The Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 is intended to bring about the most fundamental restructure of university funding in more than two decades. The bill is the Coalition’s latest attempt to impose its long-held agenda of creating an Americanised higher education system characterised by high levels of private debt, and Labor cannot support this highly inequitable legislation.
The bill delivers a $1 billion annual gross saving to the Government. This is the analysis done by highly respected higher education expert Mark Warburton and the Innovative Research Universities. The cut to funding for student places will undermine the capacity of universities to offer a high standard of teaching and learning in all courses, including in the STEM disciplines (science, technology, engineering and mathematics) the Morrison Government claims are its priority for producing “job-ready” graduates.
The bill breaks the nexus between teaching and research, and makes no provision for research funding at a time when universities are suffering huge revenue losses because of falling international student numbers during the COVID-19 pandemic. The cuts to teaching and to research will inevitably result in universities gradually losing their capacity for civic engagement with the communities and regions they serve. This challenges the very notion of a university as it has been understood in this country.
The Minister has made promises to universities about increasing the number of student places, and about finding a solution to the problem of research funding. The implementation of these promises, however, is left entirely to his discretion. They are not in the bill, which contains only the $1 billion cut by the government. Job-Ready Graduates ushers in what is arguably the highest level of ministerial discretion in the history of the Commonwealth, and represents a pernicious shift away from the standards of transparency and accountability expected of parliamentary government.
Since its announcement in June, the bill has faced a wide range of public criticism – based on its cuts to university funding, its increase to student fees, its limited evidence base, its perverse financial incentives, and its poor policy design.
The Government claims that the purpose of their changes is to provide additional university places and to redirect enrolments to academic disciplines linked to higher demand in the labour market. But the fundamental effect of the bill is to increase the total contribution paid by students – and reduce the contribution paid by the Commonwealth. Put simply, it will make Australian students pay more for the cost of their education while the Commonwealth pays less.
Under this legislation, the overall student contribution will increase by
7 per cent. 40 per cent of students will have their fees increase, with some degrees rising by 113 per cent. The cost of these degrees will more than double. Those studying commerce, humanities, communications, economics and law will now pay more than a dentist and doctor for the cost of their degree.
This is not something that can be amended out of the legislation. It is the underlying policy aim of these changes. Since taking office in 2013, the government has repeatedly attempted to increase the share of higher education funding paid by students, and reduce the Commonwealth’s own contribution. Labor has opposed two previous attempts to do this in 2014
and 2017 – successfully blocking their passage through Parliament.
The bill goes even further than the changes proposed in 2017 by the previous Minister for Education, Simon Birmingham. Minister Birmingham’s proposal increased the overall student contribution from 42 per cent of the load to
46 per cent. This bill will increase the overall student contribution from 42 per cent of the load to 48 per cent.
This change to funding will give universities less money to teach. Universities will receive 6 per cent less on average per student – while the Commonwealth will cut its spending on universities by over $1 billion annually. Base guaranteed funding for universities will drop by over $750 million per year.
This drop in funding will be felt even in disciplines the bill is ostensibly designed to promote. In fact, in many of the disciplines where enrolment is being encouraged by dropping course costs for students, funding going to universities is also dropping – meaning universities will get less money to provide supposedly ‘job ready’ courses. This would create a clear disincentive for universities to expand enrolments in those areas.
For example, universities will now receive 32 per cent less to teach medical scientists, 17 per cent less to teach maths students, and 16 per cent less to teach engineers. Experts and commentators, including former Liberal Education Minister Julie Bishop, have described this design as a perverse incentive for universities. Because of this poor design, the bill would likely achieve the opposite of what the government says it will.
The central conceit of ‘job ready’ courses is itself extremely dubious. There’s little evidence that degrees facing huge increases in student fees under this legislation make their graduates any less job ready than degrees enjoying reductions in student fees. Humanities degrees offer students robust generalist educations, with strong employment prospects upon completion. While Minister Tehan attempted to distort this data during debate over the bill, the evidence is that, three years after completion, humanities graduates are employed at the same rate as science or maths graduates.
The government claims that another key purpose of the bill is to create additional places at university for students and to redirect support to regional universities, but there are no provisions in the bill that provide for additional places. Any increase in student places is achieved by the Commonwealth returning funding it will cut from university base teaching funding – to teach students at a lower average rate of funding.
It remains unclear how many, if any, additional places will be created. The government claims it will achieve an additional 39 000 places in the first
3 years, accumulating to 100 000 over 10 years. However, there is nothing in the bill that assures that growth. This comes at a time when demand for higher education is growing at an unprecedented rate – with a spike in unemployment and underemployment from the recession, the impossibility of travel and gap years, and the demographic bulge associated with the ‘Costello baby boom’. The bill simply doesn’t provide enough places to meet this surge.
The government has claimed another key purpose of the bill is to redirect support to regional universities. The associated funding and implementation mechanisms are not specified in the bill. It remains unclear how the redirection of funds to regional universities would operate outside of the bill – and whether or not, on balance, regional universities would be better off under the whole package than they currently are. Expert analysts suggest that, taking into consideration the apparent growth and equity funding to be controlled by the Minister, regional universities would be worse off due to the design of the new Commonwealth Grant Scheme arrangements under the provisions of the bill.
This bill comes at a time when universities and young Australians are experiencing economic pain. Since the coronavirus arrived on our shores, over 10 000 university workers have lost their jobs, an unknown number of casual staff have lost hours, and 10 000 more workers are projected to lose their jobs before Christmas. The slow-moving crisis in our universities was clearly forecast, yet the government has refused to provide the kind of assistance that could help the sector through.
Year 12 students graduating this year will have endured stressful exams during a deadly pandemic. This bill will ensure that they enter a depressed jobs market with more debt than ever and less opportunities than their parents. According to ABC News reporting, youth workers say instances of self-harm and suicidal thoughts have risen significantly among young people in recent months and The Kids Helpline reported a 40 per cent rise in demand for counselling services in March. This bill does not take any account of the effect on the mental health of these young Australians, which has already been buffeted by the cancellation of the traditional rites of passage like graduations and formals, and instead presents them with a mountain of debt, rather than an open doorway of opportunity.
There’s never a good time to cut funding from to universities. But this is a particularly bad time for the Commonwealth to be cutting its support. We should be helping our universities – not making them more expensive and less accessible for students.
Lack of time for proper scrutiny
The government has actively denied the Parliament and the public adequate time and information to fully debate and interrogate the bill. It is clear to Labor Senators that the government is attempting to avoid further evidence coming to light of the bill’s unfairness, irrationality and poor design.
The government has rushed the bill through Parliament without a proper level of scrutiny. This haste has limited the capacity for stakeholders to submit their views and for Senators to conduct a thorough investigation. The unworkably short timeframes were raised frequently by stakeholders in submissions and during hearings.
An exposure draft of the bill was released on 11 August 2020, allowing only
6 days for feedback. The amended bill was introduced to the House of Representatives on 26 August 2020. Debate on the bill was gagged by the government. A Senate inquiry into the legislation was originally blocked by the government and attempts by Labor and some of the Crossbench to ensure a longer inquiry were opposed.
The inquiry was referred on 3 September and submissions closed on the 10th. Public hearings were held for only two days on the 15th and 17th, with the final Report set down for 25 September.
Given the short timeframe, the majority of submissions were not available to Senators prior to the two hearing days and were still being made available 2 days prior to the final reporting deadline. Despite the government’s best efforts to avoid scrutiny, 280 submissions were lodged by stakeholders and members of the community. Labor Senators thank everyone who contributed to the inquiry, the vast majority of whom expressed their deep concern and opposition to the bill.
Department failure to produce information and data
The Department for Education, Skills and Employment refused to provide the inquiry with modelling of the impact on universities of the bill, and Departmental officers did not attend the committee hearing in person, giving evidence by videolink instead. Since the Department’s offices are within a short distance of Parliament House, the failure to attend in person is inexplicable. The Chair of the committee should have insisted that they do so.
Witnesses to the inquiry also complained of the Department’s reluctance to provide the modelling used in its calculations. For example, asked on notice by Senator Carr about modelling in the Group of Eight’s (Go8) submission, the Go8 Chief Executive, Ms Vicki Thomson, replied:
There are a number of reasons why the Go8 is unable to provide robust modelling that extends beyond that provided in the submission’s appendix over a 10-year period:
The modelling provided was our best estimation of the funding allocation method with the data available at the time of our original submission to the draft exposure legislation based on 2018 student numbers. Since that time, the cluster rates have been varied in the legislation before Parliament and modelling provided by the Department to institutions is based on 2019 student data which the Go8 Directorate does not currently have access to.
