Vice-Chancellor’s speech to the National Press Club – May 8, 2013

Vice-Chancellor’s speech to the National Press Club – May 8, 2013

Thank you, Laurie. And I appreciate the opportunity to address you today.

In his novel set against the background of the French Revolution, Dickens began with those memorable lines:

“It was the best of times, it was the worst of times,

it was the age of wisdom, it was the age of foolishness …”

Today, I want to talk about a revolution – the education revolution - and rather than a tale of two cities it is a tale of two futures.

A future where Australia not only acknowledges the importance of tertiary education but is prepared to adequately fund that future. Or a future where we slip further down the rungs of public spending on tertiary education when ranked against comparable developed nations.

A future that will see our students short-changed, our academics under even more pressure, and our research and researchers squeezed so that the capacity of our country to innovate, to discover, to create and apply new knowledge will be severely limited.

Surely there can be no debate that Australia’s greatest resource is our people. You don’t have a mining boom if people don’t find the resource in the first place, then mine it, sell it, and use it.

You don’t have a modern, first-world economy unless you have people with the smarts to innovate, create knowledge, create new industries and work in them. And you don’t have a smarter people if Australia's public investment in tertiary education as a percentage of GDP is less than 24 of the world’s 29 advanced economies.

But before we address these core issues let me put in place a few riders. I am passionate about education.

I have spent most of my adult life studying, teaching, researching or administering in universities.

And I am passionate about the future of our country. A future that will only achieve its potential if we create a smarter Australia.

To do that we must develop more of our human capital, strengthen our capacity for research and innovation and become a more desirable destination for the world’s best talent - students, academics and researchers, entrepreneurs and professionals.

I am convinced that we can only achieve that smarter Australia by adequately funding Australia“s research enterprise and adequately funding the education of our children from early childhood through our primary and secondary schools and then on to tertiary education, either in the vocational or university sectors.

I am a supporter of any scheme that will ensure our children – our students - receive the education they deserve wherever they are.

Whether it is a “Gonski” scheme or some adaption of that, it has my support if it recognises the need for more funding per student as a means to lift the quality of their education experience in early childhood and in our primary and secondary schools.

As far as universities are concerned, let’s acknowledge that Government funding has supported significant growth in student enrolments in recent years.

Indeed as then Education Minister – our present Prime Minister Julia Gillard – said in May 20101 - and I quote - “We know that Australia’s universities have a critical part to play in making this country smarter, fairer and more prosperous. In order to meet our economic and social ambitions we need to make sure that our universities are properly resourced and able to tackle the problems, and teach the workforce, of the future.”

Sentiments I totally agree with. But amidst all the upwards and to the right-hand movements so familiar in recent weeks, the undeniable fact is that the cuts announced by the Government last month have been calculated on a reduction of Government funding per student place, and a reduction in the funding provided for a variety of support and other programs, compared with the commitments that had been made.

What’s more, while the Bradley Review of Higher Education recommended a 10 percent increase in base funding to universities and the Lomax Smith review of base funding also recommended an increase in base funding “to improve the quality of higher education teaching”, this sorely needed boost has been denied.

The different funding approaches – more public funding per student in Australian schools and less public funding per student at universities is hard to fathom.

At the Universities Australia conference just two months ago the Leader of the Opposition Tony Abbott, in his keynote address, delivered a fairly clear message that should government change in September the best the sector could hope for, given his understanding of the country’s finances, was that government funding would maintain the status quo.

Trouble is none of us knew then that the “status quo” was going to be something very different.

Far be it for me to comment on the politics of what is happening, so instead let me return to my tale of two futures and the “worst of times”.

The “worst of times” take their lead from recent events.

Let me remind you. Just over three weeks ago the Government announced that university funding and student support would have to be cut in order to help pay for increased funding for primary and secondary schools.

