Chapter 2 - Opposition Senators' report
General comments
2.1
The Opposition has accepted the necessity and
desirability of speedy passage of all provisions in this bill, with the
exception of that contained in section 16-20, regarding Melbourne University
Private (MUPL). However, the Government's decision to prorogue the 40th parliament
means that any such speedy passage is precluded. The issues discussed in this
report, and that are dealt with in the bill more generally, will now become a
matter for the next parliament.
2.2
Opposition senators note the submission to the inquiry
from the Department of Education, Science and Training and supporting evidence
provided at the public hearing of 19
August 2004. It is accepted that, with the exception referred to in
2.1, the amendments to the four Commonwealth Acts proposed are reasonable and,
in some instances, essential for the conduct of important functions and
activities of higher education institutions. In particular, as the Australian
Vice-Chancellors' Committee (AVCC) has pointed out, the amendments, contained
in sections 36-10 and 36-11, designed to allow universities to continue to
operate summer schools on a fee-paying basis (provided that units offered are
also available at other times to Commonwealth-supported students), need to be
enacted as soon as possible. To fail to do this would be to prevent
universities from offering such programs during the coming summer break and
would seriously affect many students. In making these observations Opposition
senators draw attention to the fact that the central purpose of this bill is to
deal with omissions, oversights and mistakes on the part of the Government in
the formulation of its higher education legislative package of 2003. Some of
these errors, especially that concerning the conduct of summer schools
mentioned above, would, if unattended to, cause significant hardship and
difficulty for universities themselves as well as for students.
2.3
It is unacceptable that this bill, seeking to redress
these problems, was introduced so hastily, and at a point in the legislative
cycle where severe time constraints would inevitably arise. Unfortunately, by
introducing the bill so late in the life of the parliament, the Government has
now ensured that universities and their students will be inconvenienced by
delays in righting the oversights and errors of the legislation passed with
such haste by the Parliament in December 2003. There is no reason discernible
to the Opposition that these matters could not have been dealt with in a more timely
fashion.
2.4
The legislative framework for higher education enacted
in 2003 is, as Labor senators noted at the time, fraught with inconsistencies,
administrative ambiguities and bad policy. It creates grave problems for
universities in attempting to navigate its impossible provisions. The bill
currently before the Parliament tries to deal with a few of the unworkable
aspects of the legislation as enacted. The deal struck between the Government
and the four independent senators immediately prior to, and even during, the
Senate debate of December 2003 bears the hallmarks of a rushed job which has
neither internal consistency nor policy integrity. Concessions and amendments
made on the run with independent senators in order to secure their support have
left an unfortunate legacy that universities, their staff and students have to
live with. The independent senators, for their part, pursued isolated issues
and goals, apparently unable to see the legislation as a whole package that
required internal coherence. The Government's deviousness and ruthlessness in
pursuit of passage of the bill led to the unfortunate and entirely avoidable
outcome of a weak, unworkable legislative framework.
2.5
Further, in accordance with common practice on the part
of this Government, this bill attempts to introduce, alongside eight
non-contentious provisions, one particular amendment to higher education
legislation that is highly controversial: the matter of the addition of
Melbourne University Private Limited (MUPL) to Table B of the HESA legislation.
In this way the Government seeks to force the passage of this particular
provision on the back of arguments that the remaining provisions are routine,
desirable and even essential for the continued operation of various functions
of universities. Opposition senators do not regard it as appropriate for the
Government to try to secure by such means passage of a measure about which
serious questions and doubts have been raised, and which is strongly opposed by
major stakeholder groups and policy experts alike.
2.6
The issue of Melbourne University Private is extremely
contentious. Ever since the initial establishment of this entity by the University
of Melbourne in 1997, controversy
has reigned about its nature, purpose and status. It is reported that the Board
of the AVCC recently rejected an application by MUPL for membership of that
body, apparently on the basis that MUPL was not a university independent of its
parent, the University of Melbourne. [18] The
question of the relationship between MUPL and the University
of Melbourne has proved to be a
crucial one for this inquiry. The independence and self-sufficiency of MUPL as
an academic institution is a matter of central relevance to its capacity to
meet the test of the MCEETYA Protocols.
