Conclusion

Abstract

Australia faces a critical moment in the history of higher education. There is an international consensus that the reach, quality and performance of a nations higher education system will be key determinants of its economic and social progress. If we are to maintain our high standard of living, underpinned by a robust democracy and a civil and just society, we need an outstanding, internationally competitive higher education system. As the world becomes more interconnected and global markets for skills and innovation develop even further, it will be crucial for Australia to have enough highly skilled people able to adapt to the uncertainties of a rapidly changing future. Higher education will clearly be a major contributor to the development of a skilled workforce but, as never before, we must address the rights of all citizens to share in its benefits. Higher education will continue to be a cornerstone of our legal, economic, social and cultural institutions and it lies at the heart of Australias research and innovation system. The review was established to address the question of whether this critical sector of education is structured, organised and financed to position Australia to compete effectively in the new globalised economy. The panel has concluded that, while the system has great strengths, it faces significant, emerging threats which require decisive action. To address these, major reforms are recommended to the financing and regulatory frameworks for higher education. Higher education has changed dramatically over the last 30 years or so. It once comprised a small number of publicly-funded institutions. This is no longer the case. There are now 37 public universities, two private universities and 150 or so other providers of higher education. The public universities derive significant proportions of their income from non-government sources and some private providers receive government subsidies. The public-private divide is no longer a sensible distinction. The Challenges for Australia Australia is falling behind other countries in performance and investment in higher education. Developed and developing countries alike accept there are strong links between their productivity and the proportion of the population with high-level skills. These countries have concluded that they must invest not only to encourage a major increase in the numbers of the population with degree-level qualifications but also to improve the quality of graduates. Australia is losing ground. Within the OECD we are now 9th out of 30 in the proportion of our population aged 25 to 34 years with such qualifications, down from 7th a decade ago. Twenty nine per cent of our 25- to 34-year-olds have degree-level qualifications but in other OECD countries targets of up to 50 per cent have already been set. These policy decisions elsewhere place us at a great competitive disadvantage unless immediate action is taken. The nation will need more well-qualified people if it is to anticipate and meet the demands of a rapidly moving global economy. Work by Access Economics predicts that from 2010 the supply of people with undergraduate qualifications will not keep up with demand. To increase the numbers participating we must also look to members of groups currently under-represented within the system, that is, those disadvantaged by the circumstances of their birth: Indigenous people, people with low socio-economic status, and those from regional and remote areas. xii Review of Australian Higher Education: Final Report Participation by these groups has been static or falling over the last decade. But we will also need to take account of what is happening among those already in the workforce. We need to turn the rhetoric of lifelong learning into a reality. A well-coordinated, systematic approach to addressing these complex issues and increasing the numbers gaining qualifications is vital. We also face difficulties with provision of higher education in regional areas where there are thin markets which will not sustain a viable higher education presence. These problems will be exacerbated by projections of further decreases in the 15- to 24-year age group in many regional areas. Current arrangements provide no clear incentives to set up education programs in areas of need nor to work collaboratively with other providers to address problems of provision, and they mask signals that provision in some areas may need review. It is in regional areas that some of the difficulties, blockages and inefficiencies which derive from the structures of tertiary provision in our federal system are most evident. Twenty years ago Australia was one of the first countries to restructure to enable wider participation in higher education. The results of those changes made it a leader internationally in the movement from elite to mass systems. With the increase in numbers has come much greater diversity in the student body. Full-time students straight from school studying on campus are now a minority in many institutions. There was concern at the time about the possible effects of this restructure and a range of measures was introduced to monitor and assure quality of the new system. There are now clear signs that the quality of the educational experience is declining; the established mechanisms for assuring quality nationally need updating; and student-to-staff ratios are unacceptably high. Our educational institutions and, in particular, our universities have built Australias third-largest export industry in education services in the last two decades. A quarter of our higher education students are from other countries and they make an enormous contribution to our economy, our relationships with the region and our demand for graduates. However, their concentration in a relatively narrow range of subject fields, in levels of study and by country of origin poses significant challenges both to institutions and to the long-term viability of the industry. As well, we are not making the most of all the opportunities they present to be ambassadors for Australia and to be part of the solution to some of our more intractable problems in renewal of the academic and research workforce. Our universities lie at the heart of the national strategy for research and innovation itself a critical foundation of our response to a globalised world. There is abundant evidence that government provision of funds for underlying infrastructure to support research in universities is very significantly below the real costs. This is leading to a pattern of quite unacceptable levels of cross-subsidy from funds for teaching, adversely affecting the quality of the student experience. Analysis of our current performance points to an urgent need for both structural reforms and significant additional investment. In 2020 Australia will not be where we aspire to be in the top group of OECD countries in terms of participation and performance unless we act, and act now. Review of Australian Higher Education: Final Report xiii The way forward We must increase the proportion of the population which has attained a higher education qualification. To do this we need to reach agreement on where we need to be; provide sufficient funds to support the numbers we agree should be participating; ensure that the benefits of higher education are genuinely available to all; establish arrangements which will assure us that the education provided is of high quality; and be confident that the national governance structures we have in place will assist us to meet these goals. Briefly, the panel recommends a package of reforms which if adopted will achieve the following outcomes: Targets national targets for attainment of degree qualifications a nd for participation of low socio-economic status students will be set and institution-specific targets for participation and performance established and monitored; targets will be set to enable national benchmarking against other OECD countries to track system quality and performance; Students all qualified students will receive an entitlement for a Commonwealth subsidised higher education place; students will have a choice of where to study at recognised institutions; funding will follow the student; institutions will have freedom to enrol as many students as they wish; funding for teaching will be increased; funding for low socio-economic status students will be significantly increased; funding for provision in regional and rural areas will be increased; levels of student financial support will be increased and eligibility made fairer based on need; Institutions all higher education institutions, including universities, will be accredited; criteria for the title of university and for the right to offer research degrees will be tightened; a proportion of the funds allocated to institutions will be allocated on the basis of performance against specific targets for teaching and equity; funds for research will be increased to more fairly reflect costs; funds will be made available to assist institutions to make structural changes; The national framework accountability will be simplified and streamlined to allow each institution to play to its strengths; the Australian Government will assume the primary funding and overall regulatory responsibility for tertiary education; the Australian Government will establish an independent national tertiary education regulatory body; and xiv Review of Australian Higher Education: Final Report the Australian Government will progressively extend the tertiary e ntitlement to the vocational education and training (VET) sector commencing with higher level VET qualifications. Some of the broader implications of this approach are outlined below. Targets An agreed target for the proportion of the population that has attained a higher education qualification by 2020 will provide a focus for action. T