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Higher Education Review ProcessHigher Education at the Crossroads: An Overview Paper2. key characteristics of the systema. a distinctive australian system7 Australian higher education is distinctive among the world’s higher education systems. It is basically a national system. It is predominantly public and relatively homogeneous. There is no formal stratification of higher education institutions. There is no streaming of students. Virtually all higher education provision is through universities and each institution, being a ‘university’, seeks to provide a comprehensive range of courses and to develop its research capacity. Providers other than universities, such as colleges of Technical and Further Education (TAFE), are authorised to deliver higher education awards. Detailed statistics are provided at attachment a—background and statistics. 8 Australia’s universities are almost all public. Only 5 of the 44 institutions that are eligible for funds under the Higher Education Funding Act 1988 are private and four of these receive limited funds. In 1999 there were 86 registered private higher education institutions. They are typically single-purpose institutions such as colleges of theology and business institutes. Together they account for approximately 3 per cent of higher education students (Watson 1999). Few countries have higher education systems that are as strongly public as in Australia. Indeed, there are greater levels of private provision in Australia’s schooling and vocational education and training sectors, than in the higher education sector. 9 The Commonwealth has emerged as a key player in higher education, even though responsibilities are officially shared with the States. This unusual situation exists despite Australia being a federation in which constitutional authority for education is vested in the States and Territories and all but two of its 39 universities are established under State or Territory legislation. The Commonwealth’s key role results from the States ceding full responsibility for funding higher education in 1974. Few federations have central governments with the policy control of Australia’s Government. This control is not mediated, as in many countries. Over the years Australia has experimented with ‘buffer’ bodies responsible for making decisions on the allocation of student places and funding, or for advising the Government on policy. Australia does not currently have such a body. 10 Australia’s universities have more autonomy than in most other countries. Their establishing legislation vests responsibility for governance and management of the university in the form of a Council or Senate. The governing body is accountable to the relevant government for the functioning of the university, but it has, and is expected to exercise, a high degree of discretion in directing institutional development. 11 Unlike the public institutions of many countries, Australian universities can normally invest, divest and borrow in respect of property and commercial ventures as their governing bodies see fit. Their assets, whether obtained through private donations or government grants or the proceeds of investment, unless specifically encumbered, belong to the university. They can be used or disposed of, consistent with State and Local government regulations, in accordance with the purposes of the university and the powers of the council. Public universities can and do have commercial operations, although the proceeds of their activities must be directed to the public purposes of their establishment. 12 At present, Australian universities receive the majority of their public funds (both recurrent operating and capital funds) as a single block operating grant for a specified number of student places within the context of an educational profile that broadly details the institution’s teaching and research activities. Around three-quarters of Commonwealth funds are allocated on a rolling triennial basis, giving institutions some predictability for forward planning of their operations. Many other countries provide funds on only an annual basis, with detailed ‘line item’ budgets for each of their educational inputs. 13 Australian universities are responsible for employing their staff and undertaking enterprise bargaining. Universities are responsible for negotiating appropriate workplace relations to establish an environment that promotes effective learning and scholarship. Unlike many other countries, Australian university staff are not public servants with wages and conditions fixed by the state. 14 Our universities are ‘self-accrediting’ institutions. The state does not control or directly scrutinise courses or course content for Australian universities. There are no external exams to moderate standards between institutions or ensure minimum standards. Universities decide whom to admit as students. They are responsible for deciding what to teach, how to teach it and how learning is assessed. They are required to have internal mechanisms to assess new course proposals and accredit courses, which normally involve consultation with relevant professional bodies or industry. Professional bodies and associations play a significant role as external arbiters in the quality assurance framework through their accreditation of professional courses in areas such as nursing, medicine, law, accounting, engineering and architecture. Professional bodies also have an ongoing role in monitoring the quality of such courses. 