Federal Budget Update for Swinburne Students
Wednesday 28 May 2014
Many students have expressed concern at the proposed changes to higher education announced in this year’s federal budget.
While students who were enrolled in a higher education program prior to 13 May this year will not pay higher fees as a result of the Budget provided they maintain their enrolment and complete their course by 2020, the long term consequences of the Budget for the shape of Australia’s higher education system are likely to be profound.
For those of you who are interested, I outline below Swinburne’s position on the recent Budget changes. Although the package is complex and has many elements, these are the five key issues of concern to Swinburne.
1. Full fee deregulation: We do not support full fee deregulation for Australian undergraduate degrees. Full fee deregulation will inevitably lead to much higher fees for our students. It benefits Group of Eight universities whose ‘brand position’ will allow them to charge much higher fees, irrespective of the quality of teaching students receive. Over time, full fee deregulation will lead to a higher education system characterised by the ‘haves’ and the ‘have nots’. Our system of higher education should continue to encourage fees which are not out of reach for those capable Australians who aspire to university study.
Two years ago, I wrote about the risks associated with full fee deregulation in an article for The Australian – those interested can read it here.
2. Public investment in higher education: Australia already lags the OECD in terms of public investment in higher education. The proposed changes include further reductions in public funding through changes in the subsidy rates for most subjects. It is unfortunate that the aspiration to make Australia’s higher education system “the best in the world” increasingly depends on asking our future students to bear higher levels of personal debt.
3. Expansion of system to private providers: We recognise the role of private higher education providers in a diverse higher education system. Any move to provide access to Commonwealth Supported Places for private providers must ensure that the level of subsidy does not provide new entrants with windfall gains. The Victorian vocational reforms have seen a major decline in market share among public providers because TAFEs have been unable to rapidly change to compete with private providers with substantially lower costs. We now risk repeating the same error federally. In short, if the playing field is not level, universities will lose.
4. The changes to HELP repayments: We support the lowering of the repayment threshold to $50,000. However, the proposal to index HELP debts at the long term bond rate, up to an amount of 6%, instead of CPI, will lead to a rapid increase in individual debts as this real rate of interest compounds each year. This will disadvantage women more than men, who take longer to pay their HELP debt back. It will also disproportionately affect older individuals, people of lower socio-economic backgrounds and Indigenous students. Overall, these policies will make more people think twice about commencing a higher education.
5. Quality regulation: The proposal to rapidly expand Australia’s higher education system through the entry of non-university higher education providers means that there will be greater demands on the Tertiary Education Quality and Standards Agency (TEQSA) to provide appropriate regulation of quality. We risk repeating the failures of deregulation of the Victorian vocational education system all over again unless our higher education regulatory arrangements are mature, stable and effective. It is concerning that the budget for TEQSA is being cut by $31 million at a time that a major expansion in higher education provision is being proposed.
There are many other problems that we are working through with our peak body, Universities Australia, and the various Working Groups that have been established to advise the Government.
The proposed changes have sparked a vigorous and important debate about the future of Australian higher education. As this debate progresses we will be contributing actively to discussions, grounded in our experience of the deregulation of the Victorian vocational education system and our concern for students, current and future.
Because the Bills that will give effect to these changes are yet to be presented to Parliament, it is unlikely that our students and our future students will have clarity for some time. We will continue to keep you updated on developments and any modifications as these changes play forward.
Further information about what the Budget means for current students is available at www.studyassist.gov.au.
Professor Linda Kristjanson
Vice-Chancellor and President