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Launch of the book 'Australia's future universities' by John Sharpham and Grant Harman

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7 AUGUST 1997


I am very happy to have been asked here today to launch

John Sharpham and Grant Harman’s book, Australia’s

Future Universities.

This book is indeed timely. I’m sure it will make a valuable

contribution to informed debate on higher education policy

in Australia.

The book recognises, rightly, that the changes made last

year were far reaching, not least because of the

establishment of the West Review with its very broad

terms of reference.

Across the globe, universities are facing new challenges

and increasing pressures. It is important that we are open

and alert to new ideas from a wide range of sources.



I welcome this debate - including the contributions of those

who do not share the Government’s view.

A timely debate such as is to be found in this book,

Australia's Future Universities, stimulate ideas and future

directions for the sector.

Key policy issues which face Australia’s universities are:

■ the need to encourage diversity,

■ to extend opportunities, and

■ to improve quality and access for all Australians.

When we came to office we had to address the long

overdue need to consolidate the strengths of our higher

education sector.

This consolidation has happened at a time when

governments around the world are facing a crisis in the


sourcing of funds for higher education. Australia is no


Governments are facing this crisis because of a worldwide

shift from an elitist system to a mass education system.

In 1997, Commonwealth expenditure on higher education

will be some $5.5 billion, compared with $3.2 billion in

1983. Expenditure on higher education has grown faster

than most other areas of Commonwealth expenditure over

this period. National highway expenditure, for example,

has been halved in real terms over the same period, while

CSIRO funding has remained stagnant.

It is vital that future policy directions for the sector be seen

within a framework of these constraints on public funding

of universities as they continue to expand.


One essay in this book particularly caught my eye. It

centred on an interview with Professor Ian Chubb, Vice

Chancellor of Flinders University in South Australia.

Professor Chubb was asked about cuts to university

funding (and I assume the interviewer understood cuts to

be to planned funding, not to existing expenditure; I

assume the interviewer knew universities had more money

this year than they had last year).

In any event, the question was whether these so-called

‘cuts’ signal a different relationship between government

and universities from what we have had over the last ten


Professor Chubb honestly replies: “Yes, I do, though we

could have expected changes in some form or other

whichever party won government.”



Whichever party won government, change was to be


Now what if Labor did return to power? This is a very

interesting question. What would they have done?

Politicians, who have to live in the real world, are not

always attracted to hypothetical issues. Academics,

however, live in another realm where such speculation is

permitted, and rightly encouraged.

Surely, after years of fudging the figures and refusing to

face facts, Labor would have taken steps towards turning

around the debt burdening all Australians.

Surely, even the most power drunk of Prime Ministers and

governments could not continue to ignore the problem.



Let me just briefly put that problem in perspective. The

annual interest bill alone for the Commonwealth

Government’s debt was $10 billion. $10 billion wasted.

That’s twice as much as we fund the whole higher

education sector - down the drain each year.

As a result of our budget efforts, latest estimates indicate

that by 1998/99, the $10 billion deficit we inherited will be

reduced to %VA billion.

Would Labor have had the courage to face up to the $10

billion budget deficit they managed to rack up?

Let’s give them the benefit of the doubt and say they

would have half measured up - say $5 billion.



Even so, major savings would have been sought from all

portfolios and higher education would be no exception.

In some shape or form, as Professor Chubb said, change

was inevitable.

What might Labor have done? It’s an interesting one to


To believe some commentators in the press you would

have to think that we had drastically cut funding for

universities and, therefore, funding per student.

Informed commentators know this is not true. University

funding, as Professor Fay Gale, President of the AVCC,

confirms in this book has been capped not cut. In

particular, funding per student remains relatively stable.



In the period immediately after Labor came to power in

1983 funding per student fell substantially. Indeed, base

operating grant per student declined each year between

1983 and 1991 under the last Labor government. By 1991

operating grant funding per student had fallen by just over

9 per cent in real terms.

I call this the soft option because cuts to university

operating grants do not require the support of the

Parliament to be implemented. They are invisible to

everyone except universities.

Labor let the funding per student ratio drop in the past,

they would probably would have done it again.