15 Quality, as in all countries, is of prime importance. Governing councils of institutions are ultimately responsible for the quality of all aspects of the institution’s endeavours. Australia now has the Australian Universities Quality Agency, which will assess the adequacy of each institution’s quality assurance processes for teaching, learning, research and management on a five-yearly cycle. There are protections for the term ‘university’ in business name/association legislation and under Commonwealth Corporations Law. All State and Territory jurisdictions have agreed to consistent criteria and procedures to be followed before an institution may use the title ‘university’. 16 Australia’s universities have a greater mix of students than in many countries. In comparison to other countries, a smaller proportion of higher education students commence directly from school. There is also a greater proportion of mature-aged students, more students studying part-time and more students studying via distance education programmes. Distance education programmes (initially by ‘correspondence’ but increasingly involving ‘on-line’ elements) give access to standard degree programmes, not qualifications of lower standing. There is a strong tradition of support for equity within Australia’s universities. The Commonwealth provides some means tested income support for equity groups and monitors progress in improving their access, participation and success. 17 The Higher Education Contribution Scheme (HECS) is a particularly distinctive feature of our higher education system. For government-subsidised places HECS secures a contribution from students, as direct users and beneficiaries, towards the costs of tuition. It also provides a lending mechanism for students to overcome up-front financial barriers. HECS enables students to defer the payment of their contributions to a time when they are able to pay. The recently introduced Postgraduate Education Loans Scheme extends the income-contingent, interest-free loans arrangement to fee-paying postgraduate coursework students. b. developments in policy18 The role of the Commonwealth in higher education financing in the post-war era increased considerably. It substituted for State funding, reflecting the transfer of income taxation powers to the Commonwealth. In 1974, the Commonwealth assumed full responsibility for funding higher education and abolished all student tuition fees. 19 There were fifteen years of modest and incremental change following the 1974 Commonwealth/State agreement. Massive changes to the structure of the higher education system were introduced following the 1988 White Paper, Higher Education a policy statement. Details of policy developments are at attachment b—main policy developments of the last thirty years. 20 The creation of a ‘Unified National System’ and the abolition of the binary divide between universities and Colleges of Advanced Education (CAEs) fundamentally changed Australia’s higher education system. Around 70 institutions (universities, specialised colleges and institutes) were consolidated within a comprehensive university system. The nearly 50 CAEs had been vocational in orientation and had concentrated on undergraduate teaching. By 1991 there were 35 universities. 21 The new universities broadened their range of courses from that of their predecessors and today nearly all have built a comprehensive range of offerings. There are 22 recognised fields of education. Of the 40 main institutions now operating, 35 offer 15 or more of these fields of study and 19 offer 20 or more. All now undertake research and compete for public research funds, but there remain significant differences in their research capacities and performance. 22 The move away from ‘free’ higher education began with the introduction of the Higher Education Administrative Charge (HEAC) in 1987. It was an up-front fee that re-introduced an element of user pays, but it was small. The big shift in responsibility for funding away from the Commonwealth Government and to the direct beneficiaries of higher education came with the introduction of the Higher Education Contribution Scheme (HECS) in 1989. It came with a significant innovation—a strong equity dimension allowing students to defer payment of their fees until they had the capacity to pay. 23 HECS contributions were increased from 1997. HECS liabilities as a proportion of operating grants have increased from 20 per cent in 1996 to 32 per cent in 2000 and are expected to be 33 per cent in 2003. However, these liabilities do not include the substantial Commonwealth Government subsidy. Taking these subsidies into account, the actual student contibution to the average cost of a place shifted from around 18 per cent to 25 per cent over the same period. A new charging structure was also introduced, with contributions in three bands reflecting course costs and anticipated salary levels of graduates. The rate of repayment of HECS debts was also increased. 24 HECS was not the only policy change that reduced universities’ reliance on direct government funding. In the mid 1980s overseas student entry procedures were streamlined to encourage institutions to market their education services overseas. Intakes of overseas subsidised students ceased in 1990 and all new overseas students paid full fees (with some students sponsored). This was part of a broad policy shift from aid to trade. 25 Opportunities for expanding domestic fee paying services were opened up in the postgraduate area in 1994. A reduction in the number of subsidised postgraduate coursework places occurred from 1996 as part of the major savings required to reduce the Budget deficit. In 2002 the Postgraduate Education Loans Scheme (PELS) commenced. PELS is a deferred payment scheme similar to HECS but with some significant differences. HECS is a student fee to make up the gap between the government subsidy per place and the price the government sets per place. Under the PELS arrangement universities set the fees for postgraduate courses and there is no direct government subsidy for tuition. It ensures that postgraduate coursework fees do not constitute a major barrier to potential Australian students or to the development of the postgraduate coursework market. 