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"Higher Education: Where to from here"

Belinda Robinson, Chief Executive, Universities Australia

Higher Education Summit - Melbourne

Thursday 14 July 2016

Thank you for the opportunity to speak at a most interesting time for those with an interest in politics and higher education policy.

I begin by acknowledging the traditional owners of the land on which we stand today and pay my respects to your Elders past and present.

In paying my respects, this is also an opportunity to remind ourselves that despite making up 2.7 per cent of the working age population, Aboriginal and Torres Strait Islander people represent 1.1 per cent of all university enrolments.  

Although the participation has been gradually increasing in recent years, clearly we have more work to do.  

I hope to leave you with an optimistic message on the state of the university system and its policy future.

Today I will cover three areas.  

First, some stats and facts on the Australian university system and its contribution to the nation.  

Secondly, I’ll provide a thumb nail sketch of the outcomes of the federal election – to the extent they have been settled - and what this means for the place of higher education in the new Government’s policy agenda.  

Finally, we’ll take a brief look at the policies Universities Australia will be prosecuting in this Parliamentary term. 

Universities Australia is the peak body representing Australia’s 39 comprehensive universities.

While we do a number of things, our core business is policy development and political advocacy.   

Our role is to seek the policy, regulatory and fiscal settings to support a strong, vibrant and internationally competitive university sector. 

We advocate for policy settings that enable our members to pursue their missions and realise their full potential within the nation’s higher education and research ecosystem.   

I often talk about Universities Australia’s role as a translator. 

We translate the language of universities and academics into the language of policy and politics, and do the same in reverse.

In 2014, Australian universities enrolled 1.3 million students, produced 

300,000 graduates, and employed 120,000 full time equivalent staff.  

The sector contributes $25 billion to GDP and the skills of our graduates are valued at $140 billion per annum.  

Universities also contribute more than $2 billion per year to regional economies and sustain over 14,000 regional jobs.  

International education, of which universities constitute the lion’s share, is Australia’s third largest export earner and the total value of the existing stock of all knowledge generated by university research is estimated at $160 billion.

Work done for Universities Australia by Cadence Economics shows that the growth in higher education participation creates a ripple effect across the economy.  

It is not just the graduates that benefit. 

A highly educated workforce creates new jobs and lift wages.  For every 1,000 university graduates who enter the workforce, 120 new jobs are created for people without degrees. 

In 2014-15 this meant new graduates entering the workforce created 25,000 new jobs for Australians without a degree, including more than 8,000 new jobs for technicians and tradespeople.  

Not only that, but more graduates also mean higher wages for those without tertiary qualifications. 

The average worker will earn $655 a year or $12.60 a week more when more graduates join the workforce. 

Without the entry of new graduates, Australia’s growth rate in jobs for people without a degree would have been zero over the last eight years. 

But statistics paint only part of the picture.  

The massive contribution that universities make goes way beyond just big numbers.  

Their contribution to social cohesion, civil society, rural and regional communities, ‘soft diplomacy’ and human advancement may be difficult to measure, and perhaps taken for granted. 

Yet these contributions are integral to every successful nation.  

As with every part of the economy, higher education is being buffeted by change. 

Technology is driving profound shifts in our industrial structures and our economy.  

It is estimated that 40 per cent of existing jobs could disappear within the next 10 to 15 years.  

Universities will need to play a major role in preparing its graduates for the new jobs - in the new and reconfigured industries – that will replace them.  

And we need to do this in an environment of great labour market uncertainty and at the same time that universities too are being disrupted.  

International competitiveness is intensifying.  

Countries traditionally considered to be our source markets are increasingly becoming our competitors as they strengthen and invest heavily in their own higher education systems and adopt aggressive targets for international education.  

China has a goal of enrolling 500,000 international students by 2010.  Across the ditch, New Zealand aims to double the economic value of international education by 2025.  

Japan is looking to double the number of international students to 300,000 by 2020 and Malaysia’s goal is to be the sixth largest education exporter by 2020.

Australia is a world-leading provider of international education.  

I have every confidence that our strong-track record, reputation and commitment to excellence should ensure that this continues to be the case but we must be alive to the increasing challenges that competition for international, and including Australian, students.

Constrained public budgets are here to stay.

In juggling competing priorities for public funding, our Government, like others all around the world, will be looking to ensure the maximum return possible for every taxpayer dollar spent and seek savings wherever they can in pursuing budget repair.  

And finally, students are increasingly in the driver’s seat in determining what, how, when, and where they study.  

