All weekend university leaders will have been pouring over the published details of the Job-ready Graduates Higher Education Reform Package released last Friday.

Exploiting the “never waste a crisis” mantra and linking into the zeitgeist urge for a full-scale COVID-19 reboot of the Australian economy, Minister Tehan has manufactured a policy rationale for what would be a major shift in the purpose of Australian university education.

Unlike its most recent successful predecessors, the 2003 Nelson reform package and Julia Gillard’s 2009 reforms leading to the Demand Driven System, the Tehan proposals have emerged from limited policy consultation and, notwithstanding the prospect of growth in places in subsequent years, promise little additional funding.

The Job-ready Packages raises strategic issues for both the sector as a whole and for individual universities. These include:

the unapologetic pivoting of undergraduate education towards creating a job-ready workforce:The package removes any remaining vestiges of John Henry Newman’s Idea of a University with its warning that narrow minds were born of narrow specialisations and its advocacy for a truly well-rounded education. Vocational education has triumphed. Undergraduate education is now more narrowly about training for a job, no longer laying the foundations for careers of the future. This redefinition will be a particular challenge for universities with missions and values centred on providing opportunities for students to achieve their full potential and wider citizenship capabilities.

the apparent inconsistent messaging within the policyThe minister has been keen to highlight the shift in financial incentives, by way of significant differentiation in HECS charges, encouraging students to enrol in undergraduate programs presumed to lead to jobs in designated sectors of workforce demand. Yet the Jobs-Ready Package indicates that the rate of funding universities will receive from students and the Commonwealth will decline for engineering, science, nursing, teaching and agriculture, the very disciplines where jobs of the future are said to be emerging.   In contrast, the total funding rate for law, social sciences and humanities will increase, albeit as a result of increased student charges, but if demand dips some disciplines may not be financially viable.

the overall funding for an undergraduate place will decline  The Reform Package paper indicates (p24) that from 2021 funding per place will decline by 5.8 per cent from $20,597 to $19,387. Presumably the savings are being directed to other initiatives within the Package and for growth places in subsequent years. However, these are discretionary programs and for individual institutions funding allocations cannot be assumed. Based on 2018 enrolment data (the latest publicly available) we estimate that the actual amount of funding directly available for undergraduate places will decline by some $293 million. Students will pay an additional $476 million while Commonwealth Grants Scheme funding will reduce by $769 million.

the absence of any initiatives to support universities in rebuilding international student demandThe Minister assumes a Panglossian stance relying on EY advice that Australian universities will in fact gain a further 2 per cent of the international student market. Meanwhile Universities Australia analysis predicts a revenue shortfall for the sector of between $3-4.5 billion for 2020 and up to $16 billion through to 2023, largely driven by a decline in international fee income. Universities appear to have been left to their own devices at a time when they are most financially vulnerable.

the likely differentiated impact that the Job-ready Package will have for individual universities Growth places are to be increasingly targeted to universities in regional centres and outer-metropolitan areas. The increased focus on STEM disciplines and engagement as part of the curriculum with business and industry will play to the strengths of the technological universities. The large research-intensive universities are potentially most impacted.  They will face a decline in funding per place and have little prospect of significant growth places.  These are generally the universities most affected by the loss in revenue given the overall scale of their international student programs. Their research missions will be even more challenged.

dealing with the fallout of the devaluing of the humanities and social sciences:Despite the limited previous evidence of price-sensitivity in the HECS rates across the fields of education, the financial discouragement of a $43,500 debt for an Arts degree will now loom large and stark in student thinking. Government messaging is also unambiguous. Over time more students (and their parents) are likely to make financially driven decisions both about choice of degree and choice of subjects within degrees. For universities such as Melbourne and Western Australia, the educational philosophy of a generalist undergraduate education followed by a more professional graduate education will face a stiff test. More generally, universities face pressing issues in managing morale and workforce issues within arts and uumanities faculties in particular. Moreover, given the higher cost of STEM degrees, any shift in demand from humanities and social Sciences to, for example, engineering and science is likely to lead to an overall decline in available places.

The Minister said in his Press Club Address Universities must teach Australians the skills needed to succeed in the jobs of the future’. Time will tell whether the Job-ready Package joins the Nelson and Gillard Reforms as driving a fundamental shift in the direction of Higher Education. The vocationalisation agenda it espouses is radical and, in Sir Humphrey Appleby Yes Minister terms, definitely courageous.

21 June 2020

Ian Marshman and Frank Larkins, Honorary Fellows, Melbourne CSHE, The University of Melbourne


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