Australian election: union wants tuition fees scrapped

Australian universities and their union have compiled contrasting wish lists for the sector as the federal election campaign enters its final month.

Representative body Universities Australia (UA) says Canberra could add A$24 billion (£13.5 billion) to the national economy within a decade by increasing government funding for university research and development by just 1 per cent.

Meanwhile, the National Tertiary Education Union says lifting public higher education spending to 1 per cent of gross domestic product (GDP) would bankroll major reforms including fee-free degrees.

“The next Australian government could remove the financial barrier to higher education, employ more than 26,000 staff in secure full-time jobs, restore research funding, reduce the overreliance on casual staff and establish a new higher education agency to improve governance,” said union president Alison Barnes.

The proposals stem from a report produced by the Centre for Future Work at Canberra thinktank The Australia Institute. It says that before the pandemic, public funding of universities had declined to just 0.65 per cent of GDP, well below the Organisation for Economic Co-operation and Development average of 0.9 per cent.

Covid-induced border closures had exacerbated this shortfall by reducing income from international students, stripping an extra A$1.9 billion from the sector’s revenue in 2020 and triggering the loss of more than 35,000 mostly permanent jobs.

These claims are debatable, with the 35,000 figure thought to overestimate university job losses due to a sampling error. The 2020 decline in revenue was mainly driven by a A$1.3 billion crash in investment earnings, and claims of low public spending on Australian universities tend to overlook the government’s subsidisation of student fees through its income-contingent loan programme widely known as Hecs.

The report says that the government should get rid of Hecs and make undergraduate degrees free, at a cost of about A$3 billion a year, arguing that students now need more than nine years on average to pay off the “increasingly burdensome” fees – almost two years more than the average a decade ago.

Dr Barnes said free undergraduate education would be “transformative” for current and future students who faced “mounting student debt and even the threat of being kicked off Hecs if they don’t pass their courses”.

Universities, by contrast, say Hecs should be extended to non-degrees. In a submission to the Productivity Commission, UA says microcredentials would be embraced far more widely to help workers upskill and reskill if income-contingent loans were available to cover the upfront costs.

The submission highlights university multiplier effects identified in a 2020 report commissioned by UA. They include A$3 of tax revenue generated for every A$1 spent on teaching, and A$5 of economic enhancement for every A$1 spent on research.

The 2020 analysis also found that every extra 1 per cent of university research and development funding increased Australia’s “multifactor productivity” by 0.13 percentage points, adding A$2.4 billion a year to GDP. “If we lift investment in higher education research and development by just 1 per cent, every Australian would reap the benefits,” said UA chief executive Catriona Jackson.

The submission advocates a move away from “indirect” schemes such as tax incentives to foster industry research. It says business research investment has declined, while universities’ share of the nation’s total research and development effort has increased “even as the real contribution from government…has decreased”.

“Translation and commercialisation of university research is important, but just as universities need to reach out, business needs to reach in,” the submission adds.

john.ross@timeshighereducation.com