Universities are alive to this and are designing their courses and marketing strategies accordingly.   

Governments too are re-examining programs and policies in ways that can demonstrate that students are at the forefront in their thinking.  

Recent examples include proposals to upgrade QILT and for more transparent university admissions processes and policies.  

These drivers are already framing the policy debates that will fundamentally affect the future shape and structure of Australia’s university system.

As the pace of the economic, industrial, technological and social change accelerates, the challenge is to ensure we have the policy settings needed to support a fit-for-purpose education and training system.

That system must be nimble, responsive and up to the task of producing graduates equipped with the skills and knowledge needed to succeed in the new economy.

So let’s take a look at who will be in the policy-making hot seat following the election.

Consistent with the political mood sweeping Western democracies, the election has delivered a large number of Independent and minor party representatives into the federal Parliament.

In the House of Representatives (as of last night) the Coalition holds a fragile majority of 76 seats.  

Labor, so far, has won 68 seats and the remaining 5 seats are held by independents and minor parties, with one still too close to call.  

The Australian Electoral Commission has only counted about half the Senate votes so the final outcome for our Upper House is far from certain. 

At this stage the ABC is predicting the Coalition with 29 Senators, Labor with 24, the Greens with 6, independents and minor parties, 6 and 11 seats too difficult to predict. 

The best guess at this stage is that without Labor, the Government will need the support of around 11 Senators from the Greens and the cross-bench to pass legislation. 

Some of you may have caught the ABC’s 7:30 report on Monday.  

It was very encouraging to hear both the Prime Minister and the Leader of the Opposition committing to a new era of cooperative politics.  

Bill Shorten pledged that “where there is common ground, we will work hard to accomplish it.”  

Malcolm Turnbull in reply said that “it is vital that this Parliament works, it is vital that we work together … to meet the great challenges that Australia faces.”  

How long this spirit of cooperation lasts remains to be seen – but these initial signs are positive. 

So what do the election results tell us about ourselves?  

They tell us, I think, that a very large proportion of the population feel alienated and possibly frightened by the economic and industrial transformation that is underway.

In times of economic and social upheaval, an optimistic and enthusiastic narrative about the future is important. 

Yet it needs to be accompanied by a clearly articulated strategy aimed squarely at providing reassurance to people that the future belongs to us all.  

With the prospect of millions of jobs disappearing, many Australians are anxious about a future of work defined by terms like ‘the age of machines’, the ‘internet of things’, robotics, automation and artificial intelligence.

The technological change shaping our world is inexorable and regardless of who we elect to the Parliament, we are on a trajectory of change that cannot be turned around. 

Let's not forget also that, because with technological advancement comes new opportunities for economic growth, human advancement and new and exciting ways of doing things.

A key challenge for the new Government will be to work with all members of the Parliament and the community to develop a practical strategy for how we approach this new era.

Education – from early childhood right through to vocational and higher education – will play an even more crucial role.

Education will equip people of all ages and at all stages of their working lives with the skills and confidence needed to thrive in the new economy.  

And so we need an education system which acknowledges that career reinvention will occur several times in a person’s working life. 

A system which understands that upskilling, reskilling and lifelong learning will increasingly be a regular part of the average working life.   

What then, is the place of universities?  

First, universities through the research they do – contributing to seventy five percent of the nation’s public research endeavour – are themselves enablers of change.  

The research done by our universities leads to the new products, industries, discoveries and breakthroughs that underpin economic and social advancement.

Secondly, universities produce the globally-connected graduates with the skills, flexibility and resourcefulness needed to create and fill the jobs of the future against a backdrop of profound economic and industrial change.

On the former point, properly funding public research is critical and on the latter, policy and regulatory settings that support new modes of delivery, flexibility, adaptability and responsiveness, are essential.

Much of the political narrative around the election outcomes has focussed on instability and uncertainty.  

Yet perhaps, this period creates the opportunity, as Professor David Lloyd, Vice-Chancellor of the University of South Australia, said in a recent opinion piece, published in The Australian:

“… for higher education to influence its own future and to chart a pragmatic and progressive course forward for the nation.”

Making the most of that opportunity requires a three-pronged approach.  

First, we will continue to promote the role of universities in positioning Australia for making a successful transition to a new economy.  

Secondly, we will to work constructively with the Government on realistic higher education and research policy settings.   

And finally, we will engage with all Parliamentarians, especially those new to higher education and research, on further evolving what David Lloyd calls the ‘Benefits Framework’.

By this I mean the value-proposition for maintaining a world-leading university system in delivering the Australia we all want for ourselves, our children and our grandchildren.

