The Budget

5/15/2014 by: Professor David Lloyd

Isn’t it strange how sometimes you know the news you are about to receive is going to be bad, but you still hope against hope that it won’t be? Perhaps that says more about the eternal optimism of humanity than it does about our ability for rational thought. Either way, it has to be said that Tuesday’s budget news was largely as expected. Despite our hope for the contrary. While we’re still working our way through the fine details, the following is clear. Students will bear the brunt of the most radical changes to the Australian higher education sector since 1988 (which ultimately led to our foundation as UniSA!). The demand driven system is being expanded to include sub-bachelor programs (diplomas / associate degrees) and also to bring non- university higher education providers (TAFEs and private providers) into the funding model under certain conditions. This expansion, on the face of it, is a good thing – especially the inclusion of sub-bachelor programs. However, in expanding the system the Commonwealth has also accepted an inability to fully fund an uncapped open participation model and is passing the funding over to the end user.  Beyond the efficiency dividend which waits in the wings of the Senate, through this budget, on average, we will see a 20% reduction in the Commonwealth’s contribution towards course fees (from 2016) with immediate ‘rebalancing’ of the funding clusters for new students. Fee indexation is gone, to be replaced by CPI linked increases.

These measures, radical enough in their own right, are also accompanied by fee deregulation – a seismic move that will truly shake up the system. This will mean that universities can set their own fee levels, cognisant of the fact that the Commonwealth will only pay a capped contribution to meeting that cost, and with the balance of the cost to be funded by the student through an expanded loan system. The threshold income at which the loan will start to be repaid (when the student is in employment) is set to be reduced, and the interest rate for loan repayment is likely to land at around 6%.  Personally, I’m concerned about what this level of debt burden will mean for future generations.  To go some way to assuaging my fears, we have the creation of a scholarship fund – where 20% of ‘additional revenue’ (read profit from increased fees) must be re-invested in a Commonwealth Scholarship Fund to support access for disadvantaged students. How exactly that will operate is unclear. As a relative newcomer to the Australian scene, I thought there was a certain irony that the ‘Commonwealth Scholarship Fund’ is not actually funded by the Commonwealth (although I acknowledge that this title has cachet through historical use) – it will be funded by the students.

There are myriad other elements which will impact on us – not just on the teaching side, but also on the research front.  Round 17 of the Cooperative Research Centre scheme is gone and the CRC core budget cut. Research Training Scheme-funded doctoral students will have to pay part of the costs of their degrees. The Australian Research Council will have a funding reduction, sorry, an efficiency dividend applied. This, I suppose, partly funds expansion of the future fellowship scheme, which is to be welcomed. Also on the positive side of the ledger, the National Collaborative Research Infrastructure Strategy investments (one of the few things the Commission of Audit liked) have been preserved and will be further reviewed. But there are reductions to R&D tax credits and to Science, Technology, Engineering and Mathematics programs. There is the creation of a Medical Research Futures Fund (targeting $20bn) – which is wonderful (although the manner in which the fund is funded may not sit so well with those paying for it) – but there are many, many other pillars of future economic growth beyond medical research – and these are not, to my mind, afforded due consideration in this budget.

We are a university with equity etched into our DNA. Over 40% of our students are from one or other defined equity group. We pride ourselves on our dedication to the education of modern professionals from all backgrounds – enabled to succeed through the transformative power of access to higher education. How exactly these new budgetary arrangements will empower our constituency is yet to be seen. Bottom line – I believe we are moving into a free market for higher education in Australia. A free market wherein fee levels and employment outcomes will become true differentiators and where both public and private providers will be fish of various sizes in the same pond, competing for sustenance. Students are, and have to be at the core of all we do. Looking at the budget through a student-centred lens, it’s difficult not to be disappointed. But it wasn’t wholly unexpected.

We now have a degree of certainty around the external environment and behind all this we have Crossing the Horizon and our plans for the future of UniSA, which we will work to realise together.

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Professor David Lloyd

Through The Big Picture, I hope that our whole community gains a greater and current appreciation of what is going on, how it fits together and how our activities connect and reinforce each other at a whole of enterprise level.


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