Australian Universities at the Crossroads


Just before Christmas last year, the Coalition announced a freeze on funding for the Commonwealth Grants Scheme, which covers the cost of higher education for students.


This will force universities to find "band-aid" solutions to cover their costs this year. Universities Australia estimates that up to 10,000 university places will go unfunded in 2018 as a result of these Federal cuts.


Universities will have to start looking at shifting resources, seriously look at what programs they really need to continue funding and what campuses they can hold on to. The impact of the funding freeze, which sees funding kept at 2017 levels for 2 years, will have some serious ramifications that the Government modellers have not thought through to a logical conclusion.


A report written by the Mitchell Institute illustrates the problems with freezing funding for 2 years. Extrapolation of enrolment numbers from 2008 to present through to 2031 with a 2-year freeze in enrolment numbers show that there will be a 4.9% drop in participation rate by 2031 – or about 235,000 students in the 18-64 age cohort.

 Mitchell Report into Participation Rates for HE and VET 2018 to 2030


With 235,000 fewer Australians at University, Australia risks a contraction in the labour market for several decades, possibly longer. For the sake of saving (cost shifting) $2.8 billion in funding costs over 2 years (easily found in other areas such as sport and arts), Australia runs the risk of losing a generation’s worth of skilled graduates that would contribute billions to the country’s revenue through taxation.


Political short sightedness leaves the sector (and Australia) with few options:

  • Increase the level of skilled migrants to make up for the lack of numbers graduating from University

  • Reduce the number of jobs that require to be filled by graduates through increased offshoring of Australian jobs, or

  • Change the funding framework for Universities (and VETs, etc) to make it less reliant on Federal Government funding

With 235,000 fewer students in the system over the next 15 years, and reduced Government funding, it follows that there will be a rapid decline in revenues to support academic programs, support systems, technologies and essential facilities. In other words, are we are seeing the dumbing down of education across the country? Is this deliberate or not? We can only draw conclusions and make extrapolations from the Mitchell report and Universities Australia’s suppositions.  


Successive conservative governments have always been troubled about the “masses” being educated (“Don’t spend money on them, the people don’t vote for us” John Howard 1997; British John Pakington MP famously said that while not all conservatives were stupid, “stupid persons are generally Conservative”).


“Learning” has been a real danger for conservative politics. Numerous studies show that the more educated a person is – the more developed their analytical faculties – the less likely they are to vote for a party of the right.


The danger for current Government now is that 50% of the voting population under the age of 40 have a tertiary degree, so they know the value of education; specifically Higher Education and Universities. This is the one group that the government does not want to alienate. Defunding will have serious ramifications for future conservative governments. And with a Labour policy to bringing down the voting age to 16 years of age (assuming they win the next election, there will suddenly be a much larger cohort either in school or in University making some very big decisions on their future.


I am not making a pitch for one side of Government or the other in this blog; I am however making the point that Education should be sacrosanct - not a political football and not something that that is used as a “vote getter”. Turnbull campaigned long and hard on innovation and agility - “jobs, jobs, jobs”. Yet, the very slogan he is pushing can’t be achieved with his current policies.


There is no doubt Australia’s population is growing in size and getting older. Without a younger, viable and taxable pool of resources coming through (workforce participation) to offset the impact of ageing population, Australia is destined to slide out of OECD rankings altogether and remain “dumb” for decades to come.


Not only do we need more people in the workforce to create a sustainable future for Australia, we need a better educated one for our social and economic future. This takes proper funding levels and commitment from our political leaders and a strong voice from our academic and corporate leaders.







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