2.7
Opposition senators have serious doubts about the
capacity of this entity to comply with the MCEETYA Protocols as set out for
universities, and in particular to meet the conditions laid down by the
Victorian Minister for Education and Training, Ms
Kosky, for the continuing accreditation of
MUPL as a recognised university in that State. Of crucial concern is the status
of MUPL’s research profile, and the question of its standing as a site of
scholarly research. Opposition senators contend that no institution that fails to
measure up to the standards required by the MCEETYA Protocols should be
recognised by the Commonwealth through listing on Table A or Table B of the Higher Education Support Act 2003.
2.8
Accordingly, Opposition Senators believe that the bill
under consideration should be split to allow immediate passage of all
amendments except that relating to the addition of Melbourne University Private
to Table B of the Higher Education
Support Act 2003.
2.9
The remainder of this chapter deals with the matter of
Melbourne University Private's inclusion on Table B of the 2003 Act. Due to
concerns regarding the independence and self-sufficiency of Melbourne
University Private's operations, and a concern to ensure that the standards set
out in the MCEETYA Protocols are upheld, Opposition senators believe that at
this time it is inappropriate to include Melbourne University Private on Table
B of the Higher Education Support Act
2003. As such it is recommended that the portion of the Bill
to include Melbourne University Private on Table B should be opposed in the
Senate.
Melbourne University
Private: Conditions for continued recognition as a university
2.10
The committee received eight written submissions
pursuant to this inquiry, and heard in addition evidence from five parties,
including two expert witnesses. Aside from that of the Government, only two
submissions (those of Melbourne University Private itself and its parent
institution, the University of Melbourne)
supported the addition of MUPL to Table B. Evidence provided at the public
hearing, in particular the evidence offered by MUPL representatives, leads
Opposition senators to conclude that Melbourne University Private should not be
admitted to Table B. The Opposition believes that, given the provisions of the
licensing agreement between the two parties, MUPL cannot be regarded either as
a genuinely independent, self-accrediting university. Nor can it be regarded as
a higher education institution that satisfies the standards and requirements of
the MCEETYA Protocols as approved by all States and Territories and the
Commonwealth in 2000.[19]
The MCEETYA Protocols form the basis of the conditions set out by Victorian
Minister, Ms Lynn
Kosky, in her Ministerial Order of July 2003
granting the institution provisional approval for a further five years as a
recognised university under the Victorian Tertiary
Education Act 1993.
2.11
In her letter of July 2003 to Mr
David Lloyd,
Chief Executive Officer of MUPL, Ms Kosky
makes the following statements regarding the conditions laid down:
I must emphasise that I will treat each and every one of these
conditions, and their timelines very seriously. If they are not met by the
times specified I would revoke MUPL’s approval to operate as a university.
2.12
Opposition senators have paid close regard to the conditions
and caveats associated with the Victorian Minister's Order. It is contended
that the demonstrated failure on the part of MUPL to meet all of these
conditions by the times specified should cast grave doubt on the credentials of
the entity, and its claim to university status.
Compliance with Ministerial Order on research output
2.13
During the public hearing of 19 August the committee
devoted considerable time to an examination of the extent to which MUPL had met
Condition One laid down by Minister Kosky.
This condition set a deadline of July 2004 (taken by all parties to mean 1 July 2004) for the provision of a
report on the research output of MUPL, as follows:
Condition One: As a condition of approval to continue
to operate as a university there be by July 2004 from each of the three Schools
evidence of at least one peer-reviewed externally-published research output per
equivalent full-time (EFT) of academic staff, and that this level of research
productivity constitutes the minimum for each of the subsequent four years.
Such research
outputs should meet the specifications required by the Commonwealth Department
of Education, Science and Training for its higher education research data
collection.
2.14
The Opposition senators interpret this condition, in
its reference to the DEST specifications, as referring directly to research
outputs: that is to say, the Condition requires the research outputs (publications) to meet the DEST specifications as
set out in its guidelines. Accordingly, the research outputs as listed by MUPL
were examined closely in the preparation of this report.
2.15
In an answer to a question on notice, MUPL asserts that
it had been advised by the Office of Higher Education in Victoria
that:
...the condition referred to the total number of publications produced
by staff in the University, provided that the total number divided by the total
number of full-time equivalent academic staff was equal to or greater than one
publication per academic staff member.
2.16
This statement does not refute the claims made below by
Opposition senators on the status of MUPL's research publications vis-a-vis the
DEST guidelines. This advice is immaterial to the issues discussed below: the
condition referred to a requirement that the publications themselves meet the
DEST criteria, and did not refer to point values to be assigned to the
publications.