The moves announced by the Government include:

* An efficiency dividend of 2 per cent in 2014 and a further 1.25 per cent in 2015 which will cut university funding by an estimated $900 million;

* Converting student start-up scholarships to a loan which will save the Government an estimated $1.2 billion; and,

* Removal of the 10 per cent discount for up-front HECS/HELP payments and the removal of the 5 percent bonus for voluntary repayment of HELP debts to save the Government $228.5 million.

These announcements followed the Treasurer’s earlier announcement that the tax incentive for self-education expenses would be capped at $2000 per annum.

I do not intend to go over all the arguments for and against these cuts, but despite the impression given that they are temporary and only in effect for two years these are cuts that just keep cutting.

There is no suggestion that the start-up scholarships will be re-introduced as a grant in 2016.

There is no suggestion that the discounts for upfront HECS/HELP payment will be re-instated in two years.

But there is the fact that after the two years of “efficiency dividends”, any indexation of university funding will be from a much lower base. The pipeline effect of these cuts is huge. The Government expects the loss to be $300 million per annum for universities.

When you throw in the cuts to student support, Universities Australia estimates the combined effect on universities and students is a loss of around $1 billion per annum at 2017. These are cuts that keep on taking.

Added to this is the $1 billion lost to universities and students announced just over six months ago as part of the mid-year budget review process.

This cut included $500 million from programs supporting research excellence - and the funding for large, nationally significant research projects and programs that encourage the international rising stars of research to work in Australia came to an end.

Those cuts represent an erosion of Australia’s research capacity at a time when the need for new ideas, new products, new industries and solutions to our gravest problems, has never been greater.

The “worst of times” also means making it harder for Australian students to participate in and succeed at their university study.

A soon to be released study funded by Universities Australia, examining university student finances in 2012, shows that students are already doing it hard.

The study reveals that more than 80 per cent of full-time undergraduates have to find a job, working on average 16 hours a week during semester.

A majority reported that their job adversely affects their performance at university.

A third of Australian undergraduate students said that they regularly miss classes because of employment obligations, and about 17 per cent said that they regularly went without food or other necessities because they were unable to afford them.

And that was the position last year.

Australian students already bear a greater burden of the costs of their education than their peers in many comparable countries. These latest “savings” mean greater hardship for students.

For starters, fixing the Start-Up Scholarships at 2012 levels until 2017 will put even more pressure on new students to increase their income from outside sources, most likely employment.

In effect, as Peter Coaldrake and Lawrence Stedman point out, turning this grant into a loan means that low-income university students will be paying for improvements in low-income schools.

And cutting the funding to various support programs, particularly those aimed at students from various equity groups, makes it harder for universities to provide the services a significant proportion of these students need.

Less support, greater costs will put enormous pressure on some families and young people when they come to consider whether to go on to university or not.

Less support, greater costs will add to the stress and pressure of those already studying.

Less support, greater costs will impact even further on the time students have to pursue their educational and vocational goals and even more on the opportunity to take full advantage of the university experience, to revel in the campus life that many of us remember fondly.

I fear the choice between the short-term gain of a fulltime job after leaving school or the long-term reward for both themselves and the country of several years at university attaining further qualifications has been tilted towards the short-term gain.

This is particularly true for the very groups that the Government has targeted in its education revolution. It has often been said that debt is not something readily embraced by people from lower socio-economic backgrounds.

Increased debt in the form of HECS/HELP payments in later life is not something families who have no history of university education may see as the best way to provide for their children’s future.

And the possible effects of the $2000 cap on tax deductibility of self-education expenses are becoming clearer.

National professional associations4 are sounding a strong warning. The fear is that this cap will deter fee-paying students – people such as nurses, teachers, engineers, and medical practitioners - from undertaking the post-graduate and in-service study they need to keep their knowledge up to date.

Universities are bracing for an impact on full-fee postgraduate participation rates as students re-evaluate the affordability of this further study.

If we pull some of the support measures put in place to encourage people to earn a degree and to update their skills, why would we not expect them to be discouraged?

On the other side of the lectern, how will the reduction in funding committed impact teaching and research?

If funding is not adequate to support the needs of increasing numbers of students then more very hard choices have to be made.

