The government’s changes to higher education will put a damaging financial strain on regional universities catering to a different cohort of students, and make it difficult for all universities to deliver to their full economic benefit, vice-chancellors warn.
In the 2017 Budget announced yesterday, students will pay up to A$3,600 more for a four year degree, and universities will face cuts of around $2.8 billion over the next five years, starting in 2018. Students will also have to start paying back their loans when they earn $42,000. The current threshold is around $55,000.
Simon Maddocks, vice-chancellor of Charles Darwin University, said his university would be particularly hard hit by the changes:
CDU has a responsibility that few Australian universities carry. Our home base of the Northern Territory covers almost one-sixth of the continent and we service large numbers of low socio-economic, first-in-family and regionally disadvantaged students.
Our largest cohort of students is mature age, studying online throughout Australia. These students invariably carry family, financial and other responsibilities. They take up to ten years to complete a three-year degree and study part-time while working full-time.
Adding to the cost of their education seems counter intuitive when Australia is pursuing an agenda of economic stimulation through improving innovation, and engaging the knowledge economy.
Universities also face funding cuts to teaching of around $384.2 million over two years (2018 and 2019). This will come in the form of a 2.5% “efficacy dividend” to the Commonwealth Grant Scheme (CGS). This essentially means universities will have to do more with less funding.
According to Maddocks, this means CDU will lose $3 million over two years. He said:
Not only do we need to find ways to continue to deliver high-quality education to our on-campus and large online student populations, we also need to continue to do more to develop the Territory and Northern Australia with even fewer resources. Now that’s a challenge.
The government also plans to introduce “performance” funding. This means universities will have to compete for a pool of funding, which is 7.5% of higher education CGS, and so will no longer be a predictable source of income for universities.
But at present it isn’t clear how the this will be assessed and allocated.
“How do we compare between regional and metro campuses of the same university, or even between different universities? Is that fair when we serve particular communities often in specific ways,” asked Jane den Hollander, vice-chancellor of Deakin University. “Before any comparative or other assessment is done we must be clearer on the attrition data and what it means.”
Education is Australia’s third largest export. A recent Deloitte report showed that universities contributed around $25 billion to the Australian economy in 2013, accounting for over 1.5% of GDP and 160,000 full-time jobs.
The goverment’s decision to cut higher education expenditure was “short-sighted” said Ian Jacobs, vice-chancellor of the University of New South Wales.
The proposed cuts will inevitably impact on the discovery-application pipeline, with negative economic consequences, at a time when investment in research innovation has the potential to diversify and grow the economy.
Our global competitors, notably China, are investing heavily in higher education for just this reason, with millions of students enrolled in subjects like mathematics, sciences, computing and engineering. They understand that education and the major institutions providing it are generational assets, embedded deeply in the social, cultural, and economic machinery of the nation.
The government needs to recognise this, and invest in the economic benefit that outstanding research can deliver, instead of cutting funding to the sector.
The government is set to save A$2.8 billion over the five years from 2016-17 by reforming the higher education system. This includes a 2.5% efficiency dividend on the Commonwealth Grant Scheme in 2018 and 2019, and a 1.82% annual increase in student contributions to the High Education Loan Program from January 1, 2018 (a 7.5% increase over the forward estimates).
The minimum income to start repaying HELP debt will be lowered to $42,000. The repayment rate will increase with income, from 1% at the minimum threshold to 10% at A$119,882, the maximum threshold.
The government will save $181.2 million over the forward estimates by limiting eligibility for VET student loans to certain courses.
Funding for schools will increase by $18.6 billion over the next decade.
Louise Watson, Professor of Education at the University of Canberra:
By retaining the architecture of the Gonski model and promising funding increases above inflation for the next three years, Malcolm Turnbull has taken Coalition schools funding policy back to the sensible centre.
To dispel any doubts about the government’s commitment to bipartisanship, David Gonski has been reappointed to advise on fine-tuning the system dubbed Gonski 2.0.
The government will give $125 million over five years to private school representative bodies in the states and territories to support “the implementation of the government’s reform agenda”.
Commonwealth capital grants for private schools will increase by 28% to an estimated $182.5 million per year in 2021.
Students considered disadvantaged will attract additional funding. A “location loading” will increase funding over the decade to schools in regional and remote areas by 5% per student per year, compared to the national average of 4.1%.
Funding for Indigenous education and for schools in the Northern Territory will also increase. Pre-school funding will increase by $429.4 million in 2018. New funding rates for students with disability are anticipated in 2018.
The government’s stated aim, in promising an additional $18.6 billion in schools funding over the next decade, is to bring federal funding for government schools to 20% of the SRS and federal funding for private schools to 80% of the SRS by 2027.
The SRS – to which federal recurrent funding is linked – will be increased at a fixed rate of 3.56% per year between 2018 and 2020. Thereafter, the SRS will be adjusted in line with a floating indexation rate that reflects “real changes in costs”. So from 2021, federal schools funding will be influenced by what costs are included in the SRS index and how much they change.
University fees and cuts
Gwilym Croucher, Senior Lecturer in the Melbourne Centre for the Study of Higher Education, University of Melbourne:
The government has confirmed the package of changes it announced a week ago with significant cuts. Students in particular will pay more, a lot more.
