Submission 

to

Senate Employment, Workplace Relations and Education 
References Committee

Inquiry into higher education funding 
and regulatory legislation

		
Submission no:
	478	
Received:	30/9/03	

Submitter:	Professor Roger Dean
Vice-Chancellor	

Organisation:	University of Canberra	

Address:
	ACT 2601, Australia	
Phone:
	(02) 6201 500	
Fax:
	(02) 6201 5036	
Email:
	vc@canberra.edu.au	

2003.09.30

Mr John Carter
Secretary
Senate Employment, Workplace Relations
and Education References Committee
Suite SG.52, Parliament House
Canberra  ACT  2600

Dear Mr Carter

On behalf of the University of Canberra I would like to address briefly the terms of reference of this Senate Inquiry. 

 	I would first like to endorse in general terms the detailed submissions already provided by the Australian Vice-Chancellors’ Committee. You will be aware that the Committee views the Government’s legislative (and imminent guideline) proposals as generally positive, but with serious limitations. I do not wish to duplicate the arguments put forward in the AVCC submission. 

	I would also like to remind the Senate Committee that my university made two submissions to the Crossroads enquiry, and we remain totally supportive of the arguments raised there, to which I refer you. As you know, these documents are to be found on the DEST website, and we would be happy to supply further digital copies if you wish.

	Granted that background, with which I will assume familiarity on the part of the inquiry, I offer some further brief comments, in support, amplification or addition. 

Comments addressed to Your Terms of reference: 

1	The principles of the Government’s higher education package.

We cannot support the unstated principle of increasing charges to domestic students. As I (and many others) have argued in considerable detail elsewhere (see for example my article in Agenda, 9, 275-288, 2002), the tax generated solely from the increment in income which graduates achieve in comparison with non-graduates, is in itself significantly greater than the present government investment in higher education. That income increment is a reflection of the enhanced economic output of these individuals and consequently of their society, and so there are much larger further multipliers over the HE investment from government in terms of the economic output and wellbeing of Australia. It can only be counterproductive to society if there are further increases in the charges on students. Yet this may be necessary for some universities, under the planned regime, as a means of enhancing income and maintain delivery quality.

There is no explicit principle within the package of government providing resources of magnitude coherent with the desired quality and quantity of the system. Thus while we would be glad of the very modest proposed increment in total resources to the University system, the funding will remain grossly unrealistic. Furthermore, as AVCC has noted forcefully, a particularly disastrous aspect of this is the failure to index operating grants (which already constitute less than 31% of total funds in our system) to a relevant index. The gross under-indexation is responsible for the c. 35% loss in resource per domestic student which has occurred since 1995. This loss will continue even at the same time as a modest increase in resource is provided (though note that the proposed increase is likely to be only very slightly above inflation). 

The principle which has been painted fully in the last week, of linking workplace ‘reforms’ to the modest enhancement in operating grants, is irrational, excessively intrusive and likely to be counterproductive in terms of achieveing the overall package as originally enunciated. The proposed Governance requirements, on the other hand, are more reasonable, and present a real opportunity for reform of our university governing bodies towards entities based primarily on expertise, trusteeship, and commitment to the University as a whole. Nominations by states and territories, and elections from groups with inevitable conflicts of interest, should be reduced or eradicated, such that expertise and governorship are foregrounded. 

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

•	The financial impact on students, including merit selection, income support and international comparisons,
•	The financial impact on universities, 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 …

As indicated above, while merit selection need not be challenged directly in the envisaged new system, equity of access and entry is still likely to be undermined by the proposals. A well qualified student who enters a university on a fee paying basis may later fill a subsidised place. This process will undermine equity of access, which is already far from fully achieved. 

•	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 package envisages allocating subsidised domestic places in part on the basis of ‘labour market needs’. The predictability of labour market needs has to be questioned. Furthermore, the extent of migration of students to and from their university training is likely to be increasing, and probably this is desirable. However, such an increase in mobility will also decrease the predictability of labour demand and supply in any given locality. Thus any approach to ‘profiles’ discussions for university entrance and distribution of places must be only modestly influenced by such predictions, until such time as they are capable of greater precision. Conversely, the generation of skills in a particular region is probably an important determinant of the future development of that region: this argument clearly applies at the level of nations, and most likely at that of states, territories and regions, such as our own Australian Capital Region. 

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

	The present legislation has largely dissociated research funding from that of teaching, but should make absolutely explicit that the operating grants are intended to support and encourage academic staff in both teaching, scholarship and research. Unless this principle is maintained, Australia will see the erosion of the research capacity of its primary research system, the Universities, which contributes 70% or more of research and applicable or commercialisable IP development. 

4	The effect of this package on the relationship between the Commonwealth, the States and universities, including issues of institutional autonomy, governance, academic freedom and industrial relations.
	
	The present debate does offer opportunity for enhanced autonomy of universities, and clearer separation between their legislative roots and their governance and reporting obligations. The workplace changes envisaged, on the other hand, are not only divisive, but also imply increased rather than reduced reporting requirements, while  the commonwealth government nevertheless speaks of reducing reporting and its duplication. I have alluded to other key aspects of these issues above. 

5	Alternative policy and funding options for the higher education and public research sectors.

	The only principle within the proposed legislation which could be roundly applauded is that of ‘no up front payment necessary’ for domestic students. However, the caveats and subsequent limitations attached to this make the applause hollow. There should be no interest rate attached to any of the categories; the levels of income at which repayment begin should be raised to the average graduate income; and scholarships supporting  those who are socioculturally (or otherwise) discouraged by the system and who also deserve support on purely economic grounds related to their family circumstances should be substantially enhanced. 
	Several features of  the package as presented will tend to increase divisions amongst universities, whereas what is desirable is enhanced cooperation together with productive competition. Means of overcoming these limitation of the presently proposed policy should be avidly sought. 

I hope these comments are of some help, and will be happy to provide any further input that might seem useful to you.

Professor Roger Dean, Vice-Chancellor and President, University of Canberra, ACT 2601.