RESPONSES TO QUESTIONS ON NOTICE: ECONOMICS LEGISLATION COMMITTEE MEDICARE LEVY AMENDMENT (NATIONAL DISABILITY INSURANCE SCHEME FUNDING) BILL 2017

September 2017

PROPORTION OF UNIVERSITY INFRASTRUCTURE EXPENDITURE THAT HAS COME FROM THE EIF

Senator Hume: The data I have in front of me says that between 2011 and 2013 the EIF revenue constituted only 14 per cent of university infrastructure expenditure and between 2012 and 14 it constituted 10 per cent. So if you have updated data on what proportion of university infrastructure expenditure the EIF actually maintains after that that would be terrific.

UA does not have access to annual outgoings from the EIF so cannot offer further figures in addition to those provided by the Chair.

It is important to note, however, that EIF was never designed to fund anywhere near all of university infrastructure. Its role was to fund major transformational projects. The report of The Higher Education Infrastructure Working Group (chaired by Philip Clark and Denise Bradley) found that 19 per cent of university investment in infrastructure came from government capital grants, and that 70 per cent of the $10.6 billion universities invested in the 2011-2013 triennium came from careful management of institutional resources. It found that:

  • in nearly every case, universities made significant co-investments in HEEF/EIF projects; and
  • the leverage impact of HEEF/EIF investments was very significant.”

Australian and international universities, Australian and publicly funded research agencies, international research facilities or collaborators, local and international foundations and philanthropists and multinational corporations all have a track record of co-investing in Australian research infrastructure. The Research Infrastructure Review Final Report notes that:

“If the Government takes the lead and supports the proposed new model, the Review Panel believes this will pave the way for significant co-investment… In the absence of that lead, co-investment prospects are, in the Review Panel’s view, much diminished”.

There have been no new commitments made from the EIF since 30 July 2013; there is one outstanding payment of $2 million due to the University of Tasmania.

At the same time, surpluses across the sector have declined by 20 per cent since 2009 (in real, constant 2015 dollar terms). Surpluses vary considerably across universities and State Audit Offices have expressed concern.

While UA is pleased that Government has made provision for the operational funding needed to support the National Collaborative Research Infrastructure Strategy (NCRIS) over the next ten years, this commitment does not address capital infrastructure at national or institutional level, and it does not address teaching and student facilities.

Between the first round of HEEF projects in 2008 and the regional priorities EIF funding round of 2012, $4.2 billion was invested in universities and vocational education institutions to fund transformative infrastructure projects.

Without new investment, universities would need to abandon plans for similar projects in the future.

The Higher Education Infrastructure Working Group Final Report 2015 made clear that universities alone do not have the capacity to make major transformational investments, and that the role of Government in supporting infrastructure is crucial. It stated that:

“the Working Group is not aware of any other national or state/provincial government having principal responsibility for university funding which does not provide some form of material capital funding”.

The Research Infrastructure Review Final Report of September 2015 also emphasised the role of Government in providing essential infrastructure for Australian researchers. The first recommendation of the review panel, chaired by Philip Marcus Clark AM, addressed the imperative for the Australian Government to invest the patient capital required to secure Australia’s future in research:

“Public investment is necessary to provide the ‘truly patient’ capital needed to create an environment for the inspired risk taking that is essential to technological discovery. Only governments have the capacity to invest this patient capital into the long timeframes that must apply to research and to research infrastructure”

It is important to remember that the EIF is designed to fund institutional teaching and research infrastructure as well as national and landmark research infrastructure, and is the last available Government fund providing capital for infrastructure at the institutional level. The Capital Development Pool for special capital projects closed in 2012.

Universities are increasingly leveraging the value of existing physical assets for maintenance and new facilities. However, they both need to ensure responsible management of assets and work with State government and other requirements.

For the full report, click here (PDF 559.8KB)