Submission to the Review of Higher Education Financing and Policy

The Australian National University

SUMMARY OF CONCLUSIONS

Demand and Provision

• After substantial growth, Australia’s higher education system has now achieved levels of participation which compare well with other OECD countries and are high by world standards. The question which now needs to be asked is are we making the variety and types of provision needed to match the range of needs and abilities of students? (Paragraphs 3.1 to 3.5).
• Minimum entry standards vary significantly as institutions seek to meet fixed load targets. An alternative approach would be to set an appropriate minimum standard and allocate the number of funded places required to meet that standard (paragraphs 3.6 to 3.8).
• Greater encouragement of student mobility would enable better utilisation of the investment in existing institutions, reducing the need for expenditure on new campuses (paragraphs 3.11 to 3.14).
• The increasing participation of students with disabilities in mainstream education places significant additional cost pressures on universities which must be met if the students’ and the community’s expectations of access to university education are to be met (paragraphs 3.16 and 3.17).
• Developments in information technology and their applications in education have the potential to change, perhaps radically, the nature of universities. However, such developments should only be embraced where it can be demonstrated that the benefits can be realised without compromising educational outcomes (paragraphs 3.19 to 3.21).
• There is a strong case for reviewing the undergraduate programs in universities in terms of the balance between liberal and vocational studies and the needs of employers and professional accreditation (paragraph 3.19).

Regulatory and Administrative Framework

• It is an appropriate time to review the changes and mechanisms for policy development and oversight of universities which have operated for the last ten years and to assess the effects of direct government involvement in administrative and funding decisions affecting individual universities (paragraphs 4.2 to 4.5).
• In general, the post-1988 regulatory and administrative arrangements have tended to encourage uniformity and inhibit diversity (paragraph 4.6).
• The development of resource allocation mechanisms which require less direct government involvement and more appropriate regulation should be explored (paragraphs 4.9 and 4.10).
• Proposals for funding institutions by allocating funds to students would reduce the requirement for centralised resource allocation and regulatory decisions. Such arrangements, overseen by an independent, expert body, warrant careful consideration as the basis for future policy development and system regulation (paragraph 4.13).
• Internal mechanisms of university governance and administration are currently being addressed in institutions. Funding mechanisms which increase direct accountability to those seeking and utilising the services of universities would make the decision-making processes more responsive to changing needs (paragraphs 4.14 and 4.15).

Financing Higher Education

• HECS provides an equitable means whereby students contribute to the cost of their university education. However, the success of the Scheme may already be at risk by the way in which successive governments have altered it. Continual monitoring of the consequences of these changes is required (paragraphs 5.3 to 5.5).
• Consideration should be given to a limit of six years of HECS-liable study for all students. Further study would then be on a fee-paying basis or under HECS exemption scholarships for research degrees (paragraph 5.6).
• Income contingent loan schemes should be available for all local students paying fees. Where HECS is not available, universities should be able to offer such Schemes by utilising the HECS system through the Australian Taxation Office for the collection of loan repayments (paragraph 5.7).
• The current mechanisms under which all students are liable to pay fees are administratively complex, confusing and potentially inequitable (paragraphs 5.8 and 5.9)
• Resource pressures on universities have increased over the last decade. The position will be greatly exacerbated over the next few years through unfunded salary increases with longer-term implications for the quality and standard of Australia’s higher education system. Since the limit of private funding capacity has been reached, if not exceeded, government must take responsibility for meeting its share of future cost increases and system developments (paragraphs 5.10 to 5.15).
• The current basis for allocating operating grants to institutions through the 1990 Relative Funding Model is becoming outdated and a review of the method used to allocate operating grants to institutions will soon be required (paragraph 5.19).
• Proposals which have been made for a scheme of national scholarships or study entitlements warrant careful consideration as a means of overcoming many of the deficiencies of the current system (paragraphs 5.20 to 5.23).
• There may be a case for reviewing current Commonwealth and State funding and accountability responsibilities for universities and for considering a proposal for universities whose missions have primarily a State or regional focus to be funded by State governments and for universities with national and internationally focussed missions to be funded by the Commonwealth Government (paragraphs 5.24 and 5.25).
• Future funding mechanisms need to take account of the benefits which flow from identifying specialised teaching and research resources and equipment which are developed and maintained by individual universities on behalf of others (paragraph 5.26).

Funding of Research and Research Training

• There is a strong case for ensuring a high level of concentration in research and research training (paragraphs 6.4 to 6.6).
• A substantial component of research funding needs to be in the form of block grants to provide the infrastructure and continuity essential for successful high quality research and research training. The fall in the level of block funding as a proportion of total government research funding should not be allowed to continue (paragraphs 6.8 and 6.9).
• An increase in the proportion of operating grants allocated as the Research Quantum would support research concentration. At the same time a review of the method of allocating the Quantum will be required (paragraphs 6.11 and 6.12).
• A plurality of competitive research funding sources needs to be maintained without arbitrary restrictions on who may compete for funds (paragraphs 6.13 and 6.14).
• The arguments for concentration are as relevant for the production of high quality PhDs as they are for nationally and internationally competitive research. The Committee needs to consider whether the current scale of PhD education is justified, whether all universities should provide PhD training, or whether it should be rationalised, consistent with the policy of research concentration? (Paragraphs 6.15 to 6.18).
• A review of the Australian Postgraduate Awards Scheme is required to ensure that the value of stipends is maintained and to facilitate mobility. Consideration should be given to allocating scholarships to students, tenable at the institution of their choice (paragraph 6.20).

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