THE SECRETARIAT
REVIEW OF HIGHER EDUCATION
FINANCING AND POLICY
LOCATION 728, SECOND FLOOR
16 MORT STREET
CANBERRA CITY ACT 2601
AIVLE National Secretariat
6 Campion Street
DEAKIN ACT 2600
Tel (06) 2822411
Fax (06) 2852194
The Institute would welcome the opportunity to make a representation
to the Review Committee to discuss the issues raised in this submission.
Mr Bryan Nye, AIVLE CEO, is available on telephone (06) 2822411.
1 Key Points
1.1 Property is a dramatic example of the rapid rate of change
in the knowledge and skill base of a discipline. The level of
sophistication required for all facets of property decision making
requires skilled professionals with university qualifications.
1.2 Property is a major investment asset class for Australia and
a major tax revenue raiser making adequate funding for property
education and research essential if informed property decisions
are to be made. Government funding and taxation concessions for
contributions to research are required.
1.3 Continued access to property courses for females and people
of diverse ethnic backgrounds is required to develop a property
profession that reflects the cultural diversity of Australian
society.
1.4 Degrees should not become a collection of subjects but have
a vocational focus which will meet the needs of the property profession,
employers, students and property academics. This point is relevant
to the other professions.
1.5 Downsizing of government makes the maintenance of the practical
components of courses essential as the traditional on-the-job
training provided by government no longer exists. This point is
particularly relevant to industries characterised by small business
such as the property industry.
1.6 Course accreditation by the professions and the universities'
internal quality assurance policies provide effective mechanisms
to ensure accountability and quality control in higher education.
2 Introduction
2.1 The Australian Institute of Valuers and Land Economists (AIVLE)
is a national association with over 7 500 members who are professionals
involved in the valuation, administration and use of land and
property. Specifically, members work in the areas of property
valuation, plant and machinery valuation, property investment,
property financing, property development, property management,
property transactions, property research and analysis, property
consultancy, property law and property education. Members' work
covers both direct and securitised property.
2.2 The Institute was established in 1926 and has had a long involvement
in education for the property industry. This involvement spans
the conducting of qualifying courses in valuation, to the accrediting
of courses through the TAFE system to the accrediting of property
courses by universities. The first property degree was introduced
by the University of South Australia in 1972. The Institute has
had a direct input into the courses offered through its course
accreditation procedures and through representation on Course
Advisory Committees.
2.3 Property is the cornerstone of the Australian economy in terms
of the creation and use of space, the relationships which exist
between land, buildings and the environment and in terms of investment.
Given the anticipated increase in superannuation funds in the
coming years there will be a significant increase in the funds
invested in real property if the super funds' current asset allocations
are maintained. This heightens the need for professional property
advice to ensure that funds are wisely invested to avoid the kind
of calamitous results of the past such as the disastrous 1890s
financial crash in Victoria mirrored a century later in the 1980s
and early 1990s.
2.4 Australia has one of the highest proportions of home ownership
in the world and property generates significant taxation revenue
through state and local government fees and duties. Australia
compared to many other countries has little government provided
housing and private investors provide much of the rented accommodation.
The Commonwealth capital gains tax on property investment is expected
to grow substantially in the future.
2.5 In money terms, the 1996 December quarter saw the total investment
in land and buildings by superannuation funds reach $15 billion
in addition to $8 billion in the statutory funds of life offices;
the market capitalisation of the listed property trust market
was $17 billion in April, 1997; housing finance approvals for
the month of January, 1997 were $4.6 billion with approvals for
housing investment loans being $1.6 billion in that same month;
commercial lending commitments for real property in January, 1997
were $1.9 billion.
2.6 The high level of property investment by individuals and institutional
investors, makes it imperative from social and economic viewpoints
that funds are protected through the highest levels of property
education.
3 Submission Format
3.1 It is recognised that the themes identified by the Review
Committee are not mutually exclusive or exhaustive, however, for
ease of reading, the submission has been arranged around the 5
identified themes.
4 Theme 1: The Role of Higher Education in Australia's Society
and Economy
4.1 Social Issues
4.1.1 Today's enrolments in university property courses show greater numbers of female students than previously and students of diverse ethnic backgrounds. Women are now undertaking significant leadership roles in what was previously an Anglo-saxon, male-dominated industry. University education has been a major catalyst to this and needs to continue to prepare female property leaders as well as leaders from a broad range of ethnic backgrounds. The desirable flow-on effect will be a more diverse property profession that more accurately reflects the cultural diversity of Australian society.
4.1.2 The trend of increasing numbers of mature age students in
higher education increases the need for the recognition of prior
learning (RPL) and the need for cost-effective and widely accessible
mechanisms to implement the recognition process.
