Higher Education in the Age of Uncertainty (article by Paul Kniest, NTEU)

We’re sharing an article below which explains the NTEU position on the impact on both students and university workers of the demand driven funding model for Australian higher education, because at the end, it shows how this intersects with the data on casualisation of Australian university teaching. From time to time we’ll pull in research articles like this, to give a sense of how others in our sector are looking at the broad context for widespread casualisation. We hope you find it useful, and thanks to the NTEU for permission to include it–with our apologies for the slightly blurry graphic.

Paul Kniest is director of the NTEU Policy and Research Unit. The article is reproduced from the NTEU Advocate magazine Vol.1 2014, p.18-19: http://www.nteu.org.au/library/advocate

If you have questions about any of the specific terms used here, just ask in the comments.

Higher Education in the Age of Uncertainty

Paul Kniest, Director, NTEU Policy & Research Unit

At 7.30pm on Tuesday 13 May 2014, Treasurer Joe Hockey will deliver the Abbott Government’s first Budget. While we do not know what impact the Budget will have on higher education, we do know that the Government’s general policy framework will be strongly influenced by the Commission of Audit and that those parts of the Budget that deal specifically with university funding will be shaped by the findings of the Kemp Norton Review of the Demand Driven Model (DDM).

While both the Commission of Audit and the Kemp Norton Review will have reported to the Commonwealth well before the Budget is delivered, the first the Australian public is likely to know about either is on Budget night. Based on public statements to date, however, neither is likely to recommend the significant increase in public funding per student that our universities desperately need.

Higher education is not likely to be quarantined from any general cuts to government spending recommended by the Commission of Audit. We would expect the size of recommended cuts to go beyond the $2.3 billion in savings announced in April 2013.

Increasing fees

Kemp and Norton might well let the Government off the hook if they recommend allowing universities to increase Commonwealth supported student place (CSP) contributions (HECS fees). When HECS was first introduced, students paid on average 20 per cent of the cost of their education; today this is 40 per cent.

Any recommendation to increase student fees without a matching increase in public investment will shift the burden even more heavily onto the shoulders of university students and their families. Regrettably, a number of universities and their peak bodies are actively promoting such a change in the funding mix and advocating for a deregulation of HECS fees.

Any significant increases in student fees will make attending an Australian public university the most expensive in the world. However, an equally if not more problematic outcome of the DDM review is the prospect that the Government will adopt the very likely recommendation for CSP funding to be made more contestable, and opened up to private non-university providers.

We know that the open market approach to Vocational Education and Training (VET) has been riddled with a myriad of fiscal and regulatory problems, including budget blowouts, false and misleading advertising of courses and failure of some providers to meet minimum standards.  In a recent article in The Australian, John Ross (‘VET in crisis as pressure mounts’, 15 January) noted that Victoria ‘has seen numerous overhauls as the government tries to contain rorting and budget blowouts by rejigging market settings’.

Demand driven model

In the NTEU’s submission to DDM we strongly argued against further deregulation and contestability of university funding, and proposed a ‘flexible but more coordinated approach’ to allocating university places.

Our proposal was to use strengthened mission-based compacts and funding agreements to allow universities to pursue their own individual missions while giving the government a higher degree of certainty over the level and distribution of funding. This model would allow the community to enjoy all of the benefits (including increased participation by traditionally underrepresented groups) that might flow from the DDM in combination with policies, such as the Higher Education Participation and Partnership Program (HEPPP), while minimising the very real risks associated with this greater contestability.

While the DDM was only fully implemented in 2012, the Government’s intention to introduce it together with transitional arrangements was announced in 2009. Therefore, in addition to the demonstrably detrimental impacts of greater contestability in VET funding on public TAFE colleges, the transition to the DDM has also provided very strong clues as to the real risks of an open market in higher education.

One of the more significant threats of the DDM is related to its fiscal or budgetary sustainability. The proposed $900 million cut to university grants (efficiency dividend) and conversion of student start-up scholarships to loans (saving an extra $1.2 billion) announced in April 2013 were a direct response to a blowout in Commonwealth spending on higher education, because of a larger than expected increase in Commonwealth supported enrolments.

There is also evidence to suggest that the increasing competition associated with the transition to and introduction of DDM has resulted in higher levels of uncertainty about future CSP loads. For example, while the growth in the number of CSPs has increased by about 25 per cent between 2008 and 2012, this varied significantly between universities, with growth being less than 10 per cent for ANU, UTS and UniSA, but more than 50 per cent at Swinburne, Macquarie and ACU. Notre Dame, the University of the Sunshine Coast and non-university providers also had very large increases, but it must be acknowledged this was from a very low base. Greater competition has resulted in significant shifts in CSP market share between universities, and such shifts will only become greater under a more contestable market model.

While the Government might argue that changing market share simply reflects students voting with their feet, NTEU would question whether students’ choices are based on better information or just superficial marketing and branding exercises which amount to little more than sloganeering.

If anyone doubts the possibility of misleading and or deceptive marketing practices in tertiary education in Australia, they only need to read an Australia Skills Quality Authority (ASQA) 2013 report entitled Marketing and advertising practices of Australia’s registered training organisation (see www.asqa.gov.au). For example, the report found that almost one in two (45%) of registered training organisations could be in breach of the nationally legislated standards required for registration with respect to their marketing and advertising. One of the more common breaches was providers claiming a student could complete a course in an unrealistic time.

DDM effect on casualisation

However, from the NTEU’s point of view what is of greater importance is the impact the introduction of the DDM and any further deregulation will have on the nature of employment at our universities. Greater uncertainty leads to greater reliance on casual employment.

This outcome is overwhelming demonstrated in Chart 1, which shows the reliance of casual employment since 2009.  The rapid increase in reliance on casual employees since 2008 just happens to correspond to the announcement to introduce the DDM. The slight decrease in 2013 simply adds to the uncertainty.

We must learn lessons from the impact that greater contestability of public funding has had on public TAFE colleges.  Can we afford to have the viability of our internationally competitive universities undermined by a contestable funding system introduced on the basis of an unquestioned faith in the operation of markets, despite considerable empirical evidence to the contrary?

Estimated casual FTE as share of total university workforce in Australian universities, 2001–2013

Source: Higher Education Selected Staff Data 2013 (Tables 1.3 and 1.4)

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Article by Paul Kniest