Senate Employment ,Workplace Relations and Education References Committee 

Inquiry into higher education funding and regulatory legislation 

Submission from the 
Sydney University Postgraduate Representative Association (SUPRA)

SUPRA 

Bldg G10 
Raglan St
Darlington Campus 
The University of Sydney 
NSW 2006  

Tel : 9351  3715 
Fax : 9351 6400
Email : supra@mail.usyd.edu.au

Contact : Mr Kenneth Pratt  President , SUPRA 

August 2003
Introduction 

While we welcome a number of the funding measures contained in the reforms such as the abolition of marginally funded HECS places  to be replaced by fully funded HECS places  and recognition that Aboriginal and Torres Strait Islander education initiatives are much needed  we  observe that on balance the reforms entrench  a framework that requires   revenue raising  to be undertaken by the Universities  themselves while at the same time the Federal Government  continues to engage in abrogation of  publicly funded education. 

We note with concern that the introduction of an interest rate  for a FEE - HELP Loan  will deter people from the commencement of postgraduate  coursework study. Postgraduate study is the most important foundation in introducing people to life long learning.   

We note with displeasure the actions of both the Minister for Education and the Department of Education Science and Training in the withholding of a number of valuable reports, or parts thereof, that have drawn attention to the fact that increases in HECS fees  have been instrumental  in contributing to a worrying decline in the participation rates of mature age students  and students from disadvantaged backgrounds.  

That such suppression has taken place in the context of a  review of higher education that has  placed an emphasis on consultation  and stakeholder participation gives cause for  doubts about the  ability of the current government to take the matter of University education seriously.   

1.The principles of the Government’s higher education package.    
  
We welcome the additional funds contained in Backing Australia’s Future and in particular those funds contained under the Commonwealth Grants Scheme but it is simply not enough.
A long term strategic public funding mechanism is required to sustain the current system.  
The Government has stated the reforms will encourage diversity. The lack of detailed framework in the Commonwealth Grants Scheme (CGS) work will not allow each  institution  to offer diversity;  instead it will consolidate a hierarchy within the sector . The CGS will subject 9 universities to a reduction in funding. A lack of detail in the discipline funding mix under the CGS gives  no guarantee that every university in each  state will be able to offer  a broad complement of courses. 
There is a potential that because of lack of detail in the CGS  there is a lack of guarantee  that , at minimum ,each discipline will be provided in  at least one University in every state.

It is of concern to us that yet again  the opportunity for a significant re investment in the intellectual capital  of Australia’s  Universities has been neglected. 

The effect of an increase in HECS 
Passing legislation to allow institutions  to increase HECS by up to 30 % will mean  Universities may be forced to increase fees to keep up  with each other.  There is a perception  that if fees are less the degree is inferior . An increase in  fees is not an arbiter  of quality  but unfortunately  is  the easiest measure by which  potential students and the public  erroneously measure quality.
Reputation alone, whether deserved or otherwise,  will favour fee increases in ‘prestigious’ older established Universities . 

This deregulation will encourage high increases in  HECS fees for  elite courses  such as Dentistry , Veterinary Science and Law particularly in the’ prestigious’ older Universities .
Concurrently it will be difficult for smaller regional Universities  to impose an increase in HECS  in order to obtain much needed funds.  

There exist variations in the ability of each University to attract enrolments and  where some Universities seek  to impose the HECS increase they  may encounter problems in  achieving  their enrolment levels . 

2.The effect of these proposals upon the sustainability , quality , equity and diversity  in teaching  and research at universities , with particular reference to :

2.1 the financial impact on students , including merit selection , income support and international comparisons 

The effect of FEE - HELP  on postgraduate Coursework students .
 
The introduction of FEE – HELP  will result in a number of negative consequences. Income contingent loans schemes  deny access to those potential students who are debt averse. 

PELS has allowed some people who would not otherwise be able to afford postgraduate study the opportunity  for entry into and continuation of  higher education although it is , like FEE HELP , a loan scheme to allow borrowing of deregulated or full fees. 
PELS is a preferable option over FEE –HELP.    
FEE HELP will, in effect , discourage some people form taking up postgraduate study and therefore  commitment to life- long learning  with a  CPI increase and a rate of interest of 3.5 %, in effect a real rate of interest that is least 7 %. 