4.2 Economic Issues
4.2.1 Currently, property courses are "small" courses
in terms of size within the universities however in terms of the
importance to the Australian economy they are critically important
as outlined in paragraphs 2.3 through 2.6.
4.2.2 The level of sophistication required in all facets of property
decision making requires skilled professionals with university
qualifications. Property issues have become more multidisciplinary.
Property professionals understand broad business and financial
issues. They also analyse the interrelationships between the economy,
property, construction, heritage matters, the environment, planning
and legal issues as well as understanding the sociological impact
of the interrelationships.
4.2.3 The increased levels of funds from compulsory superannuation
over future years will require skilled professionals to undertake
asset allocation and property is an important investment class
in the asset allocation process.
4.2.4 Employers have recognised the need for degree entry into
the property profession and it is now a prerequisite for recruitment
of new staff.
4.2.5 There are also increasing numbers of professionals undertaking
postgraduate programs as this additional study is valued by the
property industry and is a requirement of some employers.
4.3 Student and Employer Demands for Industry and Labour Market
"Relevant" Curricula
4.3.1 There is a need for vocational university courses from both
the student and employer perspectives. For decades, the professions,
for example, doctors, engineers, architects, accountants, lawyers
and property valuers, through their associations or registration
boards have undertaken course accreditation. The accreditation
process as well as the Course Advisory Committees have had major
inputs into university education at all levels but particularly
at the undergraduate level.
4.3.2 Students who have completed these "vocational"
degrees have greater success in finding employment than students
who have undertaken less vocational courses. Due to cost constraints,
universities seem to be moving towards degrees becoming a collection
of subjects with limited vocational focus; the undergraduate degree
being a generalist degree and vocational training to be offered
at the postgraduate level. The impact of this trend, if it continues,
will be to see professional education and training become beyond
the financial reach of most Australians. The financial commitment
to a first degree is significant; to have the additional expense
of a postgraduate qualification would be too great a deterrent
for many. The fact that postgraduate programs are full fee paying
increases the deterrent effect. With many property professionals
employed in small businesses, employer support in respect to postgraduate
fees is often not possible. Instead of providing greater equity
in the provision of education, this trend will further disadvantage
the "disadvantaged".
4.3.3 Rationalisation of courses has already occurred to a certain
extent, for example, accounting, finance, economics and property
students undertaking common business subjects in the first year
of their degrees. Rationalisation beyond this level would not
fulfil student or employer or the profession's expectations of
university education. If graduates are seen to not have a suitable
knowledge and skill base, there is a danger that employers could
recruit school leavers and provide them with limited, narrow in-house
training.
4.3.4 Cost constraints have caused pressures on many courses to
reduce their practical component. Students cannot be educated
in property without undertaking significant practical work within
their courses, for example, the teaching of valuation theory needs
to be underpinned by students undertaking basic practical valuation
exercises under supervision, in the same way that medical or applied
chemistry theory needs to be underpinned by practical example;
property management and investment requires similar real-life
simulation; students must be able to identify building faults,
judge the state of repair of buildings and the quality of soils
or identify the signs of possible contamination.
5 Theme 2: Factors Affecting the Demand for and
Provision of Higher Education Over the Next 10 to 20
Years
5.1 Changes to industry structure
5.1.1 Major changes to the structure of the property industry
have been caused by the downsizing of government at all levels
as well as that of the larger financial institutions combined
with the outsourcing of property functions. The traditional on-the-job
training of many property graduates was undertaken in government
departments and authorities and the larger financial institutions
which had the capability to provide training.
5.1.2 The property industry today is characterised by many small
businesses and some medium sized businesses. Small business often
does not have the resources to be able to offer on-the-job training
to graduates nor do the smaller professional groups/associations
have the resources to offer on-the-job training schemes. The pressure
to reduce the practical content of property courses, as outlined
in section 4, exacerbates this situation. It is vital that funding
constraints do not result in the further reduction of the practical
content in property courses.
5.2 Labour Market Trends
5.2.1 Property academics can attract significantly higher salaries
in the profession than in academia. There has always been a differential
between academic and practitioner salaries however the trend is
for this differential to continue widening. The community is relying
on professionals to make a "lifestyle choice" or answer
a "vocational calling" in order to have academics teaching
in universities.
5.2.2 The bulk of leading property academics will be retiring
within the next decade. Several of the key property academics
have retired in the past twelve months and university cut-backs
have meant some of their positions will not be filled. Unless
leaders in the property profession can be attracted to academia,
there will be a serious shortage of suitable candidates to take
leadership roles in the early years of the next millennium.
