Australia (2005 study tour)

AUA study tour of Australian higher education

November, 2005

Study tour participants

Jane Bunce Academic Registrar University College, Northampton

Ian Creagh University Secretary The City University, London

Julie Davies Director of Administration, School of Social Sciences The City University, London

Edward Harcourt Assistant Registrar University of Warwick

Kylie Hicks Institute Manager, Institute of Health Sciences Education Queen Mary University of London

Stephen McAuliffe Head of Student Services University College for the Creative Arts

Deborah Ranger Marketing Manager, Department of Accounting and Finance London School of Economics

Tony Rich Registrar and Secretary University of Essex

Martin Watkinson Director of Planning The Open University

Steve Woodfield Research Fellow Centre for Policy Change in Tertiary Education University of Surrey

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Part 1: Background and context for the study tour In November 2005 the AUA sponsored a tour by a group of ten senior and mid-level career administrators from across the UK HE sector to Australian universities. The decision to conduct a AUA study tour of Australian higher education had three drivers. First, we wanted to take a comparative perspective on increased student fees. Australia’s experience of income-contingent student loans stretches back to 1988-89, when the first version of the Higher Education Contribution Scheme (HECS) was introduced by the then Federal (Commonwealth) Labor Government. HECS was the centre piece of a higher education (HE) reform package which also included radical changes in student income support (Austudy) as well as changes in the structure and financing of Australian higher education institutions (HEIs). A study of Australian HEIs, then, was expected to yield valuable operation experience of the kind of student financing arrangements about to be implemented in England in the academic year 2006-07. Second, we were curious about the extent to which Australian universities had ‘internationalised’ their agendas in response to global trends. Most British universities now place increasing emphasis on international student recruitment and wider internationalisation efforts. While the Australian higher education system and economy is only a third of the size of Britain’s, there is much to be learned from Australian institutions’ success. Whilst British higher education made the shift from ‘aid’ to ‘trade’ in international student recruitment earlier than Australia, Australian HEIs have built a reputation for innovative and aggressive marketing techniques, particularly in South East Asian markets. Education exports are now Australia’s sixth largest export and it is the third largest exporter of higher education in the world behind the United States and Britain. The third area of interest behind the Study Tour was governance arrangements. Australia’s experience of higher education governance reform has closely paralleled that in England and Wales in the past couple of years. The current spate of reform in Australia has its antecedents in the Hoare Review of Higher Education management conducted in 1994-95 1. This review canvassed many of the issues that are current in both systems today – the size of governing bodies, the model of governance under which they operate, their composition and membership, and the relationship between governing bodies and senior mangers – and provided a solid framework for the set of higher education governance protocols currently being implemented in Australia. Gaining an inside view of the higher education governance debate in Australian HE promised to provide tour participants with a more finely grained insight into one of the more topical debates in international higher education. These three themes – fee deregulation, internationalisation and governance reform – were the main focus of the AUA study tour. The approach taken by the team in conducting discussions with its Australian hosts was that of professional HE managers, with a view to understanding the dimensions of their strategic and operational management in diverse institutional settings. That said, the team conducted its initial consultations with national government and non-government bodies in Canberra ahead of its institutional discussions ensuring that both the HE and wider public policy context was well understood. Host institutions and organisations for the study tour The organisations and institutions visited in date order of meetings were as follows: • The Australian Vice-Chancellors Committee (AVCC). An industry Association whose broad

British equivalent is Universities UK (UUK); • The Commonwealth Department of Education Science and Training (DEST). DEST is the

department of state that both advises ministers on all higher education policy and programmes as well as acting as the funding authority. Its broad equivalents are the DfES and the HEFCE. Australia’s HEFCE equivalent was abolished as part of the late 1980s HE reforms;

1 David Hoare (1995), Higher Education Management Review – Report of the Committee of Enquiry (Canberra, AGPS)

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• The Australian National University, Canberra. The ANU is one of a handful of HEIs created by Commonwealth Government legislation, and is one of Australia’s premier research universities. It is uniquely funded for some of its research activity, and is a member of the Group of Eight (Go8) research universities, whose equivalent in the UK is the Russell Group;

• The University of Canberra. A new university established in the late 1980s and a member of the so called New Generation Universities;

• IDP Education Australia. A wholly owned entity of the AVCC, IDP (International Development Programme) is the international student recruitment arm of the AVCC though its remit and scope is broadening as a result of recent changes;

• University of Technology Sydney. A large, new and heavily internationalised university established in the late 80s and a member of the Australian Technology Network of universities;

• University of NSW, Sydney. A large metropolitan, comprehensive research university which along with Monash University in Melbourne, has pioneered Australian higher education internationalisation over the past 50 years. UNSW is a member of the Go8 research universities;

• University of Adelaide. An older research university with an impressive record of achievement in the bio-sciences;

• Education Adelaide. A South Australian State Government marketing authority; • University of South Australia, Adelaide. A new university established in the late 1980s and a

member of the ATN group of universities; • Charles Darwin University, Darwin Northern Territory. A new, multi-sectoral institution with a

unique mission in relation to Indigenous post secondary education throughout the Northern Territory.

Australian Higher Education Development of the HE system The early development of Australian higher education borrowed heavily from British, particularly Scottish, higher education traditions. Since the end of World War II and certainly since the late 1960s, the history of higher education in Australia, as elsewhere, has been a story of system-level transformation from ‘elite to mass higher education’ 2. Rising demand for higher education derived from changes in the demographic structure of the population on the one hand, and increasing economic demand for skilled labour – accompanied by significant shifts in the occupational structure of the labour force – on the other led to HE expansion in the 1960s, 1970s, the latter half of the 1980s and the early 1990s. 3. Along with Britain and uniquely within the OECD, Australia adopted a binary model of higher education organisation as a means of responding quickly and cheaply (at least in the initial years of this policy) to rising demand for HE in the 1960s 4. These reforms were implemented in the wake of a national review of HE. By the late 1980s, the apparent duplication, complexity and financing disparities of the binary system of organisation led to its abolition. If labour supply considerations were important policy drivers during the early years of Australian higher education ‘massification’, so too were social engineering objectives. Equality of opportunity became, and has remained, an important issue for policy in Australia, although there have been some significant departures at various times over the past 40 years. One of the more significant but fundamentally flawed HE access and equity policy experiments took place in the mid 1970s with the election of the first Federal Labor government in twenty-three years. Shortly after assuming office, the Government unilaterally abolished higher education fees, introduced a universal student income support scheme, and provided institutional teaching and research grants to HEIs 5.

2 Martin Trow (1974) Problems in the transition from elite to mass HE, Policies for HE, (Paris, OECD). 3 See Ian Creagh, Adrian Graves (2003), 'Recent trends in HE public policy in Australia and the UK', in Perspectives 7 (2) 48-53 4 Peter Scott (1996), Unified and Binary Systems of HE in Europe. In Burgen, A (ed) Goals and Purposes of HE in the 21

st Century.

(London, Jessica Kingsley Publishers) pp 37-54. 5 John Dawkins (1988) HE, a policy statement. (Canberra. AGPS); Goedegebuure, L, Kaiser, F, Maasen, P, Meek, L, van Vught, F and de Weert, E, (1993) International Perspectives on Trends and Issues in HE Policy. In Goedegebuure, L, Kaiser, F, Maasen, P, Meek, L, van Vught, F and de Weert, E (eds) HE Policy. An International Perspective. (Oxford, Pergamon Press) pp 315-348.

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The abolition of fees and the provision of untargeted living costs support had no discernable impact on the socio-economic make-up of the participating HE population for two reasons. Firstly, the measures implemented were not accompanied by related measures to improve low secondary school completion rates among low socio-economic status (SES) groups. Secondly, their regressive nature provided a direct incentive to those most disposed to participate in HE (i.e. higher SES groups) to access significant subsidies. The flawed nature of these policies played an important role in the subsequent debates about the reintroduction of student tuition fee contributions via HECS. Australian HE today Today, the HE sector in Australia comprises 37 public, three private universities and four other self-accrediting higher education providers. All but three of the universities and other self-accrediting HE providers in Australia are established or recognised under State or Territory legislation. The ANU, the Australian Maritime College and the Australian Film Television and Radio School are established under Commonwealth legislation. Australia also has over 100 HE providers approved by State/Territory authorities to offer particular programmes. These providers offer courses in a range of areas including theological studies, business and information technology and arts and health related studies. Under the Higher Education Support Act 2003 HE providers are divided into different groups, with each group eligible to receive different levels of public subsidies and grants. Currently there are 39 providers eligible to receive the full range of subsidies and grants and three others eligible to receive a limited range of subsidies and grants.

