Jenny Lambert | Senate Inquiry – Higher Education Reform Bill

24 Jul 2017 |

Opening Statement to the Senate Education and Employment Legislation Committee inquiry into the Higher Education Support Legislation Amendment (A More Sustainable, Responsive and Transparent Higher Education System) Bill 2017

Jenny Lambert, Director of Employment, Education and Training
Melbourne | 24 July 2017

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Thank you for the opportunity to appear on behalf of Australian business in support of the Higher Education Support Legislation Amendment Bill.

Late last year, during the consultation period for reform, the Australian Chamber published a higher education policy position which enunciated nine principles important to business.  The policy strongly emphasised the importance of higher education to business to both to produce graduates with the skills that industry needs, and also as a source of ideas and research that can create opportunities and provide solutions to our nation’s challenges.  Undoubtedly, higher education contributes to the economy and the common good, as well as providing benefits to the individual.

In brief, our nine principles are: a holistic approach to education, an informed student market, equitable access and choice in education offerings, industry-informed, evidence based, quality teaching and well regulated, funding transparency, shared contribution and fiscally responsible.

Against the nine principles, the Bill currently before Parliament stacks up well against most, with a couple of concerns.  On the positive side, fiscal responsibility is addressed in lowering of the HELP threshold, the phased increase in student average contribution and the efficiency dividend.  The first two reforms are responsible and well supported by the evidence.  I note the submission of the Grattan Institute capably presents this case.  The efficiency dividend is not an ideal mechanism for saving, but in the absence of a full or partial deregulation of fees that is acceptable to the community, the 5% cut in the subsidies reflects that there is no magic pudding for Higher Ed funding.

Most stakeholders, including ourselves, although with one substantial condition, support the uncapped demand driven system.  Even the mere suggestion of reapplying caps creates waves – and at the end of the day – caps imply that the “government knows best” what is needed, which is questionable at best.

Our substantial condition of support for an uncapped demand driven system is a better informed market.  It was also the condition of our previous support for deregulated fees.

It is critically important that students not only receive guidance as to the courses and institutions, but most importantly, what the job outcomes are likely to be.  The 70% employment average from higher education masks huge disparities between most of the health offerings in the 80 to 96% range, down to science, maths environmental science, ag, comms and humanities all around the 60 to 61% range.    Students should not only be able to compare higher ed offerings but also understand how these outcomes compare with other parts of the education system such as Vocational education and training, where apprenticeship job outcomes match and in some cases exceed the health discipline outcomes, and the average for VET overall sits above HE.

Evidence and an informed market.  Two critically important principles, and this Bill and reform approach generally also reflects these principles in the proposed benchmarking where some of the funding is linked to outcomes.   In addition, the reforms make great headway in sending a signal to universities to reach out to industry more, improve employability skills and encourage work integrated learning.  These are all very positive messages for the business community.

The aspect of the proposed reform in the Bill that is not as ideal for business is the opening up of the sub-bachelor market but only to universities and not private colleges.  This does not support choice for students particularly given that private colleges dominate the upper rankings for student satisfaction.  We urge the government, within a well regulated environment, to support choice as soon as the fiscal conditions allow.

The sub-bachelor subsidies will also add to the pressure on VET, when that system is coming under sustained assault from declining investment at the diploma and advanced diploma level, and strong regulatory restrictions arising from shift from VET Fee Help to VET student loans.

It is against this backdrop that the efficiency dividend should also be viewed.  Higher education, like the school sector, has seen substantial increases in funding but falling student outcomes.  VET is the only sector that has not seen an increase in the last five years.

Despite this reservation, the Australian Chamber urges the Parliament to pass the Bill.  It is very important that the higher education sector now concentrates on the student outcomes rather than this constant debate about funding.  We strongly urge that this be the last substantial cut to the sector in the medium term apart from fine tuning based on evidence.  Over the next five years, we should start to see some longitudinal outcome data of the very considerable increase in student numbers that occurred from 2011 to 2016. This evidence will then inform further consideration of the funding settings in higher ed.  Thank you for this opportunity, and I am now available for questions.

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