Monash University > News and Events > Monash Memo

Ancora Imparo, February, 2009

Last year ended on a very positive note for Monash. We were awarded $89.9m from the Commonwealth Government's Higher Education Endowment Fund, the full amount we requested.

The first allocation from the fund was brought forward from July 2009 to December 2008 because of the global financial crisis as part of the package designed to stimulate the economy, and the sum dispensed was increased from $310m to $586m.

Our successful application was for the New Horizons Centre, a state of the art building to accommodate 300 of our academics from Science and Engineering and 150 CSIRO scientists. The main research themes in the centre will be materials, clean energy and simulation-directed smart manufacture. The approach will be multidisciplinary and will involve close partnerships with industry.

Monash will make a cash contribution of $56m to the project over four years and CSIRO will make a cash contribution of $14.9m.

In total, 11 universities received funding in this highly competitive initial round, with only four receiving $78m or more.

In addition to this allocation, the Government unexpectedly also distributed a further $500m as the Teaching and Learning Capital Fund. This was distributed on a formula basis related to the domestic student load. Monash received an additional $26m to use for capital works on teaching and learning facilities.

Taken together with the allocation of $500m as the Better Universities Renewal Fund in the May 2008 budget, it can be seen that the Government has acted on its stated commitment to address the neglect of universities over the last dozen years or so.

These substantial allocations will help universities to address their large backlogs of capital projects. From Monash's point of view it will allow identified priorities in relation to the science/engineering precinct to be addressed while maintaining our ongoing program of major refurbishment, including the high priority Menzies refurbishment program.

Of course, the allocations for capital refurbishment do nothing to address the inadequate recurrent funding for domestic undergraduate education and for the indirect costs of research. This means that the budget situation for 2009 remains tight.

2009 is likely to be the most significant year for Australia's universities for two decades. The Bradley Review of Higher Education was released in December 2008 and the Cutler Review of Innovation was released last September. The Government responses to these reviews will have a fundamental impact on our universities. Both recognise the significance of universities to Australia's future and outline how Australia has been falling behind with respect to public funding of its universities for education and for research compared with other countries and how this has impacted on student:staff ratios and some elements of the student experience.

The reviews also recognise that the failure to fund the full costs of research and domestic undergraduate students leads to universities having to cross-subsidise both the costs of research and the cost of education of domestic students from income from international students.

The Bradley Review makes many recommendations and I refer you to the Review of Australian Higher Education report.

Instead of attempting to cover the entire report, I will emphasise here only a few important recommendations.

The review recommended a 10 per cent increase in funding of education through the Commonwealth Grants Scheme, to be followed by a new indexation system which would ensure realistic increases in funding from year to year rather than the derisory increases that have been crippling the system.

In common with the Cutler Review of Innovation the Bradley Expert Panel argued for a move toward full-funding of the costs of research funded through national competitive grants, initially by increasing the value of the Research Infrastructure Block Grant to 50 cents for every dollar of project-based research grants, compared with its current value of just over 20 cents in the dollar.

It recommended negotiated targets for universities with respect to equity objectives with part of the funding being dependent on meeting those targets.

It also advocated for the establishment, under the aegis of the Commonwealth, of a national body to accredit universities that would also have oversight of vocational and tertiary education. This would involve a substantial transfer of responsibility for post-secondary education from the States to the Commonwealth and would allow better coordination of activities and transition pathways between the vocational education and training sector and the universities. It is not clear what the States' view will be on this.

The most controversial recommendation relates to the funding mechanism. The review suggested that all eligible students should be provided with learning entitlements or vouchers which they could choose to use to support their education at any public university and for any course to which they could gain admission. This system would apply only to public universities at first but could be extended to the private institutions and the Vocational Education and Training sector later.

Universities could admit as many students as they wished in the disciplines they chose. The panel hoped that better market information provided to students would ensure that the students' and universities' choices would match the nation's workforce needs, but the Panel recommended reserve powers for the Government to regulate numbers in disciplines judged to be national priorities.

Significantly the panel did not recommend deregulation of fees although it did suggest that by mutual agreement universities could charge full fees in courses for which they received no government-supported students.

Moving to a more deregulated and student-demand driven system rather than a regulated supply-driven system has attractions, but continuing to cap fees in the face of deregulation of load may have some unintended consequences.

It seems likely that if the only way that universities can increase teaching income from Australian students is by increasing intakes, the larger, more prestigious metropolitan universities may choose to do so, particularly in areas of relatively low cost and high demand.

Universities may also limit places in higher cost areas. I will leave it to your imagination to hypothesise on what these might be but it is unlikely that it will provide a good match for national workforce needs. Moreover the financial incentive for prestigious universities to increase numbers of students may be more damaging to smaller, less prestigious and regional universities than a system that allowed variation of fees. If deregulation of fees were to be introduced, equity concerns could be met by a requirement for a significant proportion of places to be offered as fee-remission scholarships to students from disadvantaged groups.

The point I wish to make relates not so much to the details of the model but rather to emphasise that the funding system has the potential to have a profound effect on the future of our universities as well as on our students and future generations of students. The details will be important and it will take time to work through them carefully.

In the meantime it is urgent that the funding recommendations of the reviews relating to support for education, research and financial support for students are enacted.

Taken together with the Cutler Review, the Bradley Review proposes many changes that will benefit the capacity of our universities to deliver the educational, research and research training outcomes that our nation needs if it is to be a significant player in the knowledge economy of the 21st century and if it is to play its part in solving some of the urgent problems facing the planet.

The Government's response to both reviews is therefore of fundamental importance in determining the future not only of our university system, but of our country.