Australia’s universities – by sub-groups as defined by the AVCC

Australian Technology Network of Universities (ATN)

Curtin University of Technology Queensland University of Technology RMIT University University of South Australia University of Technology, Sydney

Group of Eight (Go8) University of Adelaide Australian National University Monash University University of Melbourne University of Queensland University of New South Wales University of Sydney University of Western Australia

Regional Universities (as defined by DEST for funding purposes – may also be a member of another group)

University of Ballarat Central Queensland University Charles Darwin University Charles Sturt University Deakin University James Cook University La Trobe University University of New England University of Newcastle Southern Cross University University of Southern Queensland University of the Sunshine Coast University of Wollongong

Innovative Research Universities Australia (IRU Australia)

Flinders University Griffith University La Trobe University Macquarie University Murdoch University University of Newcastle

New Generation Universities (NGUs) Australian Catholic University University of Ballarat University of Canberra Central Queensland University Edith Cowan University Southern Cross University University of Southern Queensland University of the Sunshine Coast Victoria University University of Western Sydney

Source: AVCC

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Constitutional arrangements – the Australian federation As a federation of six States and two Territories, and with States having pre-dated the formation of the Commonwealth, Australia’s constitution provides for an apportionment of powers between the States and the Commonwealth. Relatively early on in the new federation the states gave up their power to levy income tax. The practical effect of this is that whilst the Commonwealth wields financial power, many areas of public life – including higher education – are still the constitutional responsibility of the States. By and large, the States still designate and regulate universities and other HEIs even though they are a minority funder. As in many other public policy domains, because the Commonwealth Government has no direct control over the regulation of HE, it falls back on using its financial power to influence the evolution of the industry. This means that the Commonwealth normally achieves ‘consensus’ with the States around its policy goals by ‘buying’ their support either through the allocation of new funds, or withholding these funds in return for changes in practice. This lends a unique flavour to the political process and is subtly different to the way central/regional political processes operate in a unitary political system. As a geographically large, sparsely populated and highly urbanised nation, most Australian universities are located in and around the major cities. A majority of universities are relatively large, comprehensive institutions drawing on a student body within their immediate or contiguous geographic region. The average equivalent full time student load of the 37 publicly funded universities in 2004 was 11,144 EFTSU. International comparisons According to figures from the OECD: 6 • the participation rate in higher education in Australia is comparatively high (about 68 per cent - on

the same measure, participation in the UK is 48 per cent); • the private rate of return to a first degree is about 7 per cent (in the UK it is more like 13 per

cent); • the private investment in higher education is quite large (just over 50 per cent, compared to under

30 per cent in the UK), which means there is a slightly smaller difference in the social rates of return (about 8 per cent in Australia and about 13 per cent in the UK);

• over recent years there has been an increase in private investment alongside a decrease of 10 per cent in public investment in higher education;

• the non-completion rate is slightly over 30 per cent in Australia (17 per cent in the UK). Universities and research Apart from the Commonwealth Scientific and Industrial Research Organisation (CSIRO) universities play the primary role in Australia’s research and innovation system with the bulk of pure, strategic and applied research and research training being conducted in universities. Research and Development expenditure in Australia is running at 0.45 per cent of GDP, which compares with the OECD average of 0.41 per cent.

6 Education at a Glance (2005). OECD Indicators 2005 (Paris, OECD)

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In: Nelson, B (2005) Higher Education Report 2004-05. Commonwealth of Australia, Canberra ACT

Higher education financing arrangements Total revenue for Australian HEIs in 2003 was A$11.9 billion. The Commonwealth Government is still the largest source of revenue for the sector and its outlays, through grants and student loans, accounted for 59 per cent of the sector’s revenue in 2003. The three major categories of revenue were: • Australian Government grants; • HECS payments; and • Fees and Charges. State governments only supply about 2 per cent of the sector’s revenues.


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In 2005-06 the Commonwealth Government will provide $7.8 billion for higher education. 7 The Commonwealth’s direct contribution to the financing of Australian HE has been falling, largely as a result of the introduction of HECS and the deregulation of international student and postgraduate student fees. In 1986, immediately prior to the introduction of HECS, the Commonwealth contributed more than 80 per cent of higher education institutions’ income; by 2004 this had dropped to 28.6 per cent. From 2005, the majority of Commonwealth funding for the higher education sector is administered under the Higher Education Support Act 2003. Other funds for the sector are provided through a range of grants, including for Quality, Equity, Research and Research Training, Collaboration, National Institutes, Workplace Productivity, Learning and Teaching, Superannuation and the Capital Development Pool. Funding is also provided in the shape of assistance to students through the Higher Education Loan Programme (HELP – which will progressively replace the HECS programme over the next several years) and through a range of scholarships designed to help students from disadvantaged backgrounds. Commonwealth Government expenditure on higher education programmes is administered through the DEST portfolio. The Commonwealth proposes to monitor the filling of new places – and other elements of the funding formula -- through an Institution Assessment Framework, introduced in 2004, which involves assessment by DEST of universities': • sustainability, particularly their planning processes and financial viability; • achievements in higher education provision; • quality of outcomes; and • compliance with legislation and guidelines. Some HE research infrastructure funding is provided through the Commonwealth Government's institutional funding of universities, but the bulk of these funds is provided though the Australian Research Council, the equivalent of the UK's research councils. Prior to the introduction of the new Commonwealth Grant Scheme, Capital funding from the Commonwealth government was distributed via a project-driven bidding process. This evolved into a system whereby capital funds were ‘rolled-in’ to institutions’ block operating grants against which universities reported how they had used these funds. Capital funding is now included in the recurrent funding for student places under the CGS, with no reporting on its use. Students In 2004, a total of 944,977 students attended publicly funded Australian HE. They comprised 716,422 domestic students and 228,555 students from overseas.

These students were undertaking the following types of study:

• Undergraduate - 657,935

• Postgraduate - 257,769

• Other (Enabling and Non-award courses) – 29,273

In 2004, New South Wales continued to have the largest number of student enrolments (296,546), followed by Victoria (241,755), and Queensland (182,569). Between 2003 and 2004 all States and Territories, apart from New South Wales and the Northern Territory, experienced increases in the number of students attending university in their State/Territory.

7 Brendan Nelson (2005) Higher Education Report 2004-05 (Canberra ACT, Commonwealth of Australia)

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In: Higher education student statistics and Nelson, B (2005) Higher Education Report 2004-05. Commonwealth of Australia, Canberra ACT

International student enrolments In 2004, 51 per cent (or 72 per cent including offshore) of the total international student enrolments were in the HE sector, with a total of 164,535 onshore international HE student enrolments. While Australia attracts international students from a diverse range of countries, in 2004, students from the Asian region represented 78.2 per cent of international enrolments across all sectors. In the HE sector, 82.1 per cent of international students are from the Asian region. In 2004, 58 per cent (132,430) of international HE students were enrolled in undergraduate studies, the same percentage as in 2003. There were 84,610 postgraduate students enrolled in 2004. The majority of postgraduate enrolments (79 percent) were for Masters by Coursework. There has been significant growth in offshore enrolments in HE during the past few years, with offshore student numbers increasing 321 per cent between 2000 and 2004. Offshore delivery accounted for 35 per cent of all overseas enrolments in 2004. Countries with large numbers of students studying offshore in 2004 included Singapore (60 per cent), Hong Kong (51 per cent), Malaysia (44 per cent) and China (23 per cent).


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Staff in Australian higher education In 2004 there were over 87,000 staff working in Australian higher education institutions. More than half of these staff were non-academic staff and almost 53 per cent of all staff were women. The number of staff employed on teaching only contracts has increased in recent years as has the number of research only staff.


Nearly twice as many academic staff involved in teaching taught in the field of ‘society and culture’ (covering disciplines such as languages, economics, law, psychology and studies in human society) than in fields such as science, health, management and commerce.


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Key higher education policy trends, themes and tensions There are several discernable policy trends evident in Australian higher education at this time. These are as follows: Diversification and ‘marketisation’ The current Commonwealth Government, under Prime Minister John Howard, has sought to diversify the system in a variety of ways. Specific measures include, for example: • The on-going decline of direct Commonwealth subsidies to publicly funded HE institutions as a

proportion of their total revenues; • With the involvement of the States, the formal re-consideration HE accreditation arrangements,

including the re-examination of ‘self-accreditation’ mechanisms and whether these should be extended to ‘other’ HEIs, as well as the creation of ‘specialist’ institutions;

• The partial deregulation of undergraduate fees, with institutions now able to charge up to 25 per cent more in fees than the maximum HECS contribution. However, as in England, almost all institutions have charged the maximum amount thus delivering no price differentiation, at this time;

• Income contingent loans for students who have not been offered a HECS-liable, Commonwealth funded place;

• In partnership with State Governments, special purpose start-up grants for foreign institutions. The most notable example of this is the grants in aid provided to the Carnegie-Mellon Business School to set up in Adelaide, South Australia; and

• Research funding arrangements designed to further concentrate research in fewer research intensive universities. An RAE-inspired Research Quality Framework is in development. Teaching-only universities appear to be favoured by the current Government and it appears that it is looking for a resource allocation model that provides the ‘correct’ incentive for universities to pursue this mission.

