“Solid” budget marks a shift in balance

The higher education sector has avoided the major federal budget cuts it anticipated. ‘Relief’ sums up higher education reaction to the federal budget, which spared universities the kind of cuts they feared were inevitable in tough economic times. The 3.8 per cent indexation hike of $550 million, lifting the government’s commitment to $3.15 billion from $2.6 billion over five years was an agreeable surprise. The budget also promised funding for more university places when undergraduate enrolment caps are lifted next year, setting aside an additional $1.2 billion to bring the total to nearly $4 billion. “I thought treading water was a win and I thought this was a bit better than treading water,” Group of Eight (Go8) chair Professor Paul Greenfield told Campus Review. “It would have been easy for government to either have deferred full indexation and increased the amount for the additional students, or have kept the cap on for another one or two years and provided indexation – but they did both. That’s an important first step in ensuring the resources going into teaching and learning aren’t going backwards.” The budget marks significant shifts for tertiary education, while student demand will drive university funding from 2012 it is industry which will drive funding to the VET sector. On the research front, universities will partake in a 3.4 per cent increase in science and research funding, up from $9.1 billion in 2010-11 to $9.4 billion in 2011-12. Research and innovation minister Senator Kim Carr said the figure marked a $2.8 billion increase since Labor won government in 2007. A record $3 billion of the 2011-12 total will go to the CSIRO over the next four years – although, sliced another way, the figure represents a paltry 1.6 per cent annual increase. Despite the good overall news, some expressed disappointment in the budget’s general lack of vision. University of Western Australia business Professor Tim Mazzarol said a big idea about the future is what Australia needed to hear in Treasurer Wayne Swan’s delivery. Returning the nation to a surplus so small, it may evolve into little more than a rounding error, is what it got. “Are we just going to be continuously just digging things up and shipping them, or are we going to find ways to add value?” Mazzarol said. “There’s no way we’re going to compete with China on our labour skills. Working harder ain’t [sic] going to do it; we have to work smarter. So there’s got to be greater thinking – and it’s a long-term investment – on how we build up our universities, all of them, to world’s best practice.” Likewise Nigel Palmer, research fellow at the Centre for the Study of Higher Education, said he had hoped the Labor party might announce a national transition to an “innovation economy”. The sector’s peak bodies, however, cautioned it was not the year for such expectations. “The plans the government announced in 2009 included a very strong statement about the role of higher education and research in the future,” Universities Australia chair Professor Peter Coaldrake told CR. “Not every budget is a higher education budget. This was a budget where the opportunity was to maintain the investment and maintain the commitment, and we welcome the fact that that reassurance has been provided.” Carr brushed aside any criticism that the government was not doing or saying enough about its innovation agenda. “It’s obviously very difficult times, yet we maintain our commitment to ‘powering ideas’,” the minister said. “We’ve maintained out commitment to the sector and we’re in the process of translating that white paper into action, which is leading to the transformation of the innovation system in Australia.” Greenfield credited Carr and tertiary education minister Senator Chris Evans personally for the sector’s good fortune. “I’m aware there was still negotiations going on with treasury and finance that were quite late. I suspect it was a tough fight. You can see with the reduction in the discounts for the HECS that they had to give something back,” Greenfield said, referring to the drop in savings from 20 to 10 per cent for students who make their HECS payments upfront. Cuts were made to higher education performance funding too – $95 million over the next two years – although some funding will be retained to help meet existing targets and develop related metrics. “We are less impressed with that measure but we understand the rationale,” said Coaldrake. Added Innovative Research Universities chair Professor Ian O’Connor: “Development of the performance measures has been slow due to the complexity of the issues involved. The advantage is that we now have more time to get these right and that some of the funds saved will be used to support development of suitable instruments for performance funding.” Deeper in the budget, some smaller research programs lost funding, too, namely a cut to Collaborative Research Networks of $20.7 million in 2013-15, which will hurt regional universities. Cooperative Research Centres lost $33.4 million – a hit Coaldrake said the sector would fight to restore in times that are less lean. Some of the funds will be redirected into a $21 million allocation over the next three years to Science for Australia’s Future, a program that encourages young Australians to pursue scientific careers. Also on the plus side, the budget provided $9 million for a new Australia-China Science and Research Fund. It allocated $178 million to the Higher Education Participation and Partnerships Program to help universities attract and retain students from low socio-economic backgrounds. Regional universities, which have seen a 10 per cent increase in enrolments over the past 12 months, fared well overall. They will receive $500 million over five years for infrastructure and an additional $110 million for regional loading. The National Union of Students (NUS) was not impressed with the budget, saying it had failed to deliver for its members. “Whilst finding savings within the university sector through cuts to the HECS discount for upfront payments, the government has failed to provide an increase in funding to improve quality, upgrade infrastructure or support regional students through youth allowance,” said NUS president Jesse Marshall in a statement. “The provision of $500 million from the Education Investment Fund over the next five years for capital works at regional campuses will go some way towards addressing the infrastructure backlog, but will fail to improve the situation at many universities that are planning on significantly increasing enrolments in 2012.” Mazzarol said while the governments of Asian neighbours were demonstrating long-term thinking about the future, leaders here had failed to convey an inspiring vision for how Australia would become the clever country it needed to be. Nonetheless, Swan at least noted in his budget speech that the shift in global economic power from the West to the East was bringing “growth and dynamism closer to Australia than ever before”. “Ours again is an economy in transition,” the treasurer said.