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Coalition Strategy for tertiary places

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By Dr David Kemp MP Shadow Minister for Education

5 February 1992

___________________ Information: (03) 557 4644





368 CENTRE ROAD BENTLEIGH, VIC. 3 2 0 4 TEL. (03) 557 4 6 4 4 FAX. (03) 557 2906



The Federal Opposition today outlined its strategy to lift investment in tertiary education and training, and to provide places for all qualified students.

Over 50,000 qualified students have been unable to gain places in universities this year, and over 100,000 have been effectively locked out of TAPE.

Australia has been described as at "the back of the pack" internationally in training and skills development, and the inability of our tertiary institutions to provide opportunities for so many students makes a mockery of the notion of a 'clever country'.

Labor has never adopted a comprehensive strategy to raise the levels of skills in Australia to international levels. The establishment of the Unified National System of universities was undertaken without any adequate justification and without proper consideration of the relationship of TAPE to the new institutions.

Of the OECD countries, only Greece has a lower proportion of 16-17 year old students in vocational training.

The Liberal and National Parties accept as a target that by the year 2001 at least 50 percent of people aged 22 should have attained at least a vocational certificate, or progress toward a vocational qualification above Level 3 (as recognised by the National Training Board), or a diploma or degree, '

Greater Investment from Taxpayers and Private Sector _


The necessary strategy to achieve these goals requires both increased taxpayer as well as increased private support for tertiary education and training.

The Liberal and National Parties believe that increased taxpayer support should be funded by reordering government spending priorities towards high priority areas such as education and training, according to the Shadow Minister for Education, Dr. David Kemp. ' » X

"Labor has been unable to take the necessary decisions because of its failure to act to reduce the enormous waste and inefficiency in so many programs". COMMONWEALTH


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The overcrowding and shortage of places in universities has been foreseeable for some time. The AVCC has been publishing estimates of unmet demand for several years. Last year it was conservatively estimated that some 30,000 qualified students were unable to obtain places. In addition there were some 15,000 students admitted by the universities above their quotas, for whom the government refused to pay.

It is very much in Australia's interest, as well as being in the interest of individual students, for there to be properly funded places for all qualified students who wish to continue their tertiary education.

The Government has failed to act on this advice, and bears a heavy responsibility for the enormous waste of human resources and damage to the career aspirations of young Australians which its irrational policies have produced.

With universities, as with TAPE, the ability of the government to provide funding for additional places is limited by its failure to bring under control the massive inefficiency and waste which has been demonstrated to exist by the FIGHTBACK program. As the government faces a further damaging blow out in the deficit, the resources to provide funded places are simply not available to it.

"TAPE funding, in particular, remains up in the air because of the failure of Mr.Hawke's New Federalism and Mr. Dawkins' demand that the States hand over TAPE to the Commonwealth in return for funding.

"Indeed, Labor has very little capacity to responsibly provide increased support because it has lost the ability to fund expansion in its programs. Unfunded initiatives which further blow out the Budget deficit will only worsen the current economic crisis - the worst fur sixty years.

"Dr. Hewson's FIGHTBACK program has shown how $10 billion can be cut out of existing programs and redirected to taxpayers and to priority areas such as education and training.

* "Dr. Hewson's FIGHTBACK program commits the Federal Coalition to fully funded increased expenditure on education ana.1 training of over $400 million-a year. This included funding lor over 25,000 additional places in TAPE, as a commitment prior to any discussions or negotiations with the States over TAPE.

* In addition, the Coalition has undertaken to strengthen the financial position of the Slates so that they have a mure secure basis for planning and projecting their own expenditure. The uncertainty experienced by the States has been a'significant problem for TAPE development, which is principally in the hands of4lieStates, (The Coalition

is in broad agreement with the proposals put by the Premiers and Chief Ministers to the Federal Government in November last year - proposals which Mr. Keating torpedoed).

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* There remain serious structural problems in TAFE which arise from the rigidities imposed by the'centralised administration and industrial relations arrangements applying to TAFE systems. There is a need to ensure that TAFEs have greater autonomy in relation to staffing and conditions of employment, a higher level of independence for directors and boards, and the ability to charge fees where appropriate.

* In resourcing TAFE, institutions should be encouraged to expand the resources raised from fee for service and other activities.

* The Liberal and National Parties will encourage the development of an open and flexible training market leading to a continuing expansion in the role of private providers of training services.

* The Liberal and National Party program set out in FlGHTBACK to slash business costs, facilitate exports and a more open internationally competitive economy will further encourage industry involvement with training. Internationally oriented industries tend to have a much greater awareness of the importance of continually

upgrading the skills of their workforce than industries which produce solely for the domestic market.

* In providing maximum choice for students seeking training, it will be increasingly important for them to be able to access available taxpayer support regardless of whether they attend a TAFE or a private institution. Funding will therefore come to be focussed on students rather than institutions. The Liberal and National Party government will seek to develop with the States a system of TAFE study grants or

training credits which would be tenable at any accredited institution offering appropriate training.

* It is particularly important that those people who are unemployed as a result of the failure of Labor's economic policy should not be left on the scrapheap, but should have earlier access than is presently available to programs which combine employment and training.

- Programs such as Jobstart and Jobtrain encompass wage subsidies or short training courses without any commitment to structured entry level training. Such initiatives do not in the long term contribute to either a more highly skilled workforce or to job opportunities for the unemployed. The Liberal and National Parties favour a greater

focus of expenditure on formal schooling, training and financial assistance.

