‘Baby boom’ leads to surge in university enrolments

A ‘demographic bulge’ that is boosting the number of teenage Australians is putting increasing pressure on the nation’s universities.

Facing a likely demand for 55,000 additional student places within 10 years, vice-chancellors want to know who will provide the extra money they need.

Federal Education Minister Dan Tehan told a conference of university leaders that the ‘policy settings’ for higher education would need to change because of the sharp rise in the number of students reaching the school-leaving age.

Tehan admitted Australia’s public investment in tertiary institutions, as a share of its national economy, was among the lowest in the world’s advanced economies. As a result, Australia was ranked 23rd out of 36 countries, referring to members of the OECD.

“Australia continues to rank near the bottom of the ladder for public investment in tertiary education [and] we won’t be able to compete with other advanced economies if this doesn’t improve,” Tehan said.

“The challenge for universities and government is to keep the good results coming. To do that, policy settings need to change, especially as we face a steep increase in the number of school leavers.”

Australia currently enrols 10% of the world’s international tertiary students among the advanced economies and that was ‘a real achievement’, Tehan said.

“It’s the result of more than six decades of dedicated work by universities and governments to build the AU$37 billion [US$25 billion] international education sector into Australia’s third largest export industry.

“I need to put a compelling case to my colleagues that we [should be] absolutely instrumental in driving productivity in this nation for the next decade. Then I think we can get the support we need to grow the higher education sector – and we have to grow that sector,” he said.

Funding frozen

But while pointing to the ‘productivity benefits’ of universities to the national economy, suggesting a AU$3.2 billion-a-year boost by 2030 was feasible, Tehan also admitted that the government had frozen spending for university student places at the current level.

The one exception was an annual increase that would begin next year that was linked to the growth in the Australian population aged 18 to 64.

Tehan said this would lead to an increase in government spending on universities of about AU$80 million each year.

As critics pointed out, however, this was only a fraction of total government annual spending on universities and colleges of technical and further education of some AU$36 billion.

They also noted that the amount allocated to tuition subsidies for university students was less in real terms in 2019 than it had been the previous year – and was also the first annual decrease since 2003.

Population peak

Tehan told the symposium that the government was well aware that the population of young adult Australians aged 18 to 24 was going to peak in 2024 as a result of a ‘baby boom’ in the early 2000s.

“We’ve got to make sure that our higher education system will be there to deal with, to cope with, and to educate that increased cohort of young Australians,” he said.

He told the audience, which included several vice-chancellors, that it would be possible to expand university student places to meet this demand “if we are matching and aligning with government priorities”.

The government wanted to create 250,000 jobs for young Australians in the next five years, and more than 50% of new jobs would require a degree qualification, he said.

“What we need to see is a real focus from industry and business to engage with the university sector. If we get that right it will greatly enhance national prosperity.”

Australians more educated

According to Education at a Glance 2019, the latest annual education data report from the OECD, just over half of all Australians aged 25 to 34 now hold a tertiary qualification, a 9% jump over the decade.

In addition, 59% of young Australian women have a post-school qualification, outstripping the OECD average of 51%.

The report says almost nine in 10 working age Australians with a bachelor degree are employed, while 86% of those with a masters and 89% of those holding a doctorate are also in work.

In 2017, graduates with a bachelor degree earned 35% more than those with only a final year qualification from school, while masters and doctoral graduates earned 52% more.

Knowledge worker bank

Universities Australia’s Chief Executive Catriona Jackson said the OECD report confirmed that growing Australia’s ‘bank of knowledge workers’ had benefits for graduates and the national economy.

“More Australians than ever before have reaped the rewards of a university education,” Jackson said.

“We know Australia needs an increasing number of graduates with professional, technical, communication and critical thinking skills.”

But Jackson said the government’s spending freeze imposed on universities meant funding for student places would effectively decline without indexation.

In addition, the government’s ‘performance-based funding’ scheme which, although set to grow in line with Australia’s wider population increase, was also below indexation levels.

“As a new parliamentary term gets under way, the government and parliament have begun grappling with big questions on how to bolster future prosperity – particularly as there are signs the global economy may slow,” she said.

“An important element of securing that future prosperity will be the investment we make as a nation in a home-grown and highly-skilled graduate workforce.”