2.17
The publications are clearly required by Condition One
to meet the DEST guidelines. Condition One does not specify that only some of
the DEST guidelines are relevant, but refers to all the criteria. This matter
does not go to what MUPL refers to in the same answer to a question on notice
as 'the academic merit or social significance of research publications' except
in so far as the academic merit of such publications is underpinned by the DEST
criteria, including the requirement for application of strict peer review
processes. The DEST criteria go to issues of originality, scholarly achievement
and contribution, and to the status of any given publication according to
well-accepted measures such as the standing of journals and publishers in the
academic community. It is a nonsense to assert, as MUPL tries to do, that
reference to the DEST guidelines entails only that MUPL's research publications
are to be counted according to DEST point values, and its staff weighted along
DEST-approved lines, if the publications produced do not meet the other
requirements set out in the guidelines: requirements that go to their
acceptability in the academic community as bona fide scholarly works.
2.18
In the view of Opposition senators, there is very
strong evidence that MUPL has failed to meet Condition One. If this evidence is
sound, it entails the conclusion that MUPL is not a university, as defined by
Victorian legislation. It is of course a matter for the Victorian Government to
assess this evidence for itself. It is not the business of the Senate to
examine the merits of the actions or decisions of any state government. The
Commonwealth must look to its own interests. Whatever the position to be taken
by Victoria, Opposition senators believe that the detail of the considerations
that have come to light in the course of the inquiry bring into serious
question the advisability of the Commonwealth's moving at this time to accord
MUPL the status of a stand-alone university, satisfying the MCEETYA Protocols
to the extent that it deserves inclusion on Table B of the Act.
2.19
Under detailed questioning about its research record
and output, as presented to Minister Kosky
pursuant to Condition One in its Research Report 2003-2004, MUPL
representatives exhibited a disturbing ignorance of the DEST eligibility
criteria for research publications, and in particular of the extent to which
the research publications listed in the report met these criteria. For example,
in the case of two undergraduate history textbooks co-edited by an academic
staff member, the representatives asserted that the publications satisfied the
criteria as set down.[20]
They appeared unaware that the DEST guidelines specify that books 'unlikely to
meet the criteria' include 'textbooks, anthologies, edited works...and
revisions/new editions'.[21] Furthermore,
the representatives seemed unaware that both books fitted all of these
descriptions, meaning that the publications were extremely unlikely to meet
DEST’s criteria: they failed on four counts.
2.20
The representatives of MUPL also seemed unaware of the
DEST specifications regarding author affiliation stated on research
publications. Two publications by a second academic staff member of MUPL,
listed in the MUPL Research Report, identified this staff member as employed by
the University of Melbourne
and not by MUPL. Comments made in answer to a question taken on notice on this
matter by MUPL representatives do not go to the salient issue: the DEST
guidelines (4.3.2, p.19) specify that the author has to identify an affiliation
with the relevant institution on or in the publication, or otherwise provide a
statement that the publication was produced in that person's capacity as a
staff member of the relevant institution.
2.21
The written answer says: 'So it is actually irrelevant
whether [the staff member in question] lists himself as both Melbourne
University Private and University of Melbourne'.
2.22
The point made by Opposition senators is that the staff
member failed entirely to mention in the publications in question that he
worked for MUPL in any capacity whatsoever or at any time: he identifies
himself only as a staff member of the University of Melbourne.
2.23
Further matters were raised, including the nature and
standing of a number of conferences held in Indonesia,
China and Hong
Kong. The representatives were unable to assure the committee that
papers submitted for these conferences had been subjected to peer review
processes equivalent to those followed in Australia.
Subsequently, in an answer to a question taken on notice, MUPL stated that all
publications, including conference papers, were 'properly referred by
international academic peers'. Opposition senators have undertaken their own
investigations on this matter and have satisfied themselves that, at least in
the cases of two of four overseas conference papers to which a certain MUPL
staff member contributed, refereeing processes were almost certainly much more
lax and informal than those normally required in Australia.
For example, no written referees' reports were required. The avowed inability
of MUPL to produce referees' reports pertaining to these conference papers may
be apposite to the issue.
2.24
It was put to the representatives that, of the twelve
publications claimed by MUPL as contributing to its research output for the
purpose of satisfying the Victorian Government's Condition One, only two items
clearly met the required DEST criteria. Serious doubts existed about five
further publications, while it seemed clear that five failed to meet DEST
specifications.
