News Archive

Over the past six months you would have noticed a great range of commentary in the media in relation to the Federal Government's proposed reforms to the Higher Education sector. As an engaged alumnus of UWA, I appreciate that you seek clarity around what these reforms propose, how the University is responding, and why we have adopted this position.

Earlier this year the Federal Government introduced legislation into the parliament that would make a number of changes to the University fee structure. At the time this edition of Uniview went to print, the legislation was before the Australian Senate for review. This discussion about the future of higher education comes at an important time for the sector as we face a number of emerging challenges and opportunities created through increased global competition, the emergence of new disruptive technologies, funding uncertainty and changing community and stakeholder expectations about the impact of our efforts.

As you are aware, since the establishment of the HECS system in 1989 undergraduate students have paid a contribution towards their university education. This student contribution (currently between $6,000 and $10,000 per year of study, depending on the subjects chosen) is in the form of a government loan which recipients are required to repay once they have graduated and are earning above $50,000. This deferred payment system remains intact and means that no student is required to outlay cash for fees upfront.

It was also under this HECS system that a funding model was established whereby the cost of a university education was shared between the Federal Government and the student – currently the government pays around
60 per cent and the student contribution covers about
40 per cent of tuition costs. The proposed reforms would see the government’s contribution reduced by 20 per cent, which would require a corresponding increase in student contributions of 30 per cent just to maintain the income of universities at the current level.

However, the current level of funding is too low. Government enquiries in 2008 and 2011 concluded that funding per student needed to rise by at least 10 per cent for Australia to maintain and develop its world-class higher education system. Data from the OECD confirms this. Australia currently ranks 25th out of 30 OECD countries for public investment in tertiary education, and invests 32 per cent less than the OECD average. This is the result of a long-term decline in public investment in universities. In 1990 the student-to-staff ratio in Australian universities was 13:1. Today it is at almost twice that level – around 24:1.

There is little prospect of government reversing this long-term decline in public funding. The funding cuts proposed by the current government follow hard on the heels of reductions of several billion dollars imposed by the previous Labor government in 2011-12. We are not willing to compromise the quality of education or the support we give to students and therefore we must seek solutions to rebalance our funding. If there are no additional taxpayer dollars to be had, the only alternative source of revenue is fees paid by students, and the proposed reforms allow for this by allowing undergraduate fees, which are currently
set by the Federal government, to be determined by
each university.

This is why UWA announced on 22 September that we would be setting all undergraduate course fees at $16,000 per year. We made this announcement for a very important and simple reason. Since the reforms were first proposed by the government our universities, students and the community have faced uncertainty as to what the changes would bring. We have chosen to end that uncertainty for our prospective students by being the first university to announce their fees under the new structure.

This annual fee will be consistent for every domestic undergraduate student, regardless of their course of study. This clear and transparent fee structure complements the curriculum reform introduced in 2012 which saw more than 80 separate undergraduate degrees streamlined into four principal undergraduate degrees in arts, commerce, design and science, all with common entry criteria.

We believe that deregulation of fees will allow universities across the country to differentiate and play
to their strengths, and will provide greater choice to students by opening up the higher education market to new competitors who will offer differing price points.
All 39 public universities in Australia have endorsed this move to a deregulated higher education system, because it is recognised to be the only plausible pathway to long-term sustainability of investment in teaching, research and community engagement activities.

The proposed legislation is complex and I want to make it clear that the University does not support the entire package of reforms. We endorse the following proposals as we believe they will be of advantage to both students and to the University;

• The creation of a new commonwealth scholarships scheme (CSS) which will require each university to allocate 20 per cent of additional fee income to measures which support access for students from disadvantaged backgrounds;
• Greater competition by providing commonwealth funding for students undertaking courses at non-university higher education providers (NUHEPs); and
• The retention of the HECS system meaning students will not be required to pay for their education until
• they have graduated and are earning more than $50,000 per annum.

The University does, however, have great concerns about the Government’s intent to;

• Introduce a real interest rate on student debts which will disadvantage graduates who are out of work or earning less than the threshold, or who take career breaks. The proposal particularly disadvantages women taking time out of the workforce to raise children;
• Reduce government co-funding of student tuition by an average of 20 per cent, which we believe is excessive, and which, for technical reasons, is likely to have a particularly adverse impact on the funding of science and engineering courses.

Under the current legislation, the new fee structure will not commence until the start of 2016 and will apply only to students who have enrolled in universities subsequent to the May 2014 federal budget.

I think all universities would like to see an increase in public investment in higher education in Australia, but we realise that this is unlikely to happen. At UWA we intend to use the option to increase fee revenue from students in a responsible way that ensures that UWA remains a high quality, accessible institution which continues to make a great contribution to our community. That will be the best way for UWA to continue to advance the welfare and prosperity of our students, our alumni,
and the broader community.

Professor Paul Johnson

Vice-Chancellor