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In the media: Opinion Editorial: Universities need to get their own Gonski – not a gutting

Universities need to get their own Gonski – not a gutting

Financial Review, Dec 20, 2017

Just one hour after being sworn in as New Zealand’s new prime minister, Jacinda Ardern confirmed her government would fast-track its staged free university tuition policy starting in January, sending a clear message of the importance of higher education to the New Zealand government and the electorate. And also signalling an understanding of education as a key national asset.

In Australia we are sending the opposite message with the federal government this week cutting university funding by $2.2 billion and effectively signalling the end of the demand-driven system – with major consequences for the sector, for disadvantaged students and for regional universities already struggling to lift poor rates of university attainment.

The contrast between the two governments’ attitudes towards higher education could not be more stark. Nor could the opportunities that will be afforded to each country’s students. There is a need now, more than ever, for a “Gonski-style” review and for Australia to decide how much we value a higher education.

After four years of failed attempts by the government to reform higher education, the government has shown it is not interested in genuine reform – but in budget savings. Budget savings that risk compromising an important sector of the economy.

The decision to cut billions of dollars in funding to universities in the midyear budget update is a dangerous move and contradicts the government’s foreign policy white paper, released last month, which placed education at the heart of Australia’s international engagement strategy.

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The reality is that our higher education system is world class and a centrepiece of national prosperity. Taking funding away from universities risks the economic benefits that this investment in our future would generate for the nation.

While Australia makes up 0.32 per cent of the world’s population, we make up 6 per cent of the top 100 universities in the world. Only the US and UK have more in the top 100.

Universities remain Australia’s third-largest export and, according to a 2015 Deloitte Access Economics report, our research generates an estimated $160 billion for the Australian economy per annum, almost 10 per cent of Australia’s GDP.

In real terms, investment in higher education is declining – going from 100 per cent government funding to a mere 14 per cent – and now frozen at 2017 rates. Spending on research and development has fallen as a share of national income, with spending at 1.88 per cent of GDP in 2015-16 compared to the OECD average of 2.38 per cent. This is a particular concern, which the budget announcement ignores.

All of this is in stark contrast to the rest of the world. Every successful nation recognises, and invests in, the link between higher education, cutting-edge research and enduring prosperity.

Secretary-General of the League of European Research Universities (LERU), Professor Kurt Deketelaere recently said: “The message is clear. If you want to deliver on growth and jobs, invest in research and universities. If you want a budget focused on results, invest in research and universities.”

And it’s a message our government has failed to hear – with potentially damaging consequences. To cut funds to such an important sector without true debate and in such a poorly designed way is simply irresponsible.

Australia’s higher education system, like our universities themselves, are not perfect, and the case for reform is strong. While Australia’s higher education system has grown rapidly, alongside the critical importance of research and innovation to economic strength, research in our universities remain underfunded and heavily dependent upon cross subsidy from other income streams.

If Australia is to develop a funding model that nurtures a tertiary education system fit for the challenges of the 21st century and one that benefits our students, the tax payer and the nation as a whole – we need nothing short of a “Gonski-style” review.

And that means an independent, broad, comprehensive review that looks at the post-secondary sector in its entirety – not just universities – and provides long-term, coherent policy and advice on a range of issues including the structure, diversity and size of the tertiary sector and the emerging needs of industry and the economy.

While universities would only be one part of that review, a comprehensive review of the tertiary education sector would need to address four critical questions related to universities specifically.

First: What role do we want our universities to play in a modern Australia? And that means considering how much value we place on a university education as a public and private benefit.

Second: How do we want to prioritise research – both basic and applied? Recognising the important role research plays in our national economy and in solving some of the biggest issues facing society.

Third, in relation to our students themselves: Who and how many people in Australia need a university degree? And this means deciding on the value a degree brings to individuals and to society. Is there a magic ratio of the population that should and shouldn’t receive a university degree in order to maintain our economic strength and help the Australian economy and workplace transition to the challenges of the 21st century?

And lastly: How much should these students pay for their education? A comprehensive review should look at the ratios of government versus student-funded university places and make sure we don’t discriminate on the grounds of economic status. On that front at least, compared to international examples, I believe we already have a sensible balance.

With the cuts announced in the midyear budget update, the higher education sector is facing an uncertain future. Now is the time to step back and conduct a comprehensive review.

Ian Jacobs is vice-chancellor of the University of New South Wales

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