Student contributions will increase by 1.8% each year between 2018 and 2021 for a total 7.5% increase. This means they will pay 46%, instead of 42%, of the cost of their degree on average.
So, for a four-year course, this is an increase in total student fees of between $2,000 and $3,600. The government claims the maximum any student will pay is $50,000 for a four-year course, and $75,000 for a six-year medical course.
Apart from yearly indexation, this fee rise is only one of a few major increases since the ALP reintroduced fees in the late 1980s and will be smaller than the last time.
While few students will welcome the increase, the evidence from previous fee hikes in Australia is that it will not deter many people from study.
However, when combined with the lower HELP thresholds for repayment and higher repayment rates, the changes may make studying less attractive than in the past, and potentially prohibitive for some students.
Universities too will suffer a direct cut of $384.2 million over two years. This will come in the form of an “efficiency dividend” to the Commonwealth Grant Scheme of 2.5% in 2018 and another 2.5% in 2019.
While no university will go broke from the efficiency dividend, it forms part of a series of cuts. Combined with the changes to how grants are indexed, there is little doubt universities will receive less per student in subsidies in the future, and will have to do more with less.
The package averts the worst cuts from the previous minister’s attempts to deregulate higher education, but offers little in the way of a long-term vision to students or universities.
HELP student loans
Bruce Chapman, Professor of Economics at the Australian National University:
Budgets are always contextual and reactions to them will always be relative to alternatives.
The natural comparison of the 2016/17 changes to HECS-HELP is still the extraordinary 2014/15 budget plans of the previous education minister, in which there were to be initial outlay cuts of around 20%, the introduction of a real rate of interest on HELP debts, and the introduction of the facility for universities to charge any fee they chose. If that was a man or woman-eating crocodile, then this budget is a pussy cat.
For HECS-HELP, there is to be an increase in charges introduced over a three-year period, maxing out to 7.5%. This is not a big deal and will not affect student or graduate debt; in effect it will add about a year to how long people have to repay.
More significantly, the first income threshold of payment is to be reduced from the current level of about $55,000 a year to a new and much lower level of $42,000 a year.
But, importantly, the rate of collection of the debt will be cut as well, from 4% to 1% of income. This will mean that the effect on the majority of debtors will be small.
Most affected will be current part-time workers, and the increased obligation essentially means a faster rate of repayment, and not a major impost.
Changes to VET
Kira Clarke, Lecturer in Education Policy at the University of Melbourne:
Treasurer Scott Morrison framed his announcement of a new fund for skilling Australians by saying “skilled migration must be on our own terms”.
Appealing to public animosity towards a perceived reliance on skilled migration, the treasurer announced a levy on employers of foreign workers employed under a new temporary skill shortage visa.
Employers will be charged between $1,200 and $1,800 per worker employed under this visa scheme. It is anticipated this levy will contribute to $1.2 billion within the Skilling Australians Fund.
States and territories will be able to access the fund for the explicit purpose of supporting up to 300,000 apprenticeship, traineeship and higher-level skilled workers.
The treasurer’s language in announcing this new pot of money appeared to put the onus on states and territories to stimulate apprenticeship and traineeship opportunities.
This decline is part of a long-term trend, and is compounded by the impact of the gig economy and the reluctance of employers and young workers to enter into four-year training relationships.
Part of a suite of announcements aimed at “Backing regional communities”, the budget also includes $24 million for Rural and Regional Enterprise Scholarships.
The budget papers indicate that scholarships will be available for up to 1,200 students, to support skills development and educational attainment.
While it is unclear whether $15.2 million allocated to establish eight regional study hubs in rural and remote areas will include enhanced access to VET, any increased access to VET programs for regional learners could be a positive step in addressing youth unemployment and lower educational attainment in regional areas.
Former prime minister Tony Abbott has taken a swipe at Malcolm Turnbull’s schools plan, pointing out it did not go to the Coalition party oom and predicting it will be “pretty vigorously debated” there when parliament resumes next week.
In provocative comments on the government’s major attempt to neutralise Labor’s advantage on education, Abbott said it was a “a very big change of policy that the prime minister announced”.
The government on Tuesday committed to an extra A$18.6 billion in funding to Australian schools over the next decade, including more than $2.2 billion in this budget for the first four years.
“I note that at this stage it’s hard to see that any of this extra funding is specifically tied to better academic outcomes and better student performance,” Abbott said.
“I’ve always thought that the problem with our school system is not so much lack of funding, because there’s been very big increases in education funding over the last decade without a commensurate increase in outcomes.
“The problem is that we need better teachers not just more teachers.
“We need much more academic rigour in the curriculum, we need much more principal autonomy and we need much more parental involvement. That’s what we need in schools,” he said on 2GB.
Abbott did not mention the inquiry to be done by David Gonski – who prepared the 2011 report on which the funding commitments are based – into how the money can be invested to get better student outcomes. This review was announced as part of Tuesday’s plan. It is to report in December, and the government wants the recommended reforms tied to the states’ funding.