The Go8 has also not yet had time to reconcile our modelling approach with that provided by the Department.
Key modelling parameters, including CPI projections and decisions of Government, are not available beyond the forward estimates.
It is extraordinary and unacceptable that the government wants Parliament to vote on legislation without providing the real financial impact on universities.
The dangerous extension of Ministerial discretion
As already noted, the Jobs-ready Graduates package and this bill greatly increase the level of Ministerial discretion. The negative element of Jobs-ready Graduates—the funding cut—is contained in the bill but the alleged positive elements, such as the government’s promised increase in student places, depend on discretionary decisions of the Minister. The Minister will effectively take over the legislative role of the Parliament. This is a loss of transparency and accountability in the allocation of public funds, and it denies universities the certainty in planning their own budgets that was called for by nearly all the vice-chancellors who submitted evidence to the committee. The discretion being sought by the Minister has already had a discernible impact on the willingness of some universities to be openly critical of government policy during the conduct of this inquiry.
Most dangerous of all, the increase in Ministerial discretion is a threat to the institutional autonomy that is a defining characteristic of universities. This comes after earlier encroachments on university autonomy under the present government, such as the imposition of so-called “free speech” codes. This apparent championing of free speech is in marked contrast with government interventions to cancel research grants a Minister has not liked. The government is also threatening the higher education sector with proposed “foreign relations” laws that could prevent beneficial collaboration between Australian and overseas universities, despite security agencies testifying at Senate estimates hearings that there have been no notifications of universities breaching the Defence Trade Controls Act. Labor Senators are advised that this is still the case.
In answers to Questions on Notice from Senator Carr, Dr Gwilym Croucher and Professor Vin Massaro of the University of Melbourne’s Centre for the Study of Higher Education, commented on the expansion in Ministerial discretion:
Legislation has often provided for Ministerial discretion, but it has tended to be accompanied by the conditions in which it would be exercised, and it has been limited. In the case of the Bill currently being considered by the Parliament, Ministerial discretion will be applied to significant funding allocations as well as introducing an unprecedented involvement by the Minister and the Department in the academic judgements of universities, including serious consequences financially and reputationally if they are found to have erred.
Dr Croucher noted further:
Importantly the Commonwealth Grant Scheme (CGS) Guidelines are subject to disallowance by the Parliament. Nonetheless, the provision gives very broad scope for the Minister to specify conditions with which universities and other higher education providers must comply. Based on my understanding, it does not appear there is anything that would prevent the CGS Guidelines from dealing with Vice-Chancellor remuneration or university expenditure.
There could be no more glaring instance of the loss of autonomy, and of the far-reaching changes that would be ushered in by this bill, than a university’s inability to decide how much to pay its vice-chancellor, and how to distribute the funds available in its budget.
Universities are critical to our economy
Universities are vital to the economic health of modern nations. Decades of research points to the same conclusion: the better a nation’s educations system, the more prosperous the nation is. Australian universities train and educate our people; they bring in significant export income; and they drive the kinds of innovation that creates new industries and new jobs. It is the federal government’s job to preserve and promote these institutions.
In Australia, research by the Deloitte Access Economics placed the value of universities to our productive capacity at $140 billion. That is, Australia’s annual GDP is $140 billion a year higher because of improved productivity within the 28 per cent of our workforce with university qualifications. Of course, education cannot be reduced to a simple question of investment and return. But what all the available evidence tells us is that the return is real—and that it’s reliable. The Deloitte Access Economics report estimated that Australia would require an extra 3.8 million university graduates by 2025. We need these graduates in science, engineering, medicine, the humanities and law—just like we need people trained in quality vocational education.
A deeply flawed policy
The Job-ready Graduates bill puts our world class universities at risk. It will increase fees for students and reduce funding to universities. The bill is based on poor policy with limited or no evidence. The changes will create perverse incentives for universities, contrary to the apparent intent of the bill. Enacting this bill will damage Australian universities and reduce their capacity to provide world class education and research at a time when it is desperately needed.
Labor Senators fully concur with the commentary on the bill from the CEO of the Grattan Institute, Danielle Wood,
I honestly think it’s one of the worst-designed policies that I have ever seen,” Wood says. “Even if you accept its stated rationale, it doesn’t go anywhere near achieving it.
Student fee hikes have no justification
If the bill becomes law, the difference between the lowest fees paid by students and the highest fees paid will grow to a magnitude of four. Some students will see their fees increase by 113 per cent and will be paying $14 500 a year for their education. There is no solid policy rationale for this radical change to student fees.
According to the government, a key aim of the bill is to redirect university enrolments by sending price signals to students. The bill reduces student fees in areas prioritised by the government and increases fees to dissuade students from studying in areas to which they give a low priority. The idea that price signals will shift course enrolment demand is not supported by the evidence.
Experts are clear that the study choices students make are only weakly influenced by pricing signals. As such, the government is pursuing a policy with profoundly negative consequences – with little or no evidence to justify it. Researchers from the Centre for the Study of Higher Education, echoing the findings of Professor Andrew Norton, Mr Mark Warburton and many submitting universities, outline the lack of evidence for the government’s student fee changes:
The Bill rests on a notion that students will respond to a price signal and pursue courses subsidised to a higher level, but the Government has not demonstrated that this is the case, and the evidence suggests that student choice is informed by a more complex set of factors than a simple response to price … HECS (now HELP) was not originally designed as a means to incentivise student choice between courses, and its effectiveness in this area is diminished by the lack of upfront cost.
The government has based their evidence on instances where enrolments increased when fees have been reduced in an effort to direct student preferences. Innovative Research Universities undertook detailed analysis of those historical price reductions and the associated impact on enrolment patterns. They conclude, along with all other experts submitting to this inquiry (with the exception of the Department for Education, Skills and Employment), that it was far more likely that other factors were influencing student enrolment behaviour, such as an increase in the supply of places, and the publicity accompanying the price reduction strategy:
From 2009 to 2012, the charge for maths and science units was reduced. At the same time demand driven funding saw universities expand to enrol all suitable applicants. More students enrolled in these disciplines. The relative impact of the two can be argued. That most areas grew to some extent, and that health grew almost as fast initially and then more so afterwards suggests that the supply of places was the more important. When the charge for science and maths went back to previous levels, there was no drop in student numbers but continued growth.
Other efforts to alter student choices through charges essentially failed and were abandoned. Nursing and education have been at or near the lowest charge since different rates were introduced in 1997. For four years the charge was held lower than all other subjects. It has all led to no noticeable impact on the outcomes for either profession.
Against a post-Covid-19 world where little is certain, supporting each person to pursue her or his natural strengths makes the most sense.
The government’s proposed student fee policy disconnects the setting of student fees from the likely incomes of graduating students. In effect, a graduate could pay twice as much for their degree and be earning much less as another graduate with a much lower student debt.
Mr Mark Warburton, in his submission, outlined the potential inequity students and graduates might face due to their course selection:
The effectiveness of the [current] system of contributions depends on the subsequent level of income of former students … Government costs would be reduced by requiring higher contributions from students likely to obtain higher incomes. This is the opposite of what is proposed in Job-Ready Graduates. It proposes future doctors have a lower annual student contribution than future librarians, religious ministers, human services managers and accountants.
Mr Warburton also points out that the government’s approach assumes that students are not already considering their futures when they choose their degrees. Submissions from students describe how they select subjects based on their passions and interests, as well as their employment aspirations and understandings. The James Cook University Student Association maintained in their submission:
We have consulted widely with our members and have found an overwhelming consensus that students do not pick courses based on fees but on passions. A student who is passionate about studying in the Humanities will not enrol in a Nursing course simply based on lower student contributions.
The Academy of Social Sciences in Australia and Professor John Buchanan, a labour market researcher, make the astute observation that demand side factors, such as the quality of jobs in the labour market, are a strong influence on career choice and retention, which would help to explain the large numbers of teaching and nursing graduates who do not work in their field of qualification:
Australia’s system of income-contingent loans also serves to limit the financial impact of study decisions. It follows that the most effective way to increase the supply of graduates in areas such as teaching and nursing is to improve wages and conditions in these occupations.
