Road to ruin for public higher education or welcome reform?

Australia’s academics and students were united in their condemnation of the recent first budget by the conservative government of Prime Minister Tony Abbott, describing it as putting “public higher education on the road to ruin”.

The Group of Eight research-intensive universities, however, commended the government for “progressing structural reform of higher education in its first budget”. Chair of the group, Professor Ian Young said the budget would “reconcile access and quality, and make growth affordable”.

“A more dynamic higher education sector will continue to expand opportunity in a sustainable way,” Young said. “It will be more responsive to students’ needs, offering greater diversity and new opportunities.”

But the opponents said the government was slashing A$80 billion (US$75 billion) from education and health over the next decade – more than A$1 billion from higher education over the next two years – while student fees would skyrocket at some universities, student debt would rise and the viability of some of universities would be undermined by for-profit private providers.

Uncapped fees, privates get public funds

Federal Treasurer Joe Hockey announced that university fees, previously determined by the government, would be deregulated and universities given the freedom to set their own fees at whatever level they wanted.

In addition, research funding would be cut by 10% and private universities and other non-university colleges given access to public funding.

“No longer will students gain entry into university based solely on academic merit, but on their capacity and willingness to pay the market price for a degree,” said Jeannie Rea, president of the National Tertiary Education Union, or NTEU.

“Uncapping fees will see some degrees soar to a cost of more than A$100,000, and increase the likelihood of student loan default. The NTEU believes a first degree shouldn’t cost a second mortgage.”

The peak higher education body, Universities Australia, said the reforms would “fundamentally alter the shape of Australian higher education”. Chief executive Belinda Robinson said ongoing budget constraints and the fierce competition for public funds have seen public funding per student fall over time.

“There has been very little ability for universities to address the shortfall because the fees that universities have been able to charge have been capped. With full fee deregulation, this will no longer be the case,” Robinson said.

But she noted that the government’s contribution to course fees would now fall by an average of 20% and government payments would be indexed at a lower rate based on cost of living increases.

“While the reforms pave the way for an increasingly privatised higher education system, the impact on disadvantaged students will be cushioned by scholarships that universities will be required to offer should they increase student fees,” Robinson said.

She said that in extending Australia's “demand driven system” and government funding to non-university providers, the government would have to ensure “competitive fairness” and that the relative government support appropriately took “account of the differing community expectations and public good obligations”.

Signals ‘not good’

Associate Professor Lucas Walsh at Monash University’s faculty of education said the signals sent by the budget were not good:

“They suggest an approach to encouraging job-seeking through financial deprivation, while potentially inhibiting pathways to higher education for those experiencing disadvantage, as well as impacting on regional communities from which young people are leaving in droves.

“For Australia's young people, having ‘the adults back in charge’ as Prime Minister Abbott declared on his election, is replete with irony, as many face less support and fewer possibilities for earning and learning.”

Dr Emmaline Bexley said the message from the budget was: “Fend for yourself”. Bexley, a lecturer in higher education at Melbourne University, said that over the three years from 2015, A$1.1 billion would be withdrawn from higher education by decreasing the federal contribution to undergraduate student places.

“The actual amount that will be lost to the university sector will in fact be far higher, as funding for government supported places will be extended to non-university higher education providers such as technical and private colleges. The pie will become smaller, with many more at the table to eat,” she said.

The Council of Australian Postgraduate Associations said student debt was set to escalate dramatically as a result of the “horror budget”:

“Students are being asked to foot the bill for their own equity scholarships, with $1 out of every extra $5 charged by their university under fee deregulation to go to an unspecified number of scholarships, of unspecified size,” said association president, Meghan Hopper.

“You don’t need a postgraduate degree to see that this budget sucks for students.”

As a result of the budget, real interest rates on government loans to meet the cost of tuition fees will be increased for the first time from small cost of living rises to rates of up to 6%.

In addition, the income threshold at which point graduates have to start repaying their loans will be dropped so repayments would have to start sooner. This measure alone is expected to generate an additional A$1 billion a year.

“We’re saying goodbye to a knowledge economy and issuing in an uncomfortably ignorant Australia by shifting funding of higher education on to the student, slashing research centres and putting research degrees on government loan money,” Hopper said.

The government’s budget papers describe cuts of about A$200 million from federal grants to masters and PhD students as making “a modest contribution towards the cost of their degree through a small reduction in government funding for the research training scheme”.

Hopper said the “off-handed manner in which the government had approached these dramatic changes to research student funding” demonstrated a lack of respect for Australia’s research sector and future research leaders.

Science budgets slashed

The organisation representing scientists and technologists said A$420 million would be cut from five key science and research agencies: the Australian Research Council would lose A$75 million, the CSIRO A$111 million, the Defence Science and Technology Organisation A$120 million, the Australian Nuclear Science and Technology Organisation A$28 million and Australian Institute of Marine Science A$8 million – as well as the Cooperative Research Centres programme which would lose A$80 million.

“The impact on a number of other science bodies is still unclear, but it is certain that many hundreds of science and technology jobs have been slashed,” said Science and Technology Australia chief executive Catriona Jackson.

“These cuts are profoundly counterproductive, and will reduce national capacity to conduct world-leading research, which fuels the economy and ensures we hold our place among advanced, first world nations. It is very disappointing to see funding to the trusted national icon CSIRO cut when they have already made significant staff reductions.”

Academics and students were not the only ones complaining: age pensioners, seniors concession card holders, families facing cuts in government payments and people on the disability support pension were all hit by higher charges or reductions in their allowances.

Even Hockey’s surprise announcement of a new A$20 billion medical research fund that would be generated from patients paying an extra A$5 when they visit a doctor did not lessen the shock of this budget.

This is a government intent on imposing as much pain as possible in its first election in the hope the public might have forgotten when the next comes around in three years.