| Funding, Students, University Operations

Job-Ready Graduates Senate Inquiry: IRU submission

The IRU has provided a written submission to the Senate Inquiry into the Higher Education Support Amendment (Job-Ready Graduates and Supporting Regional and Remote Students) Bill 2020.

The IRU recognises the strengths of the Job-Ready Graduates (JRG) package and calls for amendments to be made to address the four key weaknesses.

Four areas for major change

The Bill has four major weaknesses:

  1. The JRG reduces revenue per student for universities. The Government will save 15% of its funding, with students paying 7% more.

The level of revenue to be available targets expenditure at teaching yet does not allow adequately for the cost of facilities, labs, and equipment. If implemented, the Government would not be supporting base research capability and the engagement with industry and community that are required outcomes for a university.

Total revenue for most disciplines the Government wishes to grow such as engineering, nursing and agriculture will decrease, but revenue in other disciplines the Government considers less important such as law, business and humanities, will be increased.

  • Total revenue per student in engineering and science will decrease by $4,798.
  • Total revenue per student in nursing will decrease by $1,729.
  • Total revenue per student in agriculture will decrease by $3,444.

The IRU solution is to rework the funding and charges in the new JRG groups of disciplines to ensure that universities do not receive less funding on average per student than currently.

  1. Student charges will increase from a two-fold difference (lowest to highest) to a historic fourfold difference.

It seeks to reward students for choosing certain careers, though previous attempts to predict long-term workforce needs have failed. The proposed new lower and higher rates are not necessary. They have the potential to punish people for pursuing their career interests.

The IRU has shown that the top rate in JRG is not necessary to raise the total amount of student contributions that the Government proposes, with disciplines grouped in the same way. Instead, the IRU solution is to maintain an approximate two-fold spread, that supports all students pursuing their considered preference, the best-known guide to setting the needed workforce skills for the future.

Against a post-Covid-19 world where little is certain, supporting each person pursue her or his natural strengths makes more sense.

This change can be done independently of any increase to total university revenue to address the first weakness.

  1. JRG does not allocate enough growth places to meet the Covid-19 jump in demand. The planned growth for university education only just covers population growth in the younger cohort for the coming years but will fall well short by the end of the decade.

The IRU solution is that the Government provides an additional 10,000 National Priority places to meet the Covid-19 jump in demand for university education and the demand from the older student cohort needing to reskill for the future workforce.

  1. The new accountability measures outlined in Schedule 4 of the Bill are micro regulation contrary to the Government’s commitment to reduce red tape. There is no evidence that the Commonwealth requires the additional powers to ensure universities act responsibly.

The proposed provisions would insert a hard rule onto the complex set of individual circumstances, rather than let universities and other higher education providers work with their students. The 50% required pass rate measure would have the harshest impact on groups of students who take some time adjusting to university life including Indigenous students, students from rural and regional areas and students with disabilities.

The only additional power required is for the Secretary of the Department of Education, Skills and Employment to be able to determine that a student is not genuine and hence not eligible for further Commonwealth support.

Read the full IRU submission

Pre-Budget submission 2020

Summary of actions required in 2020 Budget

Through the Higher Education Relief package of 12 April 2020, the Government ensured that its funding to universities for 2020 would remain at the level expected. However, the significant mid-term impact of COVID-19 on the capacity of universities to provide the education and research Australia requires has yet to be addressed.

Universities are reshaping the approach to delivering education following the rapid move to fully digital-based delivery in response to Covid-19.

University research capability faces a major reduction through loss of revenue streams from international student fees and reductions in domestic and international end-user investment.

International student numbers will be down for several years, affecting the breadth of courses available to Australian students and with large spillover impacts on demand for accommodation and services from students unable to come to Australia.

The Job-Ready Graduates (JRG) package, announced on 19 June 2020, is a domestic funding reform package that seeks to reverse the steady decline in the value of university funding and provide a mechanism for growth in the future that will meet likely demand. The IRU recognises the intent of the package but argues it has significant weaknesses that need to be addressed within its overall structure.

In summary the IRU recommends that the 2020 budget:

  1. provide a substantial two-year Research Sustainability Program to bridge the looming gap in research investment;
  2. support three sensible improvements to the Government’s Job-Ready Graduates (JRG) package;
  3. strip back unnecessary micro controls of higher education providers proposed for the Higher Education Support Act 2003.

Read the full IRU submission