2.25
Witnesses for MUPL told the committee that the research
output listing had been audited by a firm of accountants, HLB Mann Judd.[22] However, it
was unclear from the comments made by MUPL representatives that the auditors had
done any more than to examine the report to ensure that it included correct
calculations of the number of effective fulltime academic staff and the point
value that the DEST rules would ascribe to the publication, should the listing
be submitted to the Department for its own research data collection purposes. As
Dr Massaro
said:
They are required to establish that we have followed the
processes, the measures and the definitions which have been stated by DEST to
be the way in which a calculation is made of both the value of each publication
and the number of academic staff.[23]
2.26
The Opposition senators note that Condition One
attached to Minister Kosky’s
determination did not require MUPL to assign value points, as specified in the
DEST guidelines, to its research publications as listed: the Condition went
only to the criteria for eligibility for actual inclusion on the list as
provided.
2.27
If the auditors actually examined the publications to
assure themselves that the books and papers listed met the scholarly and other
formal requirements to be included on the list as eligible research
publications, then it is contended by Labor senators that their auditing
processes failed to reveal the inadequacies and irregularities in the listed
publications referred to here. While it is accepted that universities often
engage accountants to audit their research reports, it would seem that, on this
occasion, a thorough audit was apparently not conducted.
2.28
Subsequently DEST officers told the committee that, to
their knowledge, MUPL had not submitted the listing to the Department.[24] They pointed
out that, because the institution was not listed on either Table A or Table B
of the Act, MUPL was not required to submit the report to DEST. Therefore no
claims could be made that the report had been approved in any sense by DEST.
2.29
It seems to Opposition senators that representatives of
MUPL obfuscated the issues surrounding the compliance of its research report
listing with the DEST criteria. They have tried to concentrate the committee's
attention on technical issues concerning the allocation of point values and the
calculation of fulltime equivalent staff numbers, rather than the real issue of
the extent to which MUPL's research output measures up according to commonly
accepted scholarly criteria. It is understood that the DEST specifications are
well known by members of the Australian academic community, all of whom must
prepare annual returns of their own research publications for submission to
DEST. Therefore it is more than a little odd that the MUPL Research Report for
2003-2004 has been signed off by Professor
Michael Webber
as 'Vice-President and Provost'. It is difficult for Opposition senators to
believe that Professor Webber
would not have raised doubts about the advisability of including at least some
of the publications listed in the report.
2.30
Labor senators contend it is more than likely that all
five publications said to emanate from the School
of International Development for
the year 2003-04 fail to meet the DEST criteria as eligible publications. Thus
it follows that MUPL has failed to meet the condition laid down that all three
schools must produce eligible research outputs within the year. One school has
failed the test.
2.31
Opposition senators conclude that there is clear
evidence that MUPL has failed to meet Condition One as laid down by the
Victorian Government in that, by 1 July 2004, the institution could not provide
a list of research publications, meeting the DEST criteria, including a number
of eligible publications equal to or greater than the number of effective
fulltime academic staff of MUPL. If it is accepted that the audited number of
fulltime-equivalent staff is correct at 7.6, then, even were only the prima
facie obviously ineligible publications excluded, the listing would number 7.0.
If, as is much more likely, all or most of the five publications of doubtful
status were examined in detail and found also to be ineligible, the ratio of
publications to academic staff would fall further. MUPL would clearly fail the
test of Condition One. Therefore there is unambiguous evidence that MUPL's
research output does not measure up to that expected of a genuine university.
2.32
Under these circumstances, Opposition senators consider
that the Commonwealth would be extremely ill-advised to proceed at this time to
list Melbourne University Private on Table B of the Act. The future of MUPL as
an accredited university that meets the MCEETYA Protocols must be in grave
doubt.
2.33
MUPL in its submission, and the Minister, Dr
Nelson, have both claimed that without
listing on Table B of the Act, MUPL will have difficulty in achieving a
satisfactory standard in terms of recognised research output. Dr
Nelson put the argument as follows:
The Victorian government approved the operation of the university
subject to it making ongoing improvements in its research profile. It should be
remembered that while Melbourne University Private remains unlisted members of
its academic staff are unable to apply for-or, indeed, to hold-grants from the
Australian Research Council. The university cannot access funding under the
Research Training Scheme or the Institutional Grants Scheme.[25]
2.34
Opposition senators point out that the other
universities listed on Table B - University of Notre Dame and Bond
University - were both required to
attain appropriate research profiles prior to their recognition for
Commonwealth research funding. Indeed, it was their standard and record in this
regard that was considered in assessing those institutions for this purpose.