Internationalisation Revenue derived from international students has doubled since 1999. In 2003, approximately 14 per cent of Australian higher education institutions’ revenue was derived from international student fees. As noted previously it is now one of Australia’s highest performing export industries. The Commonwealth Government has begun to invest heavily in a regulatory infrastructure managed out of DEST to assure the quality of the Australian higher education ‘brand’ both in relation to on- and off-shore delivery arrangements. Governance DEST has recently introduced a set of national Governance Protocols, and compliance by HEIs has determined whether or not they receive incremental increases (commencing at 2.5 per cent in year one, and 7.5 per cent in year three) in their base Commonwealth Grants Scheme funds. In terms of content and direction, the governance protocols share much in common with the CUC governance codes of practice adopted in England and Wales in 2005, the key difference being that the latter is (theoretically) voluntary and is not tied to funding increases. Workplace relations The new Commonwealth Grant Scheme prescribes a range of new Higher Education Workplace Relations Requirements. Their stated aim is to provide Universities with greater flexibility in terms of their ability to attract and retain staff. The Government’s reform agenda in this domain is part of wider agenda to deregulate the labour market. In crude terms, however, the higher education workplace relations requirements are designed to tip the balance of power away from the National Tertiary Education Union towards employers. Union involvement in agreement making, staff

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contracts and human resource matters is no longer guaranteed and will only take place if specifically requested by employees. The Government’s opposition to compulsory student unionism and active promotion of voluntary student unionisms is motivated in large part by its policy position in relation to industrial relations. Notwithstanding the deregulatory thrust and market orientation of much of the current Government’s policy thinking, the implementation of its reforms has been accompanied by a raft of bureaucratic regulation. The new student financing arrangements, in particular, have required a high degree of prescription from Government to ensure that the links between DEST, universities and the Australian Taxation Office are water tight. Quality assurance The Australian HE quality assurance framework encompasses a variety of roles for both the Commonwealth and the States and has been the subject of significant political interaction between them in recent times. The joint Commonwealth and States Ministerial Council on Employment, Training and Youth Affairs (MCEETYA) is the political fulcrum which both endorses policies as well as carrying forward any legislative changes that might be required at state and federal levels. The policy debate around QA has focussed on: • Accreditation – particularly with regard to international providers operating physically and virtually

in Australia; • Protection of the term ‘university’ in all legislative jurisdictions; • Quality audit – both in relation to onshore and offshore provision; • The national qualifications framework; • National surveys of students; • The assessment of graduate skills; • The introduction of a Research Quality Framework – Australia’s version of Britain’s RAE. Re-alignment of Commonwealth-State relations The Commonwealth released a discussion paper in 2004 on issues surrounding the roles and responsibilities of the different levels of government in relation to HE, policy, financing and regulation. The discussion paper floats the notion of the Commonwealth taking on greater regulatory responsibility in domains such as: • HEIs’ fiduciary responsibilities and powers and land use regulation; • Governance and management; • HEI accreditation. Voluntary student unionism The current Commonwealth Government has adopted a firm stance on this matter with one of our hosts suggesting that the current Minister considered it to be a totemic issue. HEIs are generally vehement in their opposition, at least to the financial implications of students choosing not to belong to student unions resulting in a diminution of core student services that HEIs believe they would then need to fund. As far as we could gauge, the sector’s attempts to have these financial implications recognised and appreciated by Government had hitherto failed.

Part 2: Funding, fees and financial support in Australian HE Introduction In 2004 Australian institutions drew about 43 per cent of their revenue from Government (41 per cent from the Commonwealth Government and 2 per cent from State Governments) and another 39 per cent from student contributions, fees and other charges. The equivalent proportions in 1996 were 58 per cent and 25 per cent demonstrating that in Australia, as in the UK, there has been a major rebalancing of financing from public to private funding. The remainder (18 per cent) came from consultancy and contract research, royalties, donations and bequests, and other relatively small revenue sources. This section of the report describes and analyses the impact of current arrangements for securing government and student contributions to the costs of higher education. We also look at the steps taken by the Commonwealth government in recent years to broaden participation through the introduction and development of income-contingent fee and loan schemes. Funding

The Commonwealth Government determines the number of higher education student places it is prepared to support each year and sets the contribution that it will make to each student place. The DEST allocates these ‘Commonwealth Supported’ places to eligible HE providers each year. Each HEI receiving funds enters into an annual funding agreement with the Government. The funding agreements specify the number of places and the discipline mix that the Commonwealth will support. In determining the allocation of Commonwealth Supported places to HEIs, the DEST takes into account:

• Present and future skills needs of the nation, employment opportunities and employer needs;

• population growth;

• reasonable demand for places from students;

• the priorities of State and Territory Governments in economic and social development;

• the need to sustain and grow provision in discipline areas of national importance and in national priority areas;

• the sustainability of HE provision in regions;

• the sustainability of providers and the capacity of providers to deliver the places and a quality learning experiences;

• the opportunity for collaboration with vocational education and training (VET) providers;

• the strategic priorities of HE providers.

The DEST allocates ‘Commonwealth Supported‘ places to providers in specific discipline areas at specific campuses.

The discipline areas are called ‘Academic Clusters’. The student places are expressed in terms of equivalent full-time student load (EFTSL). Each FTSL carries a specified Commonwealth contribution (base funding per EFTSL) and, from 2005, a maximum allowable student contribution (HECS Contribution). The size of the respective contributions varies between academic cluster.

The contribution levels are adjusted each year for inflation. In addition, Commonwealth contribution amounts will increase by 2.5 per cent in 2005, 5 per cent in 2006, and 7.5 per cent in 2007 for HE providers that comply with the National Governance Protocols and the Workplace Relations requirements.

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Institutions are required to achieve the student number targets set for each academic cluster or else to constrain growth within 5 per cent. Institutions may not vire across clusters. Recruitment below 5 per cent leads to loss of funding. Recruitment above 5 per cent leads to loss of funded student places. Institutions are additionally able to enrol fee-paying students but only after all Government places are filled and provided that there are no more than 35 per cent of fee-paying students on a course. Most fee-paying students are on over-subscribed courses with high entry requirements, such as law. It is interesting to note that the entry requirements for home students to full-fee-paying courses may well be lower than for supported places. Students are prepared to pay to access those institutions with the best reputations in their chosen subject area. It is questionable if this has any risk for institutional reputation. Some students pay full fees for the first year and hope to transfer to supported places in subsequent years. Retention may be affected by this strategy as supported places may not be available.

Other public funds for the sector are provided through a range of grants, including for Quality, Equity, Research and Research Training, National Institutes, Superannuation and Capital Development. Funding incentives are provided for excellence in learning and teaching and for collaboration.

Fees and student contributions

The HEI determines the amount of the student contribution (i.e. fee) within a range set by the Australian Government. The range is dependent on the band in which a subject falls. On average, students contribute about 25 per cent of the cost of their education.

Funding Cluster

Commwealth

Contribution ($A)

Max Student

Contribution ($A) Total ($A) Fee Band

1 Law 1,472 8,018 9,490 D

2 Accounting, Admin, Economics 2,420 6,849 9,269 C

3 Humanities 4,078 4,808 8,886 B

4 Mathematics, Statistics 4,817 6,849 11,666 C

5 Behav. Science, Social Studies 6,475 4,808 11,283 B

6 Computing, Built Env., Health 7,212 6,849 14,061 C

7 Foreign Languages, Art 8,869 4,808 13,677 B

8 Engineering, Science 12,003 6,849 18,852 C

9 Dentistry, Medicine, Vet, Science 15,047 8,018 23,065 D

10 Agriculture 15,996 6,849 22,845 B

11 Education 7,116 3,847 10,963 A

12 Nursing 9,511 3,847 13,358 A

A Education 7,116 3,847 10,963

A Nursing 9,511 3,847 13,358

B Humanities 4,078 4,808 8,886

B Behav. Science, Social Studies 6,475 4,808 11,283

B Foreign Languages, Art 8,869 4,808 13,677

C Accounting, Admin., Economics 2,466 6,849 9,315

C Mathematics, Statistics 4,817 6,849 11,666

C Computing, Built Env., Health 7,212 6,849 14,061

C Engineering, Science 12,003 6,849 18,852

C Agriculture 15,996 6,849 22,845

D Dentistry, Medicine, Vet, Science 15,047 8,018 23,065

Source: Nelson, B (2005) Higher Education Report 2004-05. Commonwealth of Australia, Canberra, Act

Funding per EFTSL, and student contributions, 2005

Fee Bands

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In addition, the HEI determines the fees to be paid by non-Commonwealth supported students, including overseas students. The fee charged to these students, whether studying on shore or offshore, must be equal to or above the fee charged to a Commonwealth-supported student. There is no maximum limit.

Since 2005, HEIs have been allowed more discretion is setting student contribution levels. Prior to 2005, HEIs were obliged to charge the fees prescribed by Government. Between 1989 and 1996, institutions were required to charge a single, flat rate fee to all students on Commonwealth-supported places. Between 1997 and 2004, they were required to charge differential fees, the differences reflecting broad differences in subject area. Since January 2005, fee-setting has been notionally devolved to HEIs though in practice the Commonwealth Government sets maximum levels on the fees that can be charged to Commonwealth-supported students and minimum levels on the fees that are charged to others. The new maxima are 25 per cent higher than the previous statutory level.

These new arrangements are intended to allow institutions greater flexibility to respond to and influence the market and to encourage greater differentiation between institutions and courses. In practice, all but two institutions have decided to charge the new maximum rate immediately or to move to it over two years. The Australian National University has taken a principled decision not to charge the higher rates.

Fee support

The Australian Government has provided help to students with fee payments for over 15 years. In 1989, one year after the creation of a unified national system of higher education, the Government introduced fee loans under a system known as HECS. This survived with some modification until 2004.

HECS was replaced in 2005 by another a similar loan scheme known as the Higher Education Loan Programme (HELP). The characteristics of this scheme are described below.

(a) HECS-HELP

Under current arrangements Australian citizens are eligible to enrol on a unit of study as a Commonwealth supported student. The HEI determines whether to accept them. Most do so on the basis of merit (i.e. points score). A student admitted to a Commonwealth-supported place can apply for HECS-HELP.

Students eligible for HECS-HELP can:

• Make full up-front payment of the student contribution and receive a 20 per cent HECS-HELP discount (previously 25 per cent);

• Obtain a HECS-HELP loan for the entire student contribution;

• Make partial up-front payment of the student contribution, receive 20 per cent HECS-HELP discount on payments of $500 or more, and obtain a HECS-HELP loan for the remainder.

These arrangements must be in place by the census date for a given unit of study. The HEI will set the census date for the unit of study to be at least 20 per cent of the way into the unit. Students who withdraw at or before this point will not incur a HECS-HELP debt for that unit of study.

The Australian Taxation Office is notified of the amount of the student’s HECS-HELP debt and records this against the student’s Tax File Number (TFN). The HECS-HELP debt becomes part of the students’ accumulated HELP debt and is indexed by the Tax Office on 1 June each year in line with the Consumer Price Index. No real interest is charged on the debt.

