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Ancora Imparo, November 2007

7 November 2007

One of the most disappointing things about the current election campaign is the silence of both major Parties about any strategy to develop a strong university sector. This is an essential ingredient if Australia is to have a competitive economy able to thrive beyond the current commodities boom and contribute solutions to the problems facing our planet.

The Labor Party has announced its "Education Revolution", but behind the rhetoric there have been no concrete plans to design a university sector which is supported to be internationally competitive at the highest level. Both Parties have emphasised the importance of early childhood education and identified the need to provide more incentives for teachers -- very laudable. But the emphasis of policy has been on populist, ideological and interventionist responses such as designing and prescribing curricula for schools.

There have also been generic statements about our skills shortages, although the emphasis here has been on technical skills and vocational education and training, rather than on the equal need for higher-order skills dependent on university training. We desperately need more engineers and scientists, and the shortage of information and communications technology experts will become extreme in coming years. The shortage of health professionals was recognised lamentably late and corrective steps have been populist rather than strategic. We are also not producing sufficient people with high-order policy, management and leadership skills. And our society needs scholars and artists if we are to have an enriched and civil society.

Senior members of Cabinet have been heard to say that we have too many people going to university and too few undertaking vocational education and training. The problem is actually too few students completing high school and obtaining any post-secondary training or education.

Government funding of universities fell in real terms for eight years from 1995 and has only kept pace with inflation over the last three years. The extra funds in that time have been used as an "incentive" for universities to follow governance and industrial relations requirements which are unique to our sector and where there is no evidence that these changes would achieve any improvements in performance. After 2008, the universities are due to revert to a bizarre system of indexation which delivers a 1.5 to 2 per cent increase in funding per annum, when real costs are rising at 4 to 6 per cent per annum. Secondary schools, on the other hand, have an indexation system applying to them which delivers 6 per cent or more per annum.

Of course we are not functioning in a vacuum. Other countries, including our neighbours in Asia, are investing mightily in their universities seeing them as the key to growth. The recent OECD Report (Education at a Glance, 2007) showed that in the decade to 2004 Australia decreased public investment in higher education by 4 per cent while there was an average 49 per cent increase in other OECD countries.

Detailed information about funding of our universities can be obtained through the Group of 8 website.

Of course, universities have responded by attracting large numbers of international students. This has been a great achievement by the sector. But it has placed an enormous strain on our staff with student-staff ratios in our universities blowing out from 14 to 1 to more than 20 to 1 over the last 13 years, and great stress being placed on the physical infrastructure. The Higher Education Endowment Fund announced in the last Commonwealth Budget will be a real help but it will not be anywhere near enough to relieve the strain on physical resources.

Commonwealth funding of research through the national competitive grants (largely ARC and NHMRC) has increased markedly in the last six years, but this has caused an additional problem for universities. The grants from ARC and NHMRC only cover the direct cost of the research project, and the costs of supporting the staff and facilities required to provide administrative and other infrastructure to support the research have to be funded by the university and infrastructure funds supplied in the Research Infrastructure Block Grant and the Institutional Grants Scheme. These schemes have risen by only 25 per cent over the last six years at a time when the national competitive grants have more than doubled. Activity-based costing shows that about 40-50 cents additional funding is required in each dollar to support the research funded through national competitive grants. In other words, for every additional dollar of research funds obtained from ARC and NHMRC, the university is about 50 cents worse off. This has to be obtained by cross-subsidy from less research-intensive parts of the university using funds intended for education, and places huge strains on the system.

Our universities are highly constrained with respect to the number of Commonwealth-supported places we can offer and the income from these places is determined by government. We are told that we need more diversity in the sector but the micro-regulatory environment places universities in straitjackets constraining initiatives and encouraging uniformity. Constructive criticism is dismissed as coming from "whinging vice-chancellors" and we are told that the problem is not lack of money, but rather that our universities are badly managed and have too many administrative staff. I have responded to this in an article in Campus Review.

A new funding system is required to provide more flexibility for universities, more support for economically-disadvantaged students and negotiated support for universities to deliver specific outcomes according to their particular objectives and the needs of the communities they serve. Accountability should be based on outcomes not on process, and the role of government should be enabling rather than regulatory.

The major Parties say that their market research shows universities are not a big issue for the electorate. They should be and could become so. They play an essential role in educating the leaders of the future and in performing the research necessary for a competitive economy and to solve the problems confronting our planet.

Strong leadership would ensure that strategies to develop a stronger university sector would be a central plank of the election campaign.

Professor Richard Larkins
Vice-Chancellor

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