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Diversify Australian tertiary ed to reduce costs, says Nous group

Changing Australia’s tertiary education funding and removing institutions’ need to cross-subsidise research with teaching funding could lead to cheaper alternatives for students and alleviate the urgency for international student fees, according to a report from consultancy Nous Group.

Research requirements has created a lack of diversity in Australian tertiary education, according to Nous Group. Photo: José Alejandro CuffiaResearch requirements has created a lack of diversity in Australian tertiary education, according to Nous Group. Photo: José Alejandro Cuffia

The report suggests the creation of a funding pool to support merit-based research

Diversity in Australian tertiary education: turning words into action, argues that by forcing universities to undertake research – a requirement to be classified as a university in Australia – and conflating research excellence with teaching excellence, students are left with a lack of diversity of choice and higher costs.

“Our universities are not going to get the proportion that they’ve lost back”

“The funding systems essentially require universities to do very similar things in order to break even,” said Nous principal and the report’s co-author Robert Griew.

“They’re all transferring money, cross-subsiding activity and those are major business drivers to simply stay in business rather than because that’s their particular strength.”

Among its recommendations, the report pushes for substantial reforms, suggesting a clear separation of research costs from funding teaching places, and using those savings to create a funding pool to support merit-based research.

Doing so would allow universities to focus on the areas they are strongest and remove the need to cross-subsidise teaching funds and international student fees to support their research responsibilities, the report argues.

“The concern we’ve got is that the system at the moment sets up a set of distortions in the way decisions are made. It puts too much pressure on that for reasons other than the provision of education,” Griew said.

“The funding systems essentially require universities to do very similar things in order to break even”

“We’d like it if tertiary education providers could pick the thing they’re particularly good at in the market, the particular groups of students and communities, industries they serve and get better and better serving them.”

Griew added he didn’t anticipate the recommendations if implemented, would not impact the strategic direction of all tertiary providers, noting that those that focused on research to enhance their rankings would continue to do so.

“It will still be in the interests of universities and other higher education institutions to attract international students, partly because it’s a rewarding thing to do and a lot of people are committed to it for its own inherent usefulness,” he said.

Regional Universities Network executive director Caroline Perkins, however, argued that many of the report’s observations weren’t relevant to the circumstances of her members.

“Regional universities are actually more reliant on government funding than many of the big metropolitan universities,” she said.

“We have less international students so unlike many large metropolitan universities, we don’t fund, or cross-subsidise a lot of our research from international students; we just don’t have that amount of income.”

Perkins said while it was a requirement for universities to undertake research, the work of regional providers benefited their communities.

Speaking with The PIE News, she particularly highlighted the report’s recommendation to remove research costs from teaching funding in favour of a merit-based research funding pool as substantially detrimental.

“It will still be in the interests of universities and other higher education institutions to attract international students”

“If what you’re doing is taking a percentage of the base funding out of the… pool and putting it into another research pool… our universities are not going to get the proportion that they’ve lost back,” she said, observing Group of Eight universities currently receive two-thirds of research funding.

If regional universities were less capable of attracting international and domestic students, Perkins argued further concerns would be exacerbated, such as the debate over infrastructure pressures in metropolitan areas.

“To constrict or restrict the role of regional universities to less than what they do now is not going to be in the nation’s interests and it’s certainly not in the regions’ interests.”

An August 2018 Nous report found Australia’s university sector had hit a “two-speed economy” in international education.

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