When the student’s repayment income rises above the minimum threshold for the income year, the student commences compulsory repayment of the HELP debt. The student may also choose to make voluntary repayments at any time to the Tax Office and receive a 10 per cent bonus on payments of $500 or more. The minimum repayment threshold was increased significantly to

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$35,000 in 2004-05 and rises to $36,184 in 2005-06. The compulsory payments increase as salary increases so the more a graduate earns, the higher the repayments until the debt is repaid. Currently, the average repayment time is 7.1 years (for fully repaid debts). Some 20 per cent of debt is expected never to be repaid.

This system applies equally to full-time and part-time students. All students are eligible for HECS-HELP. The level of their contribution is fixed in relation to the study load they take.

(b) Fee-HELP

Those who do not obtain or are not eligible for a Commonwealth supported place are required to pay the full tuition fee set by the HE institution. These include some 16,000 domestic undergraduate students (3 per cent of all such students) and 105,000 domestic postgraduate students (61 per cent of all such students). They are known as full fee-paying or non-Commonwealth supported students. Under the reforms of 2003, they can now apply for FEE-HELP assistance to help pay tuition fees. This replaces a number of separate loan schemes, including the postgraduate education loans scheme (PELS).

Students eligible for FEE-HELP assistance can:

• Make full up-front payment of tuition fee to their provider;

• Request FEE-HELP assistance for the whole tuition fee;

• Make partial up-front payment of the tuition fee and request FEE-HELP assistance for the remainder.

The same arrangements as for HECS-HELP then apply except that (a) there is a lifetime loan limit of $50,000 (annually indexed) and (b) there is loan fee of 20 per cent for FEE-HELP loans for undergraduate courses of study but not for postgraduate study or for courses taken with Open Universities Australia (OUA). FEE-HELP is available to students taking units of study through OUA which are not part of a course of study.

Fee-HELP is designed to help reduce the level of unmet demand for undergraduate courses (and increase private funding of HE) by enabling students to enrol as fee-paying students at both publicly-funded universities and at private HE institutions. So far 38 private providers have been approved for this purpose. Significantly, a foreign private provider (Carnegie Mellon University) has also applied successfully to operate a branch in Australia from 2006. FEE-HELP is also designed to encourage lifelong learning and the upgrading and acquisition of new skills by enabling enrolment on postgraduate courses.

(c) OS-HELP

OS-HELP is a loan that assists eligible students who are based in Australia to undertake some of their study overseas. The overseas study undertaken must count as credit towards the course of study at the home provider.

Students may receive up to $5,000 per six-month study period for one or two overseas study periods. The loans are intended to help students with a range of expenses such as airfares and accommodation.

Current numbers of Australian students studying overseas are low compared with international standards. This scheme is intended to enable more students to acquire the sorts of knowledge, skills and experience that will enable Australia to develop international relationships and engage in international trade in the future.

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Student learning entitlement

The SLE gives eligible students access to Commonwealth Supported places for a period of seven years of equivalent full-time study. Though an entitlement it also acts as a ration, enabling new entrants to occupy places freed by students who have consumed their entitlement.

The SLE is made up of:

• ordinary SLE (7 EFTSL);

• any additional SLE (for undergraduate courses taking longer than 6 years);

• from 2012, lifelong SLE (1 EFTSL at age 27 and 0.25 EFTSL every 1 January thereafter).

Each student will, from 2005, have a Commonwealth HE Student Support Number (CHESSN) and the DEST will record each student’s SLE against their number on the DEST database and adjust the balance as the entitlement is consumed. Students can augment their SLE by enrolling for units of study as a non Commonwealth supported student and thus pay the full fee.

Bursaries and financial support

Commonwealth Learning Scholarships (CWS) are increasingly being made available to help students from equity groups (such as regional, remote and indigenous students) with educational and accommodation costs. The Commonwealth Government has set aside £327 million for this purpose in 2005.

Financial support for students while they are studying has traditionally been provided by Centrelink, a government agency of the Department of Human Services. Assistance is provided as aYouth Allowance for full time students between the ages of 16-24, Austudy for full time students over the age of 25 years and Abstudy for indigenous Australians. There is also specific support for geographically isolated students who need to relocate to study. This is income & asset tested and aims to support students from low income backgrounds. To be eligible students must be Australian citizens or permanent residents studying an approved course at an approved education institution.

Due to this reason there is no widespread system of bursary or scholarship and no expectation of universities that they should be providing such support. Population in Australia is largely concentrated in urban areas along the eastern and southern seaboard and students tend to study at institutions close to home. Expenditure on outreach programmes designed to break down other barriers to participation is accorded higher priority, especially amongst those institutions with a mission to widen access.

Impact of the changes on participation levels

HECS was introduced in 1989 as part of a comprehensive higher education reform programme. Given the evidence of significant private rates of return to those participating in higher education, it was hailed as a fair means of balancing the need for financing the expansion of higher education opportunities with a desire to ensure that those who benefited most directly from going to university shared some of costs. Its deferred payment characteristics were, it was claimed, equitable and would encourage those from low socio-economic (SES) backgrounds to participate more in HE. The response of individuals to the impact of HECS has been analysed in a number of studies by Les Andrews, Bruce Chapman and others. Andrews investigated the impact of HECS on the level of applications to higher education institutions. He found that applications from school leavers fell slightly following the introduction of HECS in 1989 while those from mature persons went down slightly following the 1997 changes. Both falls in demand as measured by the level of applications amounted to about 5–7 per cent of total applications. It should be noted that this does not imply that

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the number of enrolments also declined as the number of applications has always exceeded the number of places offered in any year, rather the level of unmet demand for places was reduced. 8 Since Andrews reported, the Commonwealth Government has allowed institutions to increase student contribution levels by up to 25 per cent. These increases came into effect in 2005 but were first announced in 2003. During 2003 and 2004 there was a marked increase in applications as students sought to beat the fee rise. Though applications for 2005 and 2006 have fallen, they have only fallen back to 2001 and 2002 levels. Nevertheless, there has been some evidence of increased demand for the most popular courses and the most prestigious institutions, as students seek to gain maximum perceived value for their contribution. Bruce Chapman and others have looked at the relationships between HE participation rates and measures of family wealth. They have concluded that the introduction of HECS has not acted as a deterrent to those from low wealth groups. Indeed, they have argued that the relatively disadvantaged were less likely to attend university when there were no student fees than under HECS. 9 Andrews has examined the importance attached to financial considerations amongst those making decisions about participation in HE (Andrews. 1999). He found that people from low socio-economic backgrounds were more likely to decide against entering HE for reasons related to values and attitudes towards HE than for financial reasons. HECS was not a main reason given by individuals for failing to participate in higher education. This confirmed research published by the Higher Education Council in 1992 and by Robertson in 1990. 10 The DEST has also been monitoring the effects of HECS on various social groups (see, for example, HECS and Opportunities in Higher Education, DEST, 2003). The Commonwealth Government has identified a number of groups as targets for equity planning, on the basis of their history of relative disadvantage in accessing HE. The groups are: students from low socio-economic backgrounds; students from rural and isolated areas; students with disabilities; students from non-English speaking backgrounds; and Indigenous students. The progress of these groups has been varied. While the aggregate number of students from these equity groups participating in higher education has increased significantly overall, with the exception of women and students with disabilities, the rate of participation has not changed substantially. Overall, students from these groups have tended to achieve success and retention outcomes comparable to that of other students, indicating that increasing access continues to be the key issue for improving equity outcomes.

8 Les Andrews (1999) Does HECS Deter? Factors affecting university participation by low SES groups. Occasional Paper Series, 99F (Canberra ACT, DEST). 9 BJ Chapman, and T Chia (1989), Financing Higher Education: Private rates of return and Externalities in the Context of the Tertiary Tax, Centre for Economic Policy Research, Australian National University, Discussion Paper No. 213, 1989; and BJ Chapman, and T Salvage (1997), ‘Changes in the Costs for Australian Higher Education Students from the 1996/97 Budget’, in Australia’s Future Universities, Edited by J Sharpman and G Harmon (Armidale, UNE Press) 10 Higher Education Council (1992), Sixth Report to the National Board of Employment, Education and Training on the Operation of Section 14 of the Higher Education Funding Act 1988 and the Higher Education Contribution Scheme (Canberra, NBEET); Higher Education Council (1998), Twelfth Report to the National Board of Employment, Education and Training on the Operation of Section 14 of the Higher Education Funding Act 1988 and the Higher Education Contribution Scheme (Canberra, NBEET); F Robertson, J Sloan, and N Bardsley (1990) The Impact of the Higher Education Scheme (HECS), Evaluations and Investigations Program (Canberra, DEETYA).

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In: Nelson, B (2005) Higher Education Report 2004-05. Commonwealth of Australia, Canberra, Act

While students from low SES backgrounds are under-represented in higher education institutions, this is a long term concern which has not worsened following the introduction and changes to HECS over the past decade and more. Survey findings indicate that HECS is not a main reason given by individuals for failing to participate in higher education. The financial returns to undertaking higher education remain high after the introduction and changes to HECS. HECS does not appear to have substantially affected the level of applications or enrolments of students in general although little can be said concerning students from low SES backgrounds. Given HECS is a deferrable contribution towards students’ education it is not surprising that the demand response to the cost increase associated with HECS has been mute. Impact of recent changes on HEIs A major cost to HEIs has been the resource costs of implementing the scheme. The Commonwealth Government’s contribution to start up and recurrent costs of implementing the new student financing arrangements has been minimal. The impact has varied between institutions depending on the student record system being used. In some cases this complexity has resulted in heavy costs in man hours, for example at the University of Canberra. The income contingent loan scheme has required multiple interfaces with central government authorities and the taxation system e.g. every student has been issued with a unique identifying number. The complexity of the process of meeting targets within academic clusters has resulted in drawing back coordination control from faculties and placing in it within central departments. Meeting these targets was likened to landing a jumbo jet on an aircraft carrier in a storm. Penalties are in place for over and undershooting targets.

