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Government slashes A$1 billion from university spending

Australian vice-chancellors were shocked on Monday by the federal government’s unexpected decision to slash A$1 billion (US$1 billion) from higher education spending over the next five years.

Hundreds of jobs are expected to be lost as universities revise their planned budgets with the Group of Eight research-intensive universities likely to be the most seriously affected.

Professor Fred Hilmer (pictured), chair of the Go8 and vice-chancellor of the University of New South Wales, said the cuts would mean the loss of 1,450 research positions.

Hilmer said the cuts meant the government had reneged on its prior undertaking to boost funding for the indirect costs of national competitive research grants through its Sustaining Excellent Research programme.

He said Go8 universities would bear the brunt of the A$150 million cut from 2013 and A$500 million over the forward estimates.

“While we are relieved the government has not proceeded with cuts to research grants directly, we are alarmed by its decision to erode the research fabric that enables top researchers to do excellent work efficiently,” Hilmer said.

“These cuts to the sustainability of research funding flow from the government’s refusal to face up to the unsustainability of its ill-conceived demand-driven funding of higher education.”

This was a reference to the government’s decision two years ago to allow universities to enrol as many students as they wished. This led to a dramatic increase in enrolments while costing the government millions more to help institutions meet the costs of the rapidly rising student numbers.

Hilmer said the government was giving a higher priority to enrolling school-leavers ill-prepared for university than to supporting “our best researchers”. He said that A$1 billion could have been saved by limiting demand-driven funding to students with the ability to successfully complete and benefit from university education.

“Instead it has taken half a billion from the leading research universities [and] two consequences are likely: first, the most reputable universities will enrol even more students to make up for the cuts to research, and other universities will have to take students with lower [university entrance] scores; second, there will be lower rates of student success or lower quality, or both.”

The federal lobby group Universities Australia (UA) said the university sector was bitterly disappointed that gains recently made in funding the indirect costs of research were being eroded.

“Investing in research is a long-term endeavour and any reductions will have long-term consequences,” said UA Chief Executive Belinda Robinson. “While research grants cover the direct costs of research, they do not meet the many other administrative and infrastructure costs that accompany research. These are very substantial, and universities have fought for years to have them recognised.”

Robinson said research-intensive institutions would be hit particularly hard but the latest development would also have a substantial impact on universities that had made investment commitments on the basis of funding announcements in the May federal budget.

She said the cut was on top of a further reduction of A$60 million over the next 18 months required to keep some national research infrastructure projects operating – at a time when the National Collaborative Research Infrastructure Strategy would be abolished.

“The irony is that we are in this budget pickle at least partly as a result of Australia’s economy being over-reliant on the resources sector,” Robinson said. “By reducing research funding we are cutting the very area that provides us with the greatest hope of underpinning long-term industrial diversification and economic transformation.”

The National Tertiary Education Union said the cuts were difficult to justify and were shortsighted and unsustainable.

The union’s national President Jeannie Rea said her members would be relieved by the government’s lifting of a freeze on research allocations by the main granting bodies but they would be disappointed by the government’s savings in relation to universities and student income support.

“University staff already bear the burden of insufficient research funding through high levels of insecure forms of employment in the form of short-term contracts and casual employment,” Rea said.

“The cuts cannot be justified, especially when taken into account with other recent savings measures, which have impacted on universities and their students to the tune of A$1.5 billion over the last two years.”

But Finance Minister Penny Wong said the government had made record increases to university funding amounting to more than A$43 billion between 2008 and 2011. It would invest a further A$58.9 billion in 2012-15, Wong said.

“We've increased spending on research by more than 40% since 2008.”
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