UTS submission to the inquiry into the Higher Education Support Legislation Amendment A More Sustainable, Responsive and Transparent Higher ...
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Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System)
Bill 2017
Submission 51
Professor Attila Brungs PO Box 123
Vice-Chancellor and President Broadway
15 Broadway, Ultimo NSW 2007 NSW 2007 Australia
www.uts.edu.au
UTS CRICOS PROVIDER CODE 00099F
UTS submission to the inquiry into the Higher Education Support
Legislation Amendment (A More Sustainable, Responsive and
Transparent Higher Education System) Bill 2017 by the Senate Standing
Committee on Education and Employment
The University of Technology Sydney (UTS) appreciates the opportunity to provide a
submission to the Inquiry into the Higher Education Support Legislation Amendment (A More
Sustainable, Responsive and Transparent Higher Education System) Bill 2017 (the Bill).
UTS firmly believes that a sustainable, accessible, quality education system and the
innovation agenda are core to Australia’s long-term prosperity and societal well-being.
Australia is facing challenging times with changing societal dynamics, transformation in the
nature of work and the rapid rise and fall of whole industries and areas of economic pursuit.
This fourth industrial revolution we are facing can be likened to the industrial revolution of
the 1700s but compressed by an order of magnitude in timescale. Government has a key
role in ensuring Australia’s long-term prosperity by implementing concrete and considered
policies.
UTS firmly believes and supports the Government’s Innovation and Science Agenda as a
critical component of our national response. However, we believe that there is a lack of
coherence with the stated innovation agenda and the broader budget (including the higher
education package), with its focus on “good debt” being a road or rail, but “bad debt” being
knowledge infrastructure or national skill capacity.
Therefore we see the overall Higher Education Package as a missed opportunity – we are at
a crucial juncture in terms of investment in our broad knowledge infrastructure and as such
several aspects of the Bill need to be reconsidered to ensure that the significant benefits of
higher education and associated knowledge infrastructure development and innovation will
flow on to all Australian people and economy.
We are opposed to the proposed Commonwealth funding cuts, expressed as an efficiency
dividend for two years, but which would have a lasting impact on resources available for
education and research. Such cuts would undermine the preparation of students for major
changes in the economy and in our society, and impair a major export industry that has been
built up and based on the quality of the delivery of education over many years and is
becoming increasingly competitive. There are potential long-term impacts on students as a
result of increased fees leading to increased debt and lower repayment thresholds,
particularly in discouraging individuals from all segments of Australian society who would
benefit from a university education, to seek one out.
While supportive of transparency, and in principle the concept of linking additional funding to
critical university performance such as student attainment, UTS has significant concerns
regarding the proposed performance metrics to be applied, as these metrics have yet to be
consulted upon and developed and their impact is unclear. In particular:Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System)
Bill 2017
Submission 51
• As currently drafted the proposal has the potential to further erode university
funding;
• 7.5 per cent is a significant proportion of a university’s operations and substantial
year-to-year changes would play havoc with university planning; and
• There is the potential that this initiative will result in perverse outcomes that will see
providers excluding, rather than in investing in, some categories of disadvantaged
students to ensure that university benchmarks are achieved, resulting in a return to
educational privilege.
There are a number of elements of the Bill, however, that reflect sound and sophisticated
policy development and that will have a positive impact on the higher education sector.
Further, these reforms are of a time-critical nature to ensure the medium-term viability,
sustainability and fitness for purpose of the Australian higher education sector. Those
changes are either focused on increasing support for students, improving student choice or
reforming the sector to increase flexibility and sustainability for the medium to long term and
include:
• Changes to funding arrangements for postgraduate students;
• Provision of funding for work experience in industry;
• Sub-bachelor and enabling programs; and
• The inclusion of the Higher Education Participation and Participation Partnerships
Program (HEPPP) in legislation to give certainty to universities making an impact on
supporting access, participation and success for historically disadvantaged groups
of students.
