THE REVIEW OF HIGHER EDUCATION FINANCING AND POLICY

by

Mr Paul Orton - Manager, Policy
Virginia Mudie or Colin Tyson - Education and Training Policy

THE AUSTRALIAN BUSINESS CHAMBER SUBMISSION

Preamble

Australian Business is concerned with the future direction of tertiary education particularly in relation to spiralling costs, the resistance demonstrated by institutions in responding to the market place, the issues of credential recognition across institutions and the individual and corporate accountability to use public funds in the most cost effective manner.

The leading futurist Peter Drucker recently predicted,

‘ .........the present system of higher education is doomed. Thirty years from now the big university campuses will be relics. Universities won’t survive. It is as large a change as when we first got the printed book.

Such totally uncontrolled expenditures, without visible improvement in either the content or the quality of education, means that the system is rapidly becoming untenable. Higher education is in deep crisis.

BRW, April 1997

Australian Business supports the above view and welcomes the opportunity to present the following input into the review.

1. Theme One (Required Attributes of Future Graduates)

1. The most relevant skill for graduates is the ability to research and analyse information. Tertiary training must assist the graduates to seek, locate, assimilate and discern knowledge and encourage them to continue to do so, throughout their entire working lives.
   
   Graduates who have these attributes will be highly regarded by the labour market.
   
   Therefore curriculums that engender this skill should be encouraged.

- Future graduates will be required to be proactive/innovative solution finders rather than reactive and unable to seek opportunity in change.

Curriculum committees should be encouraged to focus on the future rather than the current needs of the work place. Such committees should work towards developing subject material with a view to what will be required in the future rather than what has been taught successfully in the past.

 

2. The range of vocational skills sought by employers will require a qualification to reflect mulitiple disciplines. It is not realistic to assume that a single range of subjects can provide the diversity of knowledge required by future employers.

The tertiary study option that incorporates the greatest range of material sources, portability, academic transfer and broadest application of knowledge will have the greatest market appeal.

1. The graduate who has practical industry experience will be in demand. Employers will require a graduate to be able to reach optimum potential as soon as possible and there will be less time for graduates to ‘learn the ropes’ in ‘company time’.
   
   Therefore it is likely that disciplines that offer industry secondment, practicums, cadetships, internships and encourage the formalisation of industry experience (ie mature age students/workers) will be the most attractive to the labour market.

Theme Two

No submission

Theme Three (Regulatory and Administrative Framework for Higher Education)

Value for Money

• It is essential that a single framework for education is put in place - the AQF may well be the appropriate framework. Any two tiered system will lead to market confusion and unequal access with little by way of benefit to the consumer.
  
  The single framework model allows for recognition of all forms and levels of formal accredited training thus enhancing the employability of the graduate. This encourages ‘whole of life learning’ and facilitates the transition from shop floor to boardroom. A two tiered system would truncate this transition, leaving no access for workers wishing to formalise their vocational training and on the job experience other than to start at the very begining. This is an extremely wasteful loss of scarce education resources.
  
  The work place of the future will require the graduate to have knowledge, aptitude and ability. The single framework assists in the development of tomorrows worker by faciliating the combination of technical expertise and all round management skills (ie a mix of practical and theoretical knowledge and experience).
  
  The single framework enables the non graduate to gain recognition at the tertiary level of trade qualifications and non tertiary education. A two tiered system would marginalise the non university student who does not use the university system.

• Government funding must be linked to innovative delivery mechanisms which will maximise the use of publicly funded tertiary facilities. Most institutions currently provide only 24 weeks of face to face instruction per year. Some full time tertiary course involve less than 18 hours per week of delivered program. For more than half the year expensive tertiary education infrastructure operates without students.
  
  By encouraging the introduction of the trimester and the provision of services at alternate times (ie week end, after hours training and traditional pupil free periods ie summer), there is scope to maximise the payback on the public dollars invested in university facilities. Tuition costs aside, it is possible to increase by 100% the number of students using a facility in a given period. Alternatively, a student may be able to reduce the time taken to complete a qualification by 50%.
  
