Debt Ready Graduates
Introduction
I thank the committee and the secretariat for the work they have done in relation to this inquiry.
At any point in time, nations should invest in their future by educating its young citizens. ‘Should’ changes to ‘must’ in the wake of a not yet concluded pandemic. This bill is a move in the wrong direction.
Effects of the Bill
Whether I read the submissions from Adelaide University, Flinders University or the University of South Australia (through the Australian Technology Network of Universities) the outcomes of this bill are not good.
The University of Adelaide articulated its concerns well in its submission with the Bill assessed to deliver:
… a 9 per cent increase in HECS charges [for the students]
… a 15 per cent reduction in federal support [for the University]
… a very significant cut to core funding for university research.
This bill is bad for students, bad for universities, bad for research, bad for South Australia and bad for Australia.
Three Steps Backwards, Two Steps Forward
Mr Dom English, First Assistant Secretary, Higher Education Division, Department of Education (the department), Skills and Employment – confirmed that the department had provided advice to the Minister on the cost of granting South Australian universities regional status such that they would receive additional funding.
The South Australian Vice Chancellors all agreed that the granting of regional status to their universities would be better, but overall would be a case of three steps backwards, two steps forward.
Any amendments to the bill which addressed some funding issues would not solve the problems with student costs and the reduction in research funding.
Objectives of the Bill
This bill seeks to steer students into STEM subjects such that they are job ready. Again, the University of Adelaide articulated the concerns well:
Universities will receive reduced funding per student in many of the STEM disciplines, including engineering, science and agriculture.
The (Interim) Vice Chancellor of the University of Adelaide articulated at the hearing a more perverse example of this bill’s flawed approach:
Maybe I could try a hypothetical on you. Let's suppose a university is one science student below its quota, its cap. Then adding one science student takes it up to its cap. A university could instead add 15 humanities students to take it up to the cap. Now the science student is going to net you $24,000 or $25,000. Fifteen humanities students will net you around $235,000. There's the potential for universities to be driven by that factor…
Apart from the flaws identified above, there was no evidence presented to the committee that suggested that increased debts would significantly or systematically influence course choice. HECS-HELP debts in the distant future are too abstract a consideration to subvert natural interest. Students will have an affinity with a particular field of study … and that’s what they will study.
Universities use the Australian Tertiary Admission Rank, not a distant price signal, as a method of regulating student distributions across courses.
This bill is so broken, it will not achieve its intended outcome.
Conclusions
This bill is a crude and blunt instrument that will likely do much harm to the interests of students and universities at a time when the tertiary education sector is reeling from the effects of the COVID-19 pandemic.
This bill cannot be salvaged. Anyone who thinks so is kidding themselves, or worse, being quite disingenuous. It’s not the case of Minister Tehan sitting the exam again, he’s got to go back and repeat the course.
Senator Rex Patrick
Senator for South Australia