Controversial higher education reforms in doubt

In a universally unpopular budget last May, Australia’s deeply conservative government of Prime Minister Tony Abbott announced savage cuts to federal spending on universities, higher fees for students and a revised loans system that would have imposed increased costs on students.

But, lacking a majority in the senate, the government has been forced to back down – with the outcome likely to be known when parliament resumes in the coming week.

In fact, after almost a year since it convincingly won the federal election, Abbott and his ministers have failed on several fronts to get key reforms adopted. The government has certainly failed to persuade senators who hold the balance of power in the upper house to approve its so-called ‘reforms’ to higher education.

These were enthusiastically promoted by the government’s bumptious Education Minister Christopher Pyne, who highlighted the success of top American universities in various ranking systems, contrasting them with the position of Australian universities on the lists.

Pyne argued that Australia should model its higher education system on that of the far more competitive US model, claiming that increased competition between universities would boost their performance.

The government’s plans

Under the government’s plans, the present federal limit on the fees that universities can impose would be lifted, allowing them to charge whatever rates they believe students would be willing to pay.

At the same time, funding for universities would be cut by an average of 20% – but up to nearly 40% – while students would face increased charges when repaying their government loans that could cost them thousands of dollars more and take years longer to repay.

Of even more concern to his critics than these proposed changes is Pyne’s plan to allow private universities and other higher education providers to compete with public universities for government funding.

Pyne wants “the most significant change of policy direction in years” to be in place by 2016, allowing the private sector to access government grants to support their students and therefore charge lower fees, so competing directly with the public universities.

Several state governments have already adopted this approach in funding their vocational education colleges with the result that public institutions have lost millions of dollars to the private sector.

Because they can choose to offer the most lucrative courses and have no public obligations to poor, indigenous, remote or disabled students, private colleges have expanded while public institutions are losing money and students.


The Labor Party and the Greens are strongly opposed to Pyne’s plans and warned that they will not support them in the senate.

A new party run by an eccentric Queensland mining millionaire, Clive Palmer, won three senate seats in last September’s election and the Palmer senators have also said they will vote against the government in the upper house where it lacks a majority.

“The minister should not be surprised that no one in the higher education sector has given the package unqualified support,” said Labor senator and former research minister Kim Carr.

“Even the Group of Eight vice-chancellors, who like the idea of removing the cap on fees, resent the scale of the package’s cuts to government-supported places.

“All stakeholders have recognised the fundamental inequity of imposing real interest rates on [student loans]. The result would be a crippling burden, taking decades to repay, and almost certainly deterring many young Australians from undertaking higher education at all.”

Carr noted that independent modelling had suggested that fees would rise by as much as 60% in some universities as they tried to make up for the funding cuts. This meant there was a real prospect of students eventually being charged A$100,000 (US$93,000) for degrees.

“The consequences of allowing this to become law would be the unravelling of equality of opportunity in access to higher education, and a loss of quality in many universities,” Carr said.

“At most, a couple of the already wealthy sandstone universities might become slightly better off, though only by raising fees to levels that would further restrict equitable access.”

He referred to the most vocal of the university critics – the smaller metropolitan and regional universities.

These already struggle to compete with the larger metropolitan institutions for students and resources but Carr warned they would fall even further behind because they did not have the same ability to raise fees, with a greater proportion of students from low-income households.

“So they will have to decide what to cut: course offerings and research will contract, and some campuses may close... The minister’s suggestion that smaller and regional universities might lower fees to become more competitive is a crazy fantasy.”

Another outspoken critic of the Pyne reforms is Dr Jamie Miller, a postdoctoral fellow in history at Cornell University.

Writing in The Conversation, Miller suggested the real motive behind the government’s plans was to attract more international students and that the reforms were driven not by education but by business interests.

“In 2012, international education was Australia’s fourth-largest export, generating about A$14.5 billion in revenue. There are currently 233,099 international students in Australia, or 22.3% of the total, the highest proportion of all OECD countries,” Miller said.

“The government has strenuously avoided acknowledging in public that the ‘demand’ it was really interested in was foreign rather than local. But the budget papers are explicit: ‘We are vying for students in a fiercely competitive international market… Currently, our universities have limited prospects of competing with the best in Europe and North America and the fast-developing universities of Asia’.”

Miller said the government knew that if the public realised Australian students would end up paying the same high fees as foreign students, instead of the latter effectively subsidising locals as was currently the case, then the government’s policy would be “dead in the water”.