Contents > Executive Summary

• Introduction
• Purposes of higher education
• Developments in teaching and innovation
• The Government’s objectives
• The Government’s achievements and directions
  • Expanding opportunity
  • Assuring quality
  • Improving responsiveness
  • Workplace Reform Programme
  • Postgraduate Education Loans Scheme
  • Additional assistance for high cost students with a disability
  • National Review of Nursing Education
  • University revenues
  • Advance the knowledge base and university contributions to national innovation
  • Implementing Backing Australia’s Ability
  • Implementing Knowledge and Innovation
• The 2002 to 2004 triennium
  • Student places
  • Funding

Introduction

The Higher Education Report for the 2002 to 2004 Triennium has three main purposes. It provides:

• an overview of the higher education sector in 2001, including new Government policies and initiatives and recent developments in the sector;

• a review of the performance of higher education institutions in delivering student places and other Commonwealth-funded outcomes in 2001; and

• information on the allocation of funding for the 2002–2004 triennium.

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Purposes of higher education

The Government regards higher education as contributing to the fulfilment of human and societal potential, the advancement of knowledge and social and economic progress. The main purposes of Australian higher education are to:

• inspire and enable individuals to develop their capabilities to the highest potential throughout their lives (for personal growth and fulfilment, for effective participation in the workforce and for constructive contributions to society);

• advance knowledge and understanding;

• aid the application of knowledge and understanding to the benefit of the economy and society;

• enable individuals to adapt and learn, consistent with the needs of an adaptable knowledge-based economy at local, regional and national levels; and

• enable individuals to contribute to a democratic, civilised society and promote the tolerance and debate that underpins it.

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Developments in teaching and innovation

Australian universities are increasingly focusing on the quality of their teaching and learning. There is a high degree of innovation in teaching as evidenced by the number and quality of proposals received from universities for the Australian Awards for University Teaching. The recipients of these awards create a platform that both recognises the work of leading teachers and inspires others to emulate their efforts.

Universities are undertaking collaborative course development and delivery through arrangements that bring together business, professional bodies and the university. The use of practicum is also becoming more common, even for non-professional disciplines, to achieve better learning outcomes. Universities are adjusting their curriculum and teaching practices in response to the need to achieve defined graduate attributes as a measure of desired learning outcomes.

Universities are also placing an increased reliance on Information and Communications Technology (ICT), both in terms of the delivery of courses, the provision of support services and access to information through digital repositories. Preliminary data from a recent survey of Australian universities by the Department of Education, Science and Training, suggests that the number of courses that are fully online is still relatively small, at 207, but about 54 per cent of the 63 468 undergraduate units and 30 378 postgraduate units offered at Australian universities are web-supported, at least in part.

There has been an increasing focus on collaboration in research with industry partners and other public sector research agencies. This is reflected in the strategic directions of most universities, as described in their Research and Research Training Management Reports. This has been accompanied by a growing recognition of the need to enhance the commercial outcomes from publicly funded research. The increasing professionalisation of research management in universities and the implementation of policies and processes to improve the management of intellectual property, technology transfer and commercialisation have been particularly notable over the past year.

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The Government’s objectives

The overarching objectives of the Government’s policies for higher education are to:

• expand opportunity;

• assure quality;

• improve universities’ responsiveness to varying student needs and industry requirements;

• advance the knowledge base and university contributions to national innovation; and

• ensure public accountability for the cost-effective use of public resources.

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The Government’s achievements and directions

Significant progress was made during 2001 against the above objectives.

Expanding opportunity

The number of domestic student places¹ (including higher degree research places) increased by around 13 900 from 2000 to 2001 (464 200 EFTSU to 478 100 EFTSU). The number of undergraduate domestic student places increased by about 10 400 from 2000 to 2001 (393 000 EFTSU to 403 400 EFTSU).

The expansion in higher education opportunities has been boosted by an additional 2670 new equivalent full-time places each year. In January 2001, Backing Australia’s Ability: An Innovation Action Plan for the Future (Backing Australia’s Ability) provided 2000 of these additional places in the fields of information and communications technology, mathematics and science. The other 670 new places were provided in the 2001–2002 Budget for regional universities and campuses in areas of high demographic growth. In 2004 an extra 6200 places will be available as a result. The allocation of these places was announced by the then Minister for Education, Training and Youth Affairs, Dr David Kemp on 24 August 2001. Thirty-two institutions benefited from the new places (see Section 2.1).

Commonwealth fully funded places in 2002 will total 393 255 including 371 500 undergraduate places (not including HECS-exempt higher degree research places). Total places will increase to 397 020 in 2004 (see section 2.1).

In 2002 the Commonwealth will support an estimated 22 059 HECS-exempt research training places, up from the 21 644 provided in 2001.