There has also been a need to develop more sophisticated arrangements for the delivery of student services. The so called “one-stop-shop” was almost ubiquitous, with rapid developments taking place in areas such as integrated on-line interfaces and 24x7 services. Information Systems development is at the core of all of this as the complex array of financial interactions between HEIs, students and Commonwealth Government third parties is integrally linked to funding and revenue collection, as well as avoidance of sanctions for not meeting student number targets.

Student centres are being established both to manage the re-payment of loans but also to meet student expectations in relation to information and services. On-line student services are being provided such as the MY University student portal at UNSW.

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Impact on student behaviour and expectations The introduction of the new regime has resulted in a major emphasis on public communications and student services. It was thought that once the students appreciated the investment they were making in their education the number of complaints and appeals would become an issue. However, the recent changes have not driven appreciably ‘new’ behaviours among the student body. Amongst the providers, on the other hand, there is an almost universal emphasis on the need for greater levels of ‘flexibility’, choice, online/anywhere to meet perceived student expectations.

Students are concerned with the quality of the course they are paying for and their expectations have to be managed. Students, we were told at a number of institutions, will withdraw if they do not feel that the course they are receiving is what they were lead to expect and they will demand their money back!

In the Australian system, funding is against credit. While this increases the complexity for the administrative departments, at the same time it does enable students to find or choose their own pace of study. As most Australian students live at home and work whilst they study, they can choose how many units to study in any one year. They are limited by the maximum amount of loan over a five year period. The system funds full and part time students on the same basis.

Longer term issues

The impact of student loans and resulting student debt may well have longer-term implications. Concern was expressed that students graduating with larger debts resulted in less disposable income leading to reduced life style choices. Fee debt may also result in upward pressure on starting salaries as graduates looked for increased pay to absorb the fee debt repayments. It was considered that debts would have a greater impact on women who would have the debt for longer if they took breaks from employment to have children. In fact, some graduates may never find themselves in a position to repay their loans and this could have implications for the national debt. On the other hand, aggregate participation in HE shows no signs of slowing and has grown steadily since the introduction of the first income contingent fees scheme – HECS – was introduced in the late 1980s.

Part 3: Internationalisation of HE in Australia Australian universities are well known for a strong commitment to internationalisation as a response to the globalising trends in higher education.11 Indeed, in terms of international student recruitment, the articulation of strategic intent, and the organization of management structures to address globalising trends, the Australian HE sector is perceived to be ahead of the US and British sectors. Our study tour confirmed this reputation: the Australians give an institutional and sectoral priority to internationalisation that is still gathering force within the UK and the US. A simple way of illustrating this is to point your browser to the homepage of the University of Technology Sydney (UTS), where five headline menu options for viewers are provided ranked in the following order:

• About UTS • Working at UTS • UTS International • Research & Innovation • Teaching & Learning

No British university gives such clear prominence to an internationalisation agenda and the UK sector has much to learn from Australia –both in terms of what has been achieved as well as present and future challenges. The achievements are self-evident, but amongst the challenges we observed is that the Australian sector is struggling to face challenges in student recruitment, concerns about off-shore quality, and, paradoxically, concerns that offshore activities may lead to cannibalisation of onshore delivery. It is also an open question as to just how international Australian universities have become in comparison with universities in the US and the UK. On some of the key performance indicators— for example curriculum reform, and student exchanges and mobility—the Australians still have a long way to go before they can truly badge their HE sector as being international in profile. Our visits suggested that universities are taking quite different approaches to engaging the international arena. These differences are conditioned by institutional culture, especially historical circumstance, strategic orientation, and attitude toward risk. Whereas universities such as Monash and New South Wales have campuses in other countries, others such as the University of Adelaide (UofA) and the Australian National University (ANU) both have a ‘no bricks and mortar’ overseas policy and are in the process of repatriating most of their off-shore delivery activities. Some summary observations will serve to indicate the scale of Australia’s achievements in recent years while introducing some of the challenges. Student recruitment Australian universities have recruited historically from SE Asia since the early 1960s, but between 1996 and 2003 the number of international students quadrupled from 53,188 to 210,397 some 22.6 per cent of the country’s total higher education enrolments.12 International income is important to almost all institutions and is growing, particularly in terms of postgraduate student enrolments. Revenue derived from international students has doubled since 1999 and in 2003 approximately 14 per cent of Australian higher education institutions’ revenue was derived from international student fees. The split between undergraduate and postgraduate enrolments is about 60:40. Traditionally, Australia has recruited from SE Asia—especially Singapore, Malaysia and Hong Kong—with China and India now recording huge growth in recent years. In 2004, 76 per cent of overseas students were recruited from the Asia Pacific region and the US. Between 2002 and 2003 recruitment from China increased by 38 per cent and from India by 33 per cent.

11 For a recent review, see Grant Harman, “Australia as an Higher Education Exporter,” in International Higher Education No. 42 (Winter, 2006). See also IDP’s most recent report on “International Students in Australian Universities”, available at http://www.idp.com/research/fastfacts/article406.asp (last accessed 20 January 2006). 12 Private colleges attract an additional 30,000 international students. In addition, public universities enrol between 8-10,000 study-abroad and exchange students. Harman, “Australia as an Higher Education Exporter”, and Australian Vice-Chancellor’s Committee website, http://www.avcc.edu.au/documents/publications/stats/International.pdf (last accessed 13 January 2006).

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As we have seen in the UK and US markets, however, growth in enrolments in 2005 dropped from around 10 per cent in the first half of the year to about 8 per cent in the second half. Enrolments are expected to continue to decline, largely in response to the development of indigenous HE sectors (often with the cooperation of international partners) in Malaysia, Singapore, and Hong Kong. Indeed each of these countries sent fewer students to Australia in 2005. Growth in enrolments, however, remains strong from India (33.2 per cent in 2005), China (17.9 per cent) and South Korea (10.6 per cent). 13 We saw some evidence that universities want to address this high level of dependence on a small number of markets by diversifying to regions such as India, Middle East and South America. In-bound Study Abroad from the US also appears to be important to some universities. In developing strategies for effective recruitment of overseas students, Australian universities use a mix of agents, networks and in-house International Office staff. IDP (Independent Development Programme – a marketing agency for international student recruitment owned by 38 Australian universities) has a network of global offices in over 30 countries, as well as substantial expertise in recruiting international students, developed since the 1960s. As Australian universities are starting to operate in an increasingly competitive environment, some universities (e.g. UNSW) are maintaining and strengthening their relationship with IDP, who have an exclusive contract to recruit to the UNSW campuses in both Sydney and Singapore. UofA, however, reported mixed experience with IDP and prefer to rely upon their own networks. ANU, interestingly, is seeking to develop a compact with Sydney and Melbourne to market themselves collectively in North Asia (China and Japan) and the Middle East. They plan to identify areas of activity that are complementary and not competitive, to more effectively utilise their joint resources for international student recruitment. Offshore experience

13 2005 enrolment figures from Australian Educational International report issued 20 December 2005, available on-line at http://aei.dest.gov.au/AEI/MIP/ItemsOfInterest/05Interest101.htm (last accessed 10 January 2006).

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Offshore experience appears to be very similar to the UK—i.e. it is increasing amidst some concerns about quality. Over the past two decades Australian universities have developed considerable off-shore activities in a variety of partnership models. In 2005 about one third of international students were enrolled on programmes delivered outside of Australia. All the universities we visited have partnership agreements with overseas institutions for course delivery. In recent years, however, these arrangements have come under the critical scrutiny of the Australian Universities Quality Agency and a new framework for quality assurance in Australian off-shore provision is currently under review14. Simultaneously, many universities have begun to question the value of off-shore provision, especially within China, and some have begun to downsize significantly their overseas course delivery. Some universities are withdrawing to home ground in response to the perceived risks of off-shore delivery. UofA, with only two limited off-shore teaching commitments (in Singapore and Malaysia), has a firm policy of preferring to teach international students in its own buildings partly because they insist on using their own full-time academic staff. They consider the “Adelaide experience” as something that will attract international students to their campus, and have a network of active alumni across the Asia-Pacific region to support the institution in its student recruitment efforts. Some Australian universities, growing in number, have campuses overseas. The majority of these are commercial partnership arrangements where the Australian provides the brand name and the academic programmes. But in three notable cases Australian universities have developed their own campuses and fully own their operations. The first to develop an overseas campus was Monash, which has a commercial campus in Malaysia and a fully-owned operation in South Africa.15 RMIT University has recently become the first foreign private university in Vietnam with a purpose-built campus financed with World Bank and Asian Development Bank loans. And UNSW will be the first international university to set up a full and comprehensive campus in Singapore in 2007. The perception within the sector, however, is that the financial and reputational risks of opening large-scale campuses overseas are too great. Monash, we were told, has ‘lost a lot of money overseas’, and most of the senior executives we spoke to were sceptical of the advantage gained by UNSW in developing a fully-owned operation in Singapore financed largely by soft loans from Singapore’s Economic Development Board and the government of New South Wales. UNSW was a clear outlier among the institutions visited concerning international students, international relations and offshore activity, as well as an appetite for risk. UNSW see this activity as an opportunity to develop their presence in the region and to promote excellence in teaching and research but also to develop efficient and responsive student services and support, taking lessons from their experiences in their Sydney campus. They have also branded their international activities under the umbrella slogan of “1 University, 2 Countries, 3 Cities”. Older research universities (e.g. ANU, UoA) are tending to pull back offshore exposures whereas others (e.g. UNSW) see it as part of their mission. Newer institutions—such as the University of Canberra and the University of Southern Australia—are tending towards an increase in exposure largely for financial reasons. IDP is also changing, partly in response to the heterogeneous activities of its constituent members but largely because of the emergence of Australian Education International (AEI) an international promotion arm of DEST (see below). In a session with the new director, Anthony Pollock (formerly of Monash) we heard how Australia’s largest recruiter of international students will soon become a fully fledged business serving students and operating for profit. In conjunction with partners it is envisaged that IDP will offer international students a range of services including air fares, accommodation, health insurance, financial products, counselling, study assistance and job searches. In addition, they plan to develop an offering for markets outside of Australia, putting their network and expertise at the disposal of countries and universities seeking to develop their international student recruitment activities. Moving from a representational not-for-profit company

14 For reference to the Australian Government’s review of Offshore Delivery of Higher education, visit the DEST website http://www.dest.gov.au/sectors/international_education/policy_issues_reviews/reviews/quality_auditing_of_offshore_delivery/ 15 Monash also has study centres in Italy and London giving it the broadest international reach of all the Australian universities.