26 In 1998 universities were enabled to charge domestic undergraduate students fees provided they had filled all their government subsidised places. This increased the number of Australians undertaking higher education. The policy is restricted so that universities can have no more than 25 per cent of students in any particular course being charged fees. Students accessing these arrangements do not have access to a deferred payment scheme. 27 Government higher education policy has reduced universities’ financial reliance on government. Consequently many universities are now more responsive to community needs, provide services that are in demand, make sure these services are accessible and provided efficiently, and market themselves to overseas students. 28 Universities are subject to the same financial discipline as has applied throughout the Government sector. General Government policy has been that pay increases should be (at least partially) offset by higher productivity. Wages are the biggest item of university expenditure. In 1995, the Government replaced the wages component of the index used to adjust higher education grants. This component, which had been based on actual wage movements in the sector, was replaced with the Industrial Relations Commission’s Safety Net Adjustment. A guarantee of increased government funding to meet any negotiated wage increases was inconsistent with the enterprise bargaining framework. 29 In research and research training, policy has been directed to improving the innovation system as a whole. Knowledge and Innovation: A policy statement on research and research training, released in 1999, saw the introduction of major reforms, including performance based funding for block research and research training. Research and research training management reports were introduced to improve the quality and productivity of research training, the management and utilisation of intellectual property and the commercialisation of research. These reforms occur in a policy context that promotes selectivity and concentration in research. 30 Backing Australia’s Ability, released in early 2001, provided a substantial injection of direct funds ($1.5 billion over 5 years) for universities, mainly for research. The total package is worth nearly $3 billion over five years. An independent Australian Research Council (ARC) began operation in July 2001 with a reinvigorated national competitive grants programme. There have been significant investments in research infrastructure to underpin ‘critical mass’ of expertise. A new set of four national research priorities was announced in early 2002. 31 The last decade and a half has radically transformed higher education in Australia. There have been major achievements, including significant growth in the number of students, from 534 510 in 1991 to 695 485 in 2000, an increase of around 30 per cent—effectively creating a ‘mass’ higher education system. Most of the growth has been in domestic undergraduates, funded by HECS. The number of full fee paying overseas students, again mainly undergraduates, has also grown considerably. This has resulted in greater diversity of student backgrounds. The number of students from disadvantaged groups has increased in line with overall domestic growth. There is no evidence of any decline in the capacity of students to succeed in higher education. The proportion of students with characteristics that are positively associated with success has increased over the last decade. 32 Student contributions were introduced with bi-partisan political support and governments of both persuasions deregulated significant areas of higher education provision. Universities became less dependent on government revenue and had to engage more actively with the markets for their services. The application of information technology to teaching, learning, research, student services and administration accelerated. Students became more demanding as consumers. c. developments in practice33 Universities have grown their revenues from $5.5 billion in 1991 to $10.4 billion in 2002. Total university revenues are expected to reach the record level of an estimated $10.4 billion in 2002. Universities have become less reliant on government funding. Between 1991 and 2000 non-government sources of income doubled as a share of university revenue, especially through expanding involvement in the business of international education. Fees and charges, including HECS, represent 36 per cent of revenue. An average of 45 per cent of university revenue comes from the Commonwealth, although the proportion varies by institution. 34 Universities now face greater competition in attracting students, at the same time as student expectations about service delivery have increased, in part due to the existence of contributions and fees. Although university courses are now more flexible than in the past, many students are keen to have even greater control over the combination of subjects. Increasingly other public and private education providers are competing for the student investment. 35 Australian higher education institutions have been characterised by significant changes in management practice over the past ten years. While some of these changes can be attributed to institutions responding to changes in government policy, others are direct initiatives by institutions to shift away from traditional approaches. 