Australia is at a turning point. The economy is in transition and there are a number of balls in the air. Our future could go either way – ahead to a shining future, with knowledge-based high value jobs, start-ups and new industries or stuck in the slow lane.
We are taking steps in the right direction. As the Treasurer Scott Morrison noted in a recent speech, the transition of the Australian economy from reliance on the mining investment boom to greater diversity with broader-based growth is well underway.
Underlining the focus of the Prime Minister Malcolm Turnbull, the Treasurer pointed out the importance of policies that will drive productivity gains particularly through innovation.
“We must foster a culture of ideas because it is the ideas boom that will secure our prosperity in the future”, he told the Business Council.
Universities Australia could not agree more.
For universities are the innovation and ideas factories that will deliver the productivity gains and economic prosperity of the future. Australia’s ability to seize opportunities in a period of seismic economic and social change that is rapidly unfurling around us will depend to a high degree on the education and research stemming from our universities.
The sector already has runs on the board as a major contributor to the transformation of the economy. International education has become Australia’s third largest and top services export earner, contributing $19 billion in direct earnings last year, up from $4.1 billion in 2000.
According to a 2015 report by Deloitte Access Economics, in 2013, the sector contributed around $25 billion to the Australian economy, accounting for over 1.5 per cent of Australia’s economic output. University education added an estimated $140 billion to Australian GDP in 2014, due to higher labour force participation and employment of university graduates and increased productivity of the workforce.
But in a heavily globalised competitive market, Australia is not alone in facing such an economic transition and reaching for policies to encourage innovation to grease the wheels of the necessary gear change.
Canada, with an economy very similar to Australia’s and with an even newer Prime Minister – Justin Trudeau – is also seeking to diversify from a heavy reliance on resources and has highlighted innovation as a signature policy.
In both countries, the resources sectors remain vital. Yet the race is on to diversify and grow their economies, as competing nations prepare for a future in which the skills and smarts of the workforce become the most valuable national commodities. Both nations are examining policies to spur on this compelling agenda.
Yet in Canada, an extra $2 billion is earmarked for universities to help the country meet the challenges of a changing economy.
By contrast, in Australia, cumulative proposed cuts to university funding under governments of both political persuasions over the past five years now total $4.5 billion. The latest Budget speculation suggests further cuts to higher education are contemplated.
For nations as similar Australia and Canada, it is hard to reconcile such polar opposite approaches.
It’s time to take a sobering look at Australia’s prospects in this new era. If we want to prosper in the years ahead, smart decisions now will be key.
Of these cuts, $1.9 billion is the 20 percent cut unveiled in the 2014 Budget, and since twice rejected by the Senate. It remains on the Government’s books.
And yet – in this economy in transition – the imperative has never been greater for nations to invest in the education and research that will deliver the high value jobs, the new industries and start-ups of the future and solve the problems ordinary people face every day of their lives. Such funding is an investment in our future – rather than a cost to the budget’s bottom line.
In Australia and around the world, university enrolments are increasing in response to the rapidly changing demands of the economy and labour market.
The question for our policy makers is not “how much does a modern higher education cost?” but rather “what does it cost the nation NOT to invest in a modern higher education system?”
This is particularly so when we consider the opportunities presented by a university education for students from low socio-economic and disadvantaged groups.
While domestic undergraduate commencements have grown by 44 percent since 2008, commencements by students from the bottom quartile of the income distribution grew by 60 percent and by Indigenous Australians by 62 percent.
This progress underscores the necessity of maintaining funding for programs such as the Higher Education Partnerships and Participation Program (HEPP) which are specifically designed to support those who have the ability but not the means to go to university.
The higher education system of today is not only bigger, but it is under intense global competitive pressure. This places a premium on innovative teaching and learning as universities respond to changing student expectations which prompt them to think and act more like consumers.
Government programs to support, recognise and reward innovative and high-quality teaching – such as the incentives offered under the previous Office of Learning and Teaching – are an essential part of the modern university system.
As the Budget nears, the media speculation is that on top of the hefty incisions already announced for universities, programs assisting students from disadvantaged backgrounds and encouraging innovative teaching and learning are at risk. Suggestions the Government may re-cap some university courses have also been floated.
This would be a setback and a step backwards in the marathon match to grasp the economic opportunities presented by innovation. Hopefully, it is not a match point. The ball is in the Government’s court.
Opinion piece by Universities Australia Chief Executive Belinda Robinson originally published in The Australian on 22 April 2016.