October 28, 2020
27 October 2020
Senate Education and Employment Legislation Committee
E: eec.sen@aph.gov.au
The Group of Eight (Go8) welcomes the opportunity to make a submission to the Senate Education and Employment Legislation Committee inquiry into the Higher Education Legislation Amendment (Provider Category Standards and Other Measures) Bill 2020.
Please note that this submission represents the high-level views of the Go8, and our members may make their own, more detailed submissions.
The Go8 produces some 115,000 graduates every year, educated in a research-intensive environment. However, we also acknowledge the benefits of a diverse higher education system where there is a spectrum of institutions from education-intensive to research-intensive providing options for a high-quality and fit-for-purpose educational experience for all Australians.
We are at a moment in time when both Australia’s higher education system and our economy are in a state of flux due to COVID-19. We now need to decide what our universities will look like and how we will fund them to be in alignment with national priorities and key industries that will form the backbone of our future economy. Given the recent passage of the Job-ready Graduates legislation – with its focus on producing graduates for the future economy – there is an urgent need to reform university research funding. In particular, the Go8 believes that research must be funded to support excellence at scale. This is what the economy demands and in constrained financial circumstances the nation cannot afford to invest public money in research that does not satisfy these thresholds[1].
Consequently, this Go8 submission seeks not to make recommendations on amendments to the Bill under consideration but rather to inform the work of the Senate by placing it in the context of inter-related policies and legislation for higher education as relevant to the fundamental question of how we support research in the national interest.
The focus of this Bill is to enable new Provider Category Standards (PCS) that – amongst other matters – define the categories of Higher Education Providers (HEPs) including universities. It should be noted that the PCS themselves will be renewed by a subsequent legislative instrument following the passage of this Bill.
It is not the intention of the Go8 to re-prosecute the development of the new PCS – which has gone through an extensive consultation process. The new PCS include rigorous definitions that restrict the use of the term “University” to high-quality HEPs undertaking education, scholarship and research activities which is supported by the Go8 in order to protect the international reputation of Australia’s university sector.
Instead, the Go8 wishes to draw together the PCS and JRG legislation and the implications for research funding:
- The new PCS increase the research threshold standards for a higher education provider to qualify as an Australian University – increasing both the scale and quality of research expected of a university.
- At the same time, the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 provides base-funding for universities at a reduced level intended to support only teaching activity.
- This leaves only research block grants as a recurrent funding source for universities to both support and conduct research.
- As a consequence, the missing piece of higher education policy architecture is support for universities to conduct research of excellence at scale. This is critical for Australia’s economic recovery and funding should also be aligned to support key national priorities and industries.
- This research funding reform is particularly urgent given the impact of COVID-19 on international student fee revenue which has been used historically to subsidise and underwrite Government commissioned research. Rectifying this distorted funding model for research must be a key outcome of research reform.[2]
Underlying these considerations – both for the PCS and research funding – is the question of the quality or excellence of research. The Go8 asserts that the Australian economy requires truly excellent research at scale and that with tight fiscal constraints the Australian public cannot afford to invest in research that does not deliver this.
To attempt to quantify research quality benchmarks for university research, Australia’s principal assessment tool is Excellence in Research for Australia (ERA), conducted by the Australian Research Council.
ERA rates university research at the research discipline level on a rating scale of 1-5 relative to a “world standard”, where ratings 1-5 are, respectively, well below, below, at, above and well above this world standard.
At the broad discipline level (2-digit Field of Research) the Go8 universities collectively in the most recent ERA conducted in 2018 have 99 percent of research assessed at world standard or above (ERA 3, 4 & 5), 93 per cent at ERA rating 4 & 5, and 53 per cent at the highest rating of 5.
Paraphrasing the new PCS[3], the research standards for an Australian University are
- Up until 2030, in at least 30 per cent of all broad fields of education where it delivers education a university should also undertake research at world standard or above.
- From 2030, in at least 50 per cent of all broad fields of education where it delivers education a university should also undertake research at world standard or above.
An analysis of ERA 2018 results at ERA rating 3 for broad research fields (2-digit Field of Research) by the Go8 indicates that for institutions currently registered in the Australian University category:
- 3 institutions are under the 30 per cent level for the PCS standards up until 2030;
- A further 2 institutions are under the 50 per cent level for 2030 PCS standards; and
- A further 4 institutions may be considered “at risk” between 50 per cent and 60 per cent.
These 9 institutions represent a full-time domestic student load of approximately 80,000 or 11% of Australia’s domestic university student load.
