3.1
This chapter explores the extent of support for the bill and examines specific concerns raised by participants during the inquiry.
General views on the bill
3.2
There was broad support from a variety of stakeholders for the policy intent of bill to create additional university places and provide greater support for regional students and universities. For example, the Regional Universities Network welcomed the measures in the bill, and, the package more broadly, stating that their implementation ‘is needed to address education equity in Australia and contribute to the national good’.
3.3
Professor Barney Glover, Vice-Chancellor and President of Western Sydney University, stated that:
We note the package contains measures that are critical to optimising vital socioeconomic contributions of Australia's universities, including indexation; growth places; support for Indigenous, regional, rural and remote students; industry linkage funding and priority places.
3.4
Mr David Coltman, Chief Executive Officer, TAFE SA also offered support for the objectives of the bill:
We strongly support the bill's focus on addressing the inequities of participation of students from regional communities and remote communities. We also support the proposal to increase the number of university places available to students, many of whom are TAFE graduates entering higher education through a vocational education pathway. We support the emphasis the bill places on the importance of addressing the underrepresentation of Indigenous students in higher education.
3.5
Similarly, Ms Jane MacMaster, Chief Engineer, Engineers Australia, stated that:
Engineers Australia offers strong support for the intentions and objectives of the bill—that is, to encourage more people to study STEM, in particular, engineering, to meet future workforce needs and to support regional underrepresented student groups.
3.6
There was also general support for specific elements of the bill, including the Tertiary Access Payment, a funding floor for the Maximum Basic Grant Amount (MBGA), restoration of annual indexation, the establishment of the Transition Fund, and the introduction of demand driven funding for Indigenous students from regional and remote Australia. For example, in its submission to the committee, the Group of Eight noted:
…there are a number of positive elements to the JRG package and legislation, including a commitment to indexation of Maximum Basic Grant Amounts, additional funding to grow the number of higher education places, simplification of the funding clusters and introduction of a demand driven system for indigenous students.
3.7
The International Australian Studies Association also indicated support for a number of elements, including the Tertiary Access Payment and establishment of the National Priorities and Industry Linkage Fund.
3.8
The flexibility to transfer Commonwealth Supported Places between course levels in response to demand was recognised as important to the ongoing sustainability of the sector. For example, the Australian Technology Network of Universities stated:
ATN supports the increased indexation of the Commonwealth Grant Scheme (CGS) funding and the flexibility to distribute this funding across bachelor, sub-bachelor and postgraduate courses. The existing settings, if allowed to continue, would progressively erode real funding levels for universities and impact on our ability to continue innovating and delivering quality education.
3.9
While supporting the bill, some stakeholders indicated there were issues they would like to pursue subsequent to its passage. Others indicated their support was contingent on amendments to specific provisions in the bill.
3.10
Despite proposing amendments, some stakeholders noted the critical importance of policy and funding certainty for the sector and indicated this would be provided by passage of the bill. For example, Ms Catriona Jackson, Chief Executive, Universities Australia stated:
…I think you've heard from a wide range of universities today that what we need is some sort of stability and funding and policy certainty. The passage of law would equate with that.
3.11
Ms Jenny Lambert, Director, Employment and Skills, Australian Chamber of Commerce and Industry, also argued against delays:
…we support the need for change and we support the tenor of this legislation. We would not like to see yet another delay in tackling the problem that this legislation is attempting to deal with.
3.12
Some of the more controversial aspects on the bill drew a mixed reaction from stakeholders, with concerns raised about the need for more detailed modelling and evidence to support cluster pricing, the risk of perverse incentives, the need for certainty of additional university places, the exclusion of elements of the Job-ready Graduates package from the bill, the impact of the bill on university research and STEM teaching, and the regulatory changes attached to Schedule 4 of the bill.
3.13
The Department of Education, Skills and Employment noted that the Job-ready Graduates package was developed in close consultation with stakeholders, including 3791 submissions, working groups with Vice-Chancellors, and three Regional Roundtables.
3.14
The Hon Dan Tehan MP, Minister for Education and the Hon Andrew Gee MP, Minister for Decentralisation and Regional Education announced that following consultation on the exposure draft, a number of amendments to the package were made to create the disciplines of Professional Pathway Psychology and Professional Pathway Social Work, adjust distribution of the Tertiary Access Payment, and introduce a floor for the maximum basic grant amount for higher education courses to guarantee university funding in legislation.
3.15
Stakeholders noted the responsiveness of the government to the issues raised during the consultation process. For example, Southern Cross University and Federation University both welcomed amendments made to the bill as a result of the government’s consultation process.
3.16
Similarly, the Regional Universities Network noted that the government had made significant concessions that would ‘assist outcomes for regional students, universities and their communities’.
3.17
The University of Melbourne acknowledged the government’s response:
We are also pleased that the Government has responded constructively to feedback on the draft version of the Bill released in August. The commitment to retaining a legislated funding floor in CGS [Commonwealth Grant Scheme] allocations, and the re-classification of some social work and psychology units from the highest student contribution band of $14,500 are both welcome changes in the Bill brought before the parliament.
3.18
Several organisations, including the Regional Universities Network, Country Universities Centre, University of Tasmania, University of Wollongong, Charles Darwin University, Federation University, University of New England, and the Independent Tertiary Education Council Australia supported passage of the bill.
Comment on specific aspects of the bill
Changes to Commonwealth Grant Scheme funding
3.19
There was support for the changes to Commonwealth Grant Scheme (GGS) funding, which:
better align funding to the cost of delivering higher education and direct funding to areas of national priority and employment growth;
introduce grandfathering arrangements to ensure
no student enrolled in a course prior to 1 January 2021 is worse off as a result of this bill
universities receive the same Commonwealth contribution for grandfathered students in perpetuity;
allocate providers a funding envelope for Commonwealth Supported Places (CSPs) in ‘higher education courses’;
introduce a maximum basic grant amount ‘floor’ for ‘higher education courses’;
remove the broad exclusion of ‘work experience in industry’ units from CGS funding.
3.20
For example, the University of Melbourne stated:
The introduction of flexible funding envelopes for Commonwealth Grant Scheme (CGS) allocations made to universities is a clear improvement upon the current arrangements. This approach to CGS funding will encourage diversity and innovation in university teaching, expanding the study options available to students.
3.21
Similarly, the provision to make ‘work experience in industry’ units eligible for funding was supported by a range of stakeholders, including the National Farmers’ Federation, the Australian Academy of Science and the Australian Catholic University.
3.22
However, some stakeholders expressed concerns about the proposed reduction in relative Commonwealth contributions. For example, the Group of Eight stated that students would go from paying 42 per cent to 48 per cent of the cost of their education and that this had been achieved through ‘dramatic changes to fees for some courses—particularly those in the Humanities where the Student Contribution Amount will rise by 113% to $14,500’.