We note that unlike the current framework for  HECS and PELS  the inclusion of  an interest rate in the  FEE –HELP  scheme will actually increase  cost of education borne by a student as long as they continue to be unable to pay. (HECS and PELS  exempts a student  from payment of the debt until they are financially able to do so.) 

We do not consider that charging interest for only ten years is indicative of any measure of equity and SUPRA believes that interest should not be charged  at all.
Increase in personal debt is likely to occur given that  an individual who has a  HECS - HELP,  HECS  or PELS debt must  pay this  first  before commencing  payment of  a FEE - HELP debt. 

We recognise the merits of  making a distinction  between an interest bearing loan and interest free loan.  Notwithstanding our opposition to the placing of interest on FEE - HELP loan we  believe it makes better sense to  allow the payment of  an interest bearing loan  before that of an interest free loan .    
A cap of $50 , 000 on an  individual  FEE - HELP loan   will result in many students not being able to borrow the full  cost of a postgraduate coursework degree over  this limit.

As Universities can essentially charge what they like for a full fee  postgraduate Coursework degree an alternative would be to place a cap on the fees  charged by a University for a  postgraduate coursework degree.

Study at postgraduate level  is further  prohibited for  those students who have already borrowed  under HECS  HELP for the cost of a full fee undergraduate degree . 
In effect  given  the current cost of a full fee undergraduate degree  FEE HELP will not be accessible to this category of  student at all at the postgraduate level .

We welcome the rise in the repayment threshold to $30, 000 from 2005-6,  however we  consider that a minimum threshold for repayment be  adjusted upwards to average male weekly earnings. Early voluntary repayments and  the bonus mechanism  should  remain  as it does  under PELS . 

We recommend rejection by Senate of  legislative measures that  impose  an interest rate to the FEE - HELP scheme  and derogate from  existing early repayment  and bonus mechanisms as currently provided under HECS and PELS .

We recommend rejection of legislative measures that allows Universities to increase the percentage of available full fee paying undergraduate places  and measures that will allow institutions to adopt variations in the rate of HECS.

2.2 The financial impact on students , including the impact of the Commonwealth Grants Scheme , the differential impact of fee deregulation, the expansion of full fee places  and comparable international levels of government investment, 

Commonwealth Grant Scheme (CGS)

The proposed scheme to replace the current operating grants will result in less flexibility and diversity of course offerings at each University .
The requirement that a funding and discipline mix be annually negotiated will render a state of uncertainty for institutions. This measure takes away the very necessary element of forward planning that all Universities must engage in for  the execution of  their everyday operations and strategic planning.
The CGS and accompanying funding agreement  will restrict individual institutions from continuing to  provide a discipline mix that best suits their goals, community  and expertise.
As the  discipline funding mix requires negotiation with Government it will  serve only to place an individual institution within  an inflexible framework that may force them to abandon or deviate from their core teaching and learning goals with a correlating reduction in autonomy.

It will  result in redundancies  and retrenchment of both academic and general staff and restrict  opportunities  for new academics  particularly at smaller and regional universities and result in a loss of intellectual capital.
 
In particular the smaller regional universities may suffer the most; any devaluation or reduction in course offerings  will affect  the participation of student from the communities in which they are based. 

Even with an expansion in  the allowable  percentage of  full fee places, smaller and regional Universities  may not be able to gain the total allowable enrolments.

The reform and budget package has been silent on the issue of funding to those Universities who opt not to impose the HECS fee increase.

It is imperative that  greater research be undertaken to look at the long term effects  and differential impact  the  reform measures will have on  each University’s ability to obtain  increases in  income from this source. 

The reform package is silent on the issue of  provision of additional funding for infrastructure and resources and a corresponding measure that will provide  scholarships and income support measures.
 
Note that the University of Sydney has voted  to impose a 30 % HECS increase across the board if the reforms and requisite  legislation is implemented. There has been no accompanying  discussion of the need to examine the quality of teaching and learning and resource provision .  
The University of Sydney, because of its historical advantage and existing reputation  will  able to do so without concern as to enrolment numbers.       