The number of domestic fee-paying students is expected to increase further during the triennium, thus opening up more opportunities for people to study their course of choice. On the most recent projections, domestic fee paying students will have increased the number of places they occupy from 13 500 EFTSU, or 3 per cent of enrolments in 1996, to around 43 000 EFTSU, or 9 per cent of enrolments in 2004.

Overseas student enrolments, both fee-paying and those supported through aid programmes, continue to grow strongly with the trend expected to be maintained over the 2002–2004 triennium. Universities predict that by 2004 overseas students will occupy around 138 000 places, up from 51 700 in 1996.

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Assuring quality

The Commonwealth, State and Territory governments continue to implement the quality assurance framework agreed by the Ministerial Council on Employment, Education, Training and Youth Affairs in March 2000.

Most State Governments have now introduced, or are in the process of introducing, legislation to meet the requirements of the National Protocols for Higher Education Approval Processes. This includes strengthening protection of the term ‘university’ in companies and business names legislation. The Commonwealth Minister for Education, Science and Training has taken over responsibility for the protection of the word ‘university’ under the Corporations Act 2001. Corporate bodies wishing to trade under a title that includes the word ‘university’ will be rigorously assessed by the Minister before receiving approval to do so.

The Australian Universities Quality Agency began operating during 2001. It is an independent national agency that will monitor, audit, and report on quality assurance in the Australian higher education sector. A Chair, Chief Executive Officer and Board members have been appointed. The Agency conducted three trial audits during 2001 for the purposes of refining a draft audit manual and training auditors. These were carried out at the University of New South Wales, Northern Territory University and the Queensland Office of Higher Education. The first round of audits will commence in 2002 (see section 1.3 for further details).

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Improving responsiveness

Several measures were announced or implemented during 2001 that are intended to directly improve the ability of universities to respond to the needs of students and the wider community.

Workplace Reform Programme

Forty institutions have qualified for first-round assistance under the Workplace Reform Programme. This programme offers higher education institutions additional funding for salary supplementation, conditional on improvements in management, administrative and industrial arrangements. To date universities have been allocated additional first round funding totalling $113 million.

Outcomes from the first round show that institutions have made improvements to their workplace and management practices, including enterprise agreements that allow flexible working conditions for staff and for conditions to be determined at the work unit, department or faculty levels. Institutions have also demonstrated strong achievements in areas such as cost savings, productivity increases and revenue generation. The outcomes being achieved through this programme will help Australian universities to remain competitive in an increasingly global higher education market.

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Postgraduate Education Loans Scheme

The Postgraduate Education Loans Scheme (PELS) was announced as part of Backing Australia’s Ability. The Scheme commenced in 2002 and increases opportunities for students to undertake, and institutions to provide, fee-paying postgraduate coursework.

Postgraduate coursework provision has been de-regulated since 1994. PELS is an important equity measure that will ensure that no prospective postgraduate coursework student is prevented from studying by an inability to pay upfront fees (see 2.2 for further details).

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Additional assistance for high cost students with a disability

From 2002 institutions will receive funding under the Additional Support for Students with Disabilities programme. The programme was announced in the 2001 Budget and will make approximately $8 million available to institutions over 2002 to 2004 to assist students with disabilities who have high cost support needs.

This programme will help institutions meet the specific educational needs of disabled students and therefore improve their study outcomes (see Section 2.3 for further details).

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National Review of Nursing Education

The Commonwealth has commissioned a national review of nursing education to examine the education and training of nurses, labour market issues affecting the employment of nurses and factors governing the demand and supply of nursing education and training. The Review is Chaired by Ms Patricia Heath (see section 2.2).

The Review produced a Discussion Paper in December 2001. The final report will be presented to the Government in mid-2002.

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Advance the knowledge base and university contributions to national innovation

Improving Australia’s knowledge base and national innovation system were among the Government’s major priorities in 2001. Much of the focus of Backing Australia’s Ability, announced in January 2001, was on the education and training system, especially universities. Universities will receive a total of nearly $1.5 billion ($1.3 billion for research and research training) of the $2.9 billion over five years provided in the package. This is only the direct financial benefit of the policy. Universities will also benefit from other measures, such as the expansion of the Cooperative Research Centres Programme, the $155 million provided for Major National Research Facilities, the continuation of the R&D Start programme and the 175 per cent R&D Tax Concession that will attract private sources of funding to research.

