Simon Birmingham seized on 2016 university financials released yesterday (below) to claim the system can absorb the MYEFO cuts but he went further, much further, using the data to justify the end of the demand driven system.

And he made it clear that the current cuts are the higher education system’s fault;

“I find it staggering that when we, last year in the budget, called for an efficiency dividend of a very modest couple of per cent or so to be applied to universities, they said they couldn’t afford it. … So, we are now having to try to constrain that out of control spending growth in a different way,” he told Steve Price on Macquarie Radio yesterday.

Tough stuff, which got tougher; “our research tells us that universities saw some 15 per cent growth in their per student funding over a period of time, yet that certainly hasn’t flowed into increased expenditure on the actual teaching, or learning support, or students at universities. So, money is going elsewhere, in administration, in marketing costs, and so forth.”

And he made it plain that the cost of the Opposition and minor parties blocking funding cuts was the end of the demand driven system;

“The demand-driven system that was operated and put in place by Julia Gillard allowed universities effectively to write their own cheque each year. What we have said after some time of trying to get other reforms through the Senate that have been blocked time and again by the Labor Party, is that if we are not going to achieve reform on that front, what we will do is we will limit the size of the cheque, and that’s exactly what we’ve done by saying there won’t be a growth dividend in 2018 or 2019 to one of their streams of funding.”

This is calculated to drive the higher education community nuts. Last night Universities Australia acting CEO Catriona Jackson responded; “this is just the latest example of the government trying to blame everyone other than itself for the impact of its $2.2 billion cuts to higher education.”

“The government’s own figures make the case against the $2.2 billion in university funding cuts because they show that university operating surpluses fell by 5.5 percent from 2015 to 2016.

University surpluses as a share of their revenue also fell – and that surplus margin is now at its lowest level since 2009. And almost one in six universities are in deficit.”

CMM suspects Senator Birmingham will not care, that he thinks his is an argument that will sell electorally and will effectively neutralise higher education as an issue at the next election. With Labor showing no sign of promising to re-establish demand driven funding he may be right.