The financial measures that will see marginally funded HECS places converted to fully funded HECS places is welcomed and will provide a much needed injection of funding to the sector. However we note that a narrowing of access will result in the phasing out of marginally funded places over four years from 2005 and the time frame that will accompany the  provision of  an extra 25, 000 fully funded places.     

This reduction in access is compounded by the fact that Universities will be required to act very quickly to address over - enrolment which  is sanctioned by the Government and provided for by marginal funding .
The proposal to implement  penalties  for a more than 2% under - or over-enrolment  from 2005 does not provide an adequate lead in time for Universities to adjust their enrolment profiles .

The University of Sydney  has already acted  to  reduce the numbers of over enrolments in 2004  in an attempt  to avoid  financial penalties should the reforms be passed and  despite the lack of modelling detail   in the proposed discipline –funding mix .        

Another significant factor which will result in lack of access is that such  reduction, accompanied by the discipline funding mix is based on  needs  relating to the workforce and demographic patterns. Student demand is not catered for .    

We recommend Senate reject any measures that places a financial penalty on any institution who  is not able to meet the necessary  reduction in enrolments from 2005. 
We further recommend rejection of the proposed enrolment margin  of  + - 2%  and consider that a more detailed framework to address the appropriate margin be considered . Such a framework must allow adequate time for all institutions to adopt  an appropriate strategy to achieve this.

2.3 The provision of fully funded university places, including provision for labour market needs , skill shortages  and regional equity , and the impact of the ‘learning entitlement’.  

The ‘learning entitlement’ is a misnomer:  it actually removes the entitlement and encouragement to engage in ongoing learning. 

Postgraduate Coursework students in HECS places will be affected in the following way:

Exhaustion of ‘learning entitlements’ at  the undergraduate level  will render a student ineligible for a HECS- liable  place in a  postgraduate degree .  

The imposition of a  Commonwealth Higher Education  Student Support  Number  (CHESSN )  to  track entitlements will create an  added administrative burden and cost  for individual Universities.
We believe CHESSN is unworkable : it  places an onerous burden on Universities to control  every step of  a students enrolment choice .   

A charge  up to 30 %  more for HECS paying students in HECS liable places at the postgraduate level will subject individuals  to higher levels of debt. 
The  lack of provision or framework for those undertaking degrees of longer than 5 years duration  such as medicine , double degrees  with honours  and   for students  who may return  after being out of the university system for a number of years does little to encourage life long or flexible learning.    

We welcome the exclusion of  the disciplines of  Nursing and Teaching from such increases in HECS and their placement within a  National Priorities  HECS Band.
However , retention of the status quo in terms of  HECS status is not suggestive of a proactive engagement  to address  the  ongoing labour market deficit  in  these two professions, and more needs to be done in co - operation with State Governments  

Immediate attention must be given to a partnership between the States and Commonwealth to ensure that a package of financial measures is  implemented  to encourage study in these disciplines. Such measures might include provision of  full HECS remission scholarships or   adoption of  zero - HECS status for these courses. 

3. The implications of such proposals  on the sustainability of research and research training  in public research agencies 

The reform package and associated budget measures have missed an opportunity to matters that require immediate attention including  deficiencies in the funding parameters and completions times  of the Research Training Scheme. 

Mergers between Universities and CSIRO research facilities  may produce negative impacts upon research  students   including  the quality of postgraduate research and may reduce opportunities available for  these students  in academic teaching and tutoring, and interaction with industry partners. Potential for the intellectual property framework to be come more  complex  and of concern to postgraduate students  may also occur.     

We welcome the  provision, under Backing Australia’s  Future for the  current evaluation  of the reforms  of research and research training  introduced by  Knowledge and Innovation .
  
4. The effect of this package on the relationship  between the Commonwealth, the State and Universities , including issues of institutional autonomy, governance, academic freedom and industrial relations.

Governance 
Access to additional  funding under the CGS  contingent upon  reforms in governance and the workplace represents an unnecessary  intrusion upon the  autonomy of the University. In fact the linking of funding to governance whether  it  be through  its reform  or operation is counter productive  to the practice  of good governance . 

The suggested protocols put forward by the Government offers no reflection or acknowledgement of the  diversity or desirability in each institution choosing a governing body whose constituents members are reflective and optimal for them  in terms of  geography, population ,  age or any other characteristics  unique to any given institution. 