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Implementing Backing Australia’s Ability

A number of significant milestones in the implementation of Backing Australia’s Ability were reached during 2001:

• the first two years of additional funding for Australian Research Council (ARC) national competitive grants was appropriated by the Higher Education Funding Amendment Act 2001, which received Royal Assent on 18 July 2001. By 2006 ARC national competitive grants will be double their 2001 level;

• the first tranches of additional funding for project specific research infrastructure and systemic research and research training infrastructure were allocated to institutions and will be paid from the beginning of 2002;

• an additional 2000 new university places targeted at science, maths and information and communications technology were allocated (see Section 2.1);

• the Postgraduate Education Loans Scheme (PELS) was established. It commenced in 2002. The Innovation and Education Legislation Amendment Act (No.2) 2001, which received Royal Assent on 18 September 2001, established PELS. An advertising campaign to notify potential postgraduate coursework students of the assistance available through PELS began in September 2001;

• the first of the new Federation Fellowships were awarded by the Australian Research Council. The Fellowships provide internationally competitive salaries ($225 000 a year for five years) to help retain Australia’s elite researchers in Australia. Of the fifteen Fellowships awarded in the first round, six were awarded to researchers returning from overseas;

• the establishment of world-class centres of research excellence, in information and communications technology and biotechnology was initiated with the involvement of the ARC and funding from Backing Australia’s Ability. In September, guidelines for the centres were released and a call for applications was made. Final decisions are expected around June 2002; and

• the National Principles for Intellectual Property Management were released in September 2001, with the aim of helping universities improve their commercialisation of research and intellectual property management.

Backing Australia’s Ability flagged the need for an emphasis on research in which Australia enjoys or wants to build competitive advantage. In January 2002 the Minister announced four priority research areas for the Australian Research Council’s 2003 funding round under the National Competitive Grants Programme. These are nano-materials and bio-materials, genome/phenome research, complex/intelligent systems, and photon science and technology.

A total of 33 per cent of ARC funding in the 2003 round will be targeted at these priority areas to support project grants and centres for up to five years, at a cost of approximately $150 to $170 million.

The priority research areas were adopted on the advice of a working group of the Prime Minister’s Science, Engineering and Innovation Council following deliberations of the ARC’s own Expert Advisory Committees and the ARC Board.

Priority areas will be funded through the establishment of new Centres of Excellence concentrating teams of researchers in these areas, and through the ARC’s Discovery and Linkage grants to outstanding individual researchers. Funding for grants and centres will be guided by factors including research excellence, potential national benefit and capacity to build scale, focus and critical mass in these areas.

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Implementing Knowledge and Innovation

The implementation of the Government’s White Paper on research and research training, Knowledge and Innovation, continued during 2001.

The Australian Research Council formally became an independent statutory authority with the commencement of the Australian Research Council Act 2001 on 1 July 2001. The Council has developed a new programme structure for its National Competitive Grants Programme.

The Commonwealth’s block funding schemes for research and research training have been established with the 1 July commencement of the Australian Research Council (Consequential and Transitional Provisions) Act 2001. The Schemes are separately identifiable to improve transparency and accountability. New performance-based allocation mechanisms have been introduced with these Schemes.

New quality assurance measures for higher education research also came into effect with the requirement for universities to provide an approved Research and Research Training Management Report to be eligible for funding.

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The 2002 to 2004 triennium

This report details the Government’s allocations of funds and places to each institution for the 2002–2004 triennium. These are summarised at the national level in Tables Exec1 and Exec2.

Student places

The number of Commonwealth fully funded places will increase in each year of the 2002–2004 triennium. Between 2001 and 2004 total fully funded places will increase by 6450 EFTSU and undergraduate fully funded places by 8320 EFTSU. In 2002 there will be 19 765 more fully funded undergraduate places than in 1996.

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Funding

Commonwealth funding is set to increase in each year of the 2002–2004 triennium. In 2004 total higher education funding through the Education, Science and Training portfolio (excluding any programmes transferred to the portfolio in the November 2001 machinery of government changes) will be $6.3 billion, up from $5.9 billion in 2001.

Funding from the main programme elements is summarised in Table Exec1.

Table Exec1 Commonwealth fully funded student places, 2001 to 2004

1. This is derived from table 1.12 and table 2.1. See footnotes to those tables

Table Exec2 Commonwealth higher education funding through the Education, Science and Training portfolio, 2001 to 2004^(a)

(a) This table is a summary of table 1.13. See comments on the Cost Adjustment Factor in the text below. The table does not include funding provided through Education, Science and Training portfolio science programmes such as the Cooperative Research Centres Programme and the Major National Research Facilities programme. Although these programmes benefit universities financially, in most instance payments are not made directly to universities.

In this Report all dollar amounts for 2001 are actual 2001 amounts (unless stated otherwise). All figures for the 2002–2004 triennium are estimates using the estimated 2002 Cost Adjustment Factor – see Appendix C. They have not been adjusted for anticipated movements in the Cost Adjustment Factor.

This report is based on the 2002 estimated Cost Adjustment Factor (CAF). At the time of going to print, additional funds were in the process of being appropriated, because the actual CAF for 2002 is slightly higher than originally estimated. The additional funds that will be provided to universities because of this increase are around $8 million in 2002.

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1 Throughout this Report, 'a place' is defined as one equivalent full-time student unit (EFTSU)

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