The Bill fails to engage with the major causes of alleged skill shortages and the dynamic nature between deep and transferable skills and how these evolve as people move through the labour market. Let us consider the alleged need to train more teachers and nurses. As numerous studies have shown – we already train plenty of both. There is no shortage of teachers and nurses. Rather there is a shortage of decent nursing and teaching jobs. Problems of insecure labour contracts, work intensification and low pay compared to other occupations are the deeper causes of ‘shortages’ in these sectors. In short teachers and nurses choose to leave these professions and work in other jobs.
Arguing along the same lines the joint submission from the Council for Australian Postgraduate Associations and National Aboriginal and Torres Strait Islander Postgraduate Association suggests that a better way to improve uptake in occupations of national priority would be to improve the availability and quality of those jobs, particularly in the context of a pandemic:
….it is likely that price signalling in this context would be an ineffective and unnecessary mechanism; as compared to increasing efforts to generate interest by supporting jobs creation, improving employment benefits and conditions in industries of national interest.
While there was no evidence to show that price signalling will work. In evidence before the committee, universities admitted that the fee schedule could motivate perverse enrolment and spending outcomes. A number of universities told the committee they would need to jump immediately to maximum student contributions because of the packages funding cuts. For most Cluster One courses this will be an annual contribution of $14 500, more than double the current contribution. This would result in an approximately $2000 increase in income to the university above 2020 funding level, despite the drastic drop to just $1100 in funding per place from the government.
However, universities also admitted that while the new student debt component would be higher than the total 2020 income per student, there was no requirement that these funds be spent on these same students. Universities will be able to move income from both student fees and the government subsidy to other faculties where student debt has in fact decreased. The perversity of this likely outcome is compounded when considering the existing job losses, job insecurity and demanding working conditions within these very same faculties.
Pricing model that underpins funding is weak
The government has based its new rates for university funding on work conducted by Deloitte Access Economics that surveyed university expenditure on teaching. The government’s decision to use the Deloitte Report for this purpose has been criticised by a wide range of experts and stakeholders. The authors themselves explicitly advise against using the study for such a purpose. The report states:
…caution should be taken in drawing inferences regarding the sufficiency of CGS funding from these results.
Senators note, in particular, the analysis by Vin Massaro from the Centre for the Study of Higher Education, explaining that the research by Deloitte doesn’t report the actual cost of education for students, but rather what universities spend on educating students in different disciplines. In other words, the report does not reflect differences in quality or, as noted by the National Tertiary Education Union (NTEU) submission, take into consideration the possibility of various factors, including under reporting of staff hours.
The Innovative Research Universities also highlight the danger in the government’s assumption that the cost of education can be defined entirely through the application of efficient pricing. Their submission points out how narrow pricing can result in the degradation of anchoring education institutions, such as TAFE:
….To introduce the failed nostrums of VET funding reform from early in the century to higher education looks an unlikely success story.
The VET sector shows the risks from long-term application of efficient pricing theory. Setting the price for a given qualification to that of the most efficient and sufficiently capable provider across all areas only served to gut the capacity of the major providers, the TAFEs, to respond to changes in need, and to address the more difficult cases whether that be regions, students and industries.
…In a context of uncertain work futures, the value of the degree that prepares for the longer-term is very clear. That requires continuity and responsiveness that allows students to drive which areas grow, and which shrink.
The NTEU submission raises concerns that the drop in per student funding for universities is likely to lead to increasing class sizes and increasing reliance on casual staff. It is well recognised that both of these indicators lead to poorer quality education outcomes. This fear is echoed in submissions from professional bodies, students and universities—all of whom express concern about the impacts of cost cutting on course offerings and education quality.
Somewhat ironically, higher staff ratios and casualisation are the very cost cutting measures noted by Deloitte Access Economic as available to universities seeking to do more with less. They make this observation in the same report the government is relying on to cut university per student funding.
Incentives are perverse and mismatched
In a decision best described as irrational, the government also proposes to reduce the funding going to universities to teach in several of the study areas they have prioritised.
Bizarrely, in some areas where the government wants greater enrolment, they will pay universities less funding per student; and in areas where the government wants to discourage enrolment, they will pay universities more. The government’s funding changes will incentivise universities to over-enrol in the government’s low priority study areas and under-enrol in the areas the government has prioritised.
If these incoherent funding changes are enshrined in legislation, the consequences will be far reaching and highly damaging.
The Innovative Research Universities clearly outline how the government’s funding changes will contradict the stated intentions of the bill, leading to less funding going to universities for areas the government has prioritised:
Total revenue for most disciplines the Government wishes to grow such as engineering, nursing and agriculture will decrease, but revenue in other disciplines the Government considers less important such as law, business and humanities, will be increased.
Total revenue per student in engineering and science will decrease by $4758.
Total revenue per student in nursing will decrease by $1729.
Total revenue per student in agriculture will decrease by $3444.
Higher education policy expert, Professor Andrew Norton, points out that the two sets of incentives (student fees and funding to universities) work against each other in the government’s bill. But it's the university incentives that are most likely to impact on enrolments. He concludes that it would be better to keep the existing funding system to ensure ongoing supply of graduates from the government’s priority areas.
….Universities respond to financial incentives more than students … In many fields of likely employment growth universities would, under the Job-Ready Graduates bill, earn a lower student funding rate. These fields include allied health, nursing, clinical psychology, engineering and education. Fields without good employment prospects but which are government ‘national priorities’, such as science and mathematics, would also receive less funding per student place. The financial incentive to supply student places would be higher if the current system remains in place.
Experts, universities, academics and professional bodies have been particularly scathing about the unintended consequences of revenue falling for education and scholarship, in the government’s priority study areas. The following extracts are a small but representative fraction of the concern expressed by academics, research bodies, and university stakeholders:
…the proposed restructure of course fees appears certain to create perverse financial incentives for universities to preference certain educational offerings in a manner that runs contrary to the Government's stated policy objectives of driving more students into STEM subjects. For example, the base funding to universities (the combination of Commonwealth contribution and student contribution) for students enrolling in Science courses will decrease by $4,758 (16.4%) under the revised scheme, while funding for students enrolling in Maths will decrease by $3,513 (17% ). Of particular relevance to the health and medical research sector, Medical Science courses (FoE code 0199) have been re-classified from the Medicine cluster into a lower cluster (as "Other Natural and Physical Sciences), resulting in a funding reduction of $11 ,601 (32.4%) per student. While the reduction in student contribution might incentivise students to enrol in these STEM course, the corresponding financial disincentive for universities will result in universities prioritising their educational offerings to fields where the student contribution is comparatively high…
The current design of the Bill risks creating perverse incentives for universities to enrol fewer STEM students, as the provisions in the Bill ask universities to educate more new science students from 2021, for less funding per student.
This will lead to perverse and unintended outcomes as the decline in revenue for STEM courses will not cover the costs of teaching those programs, in turn limiting the ability of universities to offer places in these programs. Meanwhile, increased funding will incentivise universities to offer more humanities places.
I think certainly when we look at the STEM courses there has been a significant re-adjustment to get back to what the government has said are the teaching costs. We believe that has made it less attractive for universities to take on a lot of STEM students. Likewise, the increases there you talked about with the humanities, Senator, would probably encourage the universities to take more students there. It may actually create a distortion in the market. This point has been made a number of times.
The past evidence is clear that growth in disciplines is tied to university revenue incentives for them. Why would universities enrol more students in engineering if they receive almost $5,000 less per student to do so?
Labour market assumptions are wrong
Labor Senators agree with experts, professional associations, unions and other stakeholders that the government has failed to demonstrate that these changes, were they be successful, would lead to an increase in ‘job ready graduates’.
The government has provided no evidence that graduates from the social sciences, humanities, law, business and accounting are less able to achieve employment success than graduates of science and maths. The University of Melbourne and the Centre for the Study of Higher Education call out the government for their failure to justify the selection of their priority study areas.
There is little evidence that the proposed changes to student contribution levels are evidenced-based. …the implication that courses for which student contributions have been increased (i.e. humanities and social sciences, management and commerce, and law) do not deliver job-relevant skills is incorrect.
The proposed division between “job-ready” and other degrees has not been justified by the limited published evidence provided. There is little evidence that the areas of study the new rules seek to incentivise are those most beneficial, both to students and the broader Australian economy and society.
The government, in their efforts to undermine the value of studying the humanities and arts, went so far as to falsely report data from the most recent Graduate Outcomes Survey—stating incorrectly that such graduates suffered worse outcomes than science graduates. The submission from the Academy of Social Sciences in Australia is just one of many that outlined the extent to which the government was wrong to claim that humanities graduates had poor employment outcomes—including in relation to science and maths graduates.