2.35
Finally, Government senators in their report say: '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'.
2.36
Opposition senators emphasise that, as at the date of
tabling of this report, the Victorian Government has made no announcement that
it has arrived at such a conclusion.
Governance and independence of MUPL
2.37
MUPL is a wholly owned subsidiary of the University
of Melbourne. It was established
essentially as a commercial entity to ensure a revenue stream to the University
of Melbourne; to allow the University
of Melbourne to avoid regulatory
requirements of the former Higher
Education Funding Act 1988; and to permit the University
of Melbourne to conduct activities
and accredit courses that might be narrowly commercial in focus.[26] With regard
to accreditation of courses, the licensing agreement between MUPL and the University
of Melbourne states that the
President of MUPL is to be appointed by the Board of Directors on the advice of
the Vice-Chancellor of the University
of Melbourne (who is also a member
of the board). This was confirmed by MUPL at a public hearing.[27] The NTEU told
the committee that this significantly strengthens Melbourne
University's hand on the board.[28] The
Opposition also heard evidence that the accreditation and certification process
as it currently stands makes it hard for MUPL to sustain the argument that it
operates as an independent entity.[29]
2.38
The committee was told that MUPL is to deliver courses
effectively only where they are certified by the University
of Melbourne. MUPL informed the
committee that the University of Melbourne certifies its courses, which are
awarded using the brand name of Melbourne University Private with the Melbourne
University crest: 'the purpose of the agreement is to ensure that whenever that
crest is used as part of our awards, the award itself has been duly certified
by the University of Melbourne in terms of the use of that crest'.[30] It is
difficult to imagine how, practically speaking, MUPL could deliver courses and
make awards that were not so certified. The Opposition believes that this
consideration undermines MUPL's claim of independence and indicates the nominal
nature of its self-accrediting status.
2.39
The Opposition also notes that the AVCC has recently
rejected an MUPL application for membership of that body. This is a significant
development in its quest to achieve independent status and to attain
recognition as a university of equal standing to other Australian universities.
While MUPL could not advise the committee of any reasons why its applications
had been rejected, Professor Simon Marginson told the committee that it was his
understanding that the AVCC '...did not want to give the University of Melbourne
two votes at the table and that until Melbourne University private has
established its bona fides as a quite separate, independent institution the
matter will not get to its first consideration'.[31]
2.40
Mr John
Cain, appearing in a private capacity, told
the committee that, in the establishment of MUPL, the concept of the university
as funded entirely by the private sector was not discussed
or properly examined. At a public hearing Mr Cain made reference to a remark by
former MUPL CEO, Dr Barry Sheehan, who reportedly described to Mr Cain the
establishment of MUPL as involving 'a certain amount of smoke and mirrors'. He
told the committee there was a degree of deception surrounding the process for
the establishment of MUPL because it was, and still is, promoted as a private
university funded by the private sector.
2.41
Research carried out by John
Cain and associate John
Hewitt showed that, while 12 private
companies were going to contribute to MUPL's establishment, no private capital
was contributed:
Instead of it being a private university with three prestige,
modern buildings on University Square that they would occupy...all the buildings
were built at public expense. They borrowed from the National Australia Bank up
to $200 million...and it was a lemon. Do you know how many people from Melbourne
University Private occupy those building? Six.[32]
2.42
Mr Cain
concludes that MUPL is not a private enterprise partly occupied by the public
university, but essentially a public enterprise which has drained resources
away from the University of Melbourne.
The important point is that the University
of Melbourne's expenditure of $180
million on new buildings for MUPL came at a time when it was restricting its
capital expenditure for the public university. Other than of the need to finance
the outward appearance of a 'stand-alone' private university subsidiary,
according to Mr Cain
the University of Melbourne
would not have outlaid such a large amount of money, with a consequent annual
interest bill of approximately $18 million. It is acknowledged, however, that
the University of Melbourne
had other purposes in mind for some of the buildings constructed as part of
this program, including housing for the Law Faculty.
2.43
The issue of the financial independence of MUPL is
highlighted by an examination of the financial performance of the entity. MUPL generated
substantial losses - in the millions of dollars - over a number of years until
the University of Melbourne
undertook a rescue mission: it 'restructured' its
commercial entities by merging the financially
successful Melbourne Enterprises International (MEI) with MUPL, masking MUPL's
poor financial performance behind MEI's success.