3.23
Monash University noted that ‘on average, the reforms will see student fees increase by 7 per cent, while average Commonwealth Grant Scheme support per place falls by 15 per cent’, raising concerns about students incurring an increased financial burden.
3.24
Other views were more mixed, noting that while costs will shift to students, the bill will allow more students to access the benefits of higher education. On this, Professor Grady Venville, Deputy Vice-Chancellor (Academic), Australian National University, reflected:
It does shift the debt to students … If I were a student interested in those subjects where the costs would be greater—it's not a great outcome for those people. But the education they receive and the lifelong benefits of that education are a positive thing, and more students will have access to that.
3.25
Even with the proposed changes, the Department of Education, Skills and Employment highlighted the generosity of the HELP scheme compared to other jurisdictions and noted that the time taken to repay a HELP loan is dependent not only on the size of the loan, but on how income changes over time.
3.26
The department went on to contend that as cost changes are based at a unit level, students are also able to reduce the cost of study by choosing electives such as mathematics, English, science and IT within their degree.
3.27
Noting the importance of better aligning funding in the future to the cost of delivery, the department also emphasised that continuing students will not pay more for their degree:
Continuing students already studying in a CSP will be ‘grandfathered’ so they will pay either the new lower rates or their current student contribution rates. From 1 January 2021, students who enrol in units where the student contribution has decreased will have these reduced amounts applied. Continuing students who enrol in units where the student contribution has increased will have grandfathering arrangements applied.
3.28
Some universities also raised concerns about an anticipated reduction in funding for each student following the introduction of the changed arrangements. A number of stakeholders estimated that, coupled with the funding cap imposed in 2018, the funding cluster changes in the bill would reduce revenue for teaching across all universities by close to $1 billion
per annum.
3.29
The University of New South Wales indicated that:
Under the proposed arrangements, overall public funding for teaching would be approximately 94% of its current quantum (equivalent to a 5.8% cut in per student funding). To receive the same level of overall quantum of funding at the new rates, universities would have to provide around 11,700 additional student places than in 2018, but to teach those extra students without a commensurate increase in financial resources.
3.30
Other universities pointed out this would occur at a time when universities already faced a downturn in revenue. For example, Monash University revealed that the university had implemented efficiency measures in order to meet a $350 million revenue shortfall in 2020 caused by international travel restrictions and reduced enrolments.
3.31
In response to these concerns, the Department of Education, Skills and Employment explained:
Between 2020 and 2024, the package will support growth in total payments to the higher education sector of $2 billion – $200 million more than it would have been without reforms. In 2030, universities will have access to $1.7 billion more funding in that year alone. Between 2020 and 2030 overall funding for universities will increase each year. The package allows the higher education sector to expand the places it can provide as rapidly as possible.
3.32
The department also reiterated the need for change more broadly:
The gap between funding growth and population growth under current settings will not allow the system to develop capacity in pace with future demand … funding for Bachelor places is falling in real terms, even if universities receive full performance-based funding increases. The current system could not provide enough places to meet the demand of school leavers and the skill requirements of the future (even without the likely increase in demand brought about by the COVID-19 pandemic …
3.33
This view was shared by some stakeholders, who considered that the current arrangements could not continue in their present form. For example, Professor Simon Maddocks, Vice-Chancellor and President, Charles Darwin University, described the current situation as ‘absolutely unsustainable’.
3.34
Professor Margaret Gardner, Chair, Group of Eight also argued that:
The current arrangements emerging from the funding freeze of the Commonwealth Grant Scheme of 2018 and 2019 are not sustainable in terms of funding for the required expansion of higher education graduates that will be needed and will demand education during this coming decade.
3.35
This view was shared by Murdoch University, which stated that ‘post-secondary education in Australia cannot continue in the current funding model if it is to meet the training and skills development needs of an innovative economy’.
Delivery of additional university places
3.36
There was some debate about whether the projected growth in student places could be met within the reform package. For example, Mr Mark Warburton argued that ‘the funding formula does not appear to generate sufficient funds to increase the number of places consistent with the package’s claims’.
3.37
Monash University shared this view:
It is also unclear whether the Bill will deliver 39,000 places by 2024 as has been promised. Analysis against current enrolments, including those places, which have subsidies removed by funding caps introduced in 2018, sees only 16,000 additional places being established by 2024.
3.38
However, Mr Ant Bagshaw, Director, Nous Group, considered the concern was ‘theoretically correct but practically incorrect’. He went on to argue that:
…a number of these assumptions are based on current funding and not on the future funding rates and do not take into account the nature of budgeting and resource allocation within universities, which include factors such as cohort efficiencies. So I think there are different ways of analysing this, but abstracting beyond the complexities of universities does not give us the full answer, and that is why I am more confident that the principle behind the government's approach will lead to more students being educated.
3.39
The Department of Education, Skills and Employment also indicated that the growth of funded places was at the core of the Job-ready Graduates package. While stating the reforms would provide an additional 100 000 university places for domestic students by 2030, the department also acknowledged this was an estimate that was sensitive to assumptions about university and student enrolment decisions.
Growth funding for outer metro and regional areas
3.40
Various stakeholders supported the allocation of growth funding to regional universities. For example, the University of the Sunshine Coast stated:
The commitment of the JRG package to providing growth places (3.5% at regional campuses) which is critical to continued success in our regions, particularly with the opening of USC Moreton Bay in 2020. The future growth places will be fundamental to its continuing success and to meeting the demand in this region. This demand is expected to increase both in line with population growth but also due to enhanced participation in higher education in the region.
3.41
However, some universities raised concerns that they would be disadvantaged by the proposed approach to growth funding. For example, Flinders University stated that South Australia was the only state with no public universities categorised as either regional or high-growth metro, noting this would result in a lower growth rate than other states and territories.
3.42
Similarly, while acknowledging the intention to increase participation and attainment in regional areas, Swinburne University of Technology argued the proposed approach would disadvantage universities with metropolitan campuses that delivered online programs to students in regional and remote areas. For this reason, Swinburne suggested that the funding should be applied to the location of the student, rather than the campus.
3.43
The University of Melbourne suggested the approach to growth classifications in metropolitan areas should be reconsidered to ensure areas of strong population growth are not treated as low-growth areas.
3.44
Other stakeholders proposed an alternative basis for calculating growth funding. For example, the Australian Chamber of Commerce and Industry argued that:
There is a valid argument to base the three categories of growth funding on predictions of absolute numbers of students within university catchments rather than on percentage growth forecasts. Additionally, or even as an alternative, the proposed differential could be more modest, eg. 1.5% through to 3% to acknowledge that predictions of population growth may not reflect actual demand.