Graduate outcomes data demonstrates there is little difference in employment outcomes between generalist science and generalist humanities, culture and social science degrees. A 2020 report of medium-term graduate outcomes found 61.9 per cent of humanities, culture and social sciences graduates and 61.6 per cent of science and mathematics graduates were in full-time employment four months after completing their course. Three years after graduation this had risen to 87.0 per cent for humanities, culture and social sciences graduates, and 87.1 per cent for science and mathematics graduates.
Qualifications in the social science, arts and humanities lead to high quality and high paid careers and are pervasive at the top tiers of government and business. Two in three CEOs of ASX200 listed companies have a degree in the social sciences, as do 62% of government senior executives and 66% of Federal Parliamentarians.
Business leaders value social science qualifications and it’s been shown time and time again that employers place a high value on transferrable skills, such as teamwork, communication, problem solving, innovation and emotional judgement; skills that “have become widely acknowledged as important in driving business success”. These are skills that are most effectively taught through broad courses of study that incorporate the arts, humanities and social sciences alongside STEM and other subjects.
Barriers to ‘job ready graduates’
Far from preparing graduates for an uncertain and shifting labour market, the government’s bill would deny graduates access to the development of skills that are essential to careers in today’s workforce.
The government has ignored research and analysis relating to the future of work that clearly outlines the need for skills and knowledge that are gained in the very study areas they are seeking to dissuade enrolment in. This point was made by various submissions, as well as by industry associations right after the Minister’s original announcement of the legislation. As argued by the University of Sydney in its submission, employers want graduates with more than technical abilities:
The Bill ignores long-term trends in the nature of work, which clearly show a demand for higher-level cognitive abilities, excellent communication skills and creative minds, all widely recognised as graduate attributes delivered by the social sciences and humanities.
Several submissions also observed that the government’s specific labour market forecasts were made prior to the COVID-19 pandemic and as such are unlikely to have any currency in today’s economy in recession.
The importance of multi-disciplinary study
One of the prime examples of the government’s unhealthy bias against particular areas of study is their failure to recognise that STEM students benefit from humanities study just as much as humanities students benefit from the study of STEM subjects. The government has been clear that they hope to dissuade STEM students from undertaking humanities subjects by charging them higher fees to do them. The power of multi-disciplinary study, well understood by academics, employer associations, students, and experts, has been completely overlooked or conveniently ignored by the government.
Several practicing academics submitted that diverse subject selection was critical to graduate success in the labour market, citing their own experience and research to draw those conclusions. The Council for the Humanities, Arts and Social Sciences argued:
While encouraging additional students towards the STEM disciplines has some merit, there is no reason to actively dissuade students from studying subjects like criminology, history or philosophy. To do so runs counter to an emerging consensus that current developments in the domestic labour market makes the skills learned in HASS more valuable;. Some of the fastest growing job areas for university graduates are new, many of which require exactly the skills and experiences that the study of HASS subjects can provide. Content Specialists, Customer Officers, Data Scientists, and Sustainability Analysts are in high demand. These jobs did not exist five years ago, and a strong humanities or social science degree provides a foundation for working in these and the new, related fields that will inevitably emerge in the coming years.
Dr Trudi Cooper cited work by Emeritus Professor Geoff Scott who:
… has conducted research into future skills (Scott, 2019) 'Preparing work ready plus graduates for an uncertain future'. He supports curriculum breadth, including encouraging Science students to study Humanities and vice versa. He argues persuasively that future employability will require students who have STEAM (Science, Technology, Engineering, Arts and Maths).
And in his submission Dr Geir Henning Presesterudstuen pointed out,
Dealing with a rapidly changing economy, the impact of technological advancement on labour or other social relations, tackling climate change or biosecurity, and, to use a very current example, handle the politics of a global pandemic, requires cross-disciplinary and creative work rather than contrived competition between disciplines.
The Australian Institute of Physics National Executive took a broad view of the importance of a generalist education, particularly in a time of uncertainty—and criticised the government for attempting to disincentives study in the humanities:
Beyond the implications specific to physics, we consider that the tight focus on job readiness and short-term economic benefits (and some of the classifications of disciplines into funding clusters that result) is contrary to long-term societal interests. We specifically consider that the study of fundamental disciplines such as humanities, and not just STEM subjects, should be encouraged and incentivised; the long-term benefits of a highly-educated population need clearer recognition, even if they represent a less immediate economic outcome. We do not consider it wise for the government ‘to pick winners’, especially in an environment of uncertainty in relation to the future shape of the society and the economy. Specifically, we consider the disincentives for students to study fundamental humanities disciplines as counterproductive to Australia’s long-term benefits.
Professional associations also expressed concern that the legislation would create barriers to important multi-disciplinary degrees – which are fundamental to preparing graduates for their respective occupations in a modern workforce. Groups representing lawyers, criminologists, psychologists, social workers, youth workers and teachers all submitted that the government’s bill ran the clear risk of narrowing pipelines for their professions as well as limiting graduate diversity.
The Law Council disagreed with the government’s contention that legal qualifications are unaligned with national priorities, and submitted that they were:
…concerned by the proposal to move degrees in areas such as social studies, political science and behavioural science to the highest band of student contribution (a proposed cost increase of 113 percent). These fields are often studied in conjunction with law, producing graduates with highly tuned critical and analytical skills that can be applied across a diverse range of professions. To limit the study of these subjects to that narrow sector of society that can afford to pay high fees, will serve to diminish the breadth of critical thinking within Australia’s student cohort. This will flow through to our society, with less graduates equipped with the valuable analytical skills acquired in combined law degrees being available to benefit a myriad industries and professions…
The Design Institute of Australia were equally concerned that the government’s changes would limit the utility of degrees leading into their professional practice:
A narrow approach to targeting skills required for a prosperous future misses the contribution of humanities education to critical thinking, adaptability and tolerance for ambiguity. Universities may reduce both the number of places in design courses that fall within lower fee bands and the opportunities for students to incorporate humanities subjects into their courses. Humanities subjects can benefit students across all disciplines.
Academics from specific study areas were concerned that the government’s changes to financial incentives failed to recognise the practical business of teaching and learning and if enacted, would lead to poor education outcomes in areas the government claimed to champion. For many university professionals it made no sense to incentivise one study area above another when both study areas were essential to good graduate outcomes. For example, language experts, while welcoming funding increases for language study, saw no logic in the fee increases for other critical study areas that were central to the success of learning a language. The Language and Culture Network for Australian Universities explained how this was the case:
…the overall structure of the funding model does not take into account the complexities of how languages are taught at tertiary level. Successful language study involves the acquisition of both linguistic skills and cultural knowledge. If language learners are to function fully within their chosen language, they need to undertake the study of humanities and social science subjects that develop their knowledge of the society and culture in which that language is spoken. For some languages, the study of both languages and cultures is fully embedded in the curriculum, for many others, for historical, linguistic and institutional reasons, they are organised differently. For this latter group, which often includes Asian languages, the new funding system poses the risk of enforcing a language/culture divide.
Labor opposes this bill because it is based on weak or misleading evidence, will result in unintended consequences contrary to the government’s stated intent, and will damage educational and workplace outcomes in ways that are wholly unjustifiable and unnecessary.
The harmful impact on students
Many students will pay more, some much more than others
This legislation makes a university education more expensive for Australians. On average, students will pay 7 per cent more for their studies. For some, the increase in fees will be considerable – with lifelong implications for wealth accumulation, personal savings and property ownership. Around 40 per cent of students will have their fees increase, with some having the cost of their degree more than double. Fees will jump by 113 per cent for people studying humanities, rising from $27 216 to $58 000 for a four-year degree. Students studying law, accounting, administration, economics, commerce, communications, and humanities will now pay more for their degrees every year than people studying medicine and dentistry.
The effect of this fee rise will be felt over decades. As the Australasian Council of Deans of Arts, Social Sciences and Humanities argued:
Given there is no evidence to suggest that pricing signals can effectively influence course choice in Australia, it is more likely that the real effect of the policy will be to damage the long-term financial well-being of thousands of students seeking or with aptitudes for HASS learning experiences and methodologies. Modelling from the Parliamentary Library indicates these future graduates will take as long as 20 years to pay off their university loans under the HECS-HELP scheme.
Doubling the size of a student’s university debt will influence their ability to save for a home, which could undermine long term economic security. According to the National Union of Students, ‘the potential flow-on effects for future students is intergenerational’.