The new commercial entity, however, retained the name 'Melbourne University
Private'.
2.44
Yet Mr Cain
and others believe that the organisation continues to place a financial burden
on its parent, the University of Melbourne.
During the public hearing MUPL representatives were questioned about the stated
operating result of $132,000 claimed by the company in 2003 (despite the Annual
Report's representation of this amount at $140,000). This figure, whatever its
true value, appeared not to take account of a loss of $893,000 from foreign
currency transactions, specified in the financial statement for that year.[33] In evidence,
Mr O'Keefe for MUPL assured the committee that this amount was included in the
company's bottom line: 'All I can say to you is that if we have brought to
account and declared in our financial accounts some foreign currency losses
then of course they are included in the bottom line'.
2.45
Subsequently, in an answer to a question taken on
notice, Melbourne University Private acknowledged that the foreign exchange
deficit was not accounted for in the posted operating surplus of $140,000 but
that the amount of $893,000 was treated as an extraordinary item and accounted
separately.[34]
The committee cannot take the assurances given by the witnesses at face value. Witnesses
gave unequivocal accounts that, at best, were confused. It may well be argued
that the committee was misled and no amount of reference to accountancy
standards changes the nature of the evidence given directly to the committee.
2.46
Further, this admission indicates that the company,
although propped up financially by a previously profit-making subsidiary of the
University of Melbourne,
continues to be a potential financial burden on its parent institution. This
has implications for the financial health of the University
of Melbourne and thus for the considerable
amount in taxpayers' funds made available annually to this University.
2.47
On the other hand, it might be argued that, while MUPL
was propped up by a capital injection from the proceeds of the sale of another
wholly-owned subsidiary of the University
of Melbourne (Melbourne IT), it has
not directly drained funds from its parent institution. However, the proceeds
from the float of Melbourne IT could may have been put to other uses by the University
of Melbourne.
2.48
Labor senators believe that it is impossible to
reconcile MUPL's insistence on its independence, which underpins the argument
for inclusion on Table B, with its actual degree of practical, legal and
financial dependence on Melbourne University.
Attention is also drawn to the financial drain on the University
of Melbourne of the commercial
entity.
Compliance with MCEETYA Protocols
2.49
Turning to the MCEETYA Protocols, the committee was
told that these protocols are very important to higher education and to Australia's
global reputation for higher education. Professor
Marginson argued that under the protocols
universities must measure up as doctoral institutions that are genuine academic
operations not solely concerned with commercial revenues and whose degrees have
international standing. The protocols have established norms and standards
which have been subscribed by Commonwealth, state and territory governments.[35]
2.50
The Protocols require both that an institution have a
broad research profile and that it be an independent entity, established in its
own right. The Opposition does not believe that MUPL meets the definition of
'university' under the protocols. It takes particular note of the view of Professor
Marginson, a member of the committee
established by Victoria's
Minister for Education, Hon. Lynn
Kosky, to review the university and
establish a broader set of criteria for MUPL's second phase:
My sense is that [MUPL] does not currently fulfil our
understanding of what a university is. It is an exception which is an anomaly
in the system. It does not have a substantial staff in its own right, and the
tactic has been to point to the University
of Melbourne staff as the
supporting staff structure, when in fact that is the structure of a university
separate from the one Melbourne University Private purports to be as a
self-accrediting institution. Yet it is fully controlled by the University
of Melbourne. So it is an odd
beast.[36]
2.51
An institution that fails to meet the standards
required by the MCEETYA protocols, according to the Higher Education Support Act 2003, cannot, under the provisions of
that Act, be placed on Table A or Table B of the Act and is ineligible for
Commonwealth funding.
