Differentiating Australia s Universities Professor Ian Young Vice-chancellor Swinburne University of Technology
Introduction Past decade Australia has developed a unique experiment in tertiary education Significant rise in user pays Development of a major export industry Further deregulation is planned How will this affect the system and how will institutions position themselves?
Funding & Quality Tertiary education in Australia largely not for profit but highly competitive Compare to Health - no rankings - little advertising
Funding & Quality Funding and quality linked Institutional Funding $ Attract best staff, equipment and facilities $ Produce wealthy alumni Attract best students Obtain best outcomes
Funding & Quality The cycle of funding breeding funding is not as it would be in an open system Governments do influence this process by their policies As competition is international, government funding policies influence how institutions can perform in the international market
Australian Funding University Funding 18,000 16,000 14,000 $M 12,000 10,000 8,000 6,000 Sate Govt. Other Sources HECS Fees and Charges Commonwealth Grants 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Funding of Australia s Universities (2005 dollars)
Australian Funding University Funding 100% 90% 80% 70% 60% 50% 40% 30% Sate Govt. Other Sources HECS Fees and Charges Commonwealth Grants 20% 10% 0% 2000 2001 2002 2003 2004 2005 2006 2007 2008 Relative magnitude of funding sources
Australian Funding University Funding 1.80% 1.60% 1.40% % of GDP 1.20% 1.00% 0.80% 0.60% State Govt. Other Sources HECS Fees and Charges Commonwealth Grants 0.40% 0.20% 0.00% 2000 2001 2002 2003 2004 2005 2006 2007 2008 Funding as a percentage of GDP
Australian Funding Funding per place 16,000 14,000 12,000 $ 10,000 8,000 6,000 HECS Commonwealth 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 Funding per Commonwealth Supported Student
Australian Funding Student to Teacher Ratio, 1993 to 2003 22 20 18 Ratio 16 14 12 10 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 The increase in student:staff ratio
International Comparison Expenditure as % of GDP Country mean United States United Kingdom Turkey Sw itzerland Sw eden Spain Slovak Republic Portugal Poland Norw ay New Zealand Netherlands Mexico Korea Japan Italy Ireland Ic eland Hungary Greece Germany France Finland Denmark Czech Republic Canada Belgium Austria A ustralia Public Private 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0%
International Comparison Although Australia does not appear unusual, the system is quite different to most other countries Government funding below OECD average Private funding largely generated by student fees, rather than alumni or industry User pays has possibly gone further than any other country
International Comparison Country mean United States United Kingdom Turkey Switzerland Sweden Spain Slovak Republic Portugal Poland Norway New Zealand Netherlands Mexico Korea Japan Italy Ireland Iceland Hungary Greece Germany France Finland Czech Republic Canada Belgium Austria Australia 0% 5% 10% 15% 20% 25% 30% 35% 40%
Future Options Four possible options for future funding of Australian Higher Education Increase in base Commonwealth support, whether for student load or research A redistribution of research funding as proposed under the RQF Change to the domestic fee-paying situation to lift the present cap of 35% Further change to the HECS system to lift the present maximum additional charge above 25%
Future Options Enhance base Commonwealth funding Essentially the status quo option Indications from government are that this option is unlikely Not even an indication that indexation might improve Marketing imperative will be to build reputation and attract best students Competition will mainly be at international level where performance in rankings and league tables will become more important
Future Options Enhance base Commonwealth funding Success internationally will depend on status generated through research The outstanding teaching only University is not an option in Australia Teaching only = lower status = poverty
Future Options The RQF impact RQF will be the measure of research success and hence status Success will require focussed excellence in chosen areas rather than reasonable quality across a range of areas Key question is which of the non-go8 can focus in this manner? Will all Go8 be winners? There will be a flow-on into student demand
Future Options Lift the 35% cap on domestic fee-paying students Clear advantage to those Universities which can command this market position Will have a major flow-on within the sector Elite Universities will build wealth, staff and student quality and facilities, at the expense of the remainder of the sector A two-tier system will develop at University level, similar to the private state school divide at secondary level
Future Options Lift the 35% cap on domestic fee-paying students Significant social implications due to historical disadvantage Students from low socio-economic background perform poorly at secondary level
Future Options Entry level Vs Social Background 80 75 GAT 70 65 60 55 980 1000 1020 1040 1060 1080 SES
Future Options Lift the 35% cap on domestic fee-paying students Could extensive scholarships solve this problem? Unlikely: The scheme needs fee-income to be viable. Very different to the US where scholarships are supported by the University endowment Low SES students disadvantaged in even competing for such scholarships
Future Options Lift the 35% cap on domestic fee-paying students At present, such students have a range of educationally comparable Universities to attend In such a new funding situation, these students would need to attend a second tier, poorly funded University The social disadvantage would have been institutionalized at University level
Future Options Deregulate the HECS cap Institutions can charge HECS at a maximum rate of 25% above the Commonwealth-defined base Intended to introduce price competition Has not occurred as the 25% was too small all institutions have moved to the full 25%
Future Options Deregulate the HECS cap Expansion of the fee cap limit to 50% would probably introduce the competition originally desired Would have less impact on social issues Would be spread across more institutions But would not achieve the desires of the Go8
Conclusions Funding options A combination of an increase in Commonwealth base funding (justified by OECD comparison) together with a further deregulation of HECS would be an equitable outcome Whatever the future holds, institutional success will be built around raising status, which is largely achieved through research performance
Differentiating Australia s Universities Professor Ian Young Vice-chancellor Swinburne University of Technology