Accord timeline risks entrenching ‘perverse’ funding rules

A lack of “urgency” in Australia’s higher education review process could lead to “perverse” funding arrangements becoming entrenched as permanent fixtures, observers have warned.

In its interim report, the Universities Accord panel stressed the need to overhaul the Job-ready Graduates (JRG) package introduced during the pandemic, which cut average subsidies for undergraduate courses and more than doubled tuition fees in some disciplines while reducing them in others. The report says “fundamental reform” is required to the JRG, which must give way to “something better” before it “causes long-term damage to Australian higher education”.

As a first step, the report recommends abolition of the JRG’s “50 per cent rule”, which removes students’ access to government subsidies if they fail half or more of their subjects. The panel also proposed that the Higher Education Continuity Guarantee (HECG), a three-year “funding floor” to help universities adapt to JRG, be extended for a further two years. The federal government accepted both recommendations.

The HECG was scheduled to end in December. The report says this could force universities into “difficult and premature financial choices” such as cutting staff numbers, slashing support services or cancelling capital works.

But critics say the extension means the promised JRG overhaul may now be postponed until 2026. “With an election due in the interim, there’s a risk the panel’s eventual reforms may never be implemented,” warned Claire Field, a tertiary education policy consultant and former regulator.

The accord has largely resisted incremental tweaks, preferring to canvass issues thoroughly before recommending changes. “Higher education needs more bipartisanship and fewer policy changes each time there is a change of government,” Ms Field conceded. But she highlighted a “surprising and worrying disconnect” in the panellists’ approach to funding, such as a failure to recommend debt waivers for the students most disadvantaged by JRG.

“There’s…no sense of urgency about what leaving the JRG funding in place until 2026 means for the approximately 40 per cent of students currently paying incredibly high fees. And it leaves universities which have healthy enrolment numbers to wear the cost of government underfunding for another two years,” she said.

Asked whether he would consider extra interim support for “over-enrolled” metropolitan institutions, education minister Jason Clare said they were already benefiting from funding for an additional 20,000 university places announced last year. “These are the sorts of things that [review chair] Professor O’Kane and the team, I suspect, will look at when it comes to the final report,” he added.

Critics say that with its major recommendations delayed until December, the accord could squander the chance to have its key ideas implemented next year. Science & Technology Australia chief executive Misha Schubert said that with significant expenditure proposals generally required before December each year, the accord’s approach “potentially risks missing next May’s budget and having to wait a whole other year”.

Ms Field said even 2025 could be optimistic, given the number of “underdeveloped” and apparently contradictory reform proposals under consideration.

“It looks likely that their final report will land on a small number of funding changes to be made in the short term, with more significant reforms pushed into the future for further development by the proposed Tertiary Education Commission,” she predicted.

john.ross@timeshighereducation.com