Sector-wide implications
2.52
The committee heard evidence that admission of MUPL to
Table B would set a precedent for other universities to establish adjunct
private institutions under their own auspices. This would have major
implications for the higher education sector as a whole. The concern is
summarised by the NTEU:
The inclusion of MUPL in Table B would establish a major
precedent, and open the way for a large number of small, niche providers to
seek access to the funding tables of the Act. This would be all the more
serious given the lack of open and transparent processes surrounding the
Government's selection of MUPL, a scenario likely to be replicated by the
Government in its choice of other candidates for inclusion in the Tables of the
Act.[37]
2.53
Professor Simon
Marginson argued that if
the Parliament were to legitimate MUPL as a Table B member with the capacity to
build up its fee paying enrolments, it would be inevitable that other major
universities would be in a better commercial position to become full-fee
chargers through similar mechanisms. The public sector would be transformed and
weakened under this scenario in one of two ways. First, the public and private
arms of higher education institutions would compete with each other for student
enrolments, for research activity and for reputation:
In the world of higher education, money is important but
reputation is the lodestar on which the whole thing turns. You would have a
situation where the reputation of our strongest global competitors would be
diminished by their own commercial child walking alongside them. That to me is
a very odd situation - and I do not think it is a very productive one.[38]
2.54
The NTEU submitted that in the longer term, this situation
would most likely drive down the quality of higher education across the sector
by forcing established public universities to compete with smaller, boutique
institutions with limited course offerings.[39]
2.55
Second, fee-paying would become the normalised route to
a prestigious, socially and economically advantageous education. This would
mean that institutions on the metropolitan fringes which educate up to 50 per
cent of higher education students, and the degrees which they award, would be
considerably affected. The Opposition is therefore concerned about the
implications of diluting public funding for higher education research, which
were highlighted by the Federation of Australian Scientific and Technology
Societies (FASTS).[40]
2.56
Opposition senators are also concerned that, if MUPL is
added to Table B, other higher education institutions will consider
establishing parallel secondary institutions for additional benefits such as
receiving a second vote at the Vice-Chancellor's Committee and a second
allocation on Table B.[41] They also
take into consideration concerns raised that placing MUPL on Table B would
'...confuse, confound and ultimately undermine the existing basis of research
funding'.[42]
This is because of the double-counting which, it is argued, is directly, if not
indirectly, taking place as long as MUPL relies upon Melbourne
University staff.
2.57
The Opposition believes that any attempt to draw a
comparison between the success of private universities in the US
and the potential for the concept to mature in Australia
is highly misleading. Professor Simon
Marginson told the
committee that it is a myth to describe American higher education as a market: 'It
is a heavily subsidised one, if it is one. It has competition...but it is heavily
subsidised not only from government sources but from non-government sources of
a non-market kind'.[43]
Furthermore, a number of the elements involved in establishing a viable private
university in the US
do not exist in Australia.
He pointed in particular to the range of alumni, corporate and donor-financed
sponsorship schemes which are lacking in Australia:
'We cannot replicate the American structure that underpins the private
sector...because we do not have the kinds of institutions which will support the
remission of the fee cost for the majority of students...'[44]
2.58
Opposition senators also reject the suggestion made by
MUPL at a public hearing that opposition to MUPL's inclusion on Table B stems
from a wider ideological opposition to the creation of private universities in Australia.
This is simply not the case. The Opposition agrees with John
Cain's assessment that there is a place for
private universities in Australia:
however MUPL does not provide a sound example of how to proceed in this
endeavour. The implications of extending public subsidies to commercial
entities should always be kept in mind.
2.59
The Opposition notes the important differences between
MUPL and two other private universities, the University of Notre Dame and Bond
University, and rejects any
suggestion that MUPL's current status has created an anomaly in the higher
education system. MUPL's status as a 'conditional university' is substantially
different from that of either Notre Dame or Bond.
Both of these private universities were established under state Acts and they
operate under a not-for-profit status. According to Professor
Marginson, Notre Dame is a well-run and
independent private university which, unlike MUPL, is establishing a
comprehensive research framework and a range of disciplines. It also is
performing 'public good' roles in the Kimberley
region in relation to indigenous education.[45]
2.60
FASTS, in its submission, picks up on the concept of
'public good' by noting that a critical feature of public funding of research
is the notion of the 'public interest', something which apparently is specified
in the enabling legislation of Bond University.[46] The
Opposition agrees, and notes further that no compelling case has been made that
placing MUPL on Table B would be in the public interest.
2.61
Several witnesses and submissions drew attention to the
fact that MUPL, unlike the three other institutions listed on Table B, is not
established under its own act of state or federal parliament. The Opposition
takes the point made by MUPL representatives, who have argued (in the MUPL
submission) that the institution is in fact duly established under an act of
parliament - that act being the Victorian Tertiary
Education Act 1993. However, the provisional and temporary nature of the
Victorian Government’s accreditation of MUPL as a university is a stumbling
block for its inclusion on Table B. The Opposition senators do not believe that
any institution without full, unconditional accreditation by the relevant state
or territory authority should be admitted to Table B of the Commonwealth Act.