3.45
The Department of Education, Skills and Employment stated that the aim of the measure was to improve regional growth by increasing participation rates of students at regional campuses. It also noted that the measure responded to Recommendation 1 of the National Regional, Rural and Remote Education Strategy (the Napthine Review) to ‘improve access to study options for students in rural, regional and remote areas’.
Enabling programs
3.46
Enabling programs are generally foundation courses designed to prepare students for higher education. They act as an entry point into a bachelor level degree. Under current arrangements, providers are paid an enabling loading through the CGS to help with the cost of providing places in these courses.
3.47
As part of the Jobs-ready Graduates package, the enabling loading that was previously part of CGS funding would be incorporated into the Indigenous, Regional and Low Socio-Economic Status Attainment Fund (IRLSAF). The IRLSAF is a grants program designed to incentivise providers to enrol Indigenous, regional and remote, and low SES students.
3.48
The Department of Education, Skills and Employment indicated that the IRLSAF consolidates existing equity programs and noted that this would ‘streamline administration and finances, increasing efficiency and maintain the functions of these programs, with a focus on equity and access’.
3.49
Introduction of the IRLSAF was supported by a number of stakeholders. For example, in supporting its establishment, Charles Darwin University stated:
The proposal to allow universities like CDU, who have considerable experience in catering to the needs of these groups and in building aspiration in education, to decide how best to apply this funding to addressing these issues is a positive step forward.
3.50
While supporting the IRLSAF in-principle, other stakeholders requested further detail be made available. For example, the Australian Catholic University supported establishment of the IRLSAF, subject to further details on its operation, including provider eligibility.
3.51
While noting the loading will continue at its current level until 2024, Professor Helen Bartlett, Vice Chancellor and President, University of the Sunshine Coast, stated:
…we are mindful that there's no recognition that these students are not charged a student contribution amount, so any reduction in the Commonwealth contribution amount won't be counterbalanced by an increase in the student contribution amount, and that may have an impact from 2024.
3.52
The National Association of Enabling Educators Australia indicated this could particularly affect regional and remote areas of Australia:
Enabling programs increase higher education participation in regional and remote areas of Australia. At some universities, up to 20% of commencing load in a session gain admission via an Enabling pathway, so removing Enabling will directly result in fewer job ready graduates in regions with a strong demand for skilled and qualified professionals … Enabling is a cost-effective vehicle by which we can continue to create job-ready graduates from the Australian population.
3.53
Some stakeholders raised concerns about the impact on students of reassigning the enabling loading to the IRLSAF. For example, Edith Cowan University stated that:
There also seems to be an assumption from Government that enabling courses are only provided to people aligning to narrow equity group definitions of Regional, Indigenous or Low SES. Enabling courses support all Australians, including adult learners, to improve their future education and employment outcomes, with all the social and economic benefits that result for the individual and their communities.
3.54
Similarly, the Australian Technology Network of Universities noted:
Cohorts that are currently supported through enabling programs may not meet the definitions of disadvantage under IRLSAF, despite being at considerable disadvantage, and IRLSAF may not support similar programs.
3.55
Professor Andrew Norton indicated the design of the fund could impact metropolitan universities with large numbers of low SES enrolments:
Enabling is actually for academic problems, not for general equity problems, so not all enabling students are from an equity background. Because the new funding formula … is essentially going to favour regional institutions, I would be concerned that some of the metropolitan universities that have high low-SES enrolments but not many regional enrolments will lose a large share of their current funding …
3.56
While recognising the potential limitations of removing enabling funding from the CGS, the Department of Education, Skills and Employment noted that in relation to the IRLSAF:
The Government will work with the sector on the long-term fund design to improve universities’ ability to facilitate access to higher education for disadvantaged and vulnerable cohorts. The Bill allows universities more flexibility in how they meet engagement and social obligations …
3.57
On this point, a number of universities noted the Minister’s commitment to establish a working group to review the operation of the IRLSAF from 2024. They also acknowledged the Minister’s undertaking to amend the draft guidelines and Explanatory Memorandum to recognise the importance of enabling programs in providing access to higher education for students with educational disadvantage.
3.58
Some stakeholders also expressed a preference for the enabling loading to remain in the legislation until such time as the replacement program is proposed. Non-legislated elements of the package are addressed separately later in the report.
Changes to funding clusters
3.59
The proposed changes to funding clusters drew a mixed response from stakeholders.
3.60
Some submitters indicated broad support for the proposed changes to funding clusters. For example, the Australian Catholic University:
…largely supports these reforms, recognising the underlying intent of seeking to make more [Commonwealth Supported Places] available to Australian students and acknowledging the extremely difficult budgetary environment facing the Commonwealth.
3.61
The Group of Eight also referred to the simplification of the funding clusters as one of the ‘positive elements to the JRG package and legislation’.
3.62
The vast majority of submissions from students and academics were critical of the proposed changes to increase student contributions for communications, society and culture.
3.63
Specific concerns about the proposed changes to funding clusters are addressed below.
Aligning funding with the cost of delivery
3.64
The Department of Education, Skills and Employment noted the bill’s intention to better align Commonwealth and student contributions with the cost of course delivery. Using university self-reported data, the department argued that:
This data collection showed consistently over three years that some fields were over-funded while other were underfunded. The Bill provides an opportunity to correct funding arrangements to align with cost of delivery and remove cross-subsidisation by removing over and under funding.
3.65
While acknowledging discrepancies in current funding arrangements, Griffith University raised a number of concerns about the data underpinning the proposed changes. These concerns included the use of averages where there was a significant spread of costs with outliers, as well as inadequate reflection of the infrastructure costs incurred in laboratory and clinical settings.
3.66
Ms Jane MacMaster, Chief Engineer, Engineers Australia also suggested that a more detailed study of the cost of teaching would be wise given the variation in costs within disciplines:
There would be some variance across the disciplines. The heavier, larger-scale engineering—for example, aerospace, industrial and manufacturing types of engineering—would attract a higher cost. I am unsure as to the extent that the Deloitte analysis has taken the variances into account.
3.67
In response to the concerns about the underlying data, the Department of Education, Skills and Employment pointed to high participation rates by universities in the annual data collection process and stated that, in line with Australian accounting standards, universities were able to account for the depreciation of building and other infrastructure assets in the data submitted to Deloitte in the preparation of the 2019 Transparency in Higher Education Expenditure report.
Aligning cluster pricing with work-relevant qualifications
3.68
In addition to aligning cluster funding with cost, the Department of Education, Skills and Employment noted that cluster pricing will serve to increase focus on the national interest and incentivise students and universities to focus on work-relevant qualifications.