This will be compounded by the effect of recession and COVID-19:
With young people being one of the hardest hit groups by COVID-19, they simply are not in a position to field further impediments towards moving ahead post-pandemic. It is important to draw attention towards the situational context that students who must handle these pricing increases face.
While humanities graduates have similar employment rates to graduates from other academic disciplines, they take longer on average to repay their HELP debt. According to Professor Andrew Norton, these changes will make this process much longer:
…Despite being in the currently cheapest student contribution band humanities graduates already have above-median HELP repayments times. More than doubling their student contributions to $14,500 will lead to much longer repayment times. By contrast, students in other fields, especially teaching and nursing, will take much less time.
As the University of Canberra noted, this would create a significant disconnect between salary outcomes and university fees:
Proposed student fee contribution increases for some subjects are substantial and the impact will be increased HELP debts for many students. In the past, fee setting has considered graduate outcomes such as employment rates and salaries, as well as capacity to repay HELP debts. There are concerns that re-setting of fees for humanities and social sciences and communications is no longer connected to this reasoning.
While increased prices are unlikely to change the majority of student preferences, it could still influence the decision of people on the margins. This is most likely to involve students from lower socio-economic backgrounds, or with limited family experience with higher education. As the Australian Law Students’ Association argue, this is most likely to be felt by groups already underrepresented in the profession:
The increased cost of law degrees will see prospective students pay up to $14,500 per year for their education. Over the course of a five year period, this equates to $72,500 (the current maximum is $56,775). The prospect of paying or accruing this amount of debt can serve as a real barrier of entry to some individuals who wish to undertake legal education. Financial incentives and disincentives naturally have a greater influence over more vulnerable members of our community.
Specifically, our concern is that those from socio-economically disadvantaged backgrounds will be discouraged from studying law. This may deter already under-represented communities, including individuals from culturally and linguistically diverse, and Aboriginal and Torres Strait Islander backgrounds, from pursuing legal education … A robust legal profession is not one which continues to remain the preserve of privileged or exclusive groups, whose views have shaped legal practice, professional acceptance, and the creation of laws all throughout history.
Large increases in fee costs may therefore discourage students from low socio-economic backgrounds from pursuing their preferences, and instead select courses based on price. As Equity Practitioners in Higher Education Australasia noted, ‘international and domestic research has continually cited that students from low socio-economic backgrounds are more reliant on loans and are debt adverse compared to their high socio-economic peers’. This would create a two-tiered system in higher education: with higher fee courses becoming the domain of wealthier students.
This increase in fees is also more likely to hurt regional and remote students. These students are more reliant on HELP loans—and more likely to face financial pressures while studying. As James Cook University Student Association argued:
Regional and Remote Students are far more likely than metropolitan students to be of a low socio-economic background. What this means in practice is that students from regional and remote Australia are far more likely to be among the 87% of students nationally that are entirely reliant on HELP to be able to attempt higher education.
Further pain for year 11 and 12 students
This bill comes at a particularly difficult time for year 12 students. They have just completed their final year of study in extremely uncertain conditions. They have watched the jobs market collapse, just as they were graduating into it. They have seen apprenticeship opportunities vanish around the economy. Changing the rules on students now is both unfair and cruel.
The Association of Heads of Independent Schools of Australia sought feedback from their members on the bill. They found that the package was having ‘a profound impact on Year 12 students already concerned by the effect on their studies of remote learning and other disruptions due to the COVID-19 pandemic’. Students feel like the goal posts have been moved underneath them. As one principal commented:
They [Year 12 students] have all commented on it and said it just all feels like additional pressure and some are considering changing courses. They feel with the drought, bushfires, COVID all impacting on their final years that this is the last straw. They are worried that they have geared subject choices around their uni pathway and that they have not even explored some of the slated ‘cheaper’ courses and feel really thrown by this just ahead of trial exams.
Principals reported that, while this has caused distress and uncertainty, it is unlikely to change the immediate choice of tertiary courses. Most are locked into their preferences:
Staff, students and parents are very concerned. I don’t think it will change the course that the vast majority of Year 12 students apply for as they are too far down the path with setting goals, choosing pre-requisite subjects etc.
My staff and senior students are dismayed by this development. Whilst Year 12s are locked in for 2020, several students have said they will look at other tertiary pathways or study overseas in 2021.
There is, however, a fear among teachers and staff that these changes could have a negative long-term impact on the position and status of high school subjects. In the Association’s survey, several principals commented on the impact of the proposed changes on younger year levels:
Humanities staff are fearing the impact on subject selections for 2020 with current talk amongst Year 10s that HASS subjects are to be avoided. Some of our Year 12 students have expressed concern and disappointment about the fee changes for Humanities but are not likely to change their plans for next year. I suspect that their decision to stay with their plans is based on the fact that they have been preparing for this path of study for some period of time, through their senior study choices and career planning. I suspect that the decision to change fees for Humanities will start to impact on senior subject selection over the coming years, which is a concern.
Parents of high school students have also noted the unfair impact on their children. According to David Ritchie and Jenelle Bonnor, two parents from the ACT, it’s punishing students for decisions they made years before the proposed change:
The Government's decision is extremely inequitable for current Year 12 students. Already this year they have had their education significantly disrupted due to Covid-19, with potential impact on their ATARs. And most have already made their degree choices and submitted their university applications for next year. Some Year 12 students have already accepted early offers from universities in their chosen fields, many of which are in the humanities, to commence in 2021. The 2020 Year 12 cohort made their school subject choices back in Year 10, which means that many could not do a science or maths-based degree now anyway, as they haven’t got the Year 12 subject prerequisites these degrees demand. It is deeply unfair either to penalise them for this or expect them to completely reorient at this late stage of their education when their choices were made in good faith and under different circumstances.
Worse impact on women and First Nations people
Given enrolment patterns, the proposed changes will be more costly for Australian women than men, and more costly for Indigenous Australians than non-indigenous Australians. The average female student contribution will increase by 10 per cent. The average Indigenous student contribution will increase by 15 per cent to $9550.
According to the Bankwest Curtin Economics Centre, if current education patterns remain the same, the proposed changes will see young women pay an estimated additional $498 million each year towards their education, and young men an additional $339 million. This penalises economics, law, and philosophy and history students—of which women currently comprise two-thirds of enrolments.
As Professor Rae Cooper argues, these changes are likely to further entrench the gender pay gap:
Effectively doubling the fees applied in these areas, as the Bill proposes, will have serious impacts on these young women’s lives and on gender equality post-graduation. We know from research undertaken by colleagues in our group at the University of Sydney, by many other academics, and as noted by the Workplace Gender Equality Agency that gender pay gaps are both strong and intractable in Australia … The effective doubling of fees on key degrees which are highly feminised in their enrolment base, will saddle young women with higher levels of debt as they start their careers and will impact profoundly through the early career and early child-rearing phase.
The same inequitable dynamic applies to Indigenous students, who are also more likely than non-Indigenous students to enrol in courses affected by these changes. The National Aboriginal and Torres Strait Islander Higher Education Consortium provided data in their submission which revealed a significant impact on Aboriginal and Torres Strait Islander students:
2018 data shows over 52% of Indigenous students were enrolled in programs that will be impacted by an increase in student contributions for humanities based disciplines (33% in societies and culture alone) with only 14% of Indigenous students in STEM related fields of study compared to 23% for non-Indigenous. This will result in Aboriginal and Torres Strait Islander students graduating with a higher HECS debt than non-Indigenous students and moving into the workforce with a greater financial burden ... [with] Aboriginal and Torres Strait Islander students graduating with a higher HECS debt than non-Indigenous students and moving into the workforce with a greater financial burden.
Removal of the enabling loading
The consequences of the removal of enabling loading from legislation would be to jeopardise this important pathway for many students. Like many aspects of the bill, it removes protections from legislation and hands over control to the Minister. Enabling programs allow students from low-SES backgrounds, Indigenous Australians and students who have been out of the education system for a while to have a supported entry into the tertiary educational system. They learn how to learn, how to read and think critically, how to research and write for university success, and reshape their learner identity for accomplishment in higher education. The evidence to this inquiry of Professor Alex Zelinsky, Vice Chancellor at the University of Newcastle, pointed out that enabling programs support thousands of students, a dozen of whom have gone on to win university medals in the last decade:
I think the program is so important for our country and for regional areas such as Newcastle that it should remain in legislation. I think the best example I can give you is from when I first joined the university as vice-chancellor. At my first graduation, I met a student who'd received the university medal. He clearly wasn't a young person. He was probably in his late 20s or early 30s. I asked him what made him study. He was a forklift driver. He went on to do an enabling program and then went on to do engineering and get the university medal. That is just extraordinary.