Something has to give. What will that be? Staff numbers? Staff/student ratios? Student support services? Subjects? Courses? Learning resources? Equipment and facilities? When these are the ingredients of education quality.

As I mentioned, the cuts and delays also go to research funding and will impact on the quality of the work there.

At the end of February, the Chief Scientist Professor Ian Chubb, declared to the annual UA conference that the mantra that Australia, punches above its weight“ on research was a myth.

The former long-time Vice Chancellor of ANU said ten countries had stronger research-to-population ratios.

“Eleventh in the world behind the most developed countries with embedded cultures of research and education is not a particularly good place to be,” he said.

If we take Professor Chubb at his word – and I don’t know too many people who would be game to take him on – we need to do better in our research enterprise and moves against research funding and our rising research stars work against the pursuit of research excellence.

Research is not something that is nice to have. It is vital for the future. Alongside our graduates, research has produced so much in the past and it will shape the economy, the development, the well-being of society in the future.

The “worst of times” sees our research and innovation effort going backwards, with all the knock-on effects for our economy, our competitiveness - and our attractiveness as an education destination.

And research is one of the most important indicators used in most ranking tables, and the standing of universities rises and falls on the quality of their research output. Whether we like it or not, the various ranking tables impact on our reputation, which in turn drives demand from potential students.

Australia has been one of the most successful countries in attracting international students, but the market is becoming ever more competitive. In this environment, Australia cannot afford to have the quality of our education and research brought into question, as it must be when the Government reduces public funding per student compared with that previously committed and reduces funding for research and support of our rising research stars.

Such questions will do little for the reputation of the country as a provider of quality education and research.

Quality is at the core of Australia“’ comparative advantage as a provider of higher education. To compromise quality would be to compromise one of our largest export industries, when we know we must pitch higher education as the centrepiece of Australia cementing its place in the Asian century.

And what about the one hundred and twenty-seven thousand jobs – including the 88,000 jobs from outside of higher education - supported by the education sector’s $15 billion of export earnings?

And any diminution of the international flavour of our campuses will be a very sad outcome.

So taking the lead from recent developments, the “worst of times” would see fewer students particularly those from lower socio-economic groups, rural and regional areas, and Aboriginal and Torres Strait Islanders; greater drop-out rates; fewer international students wanting to come to Australia; bigger classes; the prospect of more casual teachers and tutors; fewer excellent researchers making their way to our shores and more of our own leaving to build their careers abroad; less research and innovation; and, lower productivity, with all the negative knock-on effects on prosperity, international competitiveness and quality of life that will surely follow.

A pessimistic view or a realistic one? Now I do not consider myself a pessimist so let’s consider what the “best of times” would, should, and can be like if we – in the words of our Prime Minister – “make sure that our universities are properly resourced”.

First let me make it clear that we do have a very good higher education system in Australia – one that produces quality graduates and some great research.

But in a competitive world, there is no doubt that we must do much better. Funding cuts severely hamper not only the aspirations of our students, teachers and researchers but the country’s ambitions to be in the very top rank of educated nations with all of the social and economic benefits this provides.

Cuts do not take us in the right direction.

They do not take us towards A Smarter Australia.

So what about the “best of times”? These times describe a future where more Australians have successfully engaged in higher education.

The Government has said it wants 40 per cent of all 25 to 34 year-olds to hold a qualification at bachelor level or above by 2025.

This is a mighty aspiration and one that Universities Australia fully supports. When you think that in 1970, just 3 per cent of all adult Australians held a university degree, it is marvellous that this figure is now at 37 per cent.

Recent progress has been startling, but “best of times” progress depends on ensuring base funding grows to service this growth in students.

It describes a future where any person with the desire and capacity can go to university and experience a quality education - and that includes mature age students just as much as school leavers.

It means rejecting the notion of “over-education“.

We are only a few generations away from a time when primary schooling was considered sufficient for just about everyone. We are probably only a generation or at the most two removed from a time when secondary schooling was considered enough for all but the elite few.