3.69
The goal of increasing the number of graduates in priority fields, including STEM fields, was supported by a number of stakeholders. For example, the University of Melbourne noted it was ‘altogether appropriate that our higher education system is responsive to Australia’s labour market’.
3.70
In supporting this measure, Ms Jenny Lambert, Director, Employment and Skills, Australian Chamber of Commerce and Industry, argued:
We cannot ignore the fact that there is a wide difference in graduate outcomes for employment experience depending on which course is studied … Nor can we ignore the fact that, even after three years, although this wide range of experiences has reduced and there are more people in full-time employment, there are still large differences in how many students have obtained or been able to secure what they would see as a graduate-level position … To all the people speaking in support of humanities degrees for this inquiry, there is no doubt that many of the humanities graduates over many years have experienced great careers. I am one of them. But the picture is much more mixed now. The job market has changed, and most importantly the competition is fiercer with so many more people undertaking university. Students need to know the implications of their choices.
3.71
While recognising the importance of STEM fields, there was debate about the nature of future work and the skills it would require. For example, some stakeholders pointed to the skills developed via the humanities and social sciences, including their resistance to automation:
While productivity growth is often thought to be related to STEM fields, the greatest areas of employment growth have been and will likely continue to be in jobs which are difficult to automate. These occupations typically require more interpersonal skills, which may be more supported by courses in Society and Culture. Such skills are also more transferable when jobs and tasks are disrupted by automation.
3.72
Others raised concerns about the consequences of encouraging a narrow focus on particular fields. For example, the Design Institute of Australia noted that:
A too narrowly focused approach to priority studies now unnecessarily closes off potential avenues for innovation and jeopardises opportunities for our continued prosperity. As with crisis planning, taking a broad approach to preparedness for what lies ahead in the world of work will see Australia better able to adjust to global trends while nurturing areas of deep expertise.
3.73
A number of organisations disputed the premise that STEM graduates have better employment outcomes than humanities graduates. For example, the Australian Academy of the Humanities argued:
These data [on humanities graduate destinations and labour force participation] show humanities graduate outcomes at least as strong, if not stronger, than in those fields targeted in the package of reforms as ‘job-ready’ according to analysis of jobs growth and trends in areas such as STEM.
3.74
Some submitters proposed an alternative approach to pricing. For example, the Innovative Research Universities suggested the proposed contributions could be adjusted to narrow the difference between the lowest and highest student contributions.
3.75
This approach was supported by Griffith University:
We recommend an adjustment to the bands that decreases the financial burden placed on students in the highest band and creates a modest increase for students in lower bands. This will both treat humanities and social sciences students more fairly and ensure there is adequate financial provision for science and engineering programs. We support the proposal made by the Innovative Research Universities in this regard.
3.76
In response, the Department of Education, Skills and Employment noted the anticipated need for ‘more job-ready graduates in health care, teaching and STEM related fields, including engineering and IT’ and argued that:
STEM-related occupations grew by 20 per cent over the five years to November 2019, or nearly twice the growth rate in non-STEM jobs, with 74 per cent of STEM occupations requiring a Bachelor degree or higher qualification. These core trends are unlikely to change, and will drive a need for more STEM qualified higher education graduates. Despite this, recent trends show that under current policy settings the proportion of domestic graduates with STEM qualifications has remained stable.
3.77
The department also noted the nuanced approach taken in the bill. This involves reduced student contributions in priority fields, including those experiencing declining shares of Bachelor enrolments, and the placement of core skill units, such as English, in the cheapest band. It also noted that for society and culture units, the cost of study in Australia remains below that of the United States of America and the United Kingdom.
Impact on disadvantaged groups
3.78
Some submitters, including the Australasian Consortium of Humanities Research Centres, warned the proposed changes would have a disproportionate impact on disadvantaged groups, including women, mature-age students, Indigenous students, students from low SES backgrounds, and first in family students.
3.79
The University of Sydney expressed similar concerns:
…research shows that prospective students from disadvantaged backgrounds do decide about undertaking a degree based on whether they feel they can afford university. The most significant barriers to university are concerns about living costs while studying and fear of debt. Higher fees may deter already educationally disadvantaged students from considering university studies.
3.80
The University of Sydney went on to note:
Vulnerable young people, including those who are the first in their family to go to university, are more likely to succeed at tertiary study if they choose courses based on their interests and career ambitions, rather than on purely financial grounds.
3.81
However, Professor Simon Maddocks, Vice-Chancellor, Charles Darwin University indicated that 60 per cent of the university’s female students and just under 60 per cent of its Indigenous students study disciplines that would be cheaper under this bill. In relation to psychology, social work and counselling, Professor Maddocks indicated that 70 per cent of female students and 67 per cent of Indigenous students would be better off.
3.82
The Department of Education, Skills and Employment argued that the bill would lower the cost of education in fields such as teaching and nursing, which are currently female-dominated, as well as encourage more women to enrol in STEM fields—all of which provide higher lifetime earnings than a humanities degree.
3.83
The department also highlighted other equity and access measures within the bill, such as the introduction of demand driven funding for Aboriginal and Torres Strait Islander students from regional and remote Australia, the establishment of the IRLSAF, as well as a range of measures designed to help bridge the attainment gap between regional and remote students and metropolitan students.
Effectiveness of price signals in incentivising student enrolments
3.84
Several submitters expressed concern that price signals are ineffective in incentivising student enrolment in areas of expected job growth. For example, the Australian National University noted a very limited impact on applications to university in the year following a 300 per cent increase in course fees in the United Kingdom.
3.85
Other organisations questioned the effectiveness of a deferred price signal such as HELP, which was not designed to incentivise student choice. For example, the University of Melbourne claimed:
There is little evidence that the proposed changes to student contribution levels are evidenced-based. Firstly, previous attempts at altering enrolment behaviour through price signals have proven ineffective, mostly due to domestic students having the option of deferring payments through the Higher Education Loan Program (HELP).
3.86
The University of New South Wales also raised concerns about which groups of students will respond to price signals:
Where price signals do have an impact, they are typically on students from low socio-economic, rural and regional, Indigenous and other disadvantaged backgrounds. In these instances, the effect of the price signal is to deter the student from going to university in the first place.
3.87
Some stakeholders suggested that alternative approaches would be needed to increase the uptake of particular courses at university, including the provision of engaging STEM education at primary and secondary school level and improved wages and conditions in occupations such as teaching and nursing.
