Driving Innovation, Fairness and Excellence in Australian Higher Education
Higher education is more important to the future of Australia’s industry, businesses and families than ever before. It is key to enhancing equality and delivering social and economic mobility for generations of Australians. It transforms lives and provides people with the skills and opportunities to engage in a modern economy. It is a key source of innovation for business and industry, central to Australia’s successful economic transition and a valuable export.
For these reasons it is essential that higher education policy settings drive innovation and areas of specialisation across our universities; embed fairness and equitable access to university for all Australians; ensure global excellence amongst our universities; and are financially sustainable and affordable into the long term.
Since 2009, with the demand driven system, taxpayer funding for Commonwealth supported places in higher education has increased by 59 per cent as compared to 29 per cent growth in nominal GDP over the same period. Funding of university students has grown at twice the rate of the economy. Similarly, the debt held under our income contingent student loans scheme, one of the most generous in the world, has grown to over $40 billion, with an annual expense of $2.6 billion.
While the Government is committed to a system that provides genuine choice and appropriate support for students, removes barriers for under-represented groups and allows institutions to excel and innovate to deliver world class education, at the same time, it recognises that this system must be affordable and provide a return on investment for both the student and the nation.
As part of the 2014–15 Budget, the Government announced an ambitious package of higher education reforms to address the challenges facing the higher education sector. These reforms were intended to strengthen the higher education system and ensure Australia is not left behind at a time of rising performance by universities around the world, foster greater innovation in education offerings and to widen opportunity and access to support the growing diversity of student needs and aspirations.
While this package had the support of higher education peak bodies and almost all university vice-chancellors and was twice passed by the House of Representatives, it was twice defeated in the Senate. Since it was announced on 1 October 2015 that implementation of the reform package would be delayed by one year to 2017, the Government has been discussing with stakeholders how best to find a fair and affordable way to fund a world-class higher education system with equitable access for students. To enable finalisation of revised higher education reforms and to provide certainty to the sector, students and parents, new reforms are not budgeted to commence until 2018.
Further, in response to community concerns about the perceived cost of potential higher education fees and evidence about the possible impact on student loans, the Government will not be implementing fully flexible course fees as proposed in the 2014-15 Budget reforms. An alternative model of flexibility, which focuses exclusively on courses of clearly defined excellence or innovation, is outlined for public consultation herein.
Informed by the discussions of the last six months, this paper sets out potential reforms that support the Government’s vision of a stronger, more innovative and responsive system of higher education that preserves equity of access while meeting the financial sustainability savings outlined in the budget. These reforms would complement the National Innovation and Science Agenda and the National Strategy for International Education. The Government will work closely with all stakeholders to inform a revised higher education reform package to be finalised in 2016 and legislated no later than mid-2017 for commencement from 2018.
To assist in this process, the Minister is appointing an expert advisory panel to provide advice on the content and implementation of the final package.
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