Surely, it is beyond denying that a university education is no longer just for an elite. It means acknowledging that the future will require more highly educated Australians, not fewer.

Perhaps even a move to universal post-secondary education.

As the economy develops, more and more people are discovering the need for improved qualifications, to update their skills and to play a productive role in the economy.

This means more pathways and transition programs that allow those without the normal, formal pre-requisites to access university. Such moves will be seen as an investment in maintaining skills and upskilling our workforce so Australians can remain employed, helping to create the future.

The “best of times” means a future where many more young people from disadvantaged backgrounds will gain access to universities and many will be the first in their family to do so.

University education transforms lives: and we know that the children of people with a degree are four times more likely to attend university than children from families with no such experience.

These “first in family” students are creating not just opportunity for themselves but also for all the generations that follow them.

A future where not only will Aboriginal and Torres Strait Islander peoples be attending universities in at least the same proportions as other Australians, but they will also be similarly present in the academic and professional ranks. Where the cultures and knowledge of Australia’s first peoples are part of mainstream study - not consigned to the esoteric fringe.

In the “best of times” the policy and funding environment for higher education will be responsive to the digital revolution and technological advances that are changing the face of universities in unpredictable ways.

I am a massive fan of high-speed broadband and what this national infrastructure means for our future, especially for the future of people and communities in rural and regional Australia. It will make it easier for students wherever they are to access tertiary education, easier for business to operate and for Australia to progress.

But, this doesn’t mean there will be no place for on-campus study. I believe there will still be demand for engaging in one of life’s great experiences there - and that experience too has been and will continue to be transformed.

Right now, University campuses are being re-imagined and re-designed.

And just as well, as the content and approaches to teaching, learning and research are changing for both on campus and off-campus students. Massive Open Online Courses (MOOCs) are the edge of what is a profound shift for higher education (and other education sectors) in Australia and beyond.

Relationships and experiences will continue to matter – experiences that take place in person and those that occur via digital means. This heralds a new approach to internationalisation and underscores the significance of the “third wave” of internationalisation. Students and researchers will come to Australia to study and work - even as more Australians, especially students, head abroad as well. Physical movements of course, but also easy interactions across the globe via digital means.

All this means that we will have to continue to provide physical infrastructure on campus, but of a different type, fit for purpose for a new world.

And we will have to meet the costs involved in designing, building and deploying virtual infrastructure as well as new modes of delivery informed by the digital revolution, even as we figure out how these two fit together.

In the “best of times” we will have the much-needed capacity to experiment, to create the new and to farewell the old.

This is a daunting, yet most exciting, prospect. Incremental change and the engineering of sameness through funding and regulatory drivers that encourage conformity across universities and that reproduce the current way of doing things just won’t do.

Funding cuts can’t take us where we need to go.

The “best of times” means cool acknowledgement that, like most developed countries we are facing a restructuring of our economy, where secondary industry’s contribution is falling and being replaced by tertiary industries.

Only last week at this very venue the Chief Executive of 20 CPA Australia, Alex Malley, released a groundbreaking new book on Australia’s international competitiveness and one of its key findings was "Australia needs to invest more in education and training and a highly skilled workforce to increase its competitiveness levels and become a knowledge economy".

According to the Australian Workforce and Productivity Agency, high skilled jobs are growing at a rate 1.6 times faster than low skilled jobs.

By 2025 they estimate that there could be a shortfall of 2.8 million higher-skilled qualifications needed by industry and the economy.

It is up to universities to provide the professionals and the research that will ensure Australia successfully transitions to this new world. And the quality of the education these graduates leave with needs to be better and better.

For their education is truly an investment. These same graduates are more productive than non-graduates, they have better health and they contribute a significant proportion of Australia’s annual income tax. Their productivity will underwrite Australia’s future.

And the “best of times” involves a changed public mood, when it comes to higher education and research.

We are seeing evidence of this change. Last year at Universities Australia we conducted research among the public and stakeholders on what they thought about universities.