3.88
While acknowledging that price was not the only driver of student choice,
Dr Michele Bruniges AM, Secretary, Department of Education, Skills and Employment, argued that historical evidence showed it was an important element:
We are entering an economic time where we don't have a road map to have a look at what price sensitivity will mean for school leavers and so forth. What we have is evidence from the past that we believe will stand up. Yes, there were increased enrolments in the 2008-09 period of time around the STEM agenda. We know that the jobs of the future are overwhelmingly going to require those skills in STEM, and to meet the employment needs of the future, that price sensitivity and lowering the price of those STEM related fields is one element, and a very important element, of driving choices.
3.89
Some commentators have also agreed with the department’s position that increasing fees in arts and humanities might discourage students from pursuing those subjects. For example, the Financial Review quoted economist, Professor Richard Holden, who indicated that lifting fees would discourage some students from enrolling:
"If a student is forward-looking, they are going to take into account the impact of a higher price," Professor Holden said. "People do think about how they will be paid and it seems unlikely to me the price of higher education is any different.
3.90
This was supported by the results of a survey of more than 700 community services workers by the Australian Services Union, prior to the announcement of the professional pathway social work. The survey found that almost all workers who had been planning to enrol in a social work degree (more than half of respondents) would now consider moving into nursing or teaching.
Impact on university research and STEM teaching
3.91
Some submitters noted that aligning funding with the cost of teaching breaks the nexus between research and teaching, with a subsequent impact on research budgets. The Australian Academy of Science noted the separation ‘effectively removes the cross-subsidy required to fund the indirect costs of research not covered either by the Research Block Grants, nationally competitive grants or industry income’.
3.92
Edith Cowan University suggested this would be a particular issue for smaller, regional universities given their higher costs of delivery and lack of economies of scale. It also noted this could have potential consequences for their status as universities:
A number of providers may fail the "research quantity and quality thresholds" recommended by Professor Coaldrake's review of Higher Education Provider Standards, threatening their status as Australian universities.
3.93
Similarly, the University of Sydney argued:
There is an additional risk that the lack of clarity on research funding is occurring at a time when the Higher Education Legislation Amendment (Provider Category Standards and Other Measures) Bill 2020, also before Parliament, seeks to substantially increase the threshold for what constitutes research as part of the definition of a ‘university’ in Australia.
3.94
While agreeing the bill will remove the cross-subsidy for research, the University of Tasmania did not believe this broke the research-teaching nexus:
It still enables academics to have their 40-40-20 time allocation. It funds academics to continue to do that. The piece that's there is the extra bit on top of it, which tends to go to specialist research programs and efforts. That cross-subsidy has been diminished, and we need a system which replaces that …
3.95
A number of stakeholders also raised concerns about the impact of this measure on the quality of STEM teaching in universities. Some of these concerns related to expectations of reduced funding for teaching these courses. For example, the Australian Council of Deans of Science argued that:
The Bill proposes that both students and the Government should each contribute less to the cost of each Science and Engineering Commonwealth Supported Place (CSP). Thus the total income to STEM faculties for their undergraduate teaching will be reduced by around 16%.
3.96
Science & Technology Australia shared this view, estimating the bill would cut the level of funding for universities to teach students in STEM course by
$690 million in 2021.
3.97
The impact of this potential funding reduction was outlined by Professor John Rice, Executive Director, Australian Council of Deans of Science:
Yes, it will have an impact on quality … There are the laboratories; the fieldwork; the access to the kinds of instrumentation, techniques and so on that people need to have if they are going to at least have a serious understanding of analytical chemistry to do forensics, of organic chemistry and synthesis to make compounds, of all sorts of things that go on in physics. It isn't just the classroom stuff; it's also the kind of experience that we can give them, the kind of education that we can give them. That too will be reduced.
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Stakeholders also explained the intertwined nature of research and teaching in universities. For example, while noting some differentiation is possible and desirable, the Australian Institute of Physics National Executive contended that the complete separation of funding for research and teaching is contrary to government recognition of the conjoint nature of these activities:
This problem is particularly pertinent … where the combining of teaching and research leads to better outcomes in both areas. Students taught by active researchers are intimately connected and thus inspired by the forefront of the scientific discoveries. Researchers who teach are not only grounded by the daily reality of the student experience and motivated to make their research more accessible; teaching and the students taught also provide inspiration for research. We consider that, for physics, the cost of delivery of the education needs to cover the research component of the employment of the staff who teach the physics courses (at least in significant parts).
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Stakeholders welcomed the Research Sustainability Working Group— established by the government to address research sustainability—but raised concerns about the level of detail available and the timing of its work. For example, the Australian Council of Deans of Science argued that:
Its deliberations are not targeted at producing a new funding model any time soon. The gap between implementing the Job-ready Graduates proposals and adjusting the research funding landscape will have immediate impacts; the loss of highly trained science staff, and reduction in the outcomes and impact of funded research projects.
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The Department of Education, Skills and Employment sought to assure the committee that a priority for the Research Sustainability Working Group was to consider options for providing short and medium-term support to fill the revenue shortfall arising from the loss of the international student market.
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The department also considered that the Transition Fund would help universities adjust to the package by ensuring they were not worse off between 2021–2023. This was reiterated in its evidence to the committee by
Dr Michele Bruniges AM, Secretary, Department of Education, Skills and Employment:
I want to be clear that universities will not receive a dollar less between 2021 and 2023, and the package does not remove a billion dollars from the higher education sector. Indeed, between 2020 and 2024 the new model will support growth in the annual funding allocation of $2 billion, $200 million more than it would have otherwise. So claims regarding the $1 billion appear only to take into account some elements of the package and fail to take account of the key elements of additional funding, including in the package funding for additional places, indexation, priority places and, indeed, the National Priorities and Industry Linkage Fund.
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The department also noted that the realignment of funding to match costs would ‘remove perverse incentives for universities to rely on the “profits” of student fees, or cross-subsidisation’.
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The benefit of the Transition Fund was also noted by the University of Tasmania, which recognised its value in supporting the university to adjust to the new framework in a manageable way:
As we navigate these various challenges, we are pleased that the revised approach to the calculation of the Transition Fund will provide us with certainty over the next three years as we build up our core courses, adjust to the new cluster rates and manage the impact of any demand signals from the new pricing structure. So overall, while there are challenges presented by the package to UTAS [University of Tasmania], they are manageable and its benefit to Tasmania is substantial.
Perverse incentives
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There was some discussion of contradictory incentives for students and universities within the bill. For example, Professor Andrew Norton argued:
The university incentives in the Job-Ready Graduates package are likely to be more influential than the student incentives. However, it is worth noting that in many disciplines the two contradict each other – the students are encouraged to increase demand but the university is discouraged from meeting that demand, or vice versa …
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Some stakeholders predicted the decrease in overall funding could create a perverse incentive for universities to enrol fewer STEM students.
