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Higher education escapes harsh budget cuts

Universities in Australia have emerged relatively unscathed from what the federal government had declared before Tuesday evening would be the nation’s “toughest budget in 25 years”.

Facing a deficit of more than A$44 billion (US$44.3 billion) and polls that point to an electoral massacre next year, the Labor government set out to achieve its promise and turn the dire financial situation into a $1.5 billion surplus over the next 12 months.

Then again, Federal Treasurer Wayne Swan had to juggle the figures around and slash spending in several areas to generate that questionable result.

Higher education could have been an attractive target to impose cuts and it had suffered grievously under former conservative administrations.

But a Labor government whose rhetoric for the past five years has focused on boosting Australia’s skills base seems to have kept to another promise of creating an “education revolution” in schools, vocational education and higher education.

Universities had been urging the government to provide more money to cope with a flood of new students, whose numbers have jumped by 36% since 2007. Instead, the government will only keep any increase in spending to the annual rate of inflation, which at present is less than 4%

The 39 public universities, however, will receive an extra $23.4 million over the next four years to boost the number of low-income and other disadvantaged students gaining access to higher education.

To make a saving of $315 million, the government has scrapped a previous arrangement under which students training to be mathematics and science teachers were relieved of having to pay a portion of their tuition costs under the Higher Education Contribution Scheme, or HECS.

Even here, though, the government has offered $54 million to support science, mathematics and engineering education following a report by Chief Scientist Professor Ian Chubb.

Universities Australia, the peak body representing institutions, commended the government for its decision not to step back from its programme of higher education reform, “even under difficult fiscal circumstances”.

“This is a strong budget for the university sector,” said Chief Executive Belinda Robinson.

“Over the past few years, the government has achieved a number of very significant outcomes in higher education. These include: indexation of base funding, streamlined visa processing for international students, the introduction of the demand-driven system, an increase in infrastructure investment, and funding to meet the indirect costs of research.

“These reforms have played a key role in renewing universities' capacity to compete in the Asian century. That there has been no rewind, no back-sliding on its important teaching, learning and research programme in a very tough budget environment is testament to the priority the government continues to place on the role universities play in Australia's future prosperity.”

Commenting on the cancellation of the HECS discount for undergraduates enrolled in maths and science courses, Robinson said the HECS was a high-cost measure that had not been particularly effective in boosting the number of students taking these courses. Nor did the discount address the need to focus attention on schools, where student study choices were made, and on teaching, “where students get their inspiration”.

The National Tertiary Education Union likewise welcomed the government’s decision not to impose “major funding cuts” on universities, but the union president, Jeannie Rea, also said a key outcome of the government’s base funding review, specifically an increase in overall spending on universities, had yet to be realised.

“University staff will no doubt be relieved to see that funding increases through improved indexation have not been reversed in the budget, despite rumours to the contrary,” Rea said. “Research funding, mooted as another possible area for cuts, has also been maintained at its current level.”

She said that in a tough budget year, the government had even accepted the base funding review’s recommendations of boosting spending to raise student numbers from low-income families by allocating $23 million.

“This is a welcome recognition of the increased pressure placed on universities by the new demand-driven system and the fact that some students need more help to get up to speed to succeed with their university studies,” Rea said.

The Group of Eight research-intensive universities similarly praised the government for not imposing cuts, but said inadequate funding per student and a “deep hole in funding for research infrastructure” remained.

Mike Gallagher, the group’s executive director, said that despite existing funding being protected, universities would still face serious financial challenges in the next few years.

Gallagher said funding per student was too low and remained under threat because of the growing student numbers. Also funding for major research infrastructure under the National Collaborative Research Infrastructure Strategy had been terminated and not replaced.

Meeting both these challenges would be impossible without changes to financing policy, he said.
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