Chapter 1 - Majority Report
1.1
On 11 August
2004, the Senate referred to the Legislation Committee for inquiry,
the Higher Education Legislation Amendment Bill (No.3) 2004. The committee was
due to report on 2 September.
1.2
Submissions were called for immediately and a public
hearing was arranged in Melbourne
for 19 August. Nine submissions were received.
Provisions of the bill
1.3
The Higher Education Legislation Amendment (No.3) Bill
is omnibus legislation which amends four acts. Among other provisions, the
proposed amendments extend funding for radiation oncology training; they ensure
the continuation of summer school arrangements; add Melbourne University Private
Limited (MUPL) to the list of Table B providers eligible to access Commonwealth
funding for research and FEE-HELP; and allow more flexible arrangements for
students applying for financial assistance, including extension of access to
assistance for students under the OS-Help scheme. Altogether, the amendments
proposed in the bill will increase appropriations by over $500 million.
1.4
The committee's consideration of the bill was limited
to the inclusion of Melbourne University Private to the list of Table B
providers. Matters were raised about the timeframe of the legislation in view
of the Senate's crowded schedule of legislation, and the lead-times for the
drafting of amendment bills following consultation with universities. While the
committee recognises the obligation on governments to plan legislative measures
well ahead of time, it is also sympathetic to claims from interested parties
affected by legislation to ensure that consultation takes place and that
governments are able to act on the best advice available. These requirements
weigh more heavily on the Senate workload toward the expected end of a parliament.
Provision relating to Melbourne University Private
1.5
The committee notes that government policy is to
develop a more sustainable and diverse higher education system so as to meet
the varying training and professional skills needs of industry. The flexible
and multi-disciplinary delivery of academic courses is a challenge taken up
just as readily in the private sector as in public universities. It is
Government policy to encourage the private higher education sector to increase
its share of that market.
Relevant facts about Melbourne
University Private
1.6
Melbourne University Private Limited (MUPL) is an
unlisted public company of which the University
of Melbourne is the sole
shareholder. The university was established in July 1998 under a Ministerial Order
of the Minister of Education, renewable in five years.
1.7
During its inquiry into higher education in 2001, the
committee received evidence from Melbourne University and its vice-chancellor
at the time, Professor Alan Gilbert, about the potential of MUPL to use its
competitive advantage, and the Melbourne University 'brand' and world-class
expertise to generate revenue for the university. This would happen as a
consequence of tapping into niche markets servicing the specialised needs of
industry: markets which traditional universities could not meet because they
lacked the course flexibilities required.[1] The committee
notes that while capital growth projections may have been optimistic, MUPL has
been successful in developing courses for government agencies and several
foreign clients, including PETRONAS, the large Malaysian oil corporation, and
for a number of foreign aid agencies.[2]
1.8
The committee notes advice from MUPL that it is a
self-accrediting institution whose academic and commercial operations are
focussed on its School of International
Development, School
of Applied Language Studies and its
School of Enterprise.
Around 130 full-time equivalent staff are employed, including staff placed
overseas in joint ventures. MUP currently has 344 award students, over 1000
non-award students and a turnover of $55 million in 2003-04.[3]
1.9
At the end of first three years of operation, the
Minister for Education and Training in Victoria
ordered a review by an expert panel to establish whether MUPL had met the
MCEETYA principles known as the National Protocols for Higher Education
Approval Processes. The committee heard evidence from Professor
Simon Marginson,
one of the accreditation panel members appointed by the Minister, that
reaccreditation was recommended subject to MUPL developing a comprehensive
research program.[4]
The way was now clear for MUPL to apply
to be placed on the Table B list of higher institutions eligible to accept
FEE-HELP recipients, and recipients of Commonwealth funded research grants.
Table B inclusion
1.10
The Higher
Education Support Act 2003 provides for two ways for approving funding for
institutions: either through an amendment to the act to list the institution on
either Table A or B, or through identification and approval by the Minister as
a 'higher education provider'. This second option, which is subject to
disallowance by the either House, is not appropriate in the case of Melbourne
University Private. A listing on Table B through legislative amendment will
allow MUPL eligibility for research funding through the Institutional Grants
Scheme and allow its teaching staff to apply for Australian Research Council
grants. This amendment will allow the provisions that currently apply to some
other private universities to apply also to Melbourne University Private.