Objections by MUPL to Senate scrutiny
2.62
In a letter to the committee following the public
hearing of 19 August 2004,
representatives of Melbourne University Private claimed that questioning in the
Senate had caused damage to the reputation of the entity. These claims were
subsequently reported in The Age newspaper of Sunday, 29 August 2004. Labor senators regard
it as ludicrous to assert that proper parliamentary scrutiny of an institution
seeking access to public funds is in itself dangerous or undesirable. In questioning
representatives of MUPL as to the status of these institution, senators are
performing their proper function. Universities other than MUPL take this
process very seriously and respond with genuine efforts to provide prompt and
accurate information to the Parliament.
2.63
If witnesses feel aggrieved about being subject to this
kind of scrutiny, they are seeking to present themselves more like a commercial
entity than a university. It has been the practice of Opposition senators over
a number of years to ask uncomfortable questions of entities in receipt of
Commonwealth funding, and those seeking such funding. A willingness to be
publicly accountable is inherent to the seeking of public funds: it is an
obligation. Representatives of MUPL, on the other hand, seem anxious to avoid
the scrutiny of the Parliament.
Conclusion and recommendations
2.64
The reputation and standing of the Australian higher
education system, at home and abroad, depend on the scrupulous and transparent
application of appropriate standards to institutions aspiring for Commonwealth
recognition for funding purposes. It is exactly because of the status conferred
to institutions in this regard that Opposition senators believe Melbourne
University Private has sought admission to Table B of the Higher Education Support Act 2003. While actual financial advantages
in terms of research funding might be small in the short term, the symbolic
value of inclusion in the Act would, however, be significant, as would
admission of the institution to the Australian Vice-Chancellors’
Committee-something that, it seems, the institution has been denied.
2.65
Therefore it behoves the Commonwealth to look long and
hard at the academic and organisational credentials of any entity seeking
implicit recognition through the Act. This inquiry has provided the Senate with
an opportunity to consider the standing and credentials of Melbourne University
Private against the MCEETYA protocols, and also against other criteria relevant
to its claimed status.
2.66
The Opposition members of the committee find MUPL
wanting in several respects. The institution fails to achieve the standards
required by the MCEETYA Protocols, particularly with regard to research profile
and output. Its representatives have failed to convince Opposition senators
that the institution is a bona fide stand-alone entity that truly accredits its
own degrees. It has an academic staff of approximately 13 persons, many of whom
are also staff members of the University
of Melbourne. Its income is derived
overwhelmingly from commercial activities such as consultancy and
English-language teaching, rather than the provision of undergraduate and
postgraduate award courses. While MUPL may have met the requirement of the
Victorian Government for a minimum of three per cent of students enrolled in
award courses, this hardly makes it a genuine university. Further, it is
financially dependent on its parent institution.
2.67
At the very least, the Opposition senators believe that
the temporary nature of the institution’s accreditation on the part of the
Victorian Government would imply the advisability of delaying the admission of
MUPL to Table B until such time as its accreditation is confirmed, in four years'
time.
2.68
Inclusion on Table B of the Act would provide access
for MUPL students to FEE-HELP loans. The capacity of the institution to grow
its student base provided by FEE-HELP accessibility is a further real
motivation for MUPL's request. This, as Professor
Marginson noted, has significant and
open-ended implications for public funding, especially if other commercial
adjuncts of existing universities are allowed in the future to follow MUPL onto
Table B.[47]
2.69
For all of these reasons, Opposition senators do not
believe it is in the interest of the Australian higher education system as a
whole to admit Melbourne University Private to Table B of the Higher Education Support Act 2003. Nor
is it in the public interest. Accordingly, it is recommended that the provision
allowing this measure be opposed by the Senate.
Recommendation 1
That the Higher
Education Legislation Amendment Bill (No.3) 2004 be split to remove the
section dealing with the admission of Melbourne University Private to Table B
of the Higher Education Support Act 2003,
and that, should the Government wish to proceed over the matter of Melbourne
University Private, this should be dealt with separately from the bill as a
whole.
Recommendation 2
That the provision of the Higher Education Legislation Amendment Bill (No.3) 2004 admitting
Melbourne University Private to Table B of the Higher Education Support Act 2003 be opposed by the Senate. That,
if the bill is split, as recommended, the ensuing legislation be opposed.
Senator George
Campbell
Chair |
Senator
Kim Carr |