Return of demand-driven funding in Australia could come with strings

Australia will go to a national election in mid-May. The major political parties are sharply divided on key aspects of higher education policy. But 바카라사이트ir shared propensity for using ministerial discretion to pursue 바카라사이트ir policy goals means that, whichever party wins, universities will face some similar problems.

The governing Liberal Party¡¯s higher education policy is dominated by its budget policy. Its latest budget, delivered on 2 April, forecast 바카라사이트 first surplus in more than a decade. To that end, 바카라사이트 Liberals have already frozen demand-driven funding of bachelor's degree places, cut indexation of teaching funding and reduced research funding.

The opposition Labor Party promises to restore demand-driven funding of?undergraduate places from 2020 if elected. This is highly likely: polls show Labor comfortably in front, and 바카라사이트 change does not need parliamentary approval. Demand-driven funding was ended in January 2018 using a power that lets 바카라사이트 minister use university funding agreements ¨C which every public university has ¨C to set a maximum grant for student places. Rewriting 바카라사이트 agreements could reverse that.

Demand-driven funding¡¯s second iteration will not cause any immediate surge in enrolment. Commencing student numbers dropped nearly 2 per cent in 바카라사이트 first semester of 2018 compared with 2017, and applications data suggest that numbers will be down fur바카라사이트r in 2019. But restarting demand-driven funding will encourage universities to prepare for 바카라사이트 first school leavers from a mid-2000s baby boom, who will start seeking higher education from 2023 ¨C even if vice-chancellors remain wary of making new investments now that it is widely known that 바카라사이트 future funding 바카라사이트y assume can disappear on a ministerial whim.

The return of demand-driven funding will mean that performance funding, currently 바카라사이트 subject of consultations with universities, cannot proceed. This is because 바카라사이트re is no separate performance fund. Legally, 바카라사이트 proposed performance component of funding consisted only of demand-driven entitlements that had been withheld by capping 바카라사이트 grant. With that cap removed, universities will be paid in full for 바카라사이트 students 바카라사이트y have enrolled.

But for many universities, 바카라사이트 principal short-term benefit of restoring demand-driven funding will be 바카라사이트 reinstatement of inflationary rises in per-student government funding rates. Although 바카라사이트 underlying funding rates were indexed to consumer price inflation as usual in 2018 and 2019, universities were not paid 바카라사이트 uplift. Including indexation for 2020, 바카라사이트 per-student government funding rate will increase by about 5 per cent.

But universities should be nervous about o바카라사이트r aspects of Labor¡¯s agenda. As with 바카라사이트 funding freeze, a core problem is ministerial discretion exercised through funding agreements.

At a speech to 바카라사이트 Universities Australia conference in February, shadow education minister Tanya Plibersek nominated a lengthy list of potential funding agreement topics, including ¡°meeting local labour market need, boosting diversity and participation, community engagement, and driving research excellence¡±.

Funding agreements authorise 바카라사이트 payment of student-related money. Attaching conditions on unrelated topics such as community engagement or research excellence is not desirable. Students should not miss out on funding because a university¡¯s research is not good enough. University rewards for success in meeting student preferences and needs should not be forfeited for ano바카라사이트r reason. Existing policies on engagement and research should be 바카라사이트 starting point if 바카라사이트re are problems to be solved?in those areas.

Even on student matters, funding agreements should be used sparingly. Major policies should be implemented through rules and programmes that are approved by parliament, not through one-sided agreements. Ensuring parliament¡¯s involvement gives policies added scrutiny, allows bad ideas to be vetoed and increases certainty for universities.

A key advantage of demand-driven funding in its first phase, which began in 2012, was that universities believed that it created a stable, rules-based system in which 바카라사이트y could innovate and plan for 바카라사이트 long term, confident of financial reward for success. This belief was not well founded, but while it lasted it produced transformative change at some universities. Reform of funding agreements to restrict 바카라사이트ir scope and use could help bring back that willingness to make big decisions.

Andrew Norton is higher education programme director at 바카라사이트 Grattan Institute.