Thanks very much Michael for that welcome and to you and the team at the Australian Financial Review. Thank you for the discipline and interest you apply and bring to higher education policy and particularly the way we do so through of course the conduct of this summit, and the engagement in opportunities for informed discussion and debate that you provide.
Can I acknowledge my parliamentary colleague and good friend Senator Bridget Mackenzie, the Chair of the Senate Committee on Education, who I know is well known to many of you in this room, who is engaged constructively with many of you and grilled the odd one of you across the Senate Committee table as well. Chancellors, Vice-Chancellors, international guests, members of the high education community, elephants, black or otherwise that may be in the room, ladies and gentlemen. I also acknowledge the Kulin nation and all of the Indigenous peoples of Australia and as our nation’s education minister, as I often do, acknowledge that we continue to learn more about and to learn more from and to build upon Indigenous knowledge as a nation.
Of course knowledge, knowledge of all peoples and across all disciplines is at the heart of higher education. At this summit, as we – as you – seek to explore the forces that can shape our higher education landscape in years to come, we should rightly start by recognising the objectives, strength and the challenges facing higher education in Australia.
In a modern higher education framework where access is designed for the many rather than the few, our objectives are broader than ever before. There remained the traditional objectives of universities, such as the advancement of knowledge that underpins the enhancement of human wellbeing as well as the development and critical thinking and analytical skills in graduates within disciplines and across disciplines.
Alongside these roles is an increasing responsibility to educate and train graduates across a widening range of fields of study, including an increasing number of more vocationally-oriented qualifications, without undermining the traditional objectives of higher education, there is also an increased expectation that graduates will be work-ready. Especially those in qualifications that are targeted at specific jobs or careers. These expectations are also coupled with increasing desire for universities as leaders in research to work closely with industry, business and service providers to help fuel the knowledge that can drive innovation, translation and ultimately commercialisation.
Against these objectives, our higher education sector has many successes of which it can be proud of. The sector has notably responded to policy settings, identifying the need for a more highly educated workforce and proportion of graduates has grown over the last 30 years from 12 per cent of 25 to 34 year olds, to 37 per cent while the unemployment rate for graduates, at 3.2 per cent remains well below the unemployment rate of 5.6 per cent.
The excellence of our research contributions is evidenced by the extent of publication of research findings and our universities’ responsiveness to the ARC’s Excellence in Research in Australia rankings. Despite accounting for just 0.3 per cent of the world’s population, we produced 3.7 per cent of all research publications in 2015 and 6.9 per cent of the top 1 per cent of highly cited publications.
ERA has driven quality in our research performance, with a 20 per cent increase in the share of Australia’s university research rated at or above world standard since this measure was introduced in 2010 and a growing source of success for our higher education sector in recent times has been the overwhelming endorsement from ever increasing numbers of international students. More than half a million students have studied in Australia so far in 2016; the highest number ever and 12 per cent up on the same period in 2015.
Our success in the international education is an endorsement of the global standing of our institutions, the quality of our teaching, the relevance of our qualifications, and of course the incredible lifestyle and experience that’s available in our safe, open, tolerant English speaking nation.
However, these successes do not mean that we are meeting all of our higher education objectives in their entirety. We can always do better and are constantly facing new challenges. We must continually ask ourselves are we producing the right graduates with the right qualifications for our future economic needs? How do we allow flexibility in course offerings and choices offered to students while enhancing quality and standards? How will we adapt to the growing competitive challenges posed by other universities, new modes of education and technological disruption? How do we maintain our competitive advantage as a preferred destination for international students? How do we preserve the essential role of basic research while enhancing our capacity to translate knowledge into economic and societal benefits and how do we ensure higher education costs are both sustainable for future generations of taxpayers and affordable for students?
For me, for the Turnbull Government, and indeed for all education ministers and governments, we must continually ask ourselves whether our policy settings provide the optimal incentives within available budgets for the higher education sector to meet our national objectives.
Education that produces good outcomes is a good investment, no one can or should argue with that. It can and does build productive and innovative capacity of our economy while transforming the lives of individuals but we can’t invest money we don’t have by leveraging future generations to the hilt.
Since 2009, taxpayer funding for Commonwealth-supported places at universities has increased by 67 per cent, compared to 33 per cent growth in nominal GDP. Funding has essentially grown at twice rate of the economy. Some seem to operate under the misconception that students pay for their education via their fees but the reality is the taxpayers contribute an average of 58 per cent of current costs and that is before the subsidies built into the HELP loan scheme are accounted for.
In 2016, payments to universities and higher education providers are expected to total around $13 billion in funding, for teaching and learning under the Commonwealth Grant Scheme and the Higher Education Loan Program. Research funding builds on this further with more than $10 billion across government supporting research and development this year. Overall, our total expenditure on higher education institutions stands at 1.5 per cent of GDP – above the OECD average and tenth out of the 28 countries with available data. In fact our expenditure per student at the bachelor, masters and PhD level is the sixth highest in the world.
Meanwhile, total HELP debt on the Government books stands at over $50 billion. On current estimates, one-quarter of this will not be recovered. We should be proud to have one of, if not the most generous student loans programs in the world. No upfront fees, interest charged below the cost of borrowings and no repayments until a generous wage is earned. This pride should primarily be based on the equity of access to higher education our student loans accord all Australians, regardless of their family background or personal income. Maintaining such equity of access is a non-negotiable policy objective but to do so requires us to maintain a sustainability of the HELP system.