Punitive and unnecessary interference in student progress
Under this legislation, students will lose access to government support if they fail more than half their subjects. But universities already have rules they apply to failing students, including providing support where it is needed. Reducing funding to universities as proposed in the package is likely to reduce that support. This could create an incentive for universities to lower standards so fewer students fail.
A number of universities made submissions questioning this change. Flinders University, for instance, stated that it was better to work with students than eject them arbitrarily:
Around 2% of current domestic undergraduate students at Flinders University have attempted eight or more topics and not successfully completed 50% or more. Analysis of the cohort indicates that Indigenous students and students from a low-SES background would be disproportionately impacted by the removal of Commonwealth assistance, and the preferred approach at Flinders University is to engage with students to support their success, rather than penalise them for one bad semester.
As the Central Queensland University submission notes, students live complex lives. ‘Within CQUniversity’s student profile, most are working, and many are supporting partners and parents, and as such this aspect of the proposed legislation is potentially extremely limiting and inequitable for them’. The university cited research finding that early academic performance was not an accurate indicator of academic success:
There are many reasons why students may not thrive in the initial years of study, particularly if they are juggling multiple commitments, or perhaps cannot rely on strong family support.
Student organisations expressed a similar opposition to this change. The National Union of Students (NUS) argued that it would be of particular concern to students of low socioeconomic status, student survivors and students with disabilities. While noting that ‘there will be allowances for illness or bereavement:
[NUS] do not believe that this properly accounts for the plethora of experiences that impact student success. We also believe that due to a lack of reporting of issues within the student body, coupled with support services that are impacted by significant income loss at campuses, students will fall through the cracks and be forced to cease study.
The National Aboriginal and Torres Strait Islander Higher Education Consortium also noted their concern about its impact on Indigenous students. The Consortium pointed out that, while a number of Indigenous students withdraw from their studies in the first year after failing subjects, the students that then continued on to completion carried with them experiences of resilience, the overcoming of adversity and hard-won success:
Success cannot be defined by quantitative indicators. Sometimes diverse experiences are a much better measure of success.
We know that a number of our students struggle in their first year, particularly as many are first in family; feel a disconnect and are trying find their sense of identity within higher education environments; or come from Aboriginal and Torres Strait Islander families that have had negative educational experiences irrespective of learning environments. Further to this research also indicates that racism can impact on Indigenous student engagement and success in higher education which can lead to disengaging with study and the potential to fail topics.
Organisations working with sexual assault victims stated their opposition to this change. End of Rape on Campus Australia noted research finding that:
…women who had experienced sexual violence in their teens earn lower grades during their first year in higher education than women who had not experienced sexual violence; students who are sexually assaulted while enrolled at a higher education institution experience significant drops in their grade point averages; and that sexual assault significantly affects a student's ability to focus, complete tasks, and attend class.
As the organisation argued, this did not mean that students were not ‘academically suitable’ for the course. They were rather experiencing the consequences of a traumatic event over which they had no control.
The damaging impact on universities
This bill is before the Parliament at a time when universities are already reeling from the impact of the COVID-19 pandemic. The effects of the pandemic have been felt across the economy, but the higher-education sector is particularly hard-hit because universities depend heavily on revenue from full-fee paying international students to cross-subsidise their research activities. University research funds mostly derive from that source, from Commonwealth block grants for research training and support, and from Commonwealth Supported Places for domestic students. The longer established universities also have substantial investment income, and alumni and philanthropic networks that can be called upon, but none rely on those sources alone to fund research.
Until now, it has been accepted that up to 30 per cent of Commonwealth Grant Scheme funds may be redirected to research, and governments have taken this practice of cross-subsidisation into account in deciding allocations to the CGS. The Coalition’s first attempt to cut university funding, under then Education Minister Christopher Pyne, accepted that 30 per cent of the funding allocated to Commonwealth Supported Places might be diverted to research, for it proposed funding private higher education provides at 70 per cent of the amount allocated to universities. This bill, however, with its cut of $1 billion a year in total funding for student places, severs the link between undergraduate funding and the research funding without providing a means of securing the latter. The Minister has held discussions with universities on how future research might be funded but, as with his supposed guarantees about increased undergraduate places and indexation of grants, nothing has been stipulated.
Media reports have hinted that the Budget in October will contain an emergency top-up for university research, and in one of these reports the amount was said to be $700 million for the 2021-22 financial year. That is substantially less than the likely shortfall predicted by higher education analysts such as Frank Larkins and Ian Marshman of the Melbourne Centre for the Study of Higher Education (see below), and according to the report the amount will be deducted from ‘the $2.1 billion planned spending on higher education research in 2024-25’. In other words, the government is briefing journalists about allocations from beyond the Budget’s forward estimates, which the report treats as beginning in the next, not the present, financial year. This is a political sleight of hand, juggling figures that can only be a matter of conjecture. The fact remains that there is no provision for research funds in this bill. Fulfilment of the Minister’s vague promises to universities will be at his discretion, and if the bill is passed the only certainty facing universities from 2021 is the $1 billion funding cut.
As Mr Mark Warburton, an Honorary Fellow of the Melbourne Centre for the Study of Higher Education who appeared before the committee in a personal capacity, said in his submission:
… Job-Ready Graduates reduces total funding for student places by around 6 per cent or nearly $1 billion. This gives rise to two important questions: What was that 6 per cent being spent on? What will be the impact of removing it? … Most likely, the proposed reduction in funding will further reduce universities’ capacity to fund research, adding to the difficulties associated with lost international student fee revenue.
Compounding the COVID-19 crisis
The consequences of the decline in international student fee revenue have been analysed in a paper by Professor Emeritus Frank Larkins and Associate Professor Ian Marshman, who also made a submission to the inquiry and gave evidence at the hearing, along with other colleagues from the University of Melbourne’s Centre for the Study of Higher Education. Larkins and Marshman estimate that over the next five years the drop in fee revenue will cut the discretionary income available to support research by at least
$6.4 billion, and perhaps as much as $7.6 billion. That would mean a reduction in the research workforce of 11 per cent—up to 6000 positions, including both academic staff and postgraduate or postdoctoral students in research training positions.
Larkins and Marshman warn that ‘without the same level of discretionary funding available for the next few years there is likely to be a significant loss of research momentum in Australian universities.’ They identify 13 universities as the most vulnerable in their capacity to support research at existing levels, including the research-intensive Go8 universities, which account for
70 per cent of the shortfalls in research funding and staffing. Among the 13 institutions identified by Larkins and Marshman, the University of Technology Sydney, Deakin University and Macquarie University are classified as ‘extremely high’ risk, the University of Sydney, University of Melbourne, University of NSW, the University of Queensland, Queensland University of Technology and Griffith University as ‘very high’ risk, and Monash University, the University of Adelaide, the University of WA and the Australian National University as ‘moderately high’ risk.
It is no accident that this list includes the Australian universities that are highly placed in international rankings such as the Times Higher Education World University Rankings and the Shanghai Ranking Consultancy Academic Rankings of World Universities, because such rankings are based on research performance. All 13 have improved their position in rankings in recent years because of that performance, and they have been attractive to international students because of their place in the rankings. The shortfall in research funding puts their international reputations at risk, and together with that their ability to collaborate in research with institutions overseas. That ability is also crucial to maintaining the reputation of our universities and, to cite only the most obvious and immediate danger, is extremely damaging at a time when scientists around the world are trying to develop a vaccine for coronavirus.
Larkins and Marshman also doubt that the funding shortfall will be made up by strengthening research collaboration between universities and industry, because of the relatively low R&D performance of Australian businesses as a percentage of GDP. The Science, Research and Innovation tables published by the Bureau of Statistics confirm that Business Expenditure on Research and Development (BERD) has fallen by 30 per cent since 2015, a fall that has followed the reduction in support for R&D programs under the Coalition government. The Morrison Government’s plan to cut $1.8 billion from the most important measure integrating the tax and innovation systems, the Research and Development Tax Incentive, will do nothing to help reverse the decline in BERD. Australia’s total spending on R&D is only 1.8 per cent of GDP, well below the OECD average of 2.3 per cent. And, Australia continues to fall behind in international innovation rankings: we are no longer in the
top 20, and are ranked at no.22.