Specific Proposals
The efficiency dividend, the abolition of the Education Investment Fund (EIF) and
increased student contributions:
Providers cannot absorb funding cuts of this nature without significant short and long-term
impacts – it is inevitable that these cuts will compromise the quality of higher education.
Reducing funding to universities at a time when graduate contributions to the economy,
especially the new economy, are increasingly important is unwise.
This is a $2.8 billion cut which, when combined with the $3.7 billion cut caused by the
repurposing of the EIF, will have a lasting effect on the higher education funding landscape.
The abolition of EIF, relatively unremarked in the proposed changes, will lead to the
dramatic, long-term degradation of Australia’s education and knowledge infrastructure.
Previously universities agreed to relinquish individual capital grant funding to create a pooled
resource administered by the Government. This was to provide efficient and timely
investment in renewal and new capital across Australia’s universities to support teaching
and research activities. A direct outcome of abolishing EIF will be the degradation of
university infrastructure and assets, forcing further cuts to university operating budgets as
they seek to individually accumulate the significant capital investments required to maintain,
let alone grow, the nation’s education and research infrastructure.
As a result, UTS cannot support the proposed efficiency dividend or EIF abolition.
2Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System)
Bill 2017
Submission 51
The proposed increase in student contributions and changes to loan repayment
thresholds are also unacceptable, and when combined with the efficiency dividend will
inevitably have a direct impact on student experience at a time when they will be expected to
pay more for their degrees. This inconsistency cannot be reconciled in the name of budget
repair and is further compounded by the increase in debt burden on students and changes
to repayment arrangements.
Increasing the debt burden on students will have long-term impacts on their ability to move
from study to the workforce and produce a disincentive for graduates at the beginning of
their career, a potential reduction in future tax returns for the Government and mixed
messages for future students considering their investment in higher education. For some
courses, in particular, the Commonwealth contribution will be negligible. While there is no
doubt that students realise a private benefit from the Government’s investment in higher
education, this is balanced by the direct financial return to Government through increased
taxation, and the continued development of the economy and society. We may not see the
full impacts of changes, including the current proposal, made to the Government / student
contribution ratio for many years. However, if negative, those impacts will be irretrievable
and therefore the current proposals both carry significant risk and are at cross purposes with
the Government’s stated Innovation and Science Agenda.
UTS also has a high level of concern about the lower threshold for student loan repayments.
While relatively small repayments will be required at the lowest level, they act as a
disincentive to students at a time when they are commencing their careers and making other
commitments. At that point, graduates have not yet realised the personal return on their
education investment and it is unfair to penalise them at this low level of earnings.
Proposed performance metrics:
We recognise that transparency and accountability are important – in theory, a contestable
pool of funds tied to transparency, student retention and graduate success provides a
positive incentive to meet student and societal needs, but this requires careful consideration
and consultation. The current legislation does not have enough detail and also appears to
have the provision for the incentive payments to be removed from the sector entirely in the
future. It would be challenging to embed such a provision in legislation without further
development and careful attention to how the incentive arrangements would work in
practice.
Enshrining the Higher Education Participation and Participation Partnerships
Program (HEPPP) in legislation:
UTS supports the inclusion of the HEPPP in legislation irrespective of whether other
changes are agreed. While significant elements of the program will be determined outside
legislation, the inclusion of the program’s existence, its objectives and funding base are
critical for providers’ commitment to the program and reflect a long-term commitment by all
parties to ensuring adequate support is available for underrepresented student groups.
HEPPP has excellent demonstrable benefits across the sector and UTS welcomes the
Government’s commitment to the program through legislation.
Work integrated learning hubs:
Extended funding for Work Experience in Industry is a very important initiative. UTS values
its links to industry and the professions and additional funding will allow us to extend and
improve our partnerships which provide practical work experiences for students as part of
their study program. Not only does this benefit students and their transition to work but it
also boosts greater collaboration between universities and industries, which is to be
welcomed.
3Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System)
Bill 2017
Submission 51
Postgraduate Commonwealth Supported Places:
UTS fully supports the proposed changes to the allocation of Commonwealth funding for
postgraduate places. Current funding arrangements have resulted in opaque, inconsistent
and inequitable outcomes whereby students undertaking similar courses may be
Commonwealth funded at one university but full-fee paying at another. The most efficient
way of addressing years of inconsistent postgraduate funding is for the Government to
determine its priorities and direct the funding to eligible students rather than providers. This
will allow students to base their study decisions on the particulars of courses rather than
having to make choices based on which institutions can offer Commonwealth supported
places.
Such a reform also drives the sector towards innovation and creativity in the postgraduate
space. It will be postgraduate qualifications that should and will change most radically in the
next five to 10 years. The era of sitting in a lecture theatre for two years for a postgraduate
qualification has passed. Micro qualifications, modular approaches, blended work and formal
learning, and campus intensives will all become increasingly common and vital to provide
the changing skill set required for the modern workforce and society. This reform proposal
will support and drive toward this future. The current archaic system of allocation prevents
innovation as courses do not significantly change their content and approach due to the
concern of potentially losing the supported places.
We do however have a concern about the timing of the postgraduate funding changes and
the detail of implementation and would welcome the opportunity to work with the
Government on this. A simple scholarship approach using a system analogous to the state
tertiary administration centres at the national level would be efficient, transparent and
effective. Developing a new ponderous central bureaucracy to allocate vouchers would be
antithetical to the reform. Similarly, postgraduate students who are in Commonwealth
supported places during 2017 and 2018 may be re-categorised as full fee paying on 1
January 2019 if they do not receive a scholarship. As the priority areas for Commonwealth
funding are unknown, students are unable to predict the effect on their financial situations.
Currently, most would probably be unaware of the risk even though they are submitting
applications for this year and 2018. The grandfathering provisions for the change are
inequitable.
Sub-Bachelor programs:
UTS supports the funding of enabling and designated sub-bachelor programs. This is an
important change that will provide access to higher education to those who are not prepared
to step straight into undergraduate study. This change promotes a more flexible higher
education system and allows providers to better tailor and support programs for different
student cohorts.
However, charging students for enabling programs appears to undermine the intent of the
changes and removes the possibility for universities to offer truly “open” preparation to
cohorts that would if required to pay, be unlikely to even consider embarking on higher
education. We are also unclear on providers’ options in relation to student fees for sub-
bachelor students not in approved courses and whether the alignment with professional
disciplines removes the possibility of sub-bachelor funding for courses such as languages,
entrepreneurship and practice-based components of study (for example in law and
engineering). Further, UTS believe that a strong TAFE and VET sector is critical to
Australia’s future prosperity but which is unfortunately currently in dire straits nationally.
Such a scheme would need to be designed to the broader benefit not detriment of TAFE and
VET.
4Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System)
Bill 2017
Submission 51
Summary
UTS supports the sound policy principles behind the proposed legislation in the areas of:
• Making the system more consistent by addressing long-standing inequities in the
funding of sub-bachelor and postgraduate courses.
• Ensuring that adequate support is available long term for underrepresented groups of
students through legislating the HEPPP loading.
• Providing resources for work integrated learning.
However, we believe that funding cuts to universities and student cost increases are not in
the best long-term interests of the Government, universities or students. The efficiency
dividend, combined with the current proposal for re-proportioning student contributions and
lowering loan repayment thresholds, places an undue and unjustifiable burden on students,
diminishes their university experience and embeds further challenges for graduates at a time
when the financial benefits of higher education have not been personally realised.
Please do not hesitate to contact me to discuss any elements of this submission further.
Yours sincerely
Vice-Chancellor and President
University of Technology Sydney
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