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owned by the AVCC to one with multiple roles with the student clearly identified as the customer, is a radical shift indeed. It is early days, though, and worth watching closely what IDP does in future years.16 Strategic intent As with the UK sector, the financial incentive provided by international students has been the key driver in institutional responses to the globalization trends in higher education. Yet the Australian sector has long had a non-financial motive for engagement with the wider region. For example, When the Australian Vice-Chancellors Committee (AVCC) set up IDP in the late 1960s, it had an explicit mission to attract students largely from SE Asia and the Pacific region. But IDP also provided development services to other countries and in that sense had a secondary, non-fiduciary purpose in seeking to provide access to Australia’s education and development services, expertise and intellectual capabilities.

The development of IDP in the 1970s and 1980s, while principally about recruitment, also positioned Australian universities to engage early the internationalisation agenda. In 1996, for example, IDP commissioned an influential study on internationalisation in higher education.17 The report highlighted the fact that Australia's universities had by 1995 already established a total of 1,020 international research links, and had set up a total of 519 research centres with international links.

The Australian government also provides guidance, support, and stimulus to universities efforts to recruit students, establish bilateral links, and internationalise the curriculum. The establishment of Australian Education International (www.aie.gov.au) in the late 1990s as an agency of the commonwealth education department was a direct acknowledgement of the economic importance of international recruitment and of the power of educational exchanges to be what one civil servant described as ‘the soft end of free trade’. Although judgements on the merits of their activities are mixed within the sector at large, DEST and AEI have focussed upon government-to-government relationships and are currently in the ‘third stage’ of development with the European Community over such partnerships. The role of AEI is more akin to the DTI than the British Council, though AEI is the sponsor of the ESOS Act, an internal quality assurance regime, which heavily regulates HE institutions recruiting international students. We heard mixed views on the efficacy of AEI – largely, perhaps, because of its dual roles as funder and regulator. One comment we heard was that Austrade (similar to DTI) was much easier to deal with. We also heard mixed views among institutions on the desirability of ESOS (Education Services for Overseas Students). The ESOS Act has its emphasis on safeguarding the interests of the student. Its impact has been positive and demonstrates that Australia is proud of the provision it can offer to international students. It is perceived amongst many to be an important guarantor (or even service level agreement) for overseas governments, students and parents, though some universities resent the intrusion. Within universities themselves we found well-articulated strategies for international development. While many British universities have yet to state cogently what their international ambitions are, almost all the Australian universities we visited have clearly stated goals – though metrics for the measurement of progress toward these goals was often less well developed. One exception here was at UTS, which in 2005 developed a 21-page statement of intent, together with targets and metrics, to guide the development of ‘UTS International’.18 The university’s strategy, we were told, ‘embraces a conception of knowledge and learning that extends beyond political and cultural boundaries and . . . engages intellectually, professionally and culturally with peoples and countries to advance collaboratively to academic, educational and wider social ends.’19 The UTS paper is a

16 See “Everyone to profit from the new IDP,” The Australian 16 November 2005, p. 39. 17 Back, K., Davis, D., & Olsen, A. (1996). Internationalisation and higher education: Goals and strategies. Canberra, Australia: Department of Employment, Education, Training and Youth Affairs. Accessible on-line at http://www.dest.gov.au/archive/highered/eippubs/eip9615/front.htm (last accessed 19/12/05). 18 The statement can be read on-line at http://www.uts.edu.au/about/executive/people/InternationalStrategy2004.pdf 19 From copy of presentation given at UTS in November 2005.

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good benchmark for British universities to measure against in the development of their own strategic statements. Management structures By the 1990s many Australian universities had reorganised their management structures to give clearly designated leadership responsibility for international development. Almost all institutions visited have a PVC or DVC responsible for international affairs. At the University of New South Wales, associate deans in faculties have responsibility for international affairs and, working to the guidance of a deputy vice-chancellor (international) were able quickly to evaluate the academic case for developing a second campus in Singapore. But UNSW is not alone: at the University of Adelaide, which is repatriating most of its off-shore provision, an Internationalisation Committee was set up in 2003 to “provide advice to the Academic Board’ with representation from all the faculties and schools of the university. It meets 7 times a year. The Australian universities also appoint scholars with striking international profiles to management positions with responsibility for international affairs: The PVC for International Affairs at UTS, for example, Professor David Goodman, is a recognised China scholar and speaks 5-7 languages. We saw clear differences among institutions concerning their organisational arrangements, International Offices, international admissions, international student centres, and the point at which international students are handed off to mainstream student support, etc. There doesn’t seem to be a one-structure-fits-all approach but rather institutions have growth their own structures and procedures in line with inherited cultures and strategic goals. It is important to note that the unitary administration is a less common feature of Australian HE, which probably contributed to the prevalence of responsibility for international affairs being located under a PVC or DVC. Bilateral links To our surprise we heard little about international consortia on our travels. For example, we heard no mention of Universitas 21, the network of research-intensive universities at member institution UNSW (although it does feature on their international students website). At ANU, which recently became part of another consortium, senior executives were relatively sanguine about the chances for real collaboration and exchange. Open scepticism about the value of ‘club consortia’ was openly expressed at UTS where a small number of carefully selected bilateral partnerships have been formed with four universities—Shanghai, Tec de Monterrey, the Tokyo Institute of Technology and Westminster—and focused upon complementary strengths. Our conclusion then is that the Australians, while recognising the reputational value of joining international clubs, prefer to move deliberately into carefully chosen sibling relations rather than rely upon large family consortia. How international? While there is much to learn from a close study of Australian universities, we were left wondering just have far ahead they were in becoming truly international institutions. A quick impression of this can be reached by comparing our impressions with the AVCC’s four strategic goals for international development : greater mobility, diversity in the curriculum, international competitiveness, and collaboration in research and teaching. Student / staff mobility. While the inward recruitment of students and staff is robust, the exchange is not equally two-way: only small numbers of Australians are interested in studying abroad as part of their study. UNSW, for example, the most international of the universities we visited sends only 500 exchange students overseas a semester. Taking the sector as a whole, in 2001 only 2,642 Australian students from all universities participated in exchange programmes (albeit a 50 per cent increase over 1996). 4134 students were received on exchange. With many Australian universities looking to increase the international experience and exposure of their own ‘home’ students, there is clearly a long way to go. UTS stands out as an institution attempting to approach this issue systemically with the creation of the institute of international studies and a VC nominating it as a

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priority. UTS saw a 34 per cent increase in outbound exchanges between 2004-05. But the sector as a whole saw only a 3.5 per cent growth in Australians studying abroad. Diversity in the curriculum. Although we did not study curriculum in any depth, our impression was that for many disciplines this remains an aspiration, despite some considerable Asian/Pacific texture to courses in the Arts and Humanities. Only recently has the International Education Association of Australia (IEAA) formed a working group to look at internationalisation of the curriculum, with an initial brief to look at ‘What does internationalisation of the curriculum mean in schools and universities?’ International Competitiveness. Clearly Australia has been ‘punching above its weight’ in its ability to compete with the UK and the US for international students. Commentators in the US often remark upon the performance of Australian institutions in this area. IDP has laid a strong foundation here, and the strong central government assistance provided by Australian Education International is a real asset. The government-maintained www.studyinaustralia.gov.au website signals the strength of this partnership. The ESOS Act is also giving Australian universities a competitive advantage as a quality ‘kitemark’, giving international students and parents confidence in the quality of education they can expect to receive in Australia, whichever university they attend. Collaboration in Research and Teaching. Our impression is that Australian universities do no better in this regard than British universities and institutional links, despite the proliferation of clubs and consortia, is being plotted carefully to maximise the long-term advantages. Whatever the benchmarks for success, the Australian sector has an international vibrancy upon which to build. UNSW was the most dynamic of the Australian HEIs we visited in the international arena and will be worth watching in future years. In 2007 it will establish a campus in Singapore, with the aim of developing its reputational reach and strategic engagement in the region. It aims to grow to 15,000 students. It is run by a DVC, with no separate Academic Board and is integrated into the Sydney operation. Staff will be on separate contracts and the University has created a private subsidiary company (New South Global), which includes its Study Abroad operations. Its International Strategy Committee meets every two months and pursues a strongly internationalist policy supported by a A$400k pot for bids to develop international activities. There was an ‘Asian feel’ to the UNSW campus—where we were told that “60 per cent of UNSW students don’t speak English at the dinner table”—and one got a real sense that you were treading on international soil.