There also continues to be work to do in translating equity of access into outcomes, people from disadvantaged backgrounds are still underrepresented at university. These differential levels of representation are the result of complex issues of individual, family and community ambition, prior levels of educational attainment, and the preparedness of individuals for higher education.
The current review of HEPPP is considering whether we can more effectively support the successful participation of students from all backgrounds. A key part of this, which is even more critical to maintaining confidence in the overall quality of our universities and universities admissions, is the way we admit university students into high education study. In February of this year, I asked the Higher Education Standards Panel to provide advice on improving the transparency of admissions processes. This was sparked by concerns about the availability, clarity and accuracy of information about the range of higher education admissions pathways.
Today I have released the HESP report and the recommendation from Professor Peter Shergold and his panel. I welcome the report and thank the panel for their consideration of this important issue. The report will provide much for the sector to reflect upon. The growth facilitated by the demand driven system in recent years has enabled far greater choice and access for students. At the same time, it is clear many potential students and their families struggle to decipher information on where and what to study. I support the intent of the recommendations from the panel, that there should be great clarity and uniformity in the information available to students.
I commit to you today to providing the official government response to these recommendations within weeks. We must ensure that we provide students, and their families, with the information they need, on an easily accessible and understood platform, in a format that is comparable and consistent across jurisdictions to ensure they make informed decisions about their future.
Admission policies should not only empower students to make wise, well-informed choices but should also create levels of transparency and accountability that, coupled with optimal financial incentives from government, help to ensure higher education providers make enrolment decisions that are genuinely in the best interests of students and the nation. Many of the recommendations require input from the sector, states, territories and others. We will progress the government’s response and implementation working hand in glove with all parties in the interest of providing students with the information they need, deserve and require. Greater transparency is key.
That shift towards greater transparency is why the Turnbull Government has been such a strong advocate of the QILT website – giving students better information about institutions and course quality, as well as graduate employment outcomes. To date, the site has received approximately 490,000 visits, with data telling us that students find QILT a useful online tool to compare results and opportunities across Australia’s higher education institutions.
Enhancements to QILT will form part of our response to this report, including enhanced information for postgraduate students and greater use of universal, real, accurate data sources. We also require better understanding of whether students are moving between sectors or institutions, within sectors or moving in to work or from a bachelor course of study to a diploma or advanced diploma in the same institution or another institution. These students are currently largely being counted as non-completions or attritions.
More broadly, the process of considering further reforms to education and resolving budget pressures is running to time and in accordance with my commitment to consult, engage and listen.
When I spoke to you last year I released the Review of Reviews highlighting that we hadn’t just been talking about higher education reform over the last three years but have been at it for much of the last 30. Going back over some of these observations I came across this quote from the 1998 West Review: institutions have few incentives to be innovative or to re-engineer traditional approaches to teaching and administration. It is hard to see tangible ways in which diversity among institutions is encouraged. While there is some diversity in the system, far greater differentiation is possible and desirable.
Some will argue we have differentiation and we do to an extent – but our policy settings are currently based on a demand-driven system for bachelor places with regulated prices, regulated places for sub-bachelor and postgraduate places based on historical arrangements and a funding system that actively incentivises over-supply of some disciplines to cross-subsidise the delivery of others.
Some say don’t mess with what works and don’t rock the current equilibrium. A number of the responses to our policy paper effectively suggested we walk away, that there is nothing to see here and leave us alone.
Since I spoke to you last year, the Turnbull Government has ruled out full fee deregulation, commissioned work to look at the efficient cost of delivering quality teaching and learning across disciplines and, as discussed, had the Higher Education Standards Panel recommend ways to improve transparency around admissions.
We’ve addressed a number of other major research issues via our National Innovation and Science Agenda. We of course have initiated the work on the HEPPP that I referenced earlier, and have received more than 1200 written submissions in response to our Policy Options Paper. I’ve had ongoing consultations, especially after the election, with the Universities Australia leadership, the leadership of all of the sub-peak university groupings, with the Chancellors’ group, individual Vice-Chancellors, industry, students, and other stakeholders, while also appointing an expert panel to advise me on reforms, their implications, and consequences.
As Belinda Robertson, the CEO of Universities Australia said: the depth of expertise on the panel and within the sector should assist in crafting a reform package that can be supported by both major parties. I’m not asking the panel, nor anyone else, to come up with a blueprint, a green or white paper. And the panel is not an exclusive source of advice. I, my office and Department, will continue to consult widely as we design the options that we bring forward to the sector.
But Belinda is right. We should be able to work together and attract a degree of bipartisan support. We won’t agree on everything, but our objectives for the nation and for higher education have much in common. We also face the same budget pressures, despite what some pretend. And I, for one, would rather confront them honestly than wake up in a few years and see a repeat of the $6 billion in higher education cuts that Labor announced in their last few years in power.
Ultimately, governments are elected to govern and I am determined to work to the announced timeframe and provide certainty to the sector by early next year so we can legislate any reforms by mid 2017. There is much for us to build upon. As Professor Peter Coaldrake and Dr Lawrence Stedman point out in their new edition of Raising the Stakes: Gambling with the Future of Universities, Australia has a strong and world-class system.
I look forward to working with you over the coming months to build upon that; to ensure our policy settings support our objectives of fairness, accessibility, excellence and sustainability in our higher education system. That means we will all need to make a contribution – as you are doing by participating in fora such as this one – and we all need to make some compromises to ensure future generations enjoy a higher education system that continues to enhance our nation and the lives of all Australians. I thank you for the opportunity to be with you today and for your participation in our policy debates and processes, and look forward to working with you so that in 12 months time, we have very positive directions and outcomes to be talking about. Thank you very much.