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The Academy of the Social Sciences in Australia also noted that universities may increase their offerings in fields that are easier to teach, in order to cross‑subsidise more expensive courses.
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Some submitters suggested this could be a particular issue for technology‑focused universities. For example, Swinburne University of Technology estimated the bill would substantially reduce its funding given
46 per cent of its 2019 Equivalent Full-Time Student Load are in fields that will experience reductions in net funding.
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However, the concerns raised assumed that the universities could still make a profit from any given course in order to use those profits to cross-subsidise. Since the funding would be more closely aligned to the cost, those ‘perverse incentives’ would be reduced.
Professional Pathways
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While welcoming changes that recognise social work as a job ready degree, the Australian Association of Social Workers raised concerns about the lack of detail about the Professional Pathway Social Work funding cluster, as well as the exclusion of some core units.
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Similarly, La Trobe University called for greater clarity on the operation of these specialist pathways, and more specifically, what units will be included.
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The Department of Education, Skills and Employment noted that a working group of current and former Vice-Chancellors, in cooperation with professional organisations, would provide advice on the criteria of units and courses required for professional pathways in social work and psychology.
Non-legislated elements of the Job-ready Graduates package
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There was general support for the non-legislated elements of the Job-ready Graduates package. For example, the commitment to annual indexation of MBGAs was widely acknowledged as a welcome and important measure.
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Other non-legislated elements of the package include the Transition Fund, funding for the National Priorities and Industry Linkage Fund and the Indigenous, Rural and low-SES Attainment Fund, and growth funding for student places.
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While supporting these elements, several submitters raised concerns about their exclusion from the bill. For example, Universities Australia noted:
…that while funding reductions are all to be legislated, repurposing of the money is not. While we welcome the policy intent of the package, we remain concerned that failure to protect key elements in legislation puts the policy objectives at risk, avoids Parliamentary oversight of higher education funding and will leave higher education vulnerable to ad hoc budget cuts in the medium term.
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Similarly, Professor David Lloyd, Vice-Chancellor, University of South Australia, also stated in relation to the Transition Fund:
I think it's absolutely paramount that the transition fund is legislated, because that's the only real guarantee we're going to have that we can offset what will be ministerial discretion to actually remove a chunk of funding. If that funding were to diminish over three year period, plus the COVID impost, we would have no alternative but to look at the employment numbers.
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However, this view was not supported by all stakeholders. For example, Professor Rufus Black, Vice-Chancellor and President, University of Tasmania, indicated his trust in the government’s commitment to deliver on these elements of the package.
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Similarly, the Innovative Research Universities described the proposed approach to the Transition Fund as ‘a positive combination of certainty through the Act for the transition fund and the necessary discretion for the amount to be determined once all the relevant factors are known’.
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In response to concerns about these elements of the Job-ready Graduates package, the Secretary of the Department of Education, Skills and Employment, Dr Michele Bruniges AM, argued that it was not unusual for legislation to provide overarching parameters with more detail provided in regulations or guidelines:
Like other pieces of legislation—I think the Australian Education Act is probably one that's very similar to the composition of this act, where some of the details are done in guidelines, which indeed become disallowable instruments … So it's not unusual; it's not atypical.
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The department also noted that indexation of the maximum grant amount had never been provided for in the Higher Education Support Act, and that this was consistent with the shape of the legislation for at least the past decade.
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In line with usual practice, the department also noted that guidelines would be presented to parliament and subject to disallowance.
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Given this section has addressed non-legislated aspects of these elements of the bill, this issue will not be revisited in the following discussion of individual elements.
Transition Fund
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The bill establishes a $650 million Transition Fund loading to ensure universities are not worse off in base funding terms between 2021–2023. The Transition Fund will be distributed to universities to ensure fairness across the sectors and will help them adjust to the reforms.
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Some stakeholders provided support for the Transition Fund. For example, the University of Tasmania indicated the Transition Fund would provide certainty over the next three years as it adjusts to the new cluster funding rates and builds up its core courses.
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Notwithstanding this support, some stakeholders expressed a desire for more detail about the operation of the Transition Fund and raised concerns about funding levels beyond 2023–24.
National Priorities and Industry Linkage Fund
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The bill establishes the National Priorities and Industry Linkage Fund (NPILF) to encourage higher education providers to engage with industry. The Department of Education, Skills and Employment stated that the NPILF will:
…provide a dedicated funding stream for universities to carry out engagement with industry, develop industry-relevant course material, optimise the course mix for local economies, promote the teaching of STEM subjects and provide work-integrated learning opportunities for students.
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Establishment of the NPILF was welcomed by a number of stakeholders.
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The Australian Technology Network of Universities expressed its intention to work with the Government to design the NPILF and stated:
ATN strongly supports NPILF and the aim of encouraging universities to engage with industry to design and deliver high quality teaching that equips students with the skills they need to thrive in today’s workforce.
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In supporting the NPILF, the International Australian Studies Association also recognised its potential to support existing work underway at universities:
Indeed, work-integrated learning is already common at Australian universities—including in Humanities and creative arts degrees—and having financial resources backing it will improve the ability to generate partnerships, placements and other opportunities for students.
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However, some stakeholders, such as the Innovative Research Universities, questioned whether the NPILF would improve current arrangements:
…how will the separate fund further strengthen university-industry engagement concerning student learning in ways that existing incentives do not? The risk is that a distinct fund will create siloing of activity driven by the need to demonstrate activity for the fund rather than continuing to develop well-integrated work-based outcomes into degree programs.
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Others raised concerns about the potential of the NPILF to add to the complexity of the current landscape. For example the Australian Council of Deans of Science cautioned:
The Department is responsible for … myriad overlapping schemes that are to encourage innovation and industry-university engagement. If a case could be made for removing complexity it would lie in integrating this array of schemes rather than adding further complexity with another one. Without co-ordination between the NPLIF and the current industry innovation landscape the NPLIF could well be money wasted.
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The Department of Education, Skills and Employment noted that the NPILF would simplify current programs and target the priority of producing job-ready graduates. In relation to existing activity in universities, it argued:
While recognising that many of these functions already exist, they rely on “profits” from student fees, or cross-subsidisation and have low accountability or transparency. The Bill will address this piecemeal approach.
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The department also pointed to the establishment of a working group of Vice‑Chancellors to help design the NPILF, as well as the intention to consult extensively with the sector:
The final NPILF model will be implemented by 2024 with a transition phase from 2021-23. The transition phase allows for extensive consultation with the sector, industry and the wider community to ensure the fund is dynamic and fit for purpose.