The consequences for research and the economy
The damage to the research capabilities of Australian universities will have dire consequences for the entire economy. Among the submissions and evidence presented to the committee, this was strongly emphasised by groups such as the Academy of Science, Science and Technology Australia and the Australian Council of Deans of Science. This is an irony, since the avowed aim of Job-ready Graduates is to channel more students into STEM courses, but the irony appears to have been lost on the government. The same groups also warned that degrading research capabilities would also degrade the quality of teaching and learning in universities, because, especially in STEM disciplines, excellence in teaching depends on being able to expose student to cutting-edge research.
In their submission, the Deans of Science bluntly declared that passage of the bill would court economic catastrophe:
The ACDS wishes to draw your attention the highly damaging impacts that will flow from the passage of this bill. These impacts will significantly undermine STEM education in Australia’s universities. At the same time, they will undermine the capacity of Australian university science to engage with industry, to maintain the research activity that underpins that engagement, and to play its part in building Australia’s economic competitiveness and sovereign capability in manufacturing industry.
The STEM groups pointed out that the detrimental consequences of Jobs-ready Graduates’ new funding clusters go beyond a 16 per cent reduction in total income to STEM faculties for undergraduate teaching, serious though that is in itself. The Academy of Science’s submission stated:
The assumption that underpins both the Job-Ready Graduates Package and the Bill is the idea that university teaching and research are separate, independent activities. This is simply not the case.
This Deans of Science unravelled that assumption while also drawing attention to the lack of consultation in the preparation of Jobs-ready Graduates and the drafting of the bill:
One major flaw in the Deloitte study, Cost of delivery of higher education, on which [the Government’s] argument is based, is its refusal to account for the extensive research staff time and research infrastructure that science faculties actually rely on to provide STEM graduate with cutting edge know-how and skills … The Deloitte study requested data from universities, framed under the assumption that research and teaching could be neatly separated. Apparently, that framework was not challenged, and neither were faculties, STEM or otherwise, consulted.
The Deans cited contemporary examples of the close connection between the capacity to conduct research and the quality of undergraduate teaching:
Research-informed STEM graduates stand well prepared to translate research into new products and solutions. Consider, for example, the waste-water tests to detect community presence of COVID-19 DNA, and the new tests producing genetic signatures that greatly magnify the effectiveness of contact tracing. These tests involve techniques that did not exist only a few years ago, except in high-end research.
The Deans were also scornful of the Minister’s promise that there would be a new basis for research funding
As a part of separating research and teaching at funding level, the Job-Ready Graduates proposal establishes a Research Sustainability committee to investigate research funding. Its deliberations are not targeted at producing a new funding model any time soon … It makes no sense to tear down existing mechanisms for research funding before new ones are put in place. You don’t demolish your home first and then consult an architect about building a new one, unless you have somewhere else to live. No alternative dwelling place for research funding has been provided.
Science and Technology Australia, in its submission, agreed that the impact of Job-ready Graduates on university STEM faculties would be the opposite of that claimed by the government, and that the bill’s cuts would impede economic recovery:
This legislation as drafted would cut the level of funding for universities to teach students in STEM courses by $690 million in 2021 alone … The cuts would range from a 17 per cent drop in resourcing to teach maths courses, a 16 per cent drop in science and engineering courses, and a 29 per cent drop in environmental science …
Early assessment by our members suggests the practical effect of the proposed cuts would be to limit the number of STEM degree places universities can offer. The cuts would lower base funding, which has traditionally also supported staff to undertake research and to supervise training of our next-generation researchers in crucial STEM fields such as mining, engineering, agricultural science and advanced manufacturing – vital fields for Australia to build sovereign capability.
The risks for regional universities
The government’s use of the Deloitte report to support the underlying assumptions of Job-ready Graduates—despite warnings by the report’s authors about interpretation of their analysis – was widely criticised in submissions to the inquiry. Funding provided under Job-ready Graduates is calculated according to Deloitte’s estimates of average teaching costs, but, as Professor Andrew Norton of the ANU pointed out, this does not take account of the fact, also acknowledged by Deloitte, that average costs are higher in regional universities:
Average cost rates are particularly a problem for regional universities … the Deloitte Access Economics analysis found that regional universities had higher average teaching and scholarship costs than metropolitan universities … Possible reasons include limited opportunities for economies of scale in small local markets and the higher average support needs of their students.
Under Job-Ready Graduates, the regional loading would be abolished and incorporated into the new Indigenous, Regional and Low SES Attainment Fund (IRLSAF). It is not clear that IRLSAF can be used to meet core teaching commitments.
Average-cost based funding rates obviously disadvantage institutions with above-average costs.
The consequences of Job-ready Graduates for regional universities are yet another instance of the government’s adoption of simplistic, one-size-fits-all ‘solutions’ to the sector’s problems while pretending to do the opposite. The reference to ‘Supporting Regional and Remote Students’ in the bill’s title is a mockery if the effect of the new funding model is to undermine the capacity of regional universities to conduct basic teaching, let alone engage with their communities through local research projects.
Loss of university status and private providers
The risks posed to regional universities by Job-ready Graduates are even more alarming when considered together with a warning in the submission of the University of Sydney. A memo attached to the submission, by the university’s Director of Higher Education Policy and Projects, Tim Payne, pointed out that the full impact of Job-ready Graduates bill will also reflect changes contained in its sister bill, the Higher Education Legislation Amendment (Provider Category Standards and Other Measures) Bill 2020:
The proposed severing of the CGS funding link for ‘base’ university teaching is necessary under the Job-ready Graduates model, not least to help pay for the additional CSPs the Government has committed, but because of the Government’s intention to allocate more CGS funding (in the form of Commonwealth Supported Places) to teaching only private and other non-university higher education providers.
However, with the Provider Category Standards and Other Measures Bill, the Government is moving simultaneously to increase substantially the minimum amount of research a higher education provider must undertake to register, or stay registered as, an ‘Australian university’ – as well as introduce new minimum standards of research quality that will be set and assessed by the Tertiary Education Quality and Standards Agency.
“As the JRG changes become entrenched from 2021, and in the absence of a new funding stream being developed to support the base research [of] Australia’s public (Table A) universities, the combined effect of the two new laws will be that providers will only be able to meet the higher threshold research standards for registration as an Australian university if they can cover the cost of their research from other research-specific and discretionary sources of income”.
There is a real prospect that the combined effect of the two bills will be that some existing institutions will no longer meet the minimum research standards to qualify for university status. As Mr Payne commented in his memo, these are not likely to be universities that can earn research income from nationally competitive grants, industry and other sources. In other words, although research-intensive Group of Eight universities have been hit hard by the loss of international student revenues, no one expects that any of these would be downgraded. The more likely institutions to face such a fate are those that already have limited research infrastructure and research training capabilities, and are therefore less able to receive funding through Commonwealth block grants. Regional universities will be prominent among those in this group.
If any existing university does lose university status, and is reclassified as a teaching-only ‘university college’—a category of institution the government intends to introduce—the immediate consequences would be a loss of prestige, for the institution and the region it serves, a loss of capability to conduct research that might be vital for the future of the region, and a loss of jobs together with that. Alumni of the institution, as Professor Norton, commented in evidence to the committee, might be angry because their degree had effectively been downgraded, and undergraduates might feel the same about the course in which they were enrolled. Beyond all these consequences, however, is the further issue raised in Mr Payne’s memo: would the reclassification of some universities as teaching-only institutions serve as a staging post to the Coalition’s long-held goal of extending public funding to private higher education providers?
That goal was part of the Coalition Government’s first attempt to restructure university finances, under then Education Minister Christopher Pyne in 2014. It is not explicitly included in Jobs-ready Graduates, but it has never been abandoned. And, Jobs-ready Graduates and its sister bill would certainly usher in that agenda by the back door, because ‘university colleges’ and private providers would increasingly converge in what they offer. The Coalition has always wanted to increase the level of private provision in higher education in two ways—by increasing student contributions and long-term graduate debt, as explained in earlier sections of this report, but also by opening access to public funds for private providers. The combination of higher individual debt burdens and an enhanced role for private providers risks repeating the damaging experiment with part-privatisation in the VET sector in recent years. Even worse, it raises the spectre of an Americanised higher education system: a system in which access to university education will become a privilege of those who can afford to pay, and in which institutions will no longer be expected to offer the full range of activities that properly characterise universities: teaching and learning, scholarship and research, and civic and community engagement.