1.11
Inclusion on the Table B list is dependent on a state
legislative or executive instrument, as earlier described. The committee took
evidence from the Department of Education, Science and Training (DEST). Officials
told the committee that in the course of deliberations on the inclusion of MUPL
on Table B, the minister had asked for assurances that MUPL's inclusion was
consistent with the MCEETYA protocols. A financial viability check was done, including
the adequacy of capital backing and sustainability, and possible issues that
would bring into question MUPL's continued financial viability. The minister
acted on the basis that there was adequate asset backing and that quality
assurance processes met the required standard.[5]
The independence of Melbourne
University Private
1.12
Government senators noted the extensive probing that
their opposition colleagues made in relation to the independence of MUPL and
its relationship with the University
of Melbourne. There has been
consistent ideological opposition to the establishment and continued operation
of MUPL. The case against MUPL has been made at some length in evidence to the
committee, although this cause has not been pursued with as much vigour by
those associated with the higher education sector as it has been by the
opposition. As the NTEU pointed out, they have members associated with MUPL.[6] While the
opposition members of the committee take the view that MUPL is a failed
institution approaching the end of its existence, the NTEU has stated that it
has little argument with the importance or quality of the services offered by
MUPL, and recognises its potential value as an income stream for its parent
institution, the University of Melbourne.[7]
1.13
The issue of the independence of MUPL vis-a-vis Melbourne
University is irrelevant to the
issue of including MUPL on Table B. It is difficult to understand the link that
the opposition is attempting to make. The MCEETYA protocols declare that
institutions must be self-accrediting, as MUPL is, but they do not stipulate 'independence'
as an essential criterion to be met. As the NTEU submission points out, MUPL is
a wholly owned subsidiary of Melbourne
University. The board of MUPL
includes among its number the vice-chancellor of Melbourne
University. The chairman of the board
of MUPL is a University of Melbourne
council member and the third (of a total of eight councillors) is a senior
administrator of Melbourne University.
The president of the academic senate of MUPL is appointed by the
vice-chancellor of Melbourne University.
So while MUPL is a self-accrediting institution, its role as an adjunct to Melbourne
University remains. The Government
has not regarded the status of MUPL - as compared to completely autonomous
institutions such as Notre Dame or Bond
universities - as being relevant to the issue of inclusion on Table B.
1.14
Opposition senators have suggested that the
relationship of dependency between MUPL and Melbourne
University means that MUPL has
breached MCEETYA protocols and on these grounds is ineligible for Table B
status. As DEST officials advised:
Regarding independence under the MCEETYA protocols, if you were
seeking to be a self-accrediting institution or a university, it goes to your
academic independence and your financial viability. Financial viability can be
achieved through partnerships and arrangements with owners who have equity. The
requirements under the new arrangements for Melbourne University Private mean
that they establish their own independent academic board and committee to
establish the qualifications that Melbourne University Private accredit. So
they have independence in the accreditation of their award offerings.[8]
1.15
DEST officials were asked whether the independence of
the course accreditation process was affected by the 'branding' of MUPL's courses.
The response was that this was a commercial arrangement between the two
institutions: that Melbourne University Private has the power and the
responsibility to determine and accredit its own awards. If it then chooses to
badge them with a Melbourne University
crest, then it has to get certification for that award from the University. The
fact that MUPL has chosen this course does not mean that they cannot change
this approach and determine their own awards beyond that agreement. MUPL is
entitled under Victorian law to make its own arrangements in regard to
licensing agreements, just as it has the right to issue and accredit its own
awards.[9] The
committee sees this as meaning that the Commonwealth is bound to take that as a
protocol met in full. The committee regards MUPL's decision to enter into these
arrangements as determined by commercial considerations which are not relevant,
in the case of this inquiry, to the committee's scrutiny of the bill.
Recognition of state legislation
1.16
As noted above, the MCEETYA protocols have legislative
force in Victoria
through the Tertiary Education Act 1993.
This is the legislation under which the Ministerial Order is made to approve
MUPL's operation as a university. The states are the 'gatekeepers' to the
higher education sector. That is their role. As the submission from Melbourne
University noted, Commonwealth
funding vetos on universities properly constituted under state acts, and
meeting MCEETYA guidelines would effectively block new universities which
lacked significant political patronage.[10] The
submission continued:
It would create a situation in which state governments insist on
research output while the federal government forbids new universities access to
the funds required to produce this output. It is difficult for new universities
to attract researchers and research students if they are denied access to
research funding available to other (in this case, all other) universities.[11]
1.17
To take no regard for the decision of the state
minister in extending accreditation, despite national agreement on the MCEETYA
protocols, would be an unwarranted affront to all state governments by
implication. Government senators note the inconsistent attitude of opposition
senators in the view that they hold on this issue. In previous reports on
higher education they refer to the Government's disregard for state
prerogatives. Their action in recommending that MUPL be removed from Table B
amounts to the same thing.
