Education Minister Dan Tehan has a thankless task. He has been handed a fixed pot of money that the federal government is prepared to spend on universities.
Out of it he has to find a way to expand the university system by nearly 40,000 students in the next four years (to cater for the coming demographic bulge of school-leavers). And then he has to find enough money to keep university research focused on meeting Australia’s needs in the new-look world that will follow COVID-19.
And this loaves and fishes act has to be accomplished in an environment where universities will lose up to $5bn revenue this year because of lost international students, and possibly even greater losses next year.
Tehan gave us the first part of his solution 12 days ago when he announced a new fee and funding structure for universities that spreads the available government money more thinly and reaches deeper into students’ pockets.
Considering the bad news he was delivering, Tehan emerged from that without losing much skin. Universities were surprisingly muted in their criticism even though, for each government-funded student they teach, they will receive (on average) 16 per cent less money.
In fact, they had little alternative but to accept the reality of the fiscal constraints the government is operating under.
But that was only the opening act from the minister. The next part is expected to be revealed in the budget on October 6 when he announces the government’s funding plan for university research. And, for several reasons, this is going to be a very bitter harvest for universities.
One reason is, in the past, universities have made a surplus from educating students that they used to boost the funds they could spend on research. The Australian National University’s higher education policy expert, Andrew Norton, estimates the annual surplus on government-subsidised courses at just more than $1bn.
But much of this money will now be spent on teaching the extra students who enter the university system in the next few years, although it’s hard to say exactly how much because of a lack of detail in the Tehan announcement.
Second, the billions of dollars of revenue of a year that the loss of international students has caused falls disproportionately on research. This is particularly so in the Group of Eight universities, where international student fees were a major source of research funding.
The upshot is that the amount of money now available for university research is not remotely close to what it was previously.
I don’t know how Tehan will divide the remaining research funding, but the likely answer is a ruthless pruning of research programs, concentrating the available money on those researchers and universities deemed to yield the most valuable outcomes.
This inevitably will mean that large numbers of academics who currently do research, will no longer. Whole faculties, and even whole universities, that have research programs now will see them end.
It will cost a lot of jobs. And it could have the unintended effect of ending the so-called “research-teaching nexus”, which assumes that academics need to be researchers to be good teachers. Potentially, it will drive widespread cultural change in universities (which they are not ready for), forcing many academics to become primarily teachers rather than researchers.
There will be an enormous pushback from unions, howls of pain from universities and an epic struggle between vice-chancellors for the much smaller pot of research funding that is left. Tthrough all this, Tehan will have to ensure he funds the research that will help Australia prosper in the post-COVID world. Whatever he chooses, there will be pain.
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