Universities to benefit if Labor returns to power

The new year brings the strong prospect of a Labor government taking office early in 2019 in Australia – and universities will be the big beneficiaries.

Latest polling indicates the conservative government of Prime Minister Scott Morrison could lose half or more of the seats it currently holds in the House of Representatives.

Morrison became Australia’s 30th prime minister last August, and the seventh in the past 11 years. His rise to almost certainly temporary power followed a savage bout of infighting within the conservative Liberal Party that saw former prime minister Malcolm Turnbull lose his job after less than three years.

But Morrison’s time in office will be much shorter and may possibly last less than six months.

The Australian voting public has become tired and bitter at the constant turnover of ministers and prime ministers within a trouble-plagued government.

The disaffection was dramatically shown last November when the state of Victoria, Australia’s second most populous, held its elections and the conservative parties suffered badly.

Labor won a record 56 of the 88 seats in the lower house, up nine since the 2014 election, while the conservative parties won a woeful 26 seats, to be down 12. It will take years for the conservatives to be in favour with the electorate in that state.

At the federal level, the conservative parties have also lost any friends they may have had among university students and their lecturers and vice-chancellors – not least because of the heavy cuts to spending on individual universities.

Collectively, universities face a loss of more than AU$2.6 billion (US$1.9 billion) in federal revenues over the four years from 2018-21.

An analysis by reporters at the Australian Broadcasting Corporation of federal Department of Education and Training spending figures over those four years found the cost to some universities would amount to as much as AU$175 million in lost federal revenue.

Top universities such as the University of Melbourne face a AU$139 million shortfall and Monash University AU$134 million, while one of Australia’s smallest, the University of Tasmania, would be hit by a cut of AU$177 million, or 11.4% of its total revenues.

Labor to lift cap on university places

But the federal Labor Party has promised immediate action to redress some of the government’s more controversial and damaging actions should it win the forthcoming elections.

These include lifting the cap imposed by the government on the number of places it funds for university students. As a result, thousands of young Australians are expected to miss out on gaining entry to higher education when classes resume next month.

Labor says the restrictions will be lifted should it take over the Treasury portfolio, possibly in April when federal elections are likely to be held.

Party leaders have also promised to allocate an extra AU$174 million to help students from poorer families gain entry to post-secondary education, including technical and higher education.

The party’s deputy leader and ‘shadow education minister’, Tanya Plibersek, says the money will be allocated to new mentoring and support services for students.

Under the current government’s plans, regional universities face a bigger impact from the government cuts than the city-based, top-ranked institutions. This has raised fears of a deepening in the skills shortages already evident in rural areas across Australia.

As federal contributions to cover the costs of most undergraduate courses are kept at the levels set in 2018 and now in 2019, vice-chancellors say they have few choices: They will be forced to cut back on programmes aimed at helping their students, as well as slashing the number of student places they offer.

Reporters at the Australian Broadcasting Corporation used Freedom of Information legislation to obtain the federal education department's four-year funding projections.

These indicated that the University of Tasmania and Melbourne’s La Trobe University would each have received about US$175 million more in base federal funding had the government not imposed its freeze on spending

Western Australia's Edith Cowan University and South Australia's Flinders University were both set to obtain AU$115 million more than they will receive this year.

Cuts to intake

Universities Australia Chief Executive Catriona Jackson said the changes imposed by the government effectively ended the ‘uncapped entry system’ introduced by the former Labor government under prime minister Julia Gillard, the first woman to hold that office, during her term from 2010 to 2013.

Jackson said many universities were “staring down the barrel” of being forced to make cuts to their first-year intake of students.

"That's not something that any family wants to hear, that their son or daughter, who was looking at a place at university … won't be able to get one,” Jackson said.

She pointed to a “massive gulf” in university attainment between city dwellers and rural Australians, warning that this would widen, while regional universities would not be able to respond to skills shortages in the workforce.

Limits on loans

As well as the immediate impact of the conservative government’s cuts to spending on higher education, students this year face lifetime limits on the amount they can borrow to undertake university studies.

Under the new lifetime Higher Education Loan Program cap that came into effect on 1 January, most students will be restricted to borrowing a total of AU$104,440 in government loans, or a maximum of AU$150,000 for those studying medicine, dentistry or veterinary science.

Prior to this year, only postgraduates were subject to limits on the amount of money they could borrow from the government to meet the cost of their studies.

The new lifetime borrowing limit, however, is not retrospective so students with existing loans taken out before 1 January will not have their current loan amount included in the current limit.