As a side bar to these considerations, the Go8 would also point out that the results of ERA will likely be employed to judge performance against the new PCS research standards. As such these considerations should form part of the review of ERA currently being undertaken by the Australian Research Council.
The above discussion raises fundamental questions for the Government in terms of allocating limited research funding to best effect in the national interest and following through on the higher education framework it has set up through the JRG and PCS. As already noted, the Go8 contends that the best use of this funding is to support excellent research at scale.
In addition, given that the JRG has removed the research component from base-funding (noting that institutions still have some discretion in how they spend this funding) and given the new PCS research standards, directing research funding to excellence at scale may put pressure on some universities to retain their Australian University status. The alternative for institutions in this position is to transition to the University College category which comprises high quality, education focused Higher Education providers without research standards applied.
As a final note, the Go8 takes this opportunity to acknowledge both the formation of the Minister for Education’s Research Sustainability Working Group and the announcement in the October 6 Budget of an extra $1 billion in research block grant funding for universities to support research activity.
However welcome, this is a stop gap measure and there is an urgency to address the matters raised in this submission. The Go8 asks that in its report that the Committee notes the need for research reform and supporting research excellence at scale that forms part of the proper framework in which the Provider Category Standards sit.
The Go8 looks forward to an ongoing engagement in the development of this legislation which is critical to Australia’s future economic prosperity and societal well-being. If you have questions regarding the Go8 submission please do not hesitate to contact me.
Yours sincerely
VICKI THOMSON
CHIEF EXECUTIVE
Appendix: Background and Detailed Discussion
Changes to the Provider Category Standards
The Provider Category Standards – as Part B1 of the Higher Education Standards Framework (Threshold Standards) 2015[4] – classify the types of education providers that can be registered by the Tertiary Education Quality and Standards Authority (TEQSA).
These standards articulate five categories for Higher Education Providers (HEPs) that use the word ‘university’:
- Australian University – 40 registered HEPs including all public universities[5]
- Australian University College – 1 registered HEP (Avondale University College Limited)
- Australian University of Specialisation – 1 registered HEP (University of Divinity)
- Overseas University – 1 registered HEP (Carnegie Mellon University)
- Overseas University of Specialisation – no registered HEPs
In this taxonomy the Australian University College category is for HEPs who have realistic and achievable plans to meet all criteria for the Australian University category within five years.
The Australian University category has research standards that specify that the HEP must deliver Masters Degrees (Research) and Doctoral Degrees (Research) in at least three broad fields of study and additionally undertake research that leads to the creation of new knowledge and original creative endeavour.
For a HEP to be an Australian University of Specialisation, these research standards are required for only one or two broad fields of study.
In this way, the existing PCS enshrines research as part of the requirement to be a university – part of the “DNA” of an Australian University.
The report of the review of PCS conducted by Professor Peter Coaldrake AO recommended changes to these categories and to the research standards. These recommendations were accepted by Government and formed part of the amended PCS consulted on by the Higher Education Standards Panel[6]. Specifically:
- The University College category no longer solely be a transition category for HEPs seeking to attain Australian University status but also be for high-achieving HEPs with a teaching but not research focus.
- The Australian University category subsume the Australian University of Specialisation category and that enhanced research standards to both the quality and quantity of research be applied.
Specifically, from Section B1.3 of the proposed PCS,
- delivers Doctoral
Degrees (Research) in:
- at least three, or at least 50 per cent, of the broad (2-digit) fields of education in which it
delivers courses of study, whichever is greater; or
- all broad (2-digit)
fields of education in which it has authority to self-accredit courses of
- study in the case of a university with a specialised focus;
and
- from 1 January 2030, undertakes research at or above one or both of the benchmark standards described in B1.3 (16) that leads to the creation of new knowledge and original creative endeavour in:
- at least three, or at least 50 per cent, of the broad (2-digit) fields of education in which it
delivers courses of study, whichever is greater; or
- all broad (2-digit) fields of education in which it has authority to self-accredit, in the case of a
university with a specialised focus.
TEQSA will use existing national benchmarking exercises where they are available. Where they
are not available, TEQSA will benchmark against standard indicators.
For the first ten years after entry to the ‘Australian University’ category, a new entrant:
- undertakes research at or above one or both of the benchmark standards described in B1.3 (16) that leads to the creation of new knowledge and original creative endeavour in:
- at least three, or at least 30 per cent, of the broad (2-digit) fields of education in which it
delivers courses of study, whichever is greater; or
- all broad (2-digit) fields of education in which it has authority to self-accredit, in the case of a
university with a specialised focus.
Following this period, the provider’s research requirements will be assessed against the
percentage set out in criterion B1.3 (14).