- Many arc unemployed because employers are not able to, afford the wages. The Coalition government will make sure that employers are ab!e‘.To=»offer training wages to the longer term unemployed, and will establish a more flexible and community based employment strategy through the establishment of Local Employment Boards which include both government and private sector representatives.

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* Funding for voluntary community based organisations and for community based programs such as Skillshare will be significantly increased.

Dr. Kemp said these policies would significantly expand both the capacity of TAPE and investment in training overall.


The problems of overcrowding and unmet demand obviously demonstrate the need for additional resources. Overcrowding is not a matter of the number of students in the system. It is a function of unfunded students, for whom teaching staff and infrastructure cannot be provided. Demand is also a function of the price at which

university education is being offered. The key policy issue is: what additional resources are required, and are they to be provided by the taxpayer, by the student, by private enterprise or other sources?

While Mr. Keating's recession has highlighted the shortage of funded places in universities in a dramatic and tragic way, it is a shortage which reflects not merely the pressure of competing demands on the government budget, but also the totally unsatisfactory framework of regulation within which the universities have been forced

to operate for some years.

Under this framework the capacity for institutions to adjust to student demand is very limited. R e s o u r c e s a m o n g in s t it u t io n s a r c c e n t r a lly allocated according to bureaucratic and political discretion. Places in institutions are rationed through government imposed quotas. Student charges are fixed by government. There is a general prohibition on admitting Australian undergraduate students for fees, and industrial

relations are centrally controlled.

It is a pre-revolutionary "East European" style system which is certain to produce a significant mismatch between the demand for places and what is offered. The Industry Commission concluded (August 1991) that:

"the current arrangements for funding higher education are flawed. The most obvious manifestation of this is^the growing number of ’qualified Australian students who are unable to gain entry to Australian universities."(p.l83)

"The Commission recommends that the Government accept the need to alter current arrangements so that qualified domestic students are not precluded from a place in public universities".(p.183) V * .’

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In setting priorities within FIG H I BACK the Liberal and National Parties decided that at the university level the first priority was to strengthen research funding through additional places for postgraduate students (including an increase in the stipend of $2000 for all postgraduate research students to provide additional incentives for quality students to remain in study), and to reward researchers who succeeded in

making links with industry.

A further decision was made to provide additional resources to increase the level of student assistance for the neediest students, to more than compensate for the price effects of the GST by increasing AUSTUDY for eligible students by 6 per cent.

Thirdly, the Coalition decided that additional direct taxpayer funded places should be created in TAPE rather than in universities, due to the neglect of the demands of the training system under Labor in its frantic and damaging push to restructure higher education.

Effectively addressing the problem of unmet demand for university places is nevertheless a key objective of the F1GHTBACK program for tertiary education. This is achieved by addressing the primary reason for the problem: the excessively restrictive regulations imposed on universities which prevent them providing funded places through charging fees for undergraduate courses. Deregulation of the university sector is a pre-requsite for satisfactorily addressing this problem. Only deregulation will provide a significant increase in the number of funded places, and ensure that demand for university places and the supply is brought into balance.

Deregulation of the university sector is one of the major structural reforms essential to restoring prosperity to Australia. The Liberal and National Parlies believe that this deregulation of universities must involve:

. Abandonment of the prohibition on the right of universities to offer places to Australian undergraduates on terms determined by the university;

. Abandonment of government imposed rationing of institutional places through quotas; .

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. Re-establishment of enterprise bargaining and the right of universities to enter into voluntary employment agreements with academic staff.

The case l'ur deregulation has now been accepted by the most authoritative analysts of higher education. Professor Peter Karmel, in his John Curtin Memorial Lecture, stated his conclusion that: _ v

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"Deregulation is, I believe, our best hope for a strong, independent and diverse system of universities".

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The Industry Commission has pointed out that:

"If the amount a student could bid for a place better reflected both the value " to society of the education (through the government subsidy) and the value to the student personally (through any premium paid over and above the subsidy to secure the. place), outcomes would better reflect the costs of provding

courses and the demand for those courses. Institutions could be expected to make an allocation of scarce places in a way that maximised the benefit to Australia." (p. 181)

The additional places in universities arising from deregulation will be funded from fees charged for those places at the university's discretion. Those fees may be full cost fees, as charged to overseas students, but they may also be less than full cost fees where an institution has excess capacity. In some cases sponsorship will be obtainable from industry sources to meet all or part of the cost of fees. In many cases mature age students already in careers will be prepared to pay for additional education to further their career objectives.

Universities already have the right to offer additional places to overseas students, and over 15,000 additional places have been created for overseas students. There is a gross inequity in denying the same rights to Australian students. Deregulation is essential to secure equity for Australian students.

As the Industry Commission pointed out:

"...those students with tertiary entrance scores high enough to obtain subsidised places receive subsidies worth many tens of thousands of dollars, while students with fractionally lower scores must give up university aspirations”.(p.l80)

The Liberal and National Parlies have given a firm undertaking to maintain funding per student place in real terms and to provide as many places as are currently provided and projected. Consequently there is no possibility that the number of government funded places will be reduced. Places arising as a result of deregulation

will be additional places.

The Liberal and National Parties have also undertaken th<1i IIECS and loan arrangements will be available to ensure that no student is prevented from proceeding to a course on financial grounds.

Labor lias so far rejected this solution, even though it is the only equitable and practicable solution to the problem of unmet demand. It has done so on ideological grounds - that deregulation will allow the 'rich' to buy places. This-left wing ideological clap-trap would be laughable if the results for tens of-tlifrhsands of Australian

students, and for universities themselves, were not so serious.

The government must act to ensure that Australian universities and students have the freedom to provide and secure places in an equitable manner.