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Update on the Government's reform program

3 October 2011

The past three months have seen further development of the Government's reform program across many areas.

Supporting student preference

The most important was passage of the legislation is to allow universities to be funded for all enrolled Australian undergraduate students from 2012 - (Media Release, 14 Sept 2011).

Sometimes it is easy to forget that the proposals from the Bradley review are only due to start from 2012.  Universities have been expanding in the lead up and the Government has ramped up a number of funding streams but it is next year that the full suite of changes will take effect.

This is particularly important when there are already arguments emerging for further major changes, particularly from those who argue that a demand driven system without open ended charges is somehow an unworkable hybrid.  We will see in fact what does happen next year as universities and potential students come to understand how the more open system will work in practice.


International student arrangements

The Government has moved to redraw the basis of the international student arrangements.  The Michael Knight review is an unusually clearly written report focused at an analysis of the problems and feasible changes that will fix or at least reduce them. (Media Release,  22 Sept 2011)

Universities do well from the Report.  The new visa arrangements will provide a reasonable, swift, low risk assessment for all international students heading for a university degree, whether directly or through a package starting with English language training and/or other tertiary provision.  Universities need to show that their students justify this swift assessment through maintaining a high level of adherence to visa requirements.

Further, international students will be able to stay post completion of their degree to work for between two and four years.  There is a growing international workforce of highly skilled people who move across countries during their working careers.  The post study visa allows Australia to access this group at the beginning of their work careers, potentially setting the basis for future periods in Australia.

The Knight review goes to the future visa arrangements.  The Government has also worked through the recommendations from the Baird review concerning the regulation of international student provision, to ensure effective supervision of the myriad of smaller providers and to ensure better protections for students should their provider not be able to provide the course through to completion.

The outcome is not always easy for universities.  We are now part of the general tuition protection arrangements, in itself not necessarily a problem but the requirement to pay a levy to support the scheme has limited return for universities.  Universities do not need the scheme for their students.  The value is that the scheme reduces the risks from other providers and consequent bad publicity for Australian education overall.

The new quality framework

TEQSA formally came into being on 30 July 2011.  Dr Carol Nicoll will be the Chief Commissioner, building on her extensive background as a university academic, a Commonwealth public servant and most recently as CEO of the Australian Learning and Teaching Council.

We are yet to learn who will head the Higher Education Standards Panel, which will be responsible for the future standards against which universities and other higher education providers will be monitored and evaluated.  Initial standards based on current documents are being produced for TEQSA's initial take up of its full responsibilities from 1 January 2012.

The draft Qualification Standards build off the recently revised Australian Qualification Framework but with some unnecessary reworking given the fuss and debate around the AQF revision.  The standards also struggle to get right the balance on credit transfer and related pathway issues.  There is a risk the requirements could make a cumbersome process more so, not less. Our submission.

Research funding and support

Following the first ERA published earlier in 2011 the Government is now working to use the ERA results across the suite of research funding programs.  Using ERA to encourage the further development of world class research, not just to reward existing examples, remains the challenge for Government.

The first case is the Sustainable Research Excellence program (SRE).  SRE combines with the long standing Research Infrastructure Block Grants to support university research infrastructure with a focus on the indirect costs of competitive grants such as those from the ARC.  The Government has a target that the two programs will provide 50 cents for every dollar of competitive grant income.

The SRE is to be allocated based on a university's competitive grant income, adjusted for evidence about the indirect costs within that university and for the ERA ratings the university achieved.  The details of how this could work and the IRU proposed approach are in our submission.

The use of ERA will weight the distribution towards those universities with large numbers of highly rated fields of research.

The risk is that many universities face receiving less SRE for additional ACG income than universities with stronger ERA ratings, creating a barrier to further competitive grant success, rather than encouraging it.  Equally some areas of research with close to uniformly modest outcomes, for example education, could be downplayed across the sector, despite being a major professional area.

After SRE the Research Training Scheme will be next to be reviewed to include ERA in its allocation model.

Support for industry research and development

The Government has changed the arrangements for Research and Development taxation concessions to encourage greater take up by smaller to medium businesses and a greater targeting of development that might not otherwise occur.  The new arrangements mean that if a business makes a loss it can claim back part of its investment in research and development and a business in profit can claim a reduction in the tax to be paid.  In past years it has primarily been larger businesses which have used the R&D taxation arrangements.  The Government is keen to see more small to medium businesses involved.  Researchers working with businesses should check whether the R&D taxation arrangements are being used to full advantage.

The Government's direct support for universities engagement with industry, Government and other users of research is the Joint Research Engagement (JRE) program.  It is considering small changes to that program and to the collection of data on research income from industry and international sources.  The IRU argues in its submission that to strengthen the incentive for universities to build further on their support for the research needs of industry, Government and community organisations the funding provided needs to be increased.  Refining research income data or the formula for the allocation of the JRE will be of little moment on their own.

Student amenities fee

The Parliament has mostly addressed the Government's legislation on the merits of the issue.  The legislation to restore a student amenities fee, for various student services and supports not strictly part of the degree program, has not been so lucky.

The fee was the creation of universities during the Whitlam Government.  Since Government funding for university base operations would not cover many student services and activities the charge was a strictly defined exception to the commitment to a free university education.  Ever since, the fee has been under pressure both for its connection with membership of student bodies and the sometimes dubious use of revenue by student bodies.

The legislation to restore a fee is opposed by the Liberal Party, over two-thirds of whose Senators have so far spoken against it, a very high level of attention for one piece of legislation.  It remains likely to be passed in October with the Government, The Greens and Senator Xenophon supporting it.

Once in place from 2012, universities will need to be very attentive that the use of the funds raised is consistent with both letter and intent if we are to avoid a return to the current prohibition when next the political cycle turns.

Conor King

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