Australia’s tertiary education sector: small steps towards big change

Professor Stephen Parker AO, National Education Sector Lead & Andrew Dempster, Director, Management Consulting

With the re-election of the Morrison government, universities, TAFEs and private education and training providers throughout Australia now have certainty about who they will be working with over the next three years – even if the overall vision for tertiary education is still taking shape.

The reappointment of Dan Tehan as Minister for Education is a welcome sign that points to a degree of stability in the overall policy and funding settings for the sector.

‘Big bang’ reform of the tertiary sector now appears off the agenda, with Labor’s promised ‘once-in-a-generation’ inquiry into post-secondary education consigned by voters to history. In this term of government, reform is likely to be more incremental in nature – a series of small policy changes, each of which is difficult to take issue with, but which overall add up to significant change in the tertiary landscape.

Funding for tertiary education will continue to reflect the government’s focus on fiscal discipline. The dream of an imminent return to uncapped funding for public universities has receded. This will be a disappointment to many but a mixed blessing for some.

As we wrote in Reimagining Tertiary Education, there is a fault line in the tertiary education sector which is defined by stable and relatively generous funding for universities and patchy, unstable funding arrangements for everyone else. A restoration of the demand-driven system for public universities in the absence of broader funding reform would have further exacerbated the differences between the ‘haves’ and the ‘have nots’.

The vocational education and training sector will continue to experience challenges. Now that the tap of free-flowing money that was the VET FEE-HELP program has been turned off, there have been fewer scandals and a contraction in the number of providers, but the sector is yet to settle into a sustainable rhythm. Public TAFEs find themselves competing against a range of fast-moving training providers with lower cost bases and more productive workplace arrangements, and they have been less successful than universities in balancing the books with international student revenue.

Just prior to the election, the government released the Strengthening Skills report, by former New Zealand Minister Steven Joyce, outlining a range of potential interventions to keep vocational education at the centre of modern skills development and to ensure that the VET sector is student focused and responsive to change.

This was the genesis of the unexpected announcement in the federal budget that the government would establish a National Skills Commission “to drive long‑term reforms in the VET sector”. With good will from all parties, the basic architecture of the Commission could be in place by this time next year. The more difficult question is how much authority this new body can muster to drive reform in a sector that, frankly, gives ‘competitive federalism’ a bad name.

For universities and other higher education providers, there are some potentially significant and far-reaching changes that could fundamentally change the landscape by the end of this Parliamentary term.

The performance agenda for universities remains alive and kicking, with the government committed to tying access to future growth in university funding to demonstrable student outcomes. While the emergent view from universities has been that such a thing can’t be done, the election result itself shows that governments have a habit of finding a way. If Dan Tehan is able to settle on a formula that genuinely differentiates between those institutions delivering strong student outcomes and those who are lagging their peers, this has the potential to drive big changes in the way that universities recruit, teach and support their students.

We could also be heading for a major shakeup of the sector through the outcomes of two reviews that have been working away quietly for months and which will produce policy recommendations that will soon hit the Minister’s desk. Through the reviews of the Australian Qualifications Framework and the Provider Category Standards, the government is looking both at the structure of the qualifications that tertiary institutions deliver and the rules that define who can deliver higher education.

We don’t yet know whether the recommendations arising from these twin reviews will be ambitious, or whether they’ll simply reinforce the status quo. However, for a government that is unlikely to be opening the chequebook in any significant way for the sector over the next three years, they offer the potential to create a narrative around modernisation and reform of a tertiary sector that needs to keep pace with the changing needs of students and industry.



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