eligible undergraduate students in CSPs.[45] However, no such requirement applies to postgraduate students, meaning the UNDA could continue to offer full fee-paying non-research postgraduate courses, as current Table A providers do.

Reclassification to Table A will also extend access to the other funding programs that are shown in the table at Appendix 2 as being restricted to Table A providers. This includes equity funding for disadvantaged students (such as the Higher Education Disability Support Program and the new Indigenous, Regional and Low SES Attainment Fund), as well as the new National Priorities and Industry Linkage Fund designed to support industry engagement.

Regulation and administrative arrangements

Many policy, compliance and administrative requirements are imposed under HESA in return for funding.[46] For the most part, these apply equally to all approved providers, or to both Table A and Table B. However, reclassification will reduce compliance requirements for the UNDA in some limited areas. Namely, Table A providers are not:

• subject to audit at the request of the Minister to check compliance with certain requirements under HESA[47]
• required to have in place Tuition Protection arrangements to safeguard course provision for their students in case they default in their commitment to provide a unit (or subject) to a student as planned[48] or
• required to ensure their grievance procedures comply with the Higher Education Provider Guidelines 2012.[49]

Despite this, UNDA’s status under HESA does not affect its responsibilities as a self-accrediting university registered by the Tertiary Education Quality and Standards Agency (TEQSA) under the Tertiary Education Quality and Standards Agency Act 2011. All Australian universities have the same responsibilities to uphold academic and governance standards in accordance with the Higher Education Standards Framework (Threshold Standards) 2015, which TEQSA assesses provider registration against.[50]

Policy implications

The universities (and Batchelor Institute of Indigenous Tertiary Education) currently listed in Table A are sometimes characterised as public, and those in Table B as private.[51] Although HESA does not use these terms, and there is no consensus in the Australian policy literature about what constitutes a public university, references to government ownership and funding are common.[52] Any re‑categorisation of providers may therefore raise policy questions for some about the purpose and continued utility of the tables.

The tables were introduced in 1992 under the Higher Education Funding Act 1988 (HEF Act), the precursor to HESA).[53] Initially used to implement funding arrangements for the Unified National System (UNS), providers that met the criteria for inclusion in the UNS were listed in Table A, and received the full operating grant, while other funded providers were in Table B, and received a more limited grant without provision for capital projects or research.[54] However, this criteria was relaxed in subsequent years as more providers were added to Table A of the HEF Act, including the UNDA in 1998.[55] The tables were later adopted into HESA, albeit with the UNDA in Table B.[56] There is no criteria in HESA for a provider to be added to Table A or Table B.

In this context, the current function of Table A is administrative—it distinguishes institutions which the Parliament has approved for full access to Australian Government funding. In this respect, re‑categorising the UNDA formalises and simplifies its existing status as a publicly funded university, and referring to Table A providers as public is simply an indication of this funding status.

Other dimensions of public university status can present more definitional challenges. Most Australian universities (with the exception of the four Table B providers, and the Australian Catholic University, ACU) were established by state or Commonwealth Parliaments as secular public institutions, even if offering courses or units in religious studies or theology.[57] These government-founded providers are governed under wide-ranging establishing Acts that make them responsible to their establishing parliament (through, for example, financial reporting, and Ministerial appointments to the institution’s governing Council or Senate).[58]

In contrast, the UNDA was conceived by the Archdiocese of Perth and the Catholic Education Commission of Western Australia, and established as a ‘a private Catholic university’, with the intention of educating professionals for WA’s Catholic health and education systems.[59] Its establishing Act, the University of Notre Dame Australia Act 1989 (WA) (UNDA Act) has limited scope, and primarily serves to establish the UNDA as a university, with provisions safeguarding both the university’s independence and Catholic faith and values.[60]

However, the Australian Catholic University, which was established from four Catholic teachers colleges as a Company Limited by Guarantee, and recognised as a university in Victoria through the Australian Catholic University (Victoria) Act 1991 (Vic.) and in New South Wales through the Australian Catholic University Act 1990 (NSW), has long been a Table A provider.[61] Both of these Acts, like the UNDA Act, are relatively limited in scope compared with those of the other Table A providers. Additionally, even government-founded universities operate as autonomous institutions in most respects, and are acknowledged as such in HESA—institutional autonomy is a central feature of safeguarding academic rigour in scholarship and research.[62]

Ultimately, as Simon Marginson, Professor of Higher Education at the University of Oxford, has argued, while legal ownership does matter in terms of the access and influence of public policy makers, and potential openness to democratic politics, the more important question for policy makers is:

… the social and cultural character of the outcome or ‘goods’ produced by higher education institutions: the effects of these institutions in teaching/learning, research certification of graduates, community and national service.[63]

Application, saving and transitional provisions

The application, saving and transitional provisions at item 4 have the effect of continuing the UNDA’s treatment as a Table B provider for the remainder of 2021, in respect to the CGS. The Explanatory Memorandum indicates that this is required to provide continuity for administrative arrangements already in place for various grants under HESA, but that the Commonwealth Grant Scheme Guidelines will be used to ensure UNDA’s CGS funding for non-medical domestic undergraduate students in 2021 are in line with Table A status.[64]

Concluding comments

The Bill proposes amendments to the ARC Act and HESA, which are largely administrative in nature. While the re-categorisation of the UNDA may raise policy questions for some, this change is consistent with its existing status as a provider of CSPs, and substantial reliance on Australian Government funding.

Appendix 1: Higher Education Support Act 2003—listed providers at February 2021

Appendix 2: key higher education funding program eligibility under HESA at February 2021