Monash University > News and Events > Monash Memo

Ancora Imparo, June 2007

6 June 2007

As I am sure you are all aware, the Federal Budget was handed down on 8 May. For the first time in recent years, higher education figured prominently.

In this month's column I will highlight some of the major features affecting universities and their implications for Monash. I will also point out the substantial needs which have not been met and the major relevant features so far announced from the Labor Party platform.

A Higher Education Endowment Fund (HEEF) is to be established. So far the Federal Government has committed $5 billion to this fund from the budget surplus and it has indicated that in future years a similar capital sum might be added to the fund. The dividends from this fund (initially estimated to be at least $300m per year) would be made available to universities through a competitive process. A six person Board, chaired by Mr David Murray and comprising the Chief Scientist and the Secretary of DEST as ex officio members will be established by the Minister and will make recommendations to the Minister on the allocations from the fund. The purpose of the funding is to contribute to improved capital works and research facilities, both new and existing, for projects "which support Government policy with respect to specialisation, diversity and responsiveness to local labour market needs". On a per capita basis, Monash could expect to receive about $20m per year. As we currently allocate $60m per year to new property-related capital projects, an additional $20m would make a substantial difference and allow us to attend to some of our most pressing capital needs more quickly.

There have been significant changes to the Commonwealth Grants Scheme (CGS), the mechanism by which the Commonwealth pays the universities for Commonwealth supported or HECS places.

Currently funding is distributed according to an agreed number of student places in each university in each of 12 funding clusters. Universities are not funded for over-enrolments exceeding 1 per cent of the negotiated load in each cluster and are penalised if they fall below their load by more than 1 per cent. The budget announcement foreshadowed a reduction in the number of clusters to seven and increased funding of varying extent for a number of the disciplines. In contrast, accounting, administration, economics and commerce were moved into the same cluster as Law, decreasing the Commonwealth contribution by $1029 and making it possible for universities to increase the student contribution by just over the amount of reduction in the Commonwealth contribution. Overall, the cluster changes will produce for Monash University an increase of about $9m in the CGS for 2008.

The cap on over enrolments has been increased to 5 per cent. This will allow increased Commonwealth-supported places in some high-demand courses, but may make it more difficult to fill places in lower-demand courses or at our lower-demand campuses. The 35 per cent cap on full-fee places has been removed but these places may only be offered after the Commonwealth supported places in the cluster have been filled.

There are other changes including a new Diversity and Structural Adjustment Fund, rolling in the funds from the Collaboration and Structural Reform and some of the funds from the Learning and Teaching Performance Fund which will now continue at $83m per year.

There is some additional support for students including some rent assistance, extension of Youth Allowance and Austudy to some coursework masters degrees and additional Commonwealth Learning (now re-badged simply as Commonwealth) Scholarships. Some funding has been provided for a number of schemes to encourage Indigenous participation in education and Indigenous leadership programs.

There has been a small allocation ($450 per student) to education faculties to help fund student teaching placements, but as there is also a requirement to increase the duration of these placements, the costs to the faculties exceeds the financial allocation.

There were two substantial announcements of direct benefit to research at Monash. One was the contribution of $15m towards the capital cost of the Australian Regenerative Medicine Institute (complementing the contribution of $35m from the Victorian State government). The second was the contribution of $50m towards the operating costs of the Australian Synchrotron at Monash, which will be used extensively by our scientists.

So obviously there are many good aspects of the budget for Monash University and our students. But there are also some significant shortcomings. The first is that there has been no attention to the fundamental issue with respect to Commonwealth funding of universities. This is the lack of a realistic indexation of Commonwealth funding relating to the increase in costs. If the Commonwealth Grants Scheme had been properly indexed to CPI and adjusted according to the number of Commonwealth-supported students, universities would now be receiving $1.148b more (about 30% of the Commonwealth Grants Scheme) than is the case at present. Although the conditional one-off adjustments in 2005-2007 and again present in this budget have helped to stem the decline in real funding per student, the budget does not correct this underlying problem.

The second major issue relates to research infrastructure and its funding. In the last 6 years, NHMRC funding has increased 3.8 fold, ARC funding 2.2 fold, but research infrastructure grants by only 1.25 fold or 25 per cent. It is becoming harder and harder for research-intensive universities to support their research. This must be addressed.

More support must be provided for students in financial need. The AVCC Survey showed that many students are living in poverty and a large number need to work long hours to support themselves. Not enough is being done to help these students and to encourage socio-economically disadvantaged students to come to university.

The Labor Party has signalled interest in education by launching the "Education Revolution". Other commitments include promises to introduce proper indexation, phase out Australian undergraduate full-fee places while fully compensating universities, reducing HECS fees for maths and sciences, and the introduction of funding to universities for student services.

We have a long way to go before universities receive the political and community attention that their importance suggests they justify, but it is refreshing to see they are now at least part of the political debate.

Professor Richard Larkins
Vice-Chancellor