Part 4: Governance reform in Australian HE

The Study Group had two primary areas of interest on governance matters: the implementation of the National Higher Education Governance Protocols, and the Higher Education Workplace Relations Requirements and, in particular, the introduction of Voluntary Student Unionism (VSU).

In the report Our Universities, Backing Australia’s Future, Dr. Brendan Nelson, Australia’s Minister for Education, Science and Training, observed “the governance arrangements of some institutions do not provide the appropriate balance of capability, experience and business acumen needed to manage a large and complex organisation with oversight of budgets of millions of dollars.” 20 This followed on from the Hoare Report which recommended that “governing bodies and their constituent committees should review their role and performance and report on progress against strategic directions for the period under review.” The Hoare Review noted that “Vice-Chancellors are running large, complex organisations and are often faced with management and administrative tasks that would test the best managers in the private sector.” 21 The result is that governing bodies in Australian Universities have been streamlined in line with twelve National Governance Protocols. The Higher Education Support Act (2003) made aadditional Commonwealth funding and penalties dependant on compliance with these Protocols and with Higher Education Workplace Relations Requirements (HEWRRs), i.e. Australian Workplace Agreements (AWAs) stipulated in the Workplace Relations Act 1996 that effectively break the unions’ stronghold on collective bargaining. The size, composition, roles, responsibilities, professional development and performance review of university governing bodies are prescribed in the Protocols. Moreover, from 2006 the Commonwealth Government has established Voluntary Student Unionism (VSU) which means no student can be forced to join a students’ union. Spectacular corporate failures internationally, e.g. Enron, WorldCom, the Australian insurer HIH22 and RMIT’s precarious position in 2000-2 following heavy and uncontrolled investment in a new IT system, have focused attention on governance. The Australian Stock Exchange has produced new guidelines. There has been a world-wide move in university governance from collegiality to managerialism, what Boer describes as “government withdrawing trust [from] the academic community to manage the university efficiently and effectively.” 23 In Australia, the Commonwealth government has only had direct legislative powers over the Australian National University, ANU, as other public universities are constituted under State/Territory legislation although local government only provides 1.5-2 per cent of funding. In Australia, the State and Territory governments are exclusively responsible for each university’s enabling legislation, with the exception of ANU. The traditional collegial model of a parliamentary, self-governing, community of scholars representing constituencies is outmoded and has been replaced by corporatism in Australian universities. Justice Street ruled in Bennetts v. Board of Fire Commissioners of New South Wales and others (1967) that “once a group has elected a member he assumes office as a member of the board and becomes subject to the overriding and predominant duty to serve the interests of the board in preference, on very occasion in which conflict might arise, to serving the interest of the group that appointed him.” 24 The emphasis in twenty-first century university governance in Australia has moved to a focus on collective responsibility. The key drivers for governance reform are the size and complexity of the thirty-eight public universities, the financial, legal and reputational risks they carry, though issues of internationalisation, commercial ventures, intellectual property and mergers are also significant factors. Higher education exports in Australia are the country’s fourth highest, exceeding wool, wheat or beef exports, generating in excess of Aus$2 billion (£0.85bn) in foreign exchange annually. Australian higher

20 Brendan Nelson (2004), Our Universities. Backing Australia’s Future (Canberra, DEST). Dr Nelson, an ambitious and controversial figure, was moved in the January 2006 cabinet reshuffle and is today Secretary of State for Defence. 21 David Hoare (1995), Higher Education Management Review – Report of the Committee of Enquiry (Canberra, AGPS) 22 Australian Institute of Company Directors General (2002) Protocol for Company Directors: http://www.companydirectors.com.au 23 HR de Boer (1999) “Changes in Institutional Governance Structures: the Dutch Case” in (eds) J Brennan et al (1999) What Kind of University? International Perspectives on Knowledge, Participation and Governance, Society for Research into Higher Education and Open University Press, Philadelphia: 128-143. 24

Ibid

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education has almost one million enrolled students, approximately 90,000 staff and generates an annual income of Aus$12 billion (£5 billion) (DEST 2004). Clearly, the Commonwealth government has legislated in the Higher Education Support Act 2003 to ensure university governance is lean, mean and business-like to respond to the challenges of a major industry. Reform of governance structures reflect that many universities are recognised as large-scale operations dealing with high levels of uncertainty, encouraging and supporting commercial relationships. The higher education sector is of critical importance to Australia’s economic, social and cultural development. Previously, some universities’ boards/councils/senates were unwieldy, long-serving and focused on process, inputs and operations rather than outputs and strategy. Government’s view is that universities can be managed more efficiently and effectively by streamlined governing bodies to support the Vice-Chancellor. The Auditor-General for Australia defines corporate governance as “the system by which companies are directed and controlled. The governance framework is concerned with the structures and processes for decision-making and with the controls and behaviours that support effective accountability for performance outcomes and results. This encompasses: • defining risk and monitoring the strategic direction; • defining policy and procedures to operate within the legal and social requirements; • establishing control and accountability systems; • reviewing and monitoring management and the organisation’s performance; and • risk management.” 25 It is important for university chancellors, members of governing bodies and members of the executive management team to differentiate clearly between “governance” and “management.” Gallagher observes that “governance is the structure of relationships that bring out organisational coherence, authorise policies, plans and decisions, and account for their probity, responsiveness and cost-effectiveness…Management is achieving intended outcomes through the allocation of responsibility, resources, and monitoring their efficiency and effectiveness.” 26 Chait et al highlight the tendency for some convergence between governance and management by not-for-profit boards: “the tides of trusteeship carry boards in the wrong direction: from strategy towards operations, from long-term challenges towards immediate concerns, from collective action towards individual initiatives. In order to add significant value and afford the institution a competitive advantage, boards must constantly swim against the currents.” 27 Some critics of Australian universities governance reforms suggest that the Protocols have given the Vice-Chancellor more power, while others believe that the Commonwealth Government is politicising Chancellors as a separate group and bypassing the Vice-Chancellor. Australian Chancellors may receive remuneration in certain States, e.g. RMIT in Victoria, they have permanent offices and staff alongside those of the Vice-Chancellor, Deputy and Pro Vice-Chancellors in the Chancellery which indicates a potential for interference in day-to-day management. At the University of Canberra, a former Deputy Vice Chancellor is now Chancellor, having moved recently from a Vice Chancellor’s position at another university. At the ANU, members of the governing body including the Chancellor are subject to the same penalties as company directors for breach of duty. The Chancellors have formed a loose group that is still in its infancy and are starting to exert their influence but this falls a long way short of the role of the CUC in Britain.

Australia’s public universities have generally inherited university governance from the UK; Bond University and the Australian Catholic University are incorporated as companies limited by guarantee. Universities must now comply with the twelve National Governance Protocols for higher

25 Barrett, P.J. (2001) Corporate Governance – More than Good Management, Presentation by Pat Barrett AM Auditor General for Australia to the ‘CPA South Australia Annual Congress 2001 “Riding the Next Wave”, Adelaide, 16 November 2001. http://www.anao.gov.au/. 26 Gallagher, M. (2001) Modern University Governance – a National Perspective, Paper presented by the First Assistant Secretary, Higher Education Division, Department of Education, Training and Youth Affairs at ‘The idea of a university: enterprise or academy?’ Conference organised by The Australia Institute and Manning Clark House, The Australian National University, 26 July 2001. 27 R Chait, T Holland and B Taylor (1996) The Effective Board of Trustees, Oryx Press.

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education institutions promulgated by DEST. The Protocols, which are to be reviewed in 2007, are summarised below:

1. Objectives must be specified in enabling legislation. 2. Primary, non-delegable responsibilities must be stated. 3. Governing body members’ duties and sanctions for breach are specified. 4. Formal development programme for each member. 5. The governing body must not exceed 18 members, including 2 with financial and one with

commercial expertise, majority external, none from government. 6. Public nominations. 7. The institution is to codify and collate its internal grievance procedures and publish them with

information about the procedure for submitting complaints to the relevant ombudsman or the equivalent relevant agency.

8. Commonwealth government required outcomes must be stated in the annual report. 9. The annual report must include a risk management report. 10. Significant events affecting capacity to meet Commonwealth funding obligations must be

reported. 11. There must be effective oversight of controlled entities i.e. independent operation. 12. External auditors must audit entities not audited by the State/Territory or Commonwealth and

report to the institution’s council.

The Australian University Chancellors’ Conference has subsequently established the University Governance Professional Development (UGPD) Programme to build capacity in the sector through tailored courses for governing bodies, particularly for induction, good governance and best practice. Several people we met during the study visit indicated the governance reforms have been helpful in streamlining governing bodies, removing members who had little to contribute. At the University of Adelaide it was felt that there was no need to remunerate the Chancellor and members of the governing body as they regard membership as a public honour to serve the university. At the University of Technology Sydney it was observed that as the demands on governing body members grow the issue of remuneration needs to be reviewed.

The Australian university governance model has moved from a representative membership, where governing body members represent their constituencies, to a corporate trusteeship model for the good of the whole university. During the AUA study visit, there were generally positive comments about the streamlining of governing bodies and professionalisation of skills and feedback processes, however there was considerable opposition to the links between the Protocols and additional Commonwealth state funding and burdensome reporting requirements. The paradox is that as the relative proportion of university income from the Commonwealth declines, so the regulatory regime tightens. The AVCC suggested that Dr. Brendan Nelson is on a collision course with the universities because of his propensity for micromanagement. For example, the minister’s office has recently intervened in the approval of individual Australian Research Council funded research grants. Compared with the UK’s guidance to governing bodies published by the CUC, it is felt Australian Protocols were imposed and implemented in a heavy-handed way. The National Governance Protocols have generated debate about appropriate models of governance in universities. These models have been described as follows:

• Representative models; • Business models; and • Public trusteeship.