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The collaborative process to design the NPILF was acknowledged by Professor Alex Zelinksy, Vice-Chancellor and President, University of Newcastle, who stated the NPILF was ‘a strong element of the package’.
Demand-driven funding
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There was broad support for demand-driven funding of higher education courses for Aboriginal and Torres Strait Islander students from regional and remote areas.
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However, several submitters argued for its extension to all Aboriginal and Torres Strait Islander students, regardless of location. In its submission to the committee, Universities Australia noted that 75 per cent of Aboriginal and Torres Strait Islander people reside in cities but have an attainment rate only one third that of the non-Indigenous population.
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The University of Melbourne also argued for the extension of the measure to postgraduate fields, where it represents the most direct means of entry to a profession.
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The Department of Education, Skills and Employment noted that, in addition to this measure, the Higher Education Participation and Partnerships Program will be reformed from 2021 to ensure greater support for Indigenous students in accessing and succeeding in higher education.
Additional regulatory protections
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A number of stakeholders expressed concerns about the increased regulatory protections associated with Schedule 4 of the bill, in particular the measures dealing with non-genuine student enrolments and students who fail too many subjects in a given year.
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Griffith University recommended the measures not be included in the legislation as they increase administrative costs and divert resources from teaching, learning and research outcomes. It argued that student debt resulting from over-enrolment was generally caused by enrolments at multiple universities and would be more effectively dealt with by the Department of Education, Skills and Employment, which holds information from all institutions:
…from our nearly 50,000 students, only four were over-enrolled in a way that would fall foul of the Bill and all of them for good reason. Rather than putting a burden on universities to try to share information, it would be simpler and cleaner for the Department to take responsibility for monitoring over enrolment … and to ensure that any non-genuine students detected as a result are not permitted further enrolments.
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Similarly, Edith Cowan University argued for the removal of the measure dealing with student progression as it ‘will impose unnecessary administrative burdens (and penalties) on universities and impinges on the autonomy exercised by institutions in determining the funding entitlements associated with unsatisfactory progress of its students’.
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The Group of Eight questioned the need for enhanced provider integrity measures at all:
There is no evidence provided within the legislation documentation that there are significant issues to be addressed in this space and that the legislative measures are proportionate to the risk. Consequently, without further significant discussion and amendment these measures have the potential to disadvantage students, introduce additional red-tape for universities and undermine the proportionate and risk-based approach to regulation of the higher education system.
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However, the Independent Tertiary Education Council Australia, welcomed the measures and noted they were modelled on those applying to independent providers:
In that context, the inclusion of these measures is welcome. Indeed, were they not included in the Bill, the uneven playing field in the sector and competitive disadvantage for independent providers would be further perpetuated.
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The measures were also supported by the Tuition Protection Service:
The TPS welcomes the strengthening measures to support higher education provider integrity … Strengthening provider integrity and student protection promotes quality in the higher education sector, which reduces the likelihood of a call being made on the HELP Tuition Protection Fund to support students affected by a provider default.
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This view was also reflected by the Department of Education, Skills and Employment, which argued the measures would be critical to maintaining a high-quality higher education sector, particularly given the current increase in online study resulting from COVID-19. The department also noted that the measures will provide students with confidence that they will not incur debt for study for which they are not suited.
50 per cent pass rate
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Several stakeholders advocated for the review or removal of the 50 per cent pass rate for Commonwealth supported students.
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The University of Melbourne described legislation as a ‘heavy handed’ means of encouraging student retention and success. It noted universities already have measures already in place to address student progression and are subject to oversight by the Tertiary Education Quality and Standards Agency (TEQSA):
Universities are required to monitor student progression under the Higher Education Standards Framework and are subject to regulatory oversight from TEQSA to ensure they meet these requirements … In addition, universities have institutional policies for monitoring academic progress which, among other things, require students to enter into a performance improvement plan where progress has been inadequate.
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Stakeholders were particularly concerned about the impact of the provision on students from targeted equity backgrounds:
Students from low SES backgrounds, students from regional areas, Aboriginal and Torres Strait Islander students, and first-in-family students can struggle to adapt to university in their first year. This measure will cut off the Commonwealth assistance for some of these students, preventing universities from being able to properly support these students.
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Equity Practitioners in Higher Education Australasia suggested this provision could shift institutional behaviour and lead to exclusion of high-risk students. Similarly, Griffith University observed that it would make universities more risk averse and less likely to support these students.
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Southern Cross University argued the provision would affect the health and economic circumstances of highly-vulnerable people and act as a disincentive to pursuing higher education at a time when many Australians will need to retrain as a result of the COVID-19 pandemic.
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However, the Department of Education, Skills and Employment highlighted the importance of this measure in preventing students from accumulating large debts. It also outlined the ability of universities to apply ‘common sense if a student’s studies have been impacted by factors outside their control, like ill health, or a bereavement’.
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These aspects of the provision were also noted by Charles Darwin University:
The provision for providers to apply special circumstances in such cases and acknowledgement that higher education providers have their own processes and systems in place to identify, protect and provide support for vulnerable students are an improvement.
Student loan tax reduction
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The bill reduces the loan fee for students obtaining a FEE-HELP loan for an undergraduate course of study at a non-Table B provider from 25 per cent to 20 per cent. The loan fee recognises the cost to the taxpayer of the Commonwealth providing HELP loans. The proposed reduction allows the HELP scheme to remain sustainable, while also reducing the financial burden on students and the time taken to repay a HELP debt.
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The proposed change also aligns the FEE-HELP loan fee with the 20 per cent loan applied to VET student loans.
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The reduction in the FEE-HELP loan fee from 25 per cent to 20 per cent is supported by the Independent Tertiary Education Council Australia (ITECA), which thanked the government ‘for its constructive engagement on this issue’.
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ITECA went further and advocated for the removal of the loan fee. This was supported by Mr Craig Robertson, Chief Executive Officer, TAFE Directors Australia, who expressed concerns about the potential for the loan fee to act as a disincentive to study:
I would have thought that acts as a disincentive, even at 20 per cent. … Whilst we're in a different unemployment situation at this particular point in time, that 20 per cent represents quite a significant impost on the student for what is really little benefit or gain to the government. We would call on that loan fee to be removed altogether.
Call for implementation delay
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There was some concern about the short consultation period and implementation timeframe for the bill. Edith Cowan University recommended a delayed start date of 1 January 2022 and argued that:
The Job-ready Graduates package and the legislation to enact it, has been characterised by limited sector consultation, and a highly ambitious timetable for implementation. While the Government claims that "no current student will be disadvantaged", school students making Year 12 subject selections will be impacted by the "shifting sands under their feet". At the same time, universities have been denied the time to properly plan and adjust their marketing, course offerings, and financial bases for the new Commonwealth funding arrangements.
