February 2010
General comments
The discussion paper specifically, and the entire Performance Funding program more generally, needs to be more clearly connected to university Compacts. Page 26 of the paper states that Performance Targets will be one part of the Teaching and Learning component of Compacts, but there is no suggestion as to how they will otherwise relate to them. Universities Australia considers that some of the proposed Performance Indicators should be included as part of the greater Compact negotiation and agreement rather than seen as a separate item. These include items which are clearly part of the Government's overall national policy agenda, such as participation targets and student population growth targets.
Universities Australia notes that many of the proposed Indicators will be implemented through interim measures in 2010, with permanent measures to be introduced in 2011 or 2012. We would not wish to see any interim measures, which by their definition are not considered to be completely suitable for their intended purpose, become de facto permanent measures. Universities Australia would prefer that the Indicators be developed into their final form before major funding programs are tied to them. The transition from interim to permanent Indicators should provide for substantial stakeholder consultation and input.
The discussion paper takes the position that performance funding should be provided based on institutional improvement from baseline figures rather than rewarding pre-existing excellence. Awarding funding based on the level of improvement may provide incentives for those striving for improvement to reach the top standards but provides no incentive for those who are already achieving these standards. In a worst-case scenario there would be a perverse incentive for these institutions to deliberately drop standards in one year before raising them again in the following year to gain access to performance funding it would otherwise not receive. Universities Australia recommends that the Government consider whether this is a desired outcome. There may be some cause for seeking ways to reward both improvement and achievement.