36 Most institutions have adopted more centralised and corporate management practices. There has been some acknowledgement that Vice-Chancellors (the Chief Executive Officer) require highly developed managerial and leadership skills in addition to academic capabilities. The size of the senior executive has increased in most institutions, with Deputy Vice-Chancellor and Pro Vice-Chancellor positions created with specific responsibilities for areas such as research, teaching/academic and international. Faculty structures have also been strengthened. Changed management practices have recently resulted in most institutions investing heavily in central systems to improve their student and financial services. The transition to a corporate management approach has not, however, been without tension, as some have bemoaned the loss of a collegial model of university administration. 37 Universities are becoming more student-focussed with significant improvements in student support services. Concerted efforts have been made to enhance teaching and learning processes. Student administration services have improved through investments to create ‘one-stop shops’, develop online enrolment and extend operating times. Courses are progressively being restructured to meet changing student and employer needs. Curriculum is being developed in consultation with employer groups and degree programmes are often ‘badged’ for specific occupations. In some cases courses are specifically designed and developed for a particular company or industry. Although these changes in course structures have tended to narrow degree programmes, some courses have become multi-disciplinary and there has been substantial growth in the offerings of combined degrees. Universities have also recognised that there is a need to ensure that graduates have the generic skills desired by employers such as analysis, communication, team-work and leadership skills. 38 Australian innovation in educational design and delivery represents world leading practice in several areas. Teaching and learning processes have been increasingly professionally designed and organised. Many universities have teaching improvement strategies that include induction and professional development programmes for staff, mentoring schemes, teaching awards and support funds for innovative projects. The information and communication technology revolution has resulted in substantial investment in the design and development of sophisticated on-line materials, units of study, interactive learning experiences and student support services. A recent DEST survey of Australian universities found that 54 per cent of university units now contain an online component; six universities of those surveyed also have an online component in 100 per cent of their units and 23 Australian universities now offer some courses fully online. Courses and subjects are no longer only offered over the standard semester periods. Summer semester enrolments have increased dramatically and some institutions have moved towards modular course offerings, mainly at the postgraduate level, to provide additional flexibility. 39 Links between universities and industry are increasingly more developed. Targeted research programmes which have been tailored to support innovation, from basic research to commercialisation, have assisted universities to engage with industry and develop strategic alliances. The results have seen more market structured research that has increased universities’ capacity to capture the full economic, social and cultural benefits of research and development. 40 Higher education has become a competitive industry and universities are directly competing with each other for students and sources of funding. In many cases, the strategy for responding to the new competitive environment has been to collaborate or form strategic alliances that make the institution’s products and services more attractive. Motives for forming strategic alliances include improving access to markets, building technological links, developing complementary assets, reducing costs and risks, and co-opting or blocking competition. Many universities have expanded overseas and formed teaching partnerships with international businesses, education providers and governments to increase their profile and diversify their revenue sources. Collaborative research centres have been established between institutions and with industry to concentrate resources and expertise. These centres tend to experience considerable success in gaining competitive funding from both government and industry. 41 Some ‘educational precincts’ or multi-partner campuses of higher education providers have been established. Many educational precincts comprise partners, both public and private, representing secondary education, vocational education and training, and higher education. Costs are shared for staffing, library, student administration and building and grounds maintenance. Educational precincts use collaborative teaching programmes to bring the various levels of education together. These collaborative programmes range from simple credit transfer arrangements to articulated courses where credit recognition and transfer are facilitated by deliberate design and inter-relation of awards. 42 A range of other cross-sectoral arrangements have also been initiated. Some universities have arrangements in place with schools that enable students to combine year twelve subjects with university topics. Credit transfer arrangements between TAFE providers and universities have been established and some universities have embedded vendor training within their degree programmes |
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Any comments or
queries should be sent to:
highered@dest.gov.au
Department of Education, Science and Training
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