Under the government’s plan, a handful of wealthy non-government schools stand to lose some money. Asked whether he would be speaking up for two schools in his electorate that would go backwards, Abbott said he would not flag what may or may not be said in the partyroom.
“I just know that it’s been almost an article of faith in our party since the time of Menzies that we were the party that promoted parental choice in education, we were the party that promoted choice in health care, and I think it’s very important that we maintain our traditional position as the party which respects freedom of choice in both education and health,” he said.
The Greens on Wednesday signalled they are open to negotiations to pass the government’s schools package through the Senate.
As Labor, the states, and Catholic schools authorities attacked the plan, Greens leader Richard Di Natale said that while it was “early days”, the government’s announcement “puts the issue of needs-based funding firmly on the national agenda” and “we are open to a conversation about it”.
If the government got support from the Greens it would require just one additional vote in the Senate.
Nick Xenophon, who commands three Senate votes, said his team needed to get a full briefing. He said that in getting Gonski to give his imprimatur, the government had “pulled a rabbit out of the hat”.
The announcement was certainly an improvement on the government’s earlier position, Xenophon said. Gonski’s statements would carry “a fair degree of weight, but that’s not the only consideration”. “We will sit down constructively with the government and engage with other stakeholders,” he said.
The Turnbull government is seeking to seize the political initiative on schools, with a substantial funding injection and the appointment of David Gonski – who delivered the 2011 landmark schools report – to chair a “Gonski 2.0” review on how to improve the results of Australian students.
A day after announcing university students will pay more for their education, Turnbull unveiled an extra A$18.6 billion in funding to Australian schools over the next decade, including more than $2.2 billion in this budget for the first four years.
Turnbull said that, under the government’s plan, “every school will receive Commonwealth funding on a genuine needs basis”.
At a joint news conference with Turnbull and Education Minister Simon Birmingham, Gonski – who is a personal friend of Turnbull’s – said he was very pleased the government accepted the fundamental recommendations of the 2011 report, particularly the needs basis. The proposed injection of money was “substantial”, he said.
Turnbull and Birmingham said the plan would ensure all schools and states moved to an equal Commonwealth share of the Gonski-recommended Schooling Resource Standard in a decade. The federal government would meet a 20% share of the standard for government schools, up from 17% this year, and 80% for non-government schools (currently 77%).
Birmingham said 24 non-government schools stood to lose money (there would be some transition money for a couple of these schools with a large number of students with special needs). They are among some 353 presently over-funded schools which will be worse-off under the plan than they would otherwise have been. Australia has more than 9,000 schools in total across the government, Catholic and independent sectors.
Pete Goss, the school education program director at the Grattan Institute, said: “We still need to understand all the details but the overall shape of the package is very encouraging.
“The minister has set a clear 10-year goal of getting every school funded consistently by the Commonwealth. The additional funding will help ease that transition.
“Some schools that have been on a great wicket for a long time will lose out – and so they should. This is a gutsy call and it is the right call.”
Goss said he understood there had been “an internal debate” in the government to arrive at this plan.
The announcement is a substantial turnaround for the government, which had previously planned more modest funding, and refused to embrace the final two years of Gonski.
But Turnbull was in full Gonski mode on Tuesday: “This reform will finally deliver on David Gonski’s vision, six years ago, after his landmark review of Australian school education,” he said.
Turnbull is trying to take some of the shine off Labor’s political advantage on education which, with health, was at the heart of its 2016 election campaign. Next week’s budget will attempt to neutralise some of the Coalition’s problems on health, which saw Labor run its “Mediscare” at the election.
Birmingham said that over the next four years there would be growth in Commonwealth funding of some 4.2% per student across Australia – “importantly, most of it geared into the government sector where need is greater and the gap to close in terms of Commonwealth share is larger”.
He said the government would legislate the decade-long program, and impose conditions to ensure states did not lower their funding. “We will be expecting states to at least maintain their real funding,” he said. “This is about real extra money to help Australian schools and students.”
What Turnbull dubbed the “Gonski 2.0” review will recommend on “the most effective teaching and learning strategies to reverse declining results, and seek to raise the performance of schools and students”.
It will advise on how the extra Commonwealth funding “should be used by Australian schools to improve student achievement and school performance”, Turnbull and Birmingham said in a statement.
Another member of the original Gonski panel, Ken Boston, will also be on the review, which will report to Turnbull in December.
The government says its new arrangements will replace the patchwork of agreements left by Labor.
But Labor’s education spokeswoman Tanya Plibersek said this was “a smoke and mirrors, pea and thimble effort to hide the fact that instead of cutting $30 billion from schools over the decade, this government will cut $22 billion from schools over the decade”.
“The big picture here is that in the 2014 budget, Tony Abbott promised a $30 billion cut to our schools and in the 2017 budget, Malcolm Turnbull wants a big pat on the back for changing that cut to a $22 billion cut,” she said.
“A week out from the federal budget this is taking out the trash,” she said. “They want clear air on budget night.”
The link below is to an article that looks at the sleep patterns of those with above average intelligence – as well as others. Apparently such people sleep less – which perhaps may have people questioning their intelligence. What do you think?