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Similarly, Griffith University argued for a one-year delay in implementation in recognition of the uncertainty for students and the university sector arising from COVID-19.
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However, other submitters expressed a desire for timely implementation. In expressing its support for the legislation, the Regional Universities Network urged passage of the bill ‘as soon as practicable’ in order to meet growing demand for university places and to allow time for arrangements to be made ahead of the 2021 academic year.
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Professor Rufus Black, Vice-Chancellor and President, University of Tasmania, stated:
We have a pressing need to get the capacity to grow funded higher education places in Australia for next year, not least because of the increase in not only the population numbers but also the COVID numbers, so that there are enough places for Australians seeking higher education to create a new and better future.
Call for post-implementation review
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Given the scale and complexity of the proposed changes, some stakeholders advocated for a post-implementation review to be undertaken. For example, while supporting passage of the bill, Federation University suggested reviewing the legislation within one to two years—during the transition period—in order to identify unintended consequences.
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Other organisations called for the post-implementation review to be built into the legislation or explanatory memorandum.
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For example, Universities Australia proposed amending the bill to require a review of the impact of the legislation three years after it comes into effect.
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The Australian Technology Network of Universities, University of Newcastle and Deakin University suggested the bill or explanatory memorandum be amended to include a review of funding rates, particularly for STEM fields, within 12 months of assent.
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Similarly, the Australian Academy of Humanities called for a review mechanism to be built into the legislation to assess its impact on the sector, student choice, as well as national capacity and workforce needs.
Committee View
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The committee would like to thank all stakeholders for their continued engagement in the development of the bill and through this inquiry process. The committee also recognises the changes made by the government in response to sector, industry and community feedback. Further, the committee understands that consultations will continue as the design and implementation of individual package elements is finalised.
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The committee notes the significant support for the policy aims of the bill, with general support for specific elements such as the funding floor for the Maximum Basic Grant Amount, the restoration of annual indexation, and the flexibility for providers to transfer Commonwealth Supported Places between course levels. However, the committee is cognisant of the more mixed views on other aspects of the bill, including the exclusion of some elements from legislation, the accuracy of the modelling supporting the additional places, the changes to funding clusters, and additional regulatory protections for students.
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The committee heard conflicting views about the accuracy of the modelling behind predicted increases in university places. On balance, the committee accepts the department’s position, supported by the Nous Group, on the delivery of additional places—noting the sensitivity of these estimates to assumptions about university and student enrolment decisions.
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The committee acknowledges stakeholder concerns regarding the changes to funding clusters, in particular the focus on ‘job-relevant’ skills, the effectiveness of price signals in incentivising student choice, the impact on disadvantaged groups, and the impact on university research and STEM teaching. But based on the information presented, the committee is satisfied that the proposed changes are appropriate and would help to equip students with the skills and experience needed to succeed in a difficult labour market. The proposed changes also respond to the evidence presented about areas of future job-growth in healthcare, teaching and STEM-related fields.
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While price may not be the only basis for students’ decisions about courses of study, the committee accepts it is an important element in driving choice. The committee also supports the department’s contention that the bill takes a nuanced approach to pricing, with core skills units such as English in the lowest price band. Further, as cost changes are at the unit level, rather than the degree level, the committee is hopeful the bill will encourage all students to include a range of job-relevant units within their course of study.
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The committee heard concerns that the changes to funding clusters would have a disproportionate impact on disadvantaged groups, particularly women, Aboriginal and Torres Strait Islander students, students from low SES backgrounds, and first in family students. However, the committee also heard evidence that the bill would lower costs in female-dominated fields such as teaching and nursing, as well as encourage women to enrol in STEM fields, which provide higher lifetime earnings than a humanities degree. The committee was encouraged by evidence from Charles Darwin University that a significant proportion of its female and Indigenous students would be better off under the new arrangements.
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On reflection, the committee is not persuaded that the changes would impact negatively on disadvantaged groups—particularly given the other significant equity measures in the bill, such as demand driven funding for Aboriginal and Torres Strait Islander students from regional and remote Australia, the IRLSAF, and measures designed to boost tertiary education participation and attainment rates of regional and remote students.
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The committee also heard strong concerns about the impact of changes on the sustainability of university research funding. A number of stakeholders highlighted that separating funding for teaching and research removes the ability to cross-subsidise research costs not covered by other revenue sources. Concerns were also raised about the flow-on effect for STEM teaching, given the symbiotic relationship between research and teaching. While acknowledging these concerns, the committee is reassured by the formation of the Research Sustainability Working Group, which aims to address research sustainability. The committee notes that a priority for the group is to consider options for short and medium-term support to fill the revenue shortfall arising from the loss of the international student market.
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Similarly, the committee is satisfied that the design of the Job-ready Graduates package, including the $650 million Transition Fund, would help universities adjust to the changes and ensure they are not worse off in base funding terms between 2021–2023.
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The committee is aware of universities’ concerns about the administrative impact of the additional regulatory protections in Schedule 4 of the bill. However, the committee shares the department’s view that these protections are critical to maintaining the quality of the higher education, particularly as more study moves online as a result of the COVID-19 pandemic. The committee also notes that Schedule 4 better aligns regulatory protections in the public and independent higher education sectors.
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A number of stakeholders argued for the 50 per cent pass rate provision to be removed or reconsidered in light of existing measures universities have in place to address student progression. The committee supports this provision in light of concerns about students accumulating large debts, without ever completing a degree. That said, the committee understands the concerns raised by stakeholders and is reassured by the department’s evidence that providers would have the power to apply common sense in cases where a student’s studies are impacted by factors outside their control.
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More broadly, the committee appreciates that the bill forms an important part of Australia’s response to the challenges presented by the COVID-19 pandemic. However, the committee is also mindful that the precise impact of the pandemic will only become apparent over time. Therefore, in order to assess the impact of the bill, the committee sees value in undertaking a review of its operation two years after its commencement.
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In the committee’s view, an appropriate balance has been struck between the legislation and delegated legislation underpinning implementation of the Job‑ready Graduates package. The approach taken allows the design of the package to respond to changing needs and circumstances, while still enabling parliamentary oversight through scrutiny and disallowance. The committee also notes stakeholders will have an ongoing role in the design process and welcomes the establishment of working groups to progress a number of measures.
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Overall, the committee believes the bill will deliver policy and funding certainty for the sector, providing additional funding and expanding the places available for prospective Australian university students. The committee also recognises the particular benefits for regional students, universities, and communities. Accordingly, the committee recommends that the bill be passed.
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The committee recommends that the government undertake a review of the bill two years after commencement.
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The committee recommends the bill be passed.
Senator the Hon James McGrath
Chair