Only 3 to 5 per cent had a negative perception of universities. More than 90% agreed that a well-funded university system was critical to Australia’s economy and growth, and 90% agreed that research is an essential part of what a university does. Almost 90% said they would encourage their children or young people they knew to attend university.

As an aside, negative public reaction to the cuts is not surprising in light of this changing mood.

Policy changes that have focused on and then supported greater access to university have been successful in encouraging more Australians to aspire to undertake university studies.

Where once it was only schools that resonated strongly with the electorate, now it seems that higher education is everyone’s business.

And we are facing a future where research will be ever more important. Alongside our graduates, research is creating the future. Great discoveries rarely appear in a moment and fully formed.

Instead they stem from decades and more of inquiry, understanding and collaboration. Rarely yielding to short-term financial cycles or stop-start funding decisions, they and their applications are nonetheless the basis on which much of scientific, social and economic progress is built.

In the best of times, we will find a way to continue to support this enterprise.

A new ecology for ARC-funded researchers, so that, if these talented researchers are good enough, they and their research can continue to find support for the whole of their careers.

And we will do much better in melding universities, business, industry and the research enterprise. We must find ways of working better with business, helping business and industry understand the value of employing research trained graduates, in proportions at least equivalent to those nations that significantly outperform Australia in research and innovation.

Australia“s prosperity, productivity, competitiveness and quality of life depend on this.

One thing I cannot foresee is a day when we return to a free university education system. But the HECS/HELP 23 scheme is one of the great innovations and does allow greater access than any fees upfront system would provide. We tamper with that scheme at our peril – and at the nation’s peril.

In the “best of times”, the response to financially difficult times would be to release value in universities and across Government, by reducing or eliminating unnecessary regulation.

There is enormous scope here.

Universities Australia estimates that compliance costs universities around $280 million a year and substantial savings can and should be made by cutting red tape.

UA commends the Government for commissioning PhillipsKPA to explore the reporting obligations of universities to the higher education and research portfolio.

The report found that, in 2011, universities together allocated around 66,000 staff days to meeting just 18 of the Department’s 46 reporting requirements and went on to make a number of worthy recommendations, including the establishment of a single National Higher Education Data Collection and Information Repository.

Of course, a deal of the reporting and compliance burden falls outside of the Department, which is why UA has called for the Productivity Commission to conduct a comprehensive national audit of the entire regulatory burden with a view to making substantial reductions - and deliver a saving to universities’ and governments’ budget bottom lines.

So here is a better future – the “best of times” – a future

- where more Australians, including Aboriginal and Torres Strait Islanders, people from regional, rural and remote Australia and from low SES backgrounds – those for whom, by weight of circumstance, higher education has all too often been denied - more Australians, including these Australians, have completed higher education;

- where the quality of Australian higher education places Australian graduates in the front rank of the world’s graduates and professionals, fueling a prospering Australian economy.

- where students contribute appropriately to the cost of their education, but are well supported in turn;

- where our research effort really does punch above our weight;

- where universities, government, business and industry work together to deliver the benefits of innovation, on the back of home-grown as well as internationally informed high-quality research;

- where Australia’s universities are ready for the future, including being well-positioned to engage with the challenges and opportunities of the digital world;

- where education and research are seen as a crucial investment in Australia’s future, not as a site for “savings”.

In these “best of times,” the importance of higher education and research to our future is understood, and this is matched by a preparedness to fund that future.

In these times, universities are supported and strengthened and through them, our nation is strengthened too.

That way, Australia is assured of being a more confident part of a changing global economy, and an essential part of the Asian century.

Cuts and shuffling money from one part of the education continuum to another just won’t do it for our students, for our research enterprise or for Australia.

To conclude where I began let me return to Dickens and hope that unlike Sydney Carton we are not taking those final steps to the Guillotine and the most severest of cuts.

But rather hope that governments by reversing the cuts and instead investing in the future embrace his words.

That would be a far, far better thing that they do, than they have ever done; and a far, far better place that we will all go to than we have ever known.

That’s what we need for a smarter Australia.

That’s the revolution our children – and our nation - need and deserve.

Thank you.

ENDS