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Billion dollar cuts in higher education would force job losses, erode student support services and weaken universities at the very time the economy needs them to skill our future workforce and generate growth.

In its submission on the higher education legislation, published today, Universities Australia has told a Senate committee the majority of its members oppose the Government’s bill in its entirety.

“The proposed $1 billion in cuts to university funding would come at a time when competing nations are investing heavily in higher education and research as a way of safeguarding their economies against profound economic, industrial and social upheaval,” it notes.

The submission also warns the contraction in funding would take a toll on jobs and growth and student affordability across Australia – as cuts and job losses at universities would have a multiplier effect. 

 “The funding cuts proposed in the Bill will inevitably lead to job losses at universities … (which) will have a flow on impact in the local economy beyond the direct effect and will reduce employment and economic activity in the community broadly,” the UA submission states.

Economic modelling by the University of Adelaide has predicted that up to 220 South Australian jobs would be lost directly as $90 million is cut from the State’s three public universities. 

And, contrary to a claim there had been ‘rivers of gold’ in Government funding over the last decade, funding per university place grew by less than two per cent each year from 2009 to 2016 in real terms.

“The Government might think it has struck it rich for Budget repair but, in truth, they’re panning fool’s gold. These cuts will cost Australia way more in the long term than will be delivered in a short term Budget saving,” said Universities Australia Chief Executive Belinda Robinson.

If the committee were inclined to proceed with the legislation, the sector has urged it to remove the university funding cuts and student fee rises. It also wants a proposal to withhold ‘performance funding’ from universities excised from the Bill until detailed performance metrics have been designed and agreed. 

“The proposal set out in the Bill provides almost no information on how performance funding would work,” the submission notes. 

“That really would be putting the cart before the horse,” said Ms Robinson. 

As currently drafted, the legislation would hand the Education Minister unprecedented powers to set and change the metrics from year to year, creating dramatic new uncertainty over university funding – which is currently protected by a legislative formula.

UA also notes the sector’s concern that the proposed funding cuts would “further exacerbate a city-country divide in employment, productivity and innovation.”

“The changes will hit hardest the universities and students that need the most support. Regional and outer metropolitan universities will have less money to support students from disadvantaged backgrounds or to invest in their local communities, where they are often the biggest employers,” Ms Robinson said. 

The submission notes Charles Sturt University, for example, faces cuts of $9 million a year which would lead to 270 jobs lost in the broader regional economy. 

The submission states: “The changes pose a real threat to quality, both of the standard of education that our domestic and international students expect and the student experience more broadly. They would also limit students’ options by driving sameness across the sector as institutions pursue the cheapest teaching options.” 

“In combination, cuts to university funding and increases in fees mean that students would pay more and get less and will weaken the capacity of our universities to support Australia’s economic and social development. “ 

In its submission, Universities Australia also countered the idea that universities could simply “absorb” cuts.  

“Universities reinvest any surpluses in teaching and research. Just under half of all universities are either operating at a deficit or on slim operating margins of less than five per cent,” it states. 

Universities are being brought to a tipping point.

The Government’s proposed cuts come on top of $3.9 billion that universities and their students have already contributed to Budget repair since 2011. 

The submission also refutes the Government’s assertion that “Government funding for university teaching and research is expected to grow by approximately 23 per cent over the next four years”.

“This is not true – since the Government’s own figures show that HELP loans – most of which will be paid back by students – make up 87 per cent of that growth,” it notes. These HELP loans would increase because of the Government’s Budget decisions to make students pay more.

“Compared to current funding arrangements, the new package will reduce grant funding. It is a net cut in real terms,” the submission explains.

“Funding for student places (would be) flat despite inflation and enrolment growth. In other words, funding per student falls.”

Universities Australia Media Contacts

Misha Schubert
02 6285 8133
Mobile: 0421 612 351

Bella Counihan
Ph: 02 6285 8123
Mobile: 0419 212 219 

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