Research funding may have been pared back. Certainly,

the $130 million in additional funding promised and


delivered by the Howard Government, but not even

promised by Labor, would not have seen the light of day.

In the end, Labor would have sought most of the savings

by cutting funding per student. This would have

compromised quality.

HECS increases would have contributed some savings but

not much. Labor would have squibbed when facing

opposition from NUS.

Avoiding the tough decisions, Labor would probably gone

for a marginal increase at most. They pay a lot of lip

service to equity, but under Labor, higher education would

have remained fairly and squarely in the realm of middle

class welfare.



Whilst the number of students from socio-economic

backgrounds has increased in the transition to a mass

education system, it is a blight on the Labor Party that

their proportion as a percentage of the total student

population hasn’t.

Look at what Tony Blair is doing in Great Britain. The

response of New Labour to the Bearing Report. It

appears that ideological constraints may prevent all of

Bearing’s recommendations from being implemented.

Reports of the plans by the New Labour in Britain indicate

that proposed new revenue measures to help meet the

shortfall in university funding of more than $6 billion

expected by the year 2000, fall short of the mark.

I am advised that New Labour have announced the

introduction of annual tuition fees of up to 1,000 pounds.



These fees will be means-tested, with low income

students being exempt from fees.

These reports indicate that loans will be available to all

students for living expenses which are repaid along the

lines of our HECS system.

The amount of loans available is means tested with larger

amounts to be borrowed by students from low income


In other words, no grants will be available to these

students - only loans. If this is the case, it’s a ‘let the poor

pay more’ system. This two tiered system is apparently

designed with a view to limiting the charge of tuition fees

and preserving, to some degree, the fallacy of free




Instead it looks like New Labour has chosen to saddle the

poor with large debts just to cover their living expenses.

Working within ideological constraints has left Britain’s

Labour with a half way approach under which no one wins.

The Committee of Vice Chancellors and Principals in

Britain has apparently already expressed their concern

that New Labour’s proposals haven’t gone far enough to

meet the expected funding shortfall in higher education


What this shows, I believe, is the cost of not facing up to

the limits on the public purse.

Worldwide, governments from all ends of the political

spectrum have been squeezed for funding by universities

now catering to the mass education market.



What may be remembered by some as the good old days

are gone - when the state had a monopoly on the funding

of higher education - when it was the preserve of a small

elite. It has become critical for governments to turn to

private funds to ensure that universities remain strong and

vibrant and meet the needs of a mass system.

It’s important to see the changes we have made since

coming to government in this global context.

The critical point is that the Coalition Government has

maintained funding per student.

Our primary aim was to get the balance right for a

framework which would secure a sustainable funding base

of higher education in Australia into the next millennium.


The increase in private contributions comes from three

sources. First, new students have to pay more through

HECS. Secondly, students have to begin repaying their

debts sooner. Finally, universities will be allowed to admit

private individuals who are prepared to pay for the full cost

of their education.

By finding our savings through increased student

contributions, we were able to broaden the funding base of

the sector while preserving the important funding per

student level. Base operating grant per student will

remain steady at around $11,100 throughout the next


I have to say that I was somewhat amazed and, I

presume, most in the sector were as well, to see that one

of our prestigious newspapers arguing that this



government was weak and that the HECS increases didn’t

really do much to attack middle class welfare.

We were hammered for increasing the HECS charges for

new students and lowering the repayment thresholds.

But, in copping the flack, I believe that it was more

important for the future of higher education in this country

to get the balance between private and public expenditure


It is within this framework that policies will be formulated

which will enable our universities to cope with challenges

of the 21st century. The West Committee will provide us

with recommendations for the foundations upon which

universities may equip themselves to face these




Australia’s Future Universities presents a thorough look at

ourselves. But there lies ahead another job for you.

Having successfully packaged the higher education policy

debate domestically, an idea for a second volume would

be for a book looking at policy directions on the

international stage. Increasingly we will be formulating

policies that stretch the universities of the future beyond

the back fence and into the global market.

John and Grant, I congratulate you on your efforts in

pulling together this book. It represents a diverse, yet

balanced and stimulating read for anyone concerned with

the future directions of higher education in this country.