Where an ‘Australian University’ provider delivers courses of study in new broad (2-digit) field/s
of education, the provider may request that those field/s not be considered in the quantum of
fields for the purposes of compliance of this criterion for a period of no more than ten years from the commencement of those course of study offerings.
- The benchmark standards for research are:
- research that is ‘world standard’ measured using best practice indicators; and/or
- research of national standing in fields specific to Australia, in the case of research that is not easily captured by existing standard indicators.
Standard indicators to be used in assessment may include (but are not limited to) peer-reviewed journal papers, rate of publication, weighted publications, success in competitive grant rounds and other direct funding, citation analysis, impact measures, and existing assessment exercises.
It should be noted that these provisions significantly strengthen the standards for research quality and scale expected of Australian universities.
In its submission to the review of the PCS the Go8 strongly supported that a significant research profile is a key defining characteristic of an Australian university.
The Job-ready Graduates (JRG) package
On 19 October 2020 the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020 was passed by Parliament implementing elements of the Government’s Job-ready Graduates package.
As explained in the explanatory memorandum for the Bill, a key change was that Schedule 1 of the Bill includes amendments to HESA to redesign the Commonwealth Grant Scheme (CGS) funding clusters and the Commonwealth contribution amounts (CCAs) to better align CGS funding to the cost of delivering higher education…[7]
This is a significant change from previous Higher Education policy where base funding (the combination of CGS funding and Student Contribution Amounts – both set in the funding clusters) was seen to support teaching, research, scholarship, outreach and other functions expected of public universities.
On this basis the JRG implements a substantial cut to average per student funding at Australian universities through the cluster system[8].
Base funding for universities – as defined by the Lomax-Smith Higher Education Base Funding Review report from 2011 – is provided under the Higher Education Support Act 2003 (HESA), through the Commonwealth Grant Scheme (CGS) and student contribution payments.
According to the Lomax-Smith review the purpose of providing base funding is to
… ensure that public universities have sufficient resources to maintain the quality of course delivery expected from the Australian higher education system. Base funding to universities provides for the employment of academic staff, and resources (such as administrative support and infrastructure). This enables universities to deliver teaching and learning programs, to engage in scholarship to inform teaching programs, and to provide institutions with a base capability to undertake research, in appropriately resourced facilities. (Page 2)
The Lomax-Smith review concluded that 6 to 10 per cent of base funding could reasonably be associated with activities relating to maintenance of base research capability.
In 2014 the unsuccessful Higher Education and Research Reform Amendment Bill implicitly benchmarked the research component of the CGS part of base funding (and other non-teaching activities) at approximately 30 per cent given that Non University Higher Education Providers were provided 70% of the funding of universities to deliver higher education courses (Section 33-10)[9].
The JRG legislation breaks this paradigm by making base funding cost reflective of the teaching delivered. This was recommended in Productivity Commission’s seminal 2017 Shifting the Dial report where it was also noted this should not be done without reforming research funding:
Making payments to universities for Commonwealth-supported places more cost-reflective would be an option to address the problem. However, it would have undesirable flow-on effects to university research capacity unless offset by other funding initiatives. It cannot be recommended without a reassessment of research funding arrangements for universities, or indeed their overall operation.[10]
It is this missing piece of higher education architecture – reform of research funding – that the Go8 is recommending be delivered in the national interest with a focus on research excellence.
[1] See the Go8 publication Enabling Australia’s Economic Recovery Through Supporting Research Excellence for a complete exposition for the Go8 position on research excellence at scale.
[2] For more details see also the Go8 document Priority Directions 2: Three essentials for future economic success http://go8.edu.au/wp-content/uploads/2019/05/Go8-PriorityDirections2.pdf
[3] See the Appendix to this submission for precise details on the PCS research standards
[4] https://www.legislation.gov.au/Details/F2015L01639
[5] https://www.teqsa.gov.au/national-register
[6] https://www.education.gov.au/news/consultation-amendments-higher-education-standards-framework-provider-category-standards
[7] https://www.aph.gov.au/Parliamentary_Business/Bills_LEGislation/Bills_Search_Results/Result?bId=r6584
[8] An initial estimate by the Go8 put this cut at 6%.
[9] https://www.aph.gov.au/Parliamentary_Business/Bills_LEGislation/Bills_Search_Results/Result?bId=r5325
[10] Shifting the Dial: 5 year productivity review – inquiry report, Supporting Paper 7: University Education, Page 2 https://www.pc.gov.au/inquiries/completed/productivity-review/report/productivity-review-supporting7.pdf