In terms of our policy priorities, where to from here?

Late last year Universities Australia released its pre-election policy statement, Keep it Clever. 

Through the term of this Parliament, it will continue to shape the sector’s advocacy on policy. 

It sets out a framework to support education and research excellence, ensure access for all with the ability to complete a university qualification, and maintain Australia as a destination of choice for international students.

The outcome of the election has not determined many higher education policy outcomes, apart from the scrapping of full fee-deregulation.  

While the options paper released by the Government prior to the election provides a useful focal point for further discussion on policy options, the ultimate decisions will be taken by the new Parliament.   

In this context, Universities Australia is likely to focus on the following five areas.  

1. First and foremost, we will continue to oppose the 20 per cent cut to student funding proposed in the 2016 budget.

 Coming on top of $3.3 billion worth of cuts that have been made since 2011, we reject the premise that a further reduction of $2.5 billion over the forward estimates would not affect the ability of universities to continue to deliver the quality of education expected by our students, employers and the broader community. 

Nor is it consistent with a policy theme that focuses on leveraging human capital for the betterment of the nation.

2. Universities Australia promotes policies that help ensure that everyone with the ability to complete a university qualification has the opportunity to do so.

While the number of disadvantaged students participating in higher education has increased significantly since the introduction of the demand driven system, they are still underrepresented.  

Universities Australia will continue to advocate for the restoration of funding for programs that achieve improved access to higher education for those currently under-represented.

For this reason we support the Government’s proposal to review the Higher Education Participation Program.

3. Australia’s globally recognised and emulated income contingent loans scheme – HECS/HELP - ensures that cost does not impede access.  

It has been an outstanding success and is a key feature of Australia’s higher education system.  

However, recent reports from the Parliamentary Budget Office have forecast rising costs - particularly as a consequence of its unfettered expansion to non-university providers.  

Not surprisingly, this has led to Government concern and indications that policy readjustments aimed at containing costs are under active consideration.  

In our view, the greatest safeguard is the maintenance of its financial sustainability. 

So we don’t think it unreasonable that consideration be given to debt recovery and other design options, providing they are consistent with the scheme’s underpinning principle of fairness and do not undermine the fundamental policy intent or objectives of the scheme.  

4. Universities Australia will continue to advocate for lifting the level of strategic investment in university research, particularly in meeting the indirect costs of research.  

Under our current funding system, competitive research grants do not cover the actual cost of university research.  

Universities need to find an additional 85 cents from other sources for every dollar they receive in competitive grant funding.

This creates significant funding distortions.   

In 2012, universities sourced 56 percent of their research expenditure from general university funds, including revenue from fees paid by domestic and international students.

While the quality of education is enhanced by being research-informed, we should be careful to ensure that funding for research does not come at the expense of quality teaching.  

There has been much debate around the level of university and industry collaboration, which can also be seen as an issue of supply and demand. 

Universities, the National Innovation and Science Agenda and other incentives are creating the required supply, with industry now in the position of needing to create matching demand.

We will also continue to argue for more effective use of the $2.9 billion R&D tax incentive in promoting industry-university collaboration.

5.  Australia is the fifth most popular destination in the world for international students and, of the top five, we are the only country to have increased its market share between 2000 and 2013. 

International education is our largest services export earner.  

It supports 130,000 jobs, contributes 16.5 percent to university revenues. 

It also helps to strengthen our relationships with the rest of the world and serves many of our foreign policy objectives through its soft diplomacy impact. 

However, as I mentioned earlier, we are facing increasing competition.

More and more countries are now pursuing aggressive international education targets and strategies, and traditional source countries are investing heavily in their own higher education systems.   

Universities Australia will continue to advocate for policy settings that maintain and enhance our competitiveness as a dependable provider of high-quality education to international students.  

The current political and economic times present Universities Australia with an opportunity to forge a pragmatic and progressive course on higher education policy.  

This will involve promoting an understanding in Parliament and the wider community of the critical role to be played by universities in responding to the national challenge of economic and industrial uncertainty.

It is a challenge that we embrace because the future we face is one that will require a strong and productive research base, many more skilled graduates and life-long opportunities for reskilling and upskilling.    

Australia has an excellent higher education system.  

We are fortunate in that it is not in crisis and does not require a major policy overhaul.  

However, policy attention is required in some areas to ensure that our universities can realise their full potential in securing long term national prosperity for the benefit of everyone.

Thank you.  

Universities Australia Media Contacts

Misha Schubert
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