2020: The year the Government abandoned universities

Paul Kniest, NTEU. Director (Policy & Research)

Paul Kniest, NTEU. Director (Policy & Research)On 16 February 2021, Prime Minister Scott Morrison, said the COVID-19 pandemic 'highlighted a vulnerability' in the business models of universities. Sorry PM, what COVID-19 and the Government’s higher education policy response exposed was a Morrison-led abandonment of public universities and policies that slashed public funding and increased student fees.

What 2020 'highlighted' is a flawed higher education regulatory and funding framework and a government hostile to public universities. As NTEU says in our 2021-22 Pre-Budget Submission, now is the time for a major re-think of this framework.

A year of reckoning

In 2020 the Morrison Government abandoned public universities. In the wake of COVID-19 the Government offered the sector a paltry $80m rescue package, the bulk of which was to benefit private providers with fee relief and funding for additional short courses. Public universities were excluded from Jobkeeper while private providers and overseas universities operating in Australia qualified for this assistance.

The Government chose to kick our already battered and bruised public universities with the introduction of its Jobs Ready Graduate (JRG) package that increases student fees and decreases funding to educate each government-supported student.

The Government’s policy approach to higher education misunderstands the unique role and responsibilities of public universities. This regulatory and funding framework is unsustainable and ultimately threatens to undermine the viability of Australia’s higher education sector. This is evidenced by the rising tide of insecure employment. In 2020 only one in three (35%) of all employed at public universities enjoyed a secure ongoing job. Now is the time to re-think higher education policy and examine how universities are regulated, funded, governed and staffed. Secure employment is critical for ensuring staff enjoy academic freedom and can sustain high quality teaching and research.

Regulation of tertiary education

While Australia guards the use of the term university through legislation, tertiary education regulatory and funding policies in recent decades have deliberately tried to blur the distinction between vocational education and training (VET) and higher education (HE) and between public and private providers.

Two aspects of this approach concern NTEU. Firstly, the Government’s repeated attempts to deregulate higher education. Fortunately, they have failed to gain support in Parliament. Had they succeeded we may have seen a repeat of the failed policy experiment in VET that included contestable funding between public (TAFE) and private providers and income contingent loans. This policy failure not only undermined public TAFEs, it witnessed widespread exploitation of students and rorting of public funding through the now defunct VET-FEE HELP scheme. For NTEU this proves the point that education is far too important to be left to the market.

Secondly, with government’s predilection to reduce university education to narrowly defined and standardised jobsready graduates, echoes VET competency-based training. For the Government, this has the advantage of reducing the cost of this education. Unfortunately, this fails to develop students’ critical thinking and problem-solving skills central to a university education.

The Government’s desire to increase competition and contestability as well as narrow the scope of higher education is shown by recent policy initiatives to recognise, promote and provide funding for short-term courses and 'micro-credentials' offered by universities and other providers. NTEU calls on the Government to acknowledge the importance of public universities and ensure the regulatory framework promotes and protects institutional autonomy and academic freedom.

Sustainable public investment

Australia has one of the lowest levels of public investment in tertiary education (0.7% of GDP in 2017) in the OECD (1.0% of GDP for OECD countries). Australian students attending public universities pay amongst the highest fees in the industrialised world. Consequently, the private share of investment is amongst the highest amongst comparable industrialised economies.

NTEU’s analysis of JRG and the Government’s 2020-21 Budget papers (October 2020) not only shows that it slashes public investment by 15% per government-supported student, increases fees by an average of 8% and reduces university resourcing to educate these students, but that the Parliamentary Budget Office (PBO) analysis shows that the value of government support for these students (delivered through the Commonwealth Grants Scheme – CGS) is forecast to continually fall as a share of GDP between now and 2030-31.

COVID-19 has exposed the over-reliance of universities on overseas student fee revenue (which now exceeds the value of CGS funding). The cuts to public funding embedded in JRG will increase rather than reduce this reliance.

While NTEU acknowledges the $1billion boost in research support funding delivered in the Budget, our analysis shows this sugar hit doesn’t arrest the longerterm downward trend.

Regarding funding, NTEU makes important recommendations including:

• Ongoing commitment to increase public investment in Australian higher education to 1% of GDP in line with the OECD average.

• Minimising uncertainty and politicisation of higher education funding through the establishment of an independent higher education commission or agency with regulatory and funding authority.

• Negotiating Public Accountability Agreements between each university as funding and accountability mechanisms and to better manage and plan government supported student places allocation.

• Phasing-out tuition fees for government supported students, which under the JRG will on average equate to 50% of total resourcing, up from the 20% when HECS was first introduced in 1989.

University governance and executive power

In 2019, average remuneration for the vice-chancellors of a public Australian university was $991,000. This is emblematic of the decades’ long shift in the governance of public universities away from collegial stewardship of important civic institutions to the rise of the enterprise university and dominance of corporate governance models, which has gone hand in hand with the rise of executive power.

The shift to a more corporate/managerial approach to governance of public universities has been facilitated by government policies, including the introduction of National Governance Protocols under Minister Nelson in 2005 and various changes to university establishing legislation which has changed the size and composition of university governing boards. Most of these changes have reduced staff and student representation. In addition, reduction in public funding and increasing reliance on private sources of income has changed the nature of the governance task.

NTEU believes the evolution of the enterprise or corporatised university is not suited to the role public universities are expected to play in Australian society. This evolution has suppressed staff, student and community roles in the decision-making processes of public universities. Additionally, the elevation of financial objectives, including a drive for efficient (low cost) delivery of teaching and research, has resulted in a greater reliance on insecurely employed staff. This severely compromises public universities to act in and for the public good.

NTEU calls on governments to use their funding and regulatory powers to ensure universities and other higher education providers develop open and transparent mechanisms and structures that incorporate staff, students and local communities into their decision-making processes, and report the total remuneration received by vice-chancellors and other members of the senior executive as well as the key performance indicators attached to those positions. ◆