Reluctant support from vice-chancellors
A feature of the submissions and evidence to the committee by many individual universities and by university groupings was that, while they were frankly critical of the bill’s funding provisions and sceptical of the government’s attempt to influence student choices through price signals, they nonetheless supported passage of the bill. It would, they declared, provide them with funding certainty over the next four years. This assertion is dubious, to say the least. As noted earlier in this section, the only certainty if the bill is passed is a $1 billion annual cut to total undergraduate funding, in which universities will be expected to do more with less. In such circumstances the quality of undergraduate teaching must inevitably decline over time, along with the degradation of research capabilities already discussed. Why universities are apparently willing to endure this assault on their reputations is not clear; Professor Norton, in his evidence, suggested that vice-chancellors had been offered the prospect of a top-up to research funds in the Budget, and, as noted above, media reports of statements by the Minister indicate that this may be so. Whatever lure might have been dangled, however, there is no increase in funding in this legislation. There is only a cut.
Professor John Buchanan, of the University of Sydney Business School, submitted a brief opinion on why, in his view “…many leaders of the higher education representative bodies (aka the peaks) support the bill when all the experts and the body representing university staff (ie the NTEU) do not’. He concludes that:
…Universities need leaders committed to nurturing a highly complex knowledge creation and education system. Appreciation of this important and challenging mandate is totally absent in the submissions from most of the official peaks for Australian Higher Education. A close reading of the peaks’ papers reveals they are more akin to submissions from head contractors seeking to finetune the desires of their political masters – or at best accommodating unreasonable demands that ‘there is no alternative’.
It is important to point out that several individual universities were adamant in their principled and detailed opposition to the bill both through written submission and in testimony. Labor Senators applaud those university leaders for taking a stand on behalf of students, staff and in the national interest.
The mirage of 39,000 new student places
After years of starving universities of growth, the government’s key justification for the Job-ready Graduates bill is to provide additional places for students at universities. These additional student places will be achieved with no extra funding while reducing the average funding for students at university.
There is nothing in the government’s bill that guarantees any increase in student places. On the contrary, the bill assures that universities will receive less funding for the places they currently provide.
Labor’s demand-led system of higher education saw an increase in the number of university enrolments and graduates. Over the course of six years an additional 190,000 Australians got a place at university. Since coming to office, however, the Coalition Government has put a handbrake on new places. The capping of the Commonwealth Grant Scheme at 2017 levels led to a steady reduction in the number of Australians accessing university and, despite the assurances of the Minister, the Jobs-ready Graduates bill contains no basis for renewed growth
In Unravelling the Tehan Vision for Higher Education, a paper attached to his submission, Mark Warburton wrote:
…the increase in student places, one of the most significant claimed benefits of the package, is particularly unclear … The legislative amendments currently before the Parliament do not ensure that funding for any of these places is provided to universities or other higher education provides and they do not ensure that the proposed funding cap for student places will be indexed.
The detailed information in Job-Ready Graduates on the student places to be created does not appear to be consistent with the overall number of student places in 2023 being 39,000. Using the DESE advice I have received, the closest estimate I can derive has 23,000 places in 2023 … The source of the 39,000 places in 2023 is a mystery.
The demand for higher education places is expected to surge under the impact of COVID-19. A labour market with fewer jobs, school leavers less likely to take a gap year due to travel restrictions, and demand from the mature student cohort to enable re-skilling will all generate additional demand. This comes on top of the anticipated surge in the population of school leavers, known as the Costello baby boom.
As it stands, the University Admissions Centre for NSW and the ACT is reporting a 21 percent growth in applications from school leavers alone. According to the University of Canberra submission, universities are seeing their own increases in domestic student applications noting that this will likely put pressure on other groups seeking to enrol:
…there are indications across the sector that domestic student applications for 2021 have increased and the University of Canberra is also seeing this through various internal metrics. University of Canberra is concerned that a limited number of university places may further reduce opportunities and participation rates among some groups, including mature-ages students and first in family.
Even if the government’s claims are to be accepted, the additional places that are being proposed are not enough to meet the projected increases in student demand. Analysis undertaken by the Innovative Research Universities indicates that the touted increase will be insufficient in both the short and longer term:
JRG does not allocate enough growth places to meet the Covid-19 jump in demand. The planned growth for university education only just covers population growth in the younger cohort for the coming years but will fall well short by the end of the decade. The IRU solution is that the Government provides an additional 10,000 National Priority places to meet the Covid-19 jump in demand for university education and the demand from the older student cohort needing to reskill for the future workforce.
The government’s existing approached (the current freeze) and the proposed approach in the bill (expecting universities to do more with less), will not provide additional student places at universities – when it is clear they are sorely needed. Andrew Norton suggests that the only means of increasing the number of places to match growth in demand in the immediate term would be to provide additional funding to universities or to return to the demand-driven system introduced by Labor. As he points out:
Under either status quo policies or Job-Ready Graduates, university willingness to take more over-enrolments [i.e. full-fee places] is critical to growth. Neither status quo nor Job-Ready Graduates will do much in the short term to increase student places. Only significant extra allocated funding or a return to the demand-driven system could do that.
Both these approaches are open to the government. Instead it has chosen to put at risk the quality of university offerings and continue to limit the opportunities for many Australians to access a university education.
Professor Norton’s emphatic opposition to Job-ready Graduates—it ‘has problems that are too fundamental to be fixed by amendment. The bill should be rejected’—is especially noteworthy because he has been an adviser to three Liberal governments and has given qualified support to previous Coalition attempts to restructure university funding. But in his submission Professor Norton is clear that universities could expect more growth from the status quo than they would receive under Jobs-ready Graduates:
While the Job-Ready Graduates bill would let the Government cut CGS funding, the current Higher Education Support Act 2003 guarantees 2020 funding levels for bachelor-degree places. Even if the Government withdraws its previously promised funding increases in funding in line with population growth, status quo policies will provide more CGS funding than Job-Ready Graduates.
Degrading the sector
Previous legislative attempts by the Coalition Government to cut university funding have failed, with the government’s only notable success being the axing of the $3.8 billion Education Investment Fund in 2019, which was created to support infrastructure spending in the higher education and VET sectors. The funds were redirected to disaster relief.
If the Jobs-ready Graduates bill is passed, however, the government will finally have succeeded in substantially winding back the level of public provision for Australia’s world-class university sector. It would be an act of economic and cultural vandalism, and a denial of the aspirations of all Australians who seek increased opportunities through education.
Labor opposes this bill because we want to stop the government degrading Australia’s higher education system, and because we want that system to remain a door to opportunity.
Labor’s finding from this inquiry
Labor Senators find that the bill;
Does not implement the government’s promise of 39,000 new places. These places are unlegislated, rely on ministerial discretion and cannot be delivered at the same time as significant cuts.
Attacks the core research purpose of universities by funding only teaching and removing within the bills funding model the fundamental nexus between teaching and research.
Delivers less money, not more, for ‘job ready’ courses, creating a clear disincentive for universities to expand enrolments in the very areas the government says are a priority.
Dangerously expands Ministerial discretion and locks in cuts and fee increases, while the promised benefits remain unlegislated.
Will create further distress for year 11 and 12 students after an already difficult year.
Includes a fee schedule that will motivate perverse outcomes within universities and is fundamentally inequitable
Contains fee hikes not backed by any evidence that these pricing signals will motivate changes to university or students choices. Rather, the evidence shows that the bill will result in inequitable levels of student debt, especially for women, while incentivising the above cap enrolment of high fee courses. The very courses the government says it wants to deter students from enrolling in.
Will have a significantly worse impact on women and First Nations people.
Interferes with student progress, by removing government support from students instead of allowing for discretion from universities.
Undermines the quality of university teaching.
Creates risks for regional universities and fails to recognise their higher than average costs and cuts their regional loading.
Would damage the research capabilities of Australian universities with dire consequences for the entire economy.
Will risk the university status of some institutions because of its damage to their research capacity.
Is so deeply flawed it is cannot be repaired with amendments.
If the Jobs-ready Graduates bill is passed, however, the government will finally have succeeded in substantially winding back the level of public provision for Australia’s world-class university sector. It would be an act of economic and cultural vandalism, and a denial of the aspirations of all Australians who seek opportunity through education.
Labor opposes this bill because we want to stop the government degrading Australia’s higher education system, and because we want that system to remain a door to opportunity.
Senator Louise Pratt Senator Deborah O’Neill
Deputy ChairMember
Senator the Hon Kim Carr
Participating Member