While the Trusteeship model is ostensibly the model favoured by the current Commonwealth Government and is embedded in the Governance Protocols, much of the criticism of the Protocols emanates from a feeling that a one-size-fits-all business model is actually being imposed on universities. That said, it must be recognised that the trusteeship model, originally advocated by the Harvard Business School, is relevant to not-for-profit organisations and explicitly recognises universities’ non-financial objectives and multiple bottom lines relating to learning, research and links

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to the community. The model adopted needs to be fit for purpose with safeguards for things done or omitted in good faith. Workplace relations A second area of discussion during the visit that relates to how universities are managed and governed is the Higher Education Legislation Amendment (Workplace Relations Requirements) Bill 2005 (HEWRR legislation) which was passed in November 2005. The Workplace Relations Act (1996) provides for universities to make individual agreements directly with staff as well as through unions, thereby allowing universities scope to reward high achievers and manage under-performance. The aim is to enable universities to operate more efficiently and productively with tailored agreements. What is perceived by some as Government “union bashing” has also taken place ostensibly to allow a greater mix of employment, fixed-term and casualised contracts and to create teaching only positions. At the ANU, workplace reforms were resisted but the flexibility of new reward and performance management systems was welcomed as they enable the university to reward high fliers and high performing research teams and to deal with underperformance. Professor Di Yerbury, the outgoing AVCC President, in October 2005 argued, however, that “the Government should defer consideration of this legislation to such time as the broader workplace relations legislation has been dealt with, instead of singling out universities.” 28 It has been suggested that the workplace reform programme will create different employment types from the ‘academic’ and ‘general’ staff dichotomy. Voluntary Student Unionism was another hot topic during the study visit. The Commonwealth government says it is promoting student choice by removing the compulsory contribution to student unions from 2006. The Government’s argument is that (i) many students are disinterested in student union services and do not benefit from them, e.g. distance learning students not participating in sports; and (ii) students may object to their contribution being spent on student activism. From 2006, universities can only collect for directly course-related provision otherwise they will incur penalties. The student experience within Australian Universities is supported through services provided by both the institution and their respective Student Unions. The roles of Student Unions and most especially their funding has not been beyond the scope of the Nelson reforms. The Higher Education Funding Act has, within its clauses, conditions associated with University grants; the government intends to enact similar conditions so that any institution levying a fee for either student union services or broader student services offered by the institution will be subject to a financial penalty from 2006. The Provisions of the Higher Education Support Amendment (Abolition of Compulsory Up-front Union Fees) Bill 2005 is the chosen vehicle. Variations of these restrictions are already in place in two Australian States, in Western Australia through the Voluntary Membership of Student Guilds and Associations Act 1994; and in Victoria through the Tertiary Education (Amendment) Act 1994 (the latter allowed for the charging of a fee). However the Nelson Reforms bring more restrictive legislation to all States – something which has united both Student Unions and University Staff Unions.

“From 2006, no student will be forced to join a student organisation, union or guild or pay a fee to an institution for non-academic amenities, facilities or services. This is the 21

st Century. Union

membership should be voluntary and services should not be propped up by the compulsory appropriation of students’ hard earned money… Why is it that a single mother training to be a nurse should pay for the canoeing…club when all she wants is a degree?”

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The ideological premise for the bill is, according to its supporters, “…by way of a commitment to freedom of association”30. It was described by a number of Australian colleagues as a ‘totemic’ issue for the current Government and minister. Just how far freedom of association is at risk with regard to student unions is questionable – a Senate committee minority report highlights its view that the bill is operating within a sphere where they are not at risk. The minority report highlights its concern that

28 AVCC October 2005 media release, AVCC www.avcc.edu.au 29Brendan Nelson, 19 March 2005 media release www.dest.gov.au

30 Employment, Workplace Relations and Education Legislation Committee. Provisions of the Higher Education Support Amendment (Abolition of Compulsory Up-front Union Fees) Bill 2005 – Majority Report. August 2005.

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[the bill] “will greatly reduce the provision of essential services…and few…will be unaffected”31. That concern is also held in other parties – a leading senator in the National Party; Senator Banaby Joyce on 5 December 2005 in an interview on ABC ‘Local’ Radio 32 suggested that a more appropriate title for the bill would be “…the ‘End of University Facilities Bill’”. The Government have been charged with following a political line with regard to reducing the size and scope of a traditionally left-leaning political sphere. The suggestion is that the National Union of Students of Australia and the individual Student Unions use funds from the entire student body to promote a political agenda that represents only the few. However, the government line has been keen to highlight activity which they believe to be inappropriate, or more precisely, unsupported by the student body. Certainly Brendan Nelson, in an interview on ABC TV’s “The 7.30 Report” underlined his view that union’s activities were, in many cases “…not supported by the vast majority of students”33, he went further to suggest that in some cases they were also unlawful. There has, unsurprisingly, been substantial opposition from within the sector – the Australian National Union of Students has undertaken a broad campaign to defeat the bill, assisted by the NTEU (National Tertiary Education Industry Union). The NTEU link the government reforms associated with staff pay and conditions with those related to Voluntary Student Unionism. “The Government’s plan…will destroy student organisations by undermining their capacity to collect fees and potentially limiting the types of activities they engage in”34. The AVCC has lodged its opposition, as have the Group of Eight; with the latter highlighting how “penalising universities that seek to levy a compulsory fee for health services, for example, will be a watershed in the history of higher education and may forever change the sense of campus community that has a long and proud tradition in this country” 35. The AVCC similarly felt that “fees charged for the provision of services for students is an obligation of enrolment, whether they are provided by student organisations or in other ways by the University. It is the prerogative of universities to determine conditions of enrolment”36. The Liberal Government commands an effective majority in the Senate, making legislation easier to pass.

The study visit revealed considerable tensions, and at times outright hostility, between university Vice-Chancellors and the Minister for Education, Science and Training. While many elements of governance reforms are welcome, it is the manner of their introduction and regulatory approach to implementation that has antagonised the AVCC and people working in Australian universities. Government rhetoric extols visions of greater diversity in the higher education sector with publicly funded private universities like Carnegie Mellon in Adelaide, the possibility of teaching only universities and the equity agenda to make education more accessible to indigenous people as well as a point of delivery for increasing numbers of international students, yet the reality is high levels of government regulation that suggests attempts to create a level playing field. Professor Ian Chubb, ANU’s Vice-Chancellor, has seriously questioned this ‘one-size-fits-all’ approach:

“Being average is not going to be good enough. Getting an average number of average ability into universities of average quality supported at average levels with average staff to average research would be a simply appalling outcome. Being in the middle of the OECD expenditure tables on education and on research and on development is simply to fail, especially when those around us are improving their position. But it will fail, not just us, but all those who will inherit this country from us.”

37

From our own observations during the study visit, it seemed unfair to impose the same reporting requirements on ANU, a world-player, as on Charles Darwin University in the Northern Territory with its low population and equity remit in a militarily strategic part of the world. What Australia lacks is a buffer body like HEFCE in the UK and it is suffering from having to respond to policy of a Minister for Education with an ideaologically driven view of the sector and a personal agenda for higher office.

31 Ibid p.33 32 5th December 2005; ABC Local Radio, broadcast Nationally around Australia 33 The 7:30 Report, 16th March 2005, Australian Broadcasting Corporation 34 University Staff and Students Under Threat, NTEU information flyer – Undated. 35 VSU bill – an elephant to crush an ant Prof. Ian Chubb; Group of Eight – 16th March 2005 36 AVCC Student Organisations : A Policy Paper Dec 2004

37 Ian Chubb (2001) When to be average is to fail, National Press Club address, Wednesday 14 March.

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It will be interesting to observe over the next few years how governance issues in Australian universities evolve, how relations between chancellors, vice-chancellors, governing bodies, executive teams, academic boards, employees on individualised contracts and high fee paying students develop. Nelson’s recommendations for an Association of Governing Bodies of Australian Universities, AGBAU, have yet to be implemented. The Auditor-General has noted UNSW’s (University of New South Wales) high risk strategy of establishing a campus in Singapore, and the University of Warwick, amongst others, will watch this aggressive strategy with interest. There needs to be greater clarification of the legal liabilities of members of university governing bodies, for instance regarding health and safety, data and environmental protection, criminal liability in the case of fraudulent activity. Key questions will remain of how governing bodies can add value to universities and how chancellors can provide clear leadership to sustain the comparative advantage of a country, with a population less than that of Shanghai and a third of the UK’s yet with a land mass thirty times bigger than the UK, in the highly competitive global education marketplace.

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Part 5: Concluding observations Our visit to Australia gave us the opportunity to observe several different aspects of HE in that country and to reflect on both the similarities and the differences between UK and Australian HE.

As might be expected, there are many similarities between the two systems. Australia, like the UK, has a national, predominantly public, and relatively homogeneous system of HE. Both systems have played a significant role in supporting economic growth and wealth creation in their respective countries and student numbers in both places have grown significantly over the past two decades. Governments have sought to finance this expansion of HE by shifting the balance of funding from public to private sources and by requiring students to pay fees, though Australia introduced standard, then differentiated, and finally variable fees a ahead of the UK. Governments in both Australia and the UK have sought to make these fees affordable to students by introducing income contingent fee/loans – Australia introduced fee loans in 1989, some 17 years ahead of England and 18 years