Research issues
1.18
A major condition in the 2003 Ministerial Order relates
to research output. It is stipulated that Melbourne University Private must
achieve an average research output of one DEST research point per equivalent
full-time member of academic staff per year. The committee notes the claim that
many universities do not meet this criterion, but that Melbourne University
Private accepted this condition, and the research report to be presented to the
Minister Kosky at the end of August shows that MUPL has surpassed this
benchmark with 1.14 papers per full-time equivalent academic staff member.
Government senators are prepared to accept that the research output conditions
have been met if that has been the conclusion arrived at by the Victorian
Government. As evidence from DEST officials made abundantly clear, this has
nothing to do with the Commonwealth. They acknowledge only that MUPL is adhering
to conditions laid down by the Victorian minister.
1.19
Opposition senators appear to find some of the research
effort questionable, and identify the possibility that academics working across
the two institutions, MUPL and Melbourne
University, may have had their
publications counted twice. It is not the role of this committee to engage in
any speculation amounting to an audit of its own.
1.20
A reference was made during debate on this bill in the
House of Representatives to the absence of the MUPL's 'research profile' and
the 'sticking point' that his raised with the Victorian Government.[12] As noted
earlier, this 'sticking point' was easily resolved through the MUPL's ready
acceptance of the MCEETYA research protocol. The committee notes the response
to such comment from the vice-chancellor of Melbourne
University, Professor
Kwong Lee Dow,
who submitted that such a research capacity could not be developed without
funding.[13]
The committee makes the point that few of the universities that we now refer to
as the Group of Eight had any research capacity in the early 1950s. Capacity
was developed through Commonwealth funding distributed on not dissimilar lines
that that operated today by the Australian Research Council. The committee sees
no reason why MUPL staff should remain ineligible for ARC grants, which are
made against merit criteria.
1.21
Furthermore, the Council of Australian Postgraduate
Association (CAPA) and the Federation of Australian Scientific and Technology
Societies (FASTS) have tried to argue that the admission of MUPL to Table B
will in some way 'dilute' the total research funding that is available to all
the other universities.[14] This is a
spurious argument given the number of institutions already eligible, and given
that grants are based on merit. It cannot be argued on the one hand that MUPL
lacks sufficient differentiation and autonomy from Melbourne
University to be a Table B member,
and at the same time ignore the fact that MUPL is a likely partner in research
with Melbourne.
1.22
From the committee's perspective, the synergy that was
intended to exist between the two institutions is capable of embracing research
within the commercial relationship. The committee sees the objections of interest
groups like CAPA, FAST and the NTEU as demonstrating a barely disguised
ideological antipathy toward the kind of commercial experiment pioneered by Melbourne
University and which is still
evolving. The objection which the Government's critics have to the inclusion of
MUPL on Table B is the impetus that this may provide for collaborative research
efforts entered into by Melbourne University Private.
1.23
Finally, the committee notes comment from Professor
Simon Marginson
that the success of MUPL may encourage similar public-private arrangements by
other members of the Group of Eight.[15] This is
highly speculative. It is answered in part by comment in the submission from
MUPL. New universities will only be established if the meet the MCEETYA
protocols, which are a major disincentive to new entrants. Of six recent
applications for university status, only Melbourne University Private has been
successful.[16]
More broadly, the peculiar business and political circumstances that saw the
birth of MUPL are likely to arise infrequently. As Professor
Marginson has observed, the issue of public
benefit probably transcends the old argument about public versus private in the
education sector. The committee regards community service obligation as
befitting private institutions as well as public institutions, and, with Professor
Marginson, notes the indigenous education
work done in the Kimberleys by Notre Dame
University as noteworthy in this
regard.
1.24
The committee believes that this work must begin
somewhere. It looks to the long-term benefit likely to accrue to Melbourne
University Private and to the beneficiaries of the research and the teaching it
undertakes.
Other matters
1.25
The committee received submissions relating to one
other matter: amendments to the Higher
Education Support Act 2003 to facilitate out-of-semester full-fee
undergraduate subjects. Submissions from the Australian Vice-Chancellors'
Committee and the University of Melbourne
gave strong support for this measure which has become necessary as a result of
a review of the legislation. Under the act as it stands, most universities
would be forced to discontinue their summer school programs, given that it is
unlikely that students would choose to enrol for a fee-paying course if they
could enrol as Commonwealth supported students. Universities would lack the
additional income to cover the costs of the summer school.[17]
1.26
As noted at the beginning of the report, this amendment
can be regarded as normal 'machinery' legislation, and its delay can be
attributed to the exigencies of the legislative timetable at the end of a
parliament.
Recommendation
The committee commends this bill to the Senate and recommends its passage without
amendment.
Senator John Tierney
Chair