5.2.3 Salaries must be more competitive to ensure Australia has
good quality academics in future years. With the introduction
of greatly improved distance education technologies, Australia
will need quality academics to compete with overseas universities
for Australian students as well as to compete for overseas students
to undertake Australian courses.
6 Theme 3: Regulatory and Administrative Framework
for Higher Education
6.1 Accountability and Quality Control
6.1.1 Property is a dramatic example of the rapid rate of change
in the knowledge base of a discipline. Strategic changes in the
property industry, particularly the creation of property trusts,
has required the inclusion and expansion of property investment,
property finance, investment analysis, property portfolio and
asset management, corporate real estate asset management and international
property issues in property degrees further adding to the multidisciplinary
approach referred to in 4.22.
6.1.2 Course accreditation and industry representation on Course
Advisory Committees has ensured/enabled universities to
keep pace with the changing education requirements of the property
professions. The accreditation process is a collaborative venture
between the AIVLE and universities ensuring high quality educational
outcomes with benefits for students, employers, the tertiary institutions,
the Institute and the community.
6.1.3 Joint efforts by the AIVLE and the universities produce
graduates who possess professional competence, ethical behaviour,
a sense of responsibility to the profession and to the community
and a capacity and commitment to continuing professional and personal
development throughout their lives.
6.1.4 The principal objective of course accreditation is to foster
excellence in the provision of property courses which are relevant
to current and future professional practice. Accreditation is
undertaken in a spirit of constructive evaluation of courses against
established criteria. The AIVLE aims to ensure that all students
undertaking a course experience a quality programme with an appropriate
curriculum delivered effectively and supported by adequate facilities.
6.1.5 Factors considered in the course accreditation process are
wide ranging and include: the educational qualifications, professional
experience, teaching skills, professional development and scholarly
productivity of academic staff; student staff ratios and class
sizes; administrative support for programs; financial resources;
physical facilities and equipment; course admission policies;
course retention rates; assessment standards; educational innovation,
curriculum content; the universities' accreditation and quality
assurance procedures and the input to courses by the Course Advisory
Committees.
6.1.6 Course accreditation by the AIVLE, industry representation
on Course Advisory Committees, the universities' internal accreditation
and quality assurance procedures ensure the quality of higher
education courses and teaching.
7 Theme 4: Financing Higher Education Teaching and Research
Training
7.1 Public Funding
7.1.1 The importance of property to the Australian community and the tax revenue generated through property is so significant that continued support by Government for property education and training is essential.
7.1.2 Over the past twenty years in Australia, property has developed as an academic discipline, however in comparison to other major OECD countries this development has been retarded. Property education remains hampered by the lack of financial support and a lack of recognition of its academic rigour by some in the higher education sector. Property education in Australia is significantly behind that in the United States of America, the United Kingdom or Canada, in terms of staffing, resources, the development of graduate programs particularly to doctorate level and research funding.
7.1.3 Despite the lack of resources, a nucleus of property academics
with international standing and reputation has emerged and the
quality of the property programs can be favourably compared with
those offered internationally. The 1996 Course Experience Questionnaire
conducted by the Graduates Careers' Council of Australia placed
three of the undergraduate property programs among the leading
business courses in the country.
7.1.4 Further reductions in Government funding for property courses would pose a significant threat to the future of Australia as an internationally acceptable property investment market.
7.1.5 The size of the Australian student market is limited, duplication
of the infrastructure required for higher education would be inefficient
leading to poorer facilities for all institutions if private providers
have access to public funding.
7.2 Merit Scholarships, Vouchers and Student Loan Schemes
7.2.1 There are complex societal and implementation issues in
relation to merit scholarships and voucher systems and the Institute
does not have the resources to research these issues. However,
it has a clear desire to achieve a situation where the best qualified
and motivated candidates can be attracted to a career in property
and that these candidates should be able to achieve their career
aspirations regardless of social and economic background.
8 Theme 5: Funding of Higher
Education Research
8.1 It appears that while universities state that they are providing
adequate funding for research, the reality is that after meeting
the enormous central governance expenses, there is scarcely enough
remaining funds to provide a basic teaching program. Anecdotal
evidence indicates that without the funds generated by having
full-fee paying overseas students, the universities' teaching
programs would deteriorate significantly.
8.2 The result is that research is limited to the personal interests
of a small core of property academics so that much of the research
has been undertaken by commercial property firms for particular
client needs or sourced from overseas.
8.3 Significant tax revenue is generated from property and there
should be for greater government funding allocated to property
research.
8.4 In addition to the provision of government funding, there is goodwill within the property industry to support investment in research. However, appropriate schemes are required so that donations to universities for the establishment and operation of research centres attract a premium for taxation purposes as genuine research and development contributions.