The Tehan package: perverse outcomes and cash for the quick

The University of Melbourne Centre for the Study of Higher Education asked experts, “what the Tehan changes mean for students and universities.”  An on-line seminar yesterday heard of perverse outcomes but $1bn in the Commonwealth’s kitty to spend, on research if it chooses.

Frank Larkins (MCSHE) expanded on his and Ian Marshman’s analysis of what the Tehan changes will mean for what undergraduates study and where.

Lower guaranteed base funding for nationally important undergraduate domestic degrees is an incentive to pursue perverse outcomes,” Professor Larkins warns.

He concludes:

* the package “is cleverly constructed” to support regional and outer metro unis but asks whether there will be sufficient student demand

* the current domestic student market could be “significantly disrupted” with STEM places declining and universities shifting-load to more profitable disciplines, “to the detriment of national workforce disciplines”

* nimble universities with a strong brand, a sound knowledge of course delivery costs and flexible workplace relations practices are likely to profit most at a cost to other universities.

And he warns the overall objective of the package; to incentivise teaching, nursing and STEM study is undermined by its implementation; “there is no compelling evidence that HECS fee changes linked to income-contingent loans change student subject selection behaviour.”

Mark Warburton looked at where the money goes under the new funding model and finds:

* student load at the new CSP funding rates means $500m less for universities under the existing arrangements. “To earn all of that revenue, universities will have to provide around 11,700 more student places than in 2018.

* overall public revenue for teaching will be around 94 per cent of former value

* annual growth in general student places in 2024 will be less than would have existed but for the 2018-21 impact of the Birmingham cap on places

* “Over the period, from December 2017 to when the Job-ready Graduates package is fully implemented, the government will have delivered itself an annual saving of around $988 million.”

Which gives the government money to work with, quite a lot of money. Mr Warburton suggests, “the government will save around $1 billion dollars over the period which it could use to support research, if it chose to do so.”