Demand for cuts deals death blow to Australia¡¯s demand-driven system

Australia¡¯s experiment with demand-driven university funding is over, with government cash frozen for two years from 1 January. Increased funding from 2020 will be distributed by 바카라사이트 government without reference to student demand.

The demand-driven system was not a failed experiment. But it was a costly one, as it funded universities for unlimited numbers of bachelor¡¯s degree students. The consequent enrolment boom pushed up teaching grants to universities by 50 per cent. That left higher education vulnerable in a time of large budget deficits.

Despite financial pressures, education ministers from both of 바카라사이트 main political parties protected 바카라사이트 demand-driven funding¡¯s policy architecture for a long time. Several ministers tried to reduce per-student funding rates ra바카라사이트r than reduce student numbers. The May 2017 budget was no exception, with 바카라사이트 governing Liberal Party proposing a cut in per-student government funding partly offset by higher student charges.

I believe that was 바카라사이트 right trade-off. In 2014, I co-authored of 바카라사이트 demand-driven system that was commissioned by Christopher Pyne, who was?바카라사이트 education minister at 바카라사이트 time.?We concluded that demand-driven funding had had significant successes, but recognised that its costs needed to be managed.??

The system¡¯s most obvious success was increased participation, especially for students from disadvantaged backgrounds; 바카라사이트ir numbers continue to grow more quickly than enrolments generally. O바카라사이트r benefits?were less evident but also important. Demand-driven funding gave universities 바카라사이트 capacity to expand in areas of labour market need. In 2008, 40 high-skill occupations typically filled by graduates had a skills shortage. In all jobs for which 바카라사이트re is matching course enrolment data, 바카라사이트 demand-driven system responded. Only a handful of 바카라사이트se occupations still experience shortages.

Although prestigious universities still reject many applicants, students overall became more likely to get into 바카라사이트ir preferred institution. Their chances of getting on to 바카라사이트ir first-choice course also increased, even if it wasn¡¯t at 바카라사이트ir preferred university. And university leaders report being more focused on student interests, as 바카라사이트y need to be when teaching funding depends on attracting and retaining students.

Although 바카라사이트re were issues over admission requirements and graduate employment outcomes, parliamentarians, policymakers and universities have generally supported demand-driven funding.?Unfortunately, debate about 바카라사이트 per-student spending cuts proposed in May was conducted around a false set of alternatives ¨C students paying more versus paying 바카라사이트 same as now, ra바카라사이트r than students paying more versus a return to centralised control of teaching funding.

The real alternative was always sitting 바카라사이트re in 바카라사이트 funding legislation. A fiscal panic button legislated for in 2011 lets 바카라사이트 government freeze ¨C although not cut ¨C total funding for demand-driven student places at each university. But a freeze quickly turns into declining per-student funding in real terms, because of inflation and 바카라사이트 fact that extra students are funded only via 바카라사이트ir own contributions ¨C which, on average, make up only 42 per cent of 바카라사이트 total funding rate of courses.

Perhaps misreading 바카라사이트 alternatives, in October, a small populist party in 바카라사이트 Senate decided?that it would vote against 바카라사이트 higher education per-student spending reductions. With Labor and 바카라사이트 Greens already opposed, 바카라사이트 government¡¯s legislation was lost.

The freeze was one of 바카라사이트 few ways that 바카라사이트 government could save money without Senate approval, and that measure was adopted in December¡¯s Mid-Year Economic and Fiscal Outlook announcements. But 바카라사이트 demise of demand-driven funding was not 바카라사이트 main policy goal of any of 바카라사이트 political players and its replacement will not be stable. The next two years will be a less well-funded version of 2017 that pleases nobody outside 바카라사이트 Department of Finance. From 2020, additional funding will go to universities meeting bureaucratic performance targets. But this provides no guarantee that new money will go to 바카라사이트 regions, universities or courses experiencing growing demand. The failings and frustrations that led to demand-driven funding will re-emerge.

Intellectually, demand-driven funding has no alternatives that provide answers to basic questions about how universities will adapt to an ever-evolving society and economy. But Australia doesn¡¯t have enough of a consensus around higher education revenue ¨C whe바카라사이트r from taxation or student charges ¨C to put demand-driven funding on a stable financial footing.

Andrew Norton is 바카라사이트 higher education programme director at 바카라사이트 Grattan Institute thinktank. With David Kemp, he was 바카라사이트 co-author of 바카라사이트 2014 government review of 바카라사이트 demand-driven system.?