  To encourage consideration of the above, a proportion of tertiary education funding could be reserved for institutions and courses that actively seek to maximise facility usage or reduce the traditional time lines involved in gaining qualification.

• Currently there appears little influence by the funding agency and the market place on the providers of the tertiary education. As a result the institution is able to determine a product range and delivery mechanism to suit itself.
  
  It is possible to use government funds to break up the and delivery monopoly enjoyed by institutions by placing purchasing power in the hands of the student consumer. This can be achieved by giving the student a redeemable bond of say $800 per subject (max $19,200 ie a degree). The student can then elect to purchase the subjects they wish to study from a reasonable range of institutions.
  
  This process will encourage those universities to meet the market place needs and to forge links with industry. Universities which are unwilling to meet changing user requirements and who stubbornly maintain a ‘more of the same’ approach to learning, should no longer be able to use public funds to develop a full fee paying course. This will ensure that the University seeking to enter the lucrative full fee market will do so with sound business approach, not one based on poor market research and which relies on a public fund bail out if unsuccesful.

Increased Student Accountability

• One of the extraordinary wastes in the education spend is the large numbers of undergraduate students who fail to complete their course. These people fail to complete for a variety of reasons some of which are beyond the control of the individual. Many however, attempt a course of study out of curiosity with no sense of commitment to either the course, the institution or who ultimately pays the lions share of the costs of mistaken subject/course choice ie the federal government. Every attempt to reduce this leakage in education funding should be made.
  
  A suggested mechanism is to compartmentalise an undergraduate course into a staged qualification. A example of which could be a Certificate in Commerce (one semester and four subjects), which leads to a Diploma of Business Studies (8 -12 subjects) and culminates in a Bachelor of Business. This process ensures a greater likelihood of completion at all stages and makes the concept of multiple entry and exit points in tertiary education more achievable.
  
  High drop out rates can be reduced and resource waste due to incomplete qualifications can be cut if more consideration was given to encouraging a time gap between completing secondary school and tertiary enrolment.
  
  Additionally it is possible to institute a pro - rata funding arrangement whereby the institution is penalised by high drop out rates. This would ensure better candidate selection and may lead to the creation of a bonded system whereby students bear some of the financial loss if they fail to complete subjects/qualifications. This would ensure that all partners in tertiary education share a proportion of the loss incurred through incomplete qualifications.

• Significant leakage of tertiary funding occurs when some institutions fail to either recognise subjects or offer subjects that are transferable with other institutions.
  
  It is suggested that funding could be tied to ensure that the majority of federal funds are allocated to subjects areas that are fully transferable between institutions.

Alternate Funding Sources

• Tax incentives could be devised to encourage the creation of foundations to fund scholarships, undergraduate positions and infrastructure as a way to reduce the reliance on federal funds.

Executive Summary

Australian Business supports the concept of a single framework for education - the Australian Qualifications Framework. It is accepted that there is a need for minor changes but this does not warrant reforms that would confuse the market place and offer few benefits to the consumer (ie employer and graduate)

Australian Business sees the need to address some of the shortfalls in the way the provision and development of tertiary education is matched to the needs of the market place (employers and students).

Australian Business believes that graduates are required to have the skills for whole of life learning, which include the enquiring mind, the ability to apply knowledge in innovative ways and the capacity to absorb both related and unrelated themes into their core knowledge. Graduates who do not have these skills will not be competitive in the employment market.

Australian Business supports efforts made to maximise the use of education facilities. This can be acheived by the introduction of increased hours of tuition per week, three semesters of twelve weeks per year and/or more scheduling of lectures ‘out of hours’. Attention must be given to reducing the high incidence of incomplete qualifications. This could be achieved by introducing financial burdens on institutions for poor student selection processes and on students for not completing a course of study.

Australian Business supports the need for articulation of subjects and credit transfer between institutions and suggests that government monies should only fund those courses and subjects that allow for full articulation and full and complete (unequivocal) transfer of credit.

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