With labour productivity the key to Budget recovery, funding cuts that slash the number of Australians able to enhance their productivity through higher education would be deeply counter-productive. Similarly, cuts to research funding would hamper innovation in the Australian economy.
In its 2018-19 Pre-Budget submission, Universities Australia urges the Turnbull Government not to disinvest in Australia’s people and productivity by cutting Australia’s investment in universities.
“Especially in advanced economies like Australia, continued growth in economic activity, employment and living standards depends largely on improving productivity,” it notes.
“The most effective and sustainable way to support growth and prosperity is to invest in skills.”
There is a vast body of research that shows lifting educational attainment boosts productivity gains.
The submission highlights productivity analysis that shows higher levels of education deliver a boost to Budget revenue, meaning university funding cuts would hurt – not help – the Budget.
The Parliamentary Budget Office says if labour productivity growth rose permanently by just a quarter of a per cent each year above current Budget forecasts, it would boost personal income tax revenue by $6 billion and double the forecast surplus in 2027-28.
Universities Australia Chief Executive Belinda Robinson urged the Government to maintain a focus on investments in Australia’s people, productivity and prosperity as a central theme of its Budget.
“If – as speculated in media reports – the Government freezes university funding in 2017 dollars and cuts equity programs, that would be a double whammy to opportunity and equity,” she said.
“A funding freeze would effectively slash the number of people who have the chance of a university education, and cuts to programs that support disadvantaged students will make it harder for Australians from poor backgrounds just to get their foot in the door.”
“That won’t just be a blow for students and universities – it would be a blow to the Government’s Budget repair ambitions and to the economy which now needs more – not fewer – skilled workers.”
The submission also notes the contribution universities make to social cohesion, ensuring that we don’t leave large groups of Australians behind in a time of dramatic economic upheaval.
“Our nation’s investment in broad access to higher education is a powerful inoculation against entrenched disadvantage – and the political and economic dislocation that inevitably results,” it says.
“Australia’s future social cohesion will be shaped by our commitment to grow our economy for the many, not just the few.”
The Universities Australia 2018-19 Pre-Budget Submission encourages the Government to:
- reconsider the relative returns on the investment in a strong, vibrant university and research system;
- defer ‘performance-funding’ scheme pending comprehensive consultation with key stakeholders;
- retain the demand-driven system; and
- at least maintain funding for the Commonwealth Grant Scheme, Research Block Grants, and the Higher Education Participation and Partnership Program at 2017 levels indexed for 2018.
