Jason Clare has a blueprint to radically change higher education in Australia. Can he fund it?

Education Minister Jason Clare has a new blueprint for tertiary education. Commissioned in his first months in office, and delivered last week by Mary O’Kane, the blueprint has been given the grand title of the Universities Accord.

At stake is the future of one of the nation’s largest export industries and some of the country’s most prestigious and influential institutions — not to mention the prospects of a generation of young people, who the accord says will increasingly require post-secondary qualifications in an upskilling and competitive labour market. 

Perhaps predictably, no-one is really in accord about the accord. Instead, the release of its final report has reignited a fierce debate about the future of Australian universities. 

There’s no question Australian universities need a policy overhaul. The accord’s report delivers a stinging indictment of the state of tertiary education, painting a picture of an increasingly unequal system struggling to properly teach students, or even to properly pay its staff. As eminent academic Graeme Turner wrote this week, the key takeaway is that “our universities are busted”.

Turner observes that “students are dropping out, academics are burning out, and government has been tuned out for decades”. 

Many who study or teach at a big Australian university will concur. Students are hard-pressed and disconnected. The spiralling cost of living — especially housing — means few enjoy the leisurely campus lifestyle of yore. Instead, students squeeze video lectures and overcrowded classes in between multiple part-time jobs. Unsurprisingly, university enrolments have started to plateau in recent years, and the drop-out rate is climbing. 

University staff are disaffected, many eking out precarious short-term contracts marked by insecurity and wage theft. Teaching quality is declining, while student-to-staff ratios are high and rising. 

A recent restructure at Australian Catholic University encapsulates the uncertainty academics feel. After scouring the world, ACU recruited a series of high-profile scholars in fields such as history and philosophy to boost the university’s international research profile. Just a few years later, however, ACU reversed course, announcing a string of redundancies in the very disciplines it had head-hunted for. 

What should we do? O’Kane’s final report provides a big-picture plan for reform of a sclerotic and under-funded sector. There are 47 recommendations, some of them already bitterly contested. This immediately raises questions about whether Prime Minister Anthony Albanese and Minister Clare really want bold reform. 

Some of the report’s goals seem heroic: the headline ambition of lifting enrolments from 800,000 to 1.8 million, for instance, will more than double the size of the tertiary sector. It represents a historic expansion that Clare has already compared to the growth of secondary schooling since the 1980s. O’Kane’s recommendation to boost research funding also won’t come cheap. 

Funding this expansion will require tens of billions of dollars. But the report is mostly silent on how this money should be found. Student fees are already high enough to discourage many low-income school leavers, and government funding has flatlined for decades. 

Australian universities have squared this circle by recruiting an ever larger number of lucrative international students, and using their fees to cross-subsidise domestic teaching and research. This huge cohort of foreign student revenue is the source of the universities’ proud boast that they are one of Australia’s largest export industries. 

But the international student model creates its own problems: it favours the largest and most prestigious universities, supercharging an already unbalanced sector and placing uncomfortable pressure on capital city housing and infrastructure. So many international students are arriving in our big cities that they appear to have placed measurable upward pressure on rents. 

The report’s most controversial recommendation is a kind of tax or levy on the rich universities, forcing them to contribute to a Higher Education Future Fund. Group of Eight vice-chancellors have predictably hit the roof, using their high media profile to savage the idea. The University of Sydney’s Mark Scott called the fund “bizarre”, claiming it was “a tax on universities themselves”. 

The confected outrage suggests O’Kane’s report may have hit the mark. Australian universities are very unequal. The Group of Eight universities vacuum up the vast majority of the sector’s philanthropic donations and are sitting on billions of dollars of assets, including some of the most valuable real estate in the country. O’Kane has pointed out the obvious: the sandstone unis can afford to give some wealth back to their poorer cousins at regional and suburban institutions.  

Now that the dust has settled, the battle lines have been drawn. On one side are the vice-chancellors of rich universities, like Scott and Monash University’s Sharon Pickering. On the other side are students from low-income backgrounds. In such a contest, you wouldn’t bet on the students. 

Clare’s challenge will be to convince his cabinet colleagues that university reform is as important as Navy frigates or another round of cost of living relief. And indeed, winding back the ruinous indexation of HECS and HELP repayments certainly will help many middle-age graduates struggling to make ends meet. In a speech this week, Clare hammered home the importance of “a workforce where 80% have a tertiary qualification”. 

If Clare wants that, he and Jim Chalmers are going to have to pony up a lot of cash. 

O’Kane told university bosses last week that the real question on funding was not whether we could afford it, but “can we afford not to do it?” Observers of politics will be sceptical. Governments of both major parties have considered that question in recent decades, and the answer has been “yes”. 

Disclosure: Ben Eltham is an elected representative of the National Tertiary Education Union at Monash University.