Being subject to State legislation Universities are already subject to a mechanism by which governance , financial and audit issues are regularly and vigorously reviewed.
The governance protocols as they stand are well intentioned yet  ill drafted in response to varying financial crises that have beset individual institutions, crises which have been addressed by the active audit and participation of the State governments and legislation  under which those  institutions are founded.  

The protocols proposed take a dangerous path of exclusion from institutional autonomy and effective governance  with respect to the requirement that elected representatives place the interest of the university first  whilst neglecting  the interests of a constituency  from , and by whom they are elected. 

That every member of a governing body upholds the interests of their institution  is a concept that no one ,we hope ,would argue against. 
However good governance also requires that  when appropriate an elected representative should speak on matters which are related  to and  affect the constituency whom they represent . We believe that such an action is in effect an important  and integral  thread  of  the many strands that  make up  good governance in action.

The Federal Government should be wary of becoming confused  between good governance and its promotion thereof  and an ill conceived notion that when an elected representative speaks on matters of concern to their constituency that this is somehow an example of bad governance or of  not placing the interests of ‘the University’ first.

We remind the Inquiry that speaking on a matter of  concern to ones constituency  with its attendant status  of being opposed to the general view of fellow ‘governor’ is not in and of itself a dereliction of a duty to place the interests of the University first. Speaking for ones own constituency in such a forum where appropriate contributes to open debate and a wider  recognition  that the needs of the University community  have been discussed.   

Indeed the protocols assume a naivety about who says what during a meeting of the governing council of a University.
The work of the University of Sydney Senate provides a clear example of individual members :
speaking upon matters affecting the University as a whole  notwithstanding their provenance,
speaking to matters affecting the group from whom they are elected and speaking to matters that may be seen as the concern of a particular representative group to which they do not belong.       

It is the lack of reference to this legitimate role of the elected representative to ‘give voice’ to concerns affecting the group from whom they are elected  that renders both the content of the governance protocols and  its tie to funding unworkable.  

The reforms push for  a majority   of council members to be external to the University. 
It is imperative that a sufficient number of internal appointees are present so that  the governance of each University  is undertaken by people who have expertise and knowledge of the way their University operates . 

There is scope for the promulgation, improvement and monitoring of   a broad set of governance principles  for each individual institution. 
Individual institutions are best able to determine the governance structures membership and membership numbers that suits them best without being subject to an ill conceived attempt at a set of protocols with too many gaps  and which is  subject to funding.  

We recommend a review of the relationship between  the States and the Commonwealth with respect to  university governance and funding 6 be undertaken  with provision for wide ranging consultation  with all stakeholders and the States . 

An independent review is also required of the many changes that have occurred to University Governance structures  and the benefits and losses that have resulted from change in governance .   

Industrial matters. 
  
We do not support the contingency of funding upon industrial reform.
Intervention by the Federal Government will cause a number of problems;  significantly, the burden that will be placed upon individual institutions  by  the requirement that an enterprise agreement will  include  reference to a Workplace Agreement  or that the option of a workplace agreement be available to  all staff outside the terms of  an enterprise agreement . 
For the former the placement of an option for a Workplace Agreement within an enterprise agreement has the potential to cause considerable  and unforeseen financial  impact  for any University. Quite simply many institutions do not have funds available for  employment on these terms.  Were funds to be directed towards Workplace Agreements  it would be done on the basis that it would take away from the funds committed under a collective  enterprise agreement .
The significant amount of time and cost involved  in individual negotiation of a Workplace Agreement  also mitigates against inclusion within an enterprise agreement  or  on its own. 
Present reality of the time , productivity and work load carried by individual staff is, generally speaking , worthy of  an allocation of  considerably more funding and salary increases.  However,  were this to be translated to a Workplace Agreement with negotiation between  individual and institution , institutions would find themselves  without sufficient funds to pay . 

We recommend  rejection pf legislation that ties industrial reform with university funding.
We recommend that the  Federal  Government works with the States  to provide payroll taxation exemptions  for Universities .
Academic staffing has seen an increase in casualisation as a result of   funding cuts to the sector.
Many part time casual  academic staff  are postgraduate students and in particular research students.

Voluntary student unionism 

We refer to the commentary contained in the University of Sydney submission to the Inquiry and commend this to the Committee.  
We append a recent speech given by the immediate past President of  SUPRA to the University of Sydney Senate to highlight both the integral role that students play in University governance and  recognition by Universities of  the importance of their contribution to  both student welfare and  monitoring of teaching and learning practice  in their individual institutions.
 
5.Alternative policy and funding options  for the higher education  and public research sectors 

The optimal balance  between public and private investment  is attainable  by: 

Abolition of up - front fees  at both postgraduate and undergraduate level
Revision and extension  of eligibility for student income support 
Raising the HECS and PELS  repayment threshold to average Australian  (male ) weekly  earnings 
Reintroduction of a progressive tax system  which includes higher rates of  payment of HECS  and PELS  in higher income brackets should be  considered as a policy option.

   

                                                  ---------

Speech delivered to the meeting of the University of Sydney Senate, 
2nd June 2003

The editorial in the latest issue of Nature magazine notes that “Australia has long been the vanguard of providing publicly funded student loans…. So a significant change in its approach to higher education is worth watching”. That the world’s premier science research journal chose to devote two thirds of its editorial space to Australian higher education is a symbol of the importance of the current proposed reforms. The editorial goes on to note that “there are concerns about growing student debt and potential government influence over university curricula”, and conclude that “driving universities to compete for fee-paying students runs the risk of reshaping universities as sites of vocational training rather than places of higher learning”.(29 May 2003).

That the current budget presents ‘opportunities’ for this University may be true – but they aren’t great opportunities – and they don’t go any way towards redressing the current state of Universities. The budget hardly provides for the “bare essentials”. When the Senate made it’s submission to the Crossroads enquiry last year, the subsequent response from University community at the open forum which was held was one of disappointment. As predicted, the recommended increase in HECS from this University was taken up by the Federal government, but the matching funds requested were not forthcoming. SUPRA was not surprised, and remains disappointed with that University Senate recommendation.

I would like to highlight some areas of concerns for SUPRA in the package.

The funding increases proposed in the budget can only be realised once a range of workplace and governance changes have been achieved. This includes changes to state legislation – the removal of State government representatives from the University governing bodies. It is unacceptable that the States be held to ransom for Federal policy change, especially one that restricts the independence of Universities to govern their own affairs.

The introduction of an interest rate above CPI to remodelled PELS from 2005 has serious implications for PG coursework degrees and the enrolment dollars it provides – given the large number of degrees with low enrolments, the University will need to focus on the potential impact to degree viability and quality. This may be offset by the increased number of international students through the worrying subsidised advertising schemes in the package, but the modification of a two year-old scheme designed to increase equitable access to PG coursework degrees is not acceptable to SUPRA. It is yet to be seen how recent regional bias allocated by DIMIA to international students will impact. On an aside, and while it is not a specifically postgraduate issue, we are also concerned that the interest rate loaded deferred student loans applied to postgraduate courses is merely a foot-in-the-door for interest rates being applied to HECS.

The budget did not address research concerns in any large way. We already know that there will be a re-jigging of the Research Training Scheme later in the year, which will incorporate a number of research initiatives. SUPRA understands that this will incorporate an expanded scheme for attracting mid-career academics home – but not postdoctoral and early stage academics, which is disappointing. Whether matching research funds will be available – or the funds will need to be found from within - is a matter of uncertainty, and something to keep in mind.

I cannot finish without mentioning voluntary student unionism (VSU), which has again been included in the budget package. While many Fellows do not interact with SUPRA on a regular basis, those of you who do know how far reaching our efforts are, and how beneficial we are for the University community. We contribute to policy development, make large submissions to University reviews, and cooperate with academics on requests for individual advice, among the wide range of services we directly provide members with. All this is done in a spirit of cooperation and maturity. As the Vice-Chancellor noted recently when he opened the council meeting for the Council of Australian Postgraduate Associations, we may not always agree, but we achieve a lot together. The introduction of so-called voluntary student unionism will remove an important constructive voice in Higher Education.

Please consider these points when discussing your response to the Nelson review, for the benefit of everyone in this room, and those who aspire and deserve to learn at this institution.

Thankyou.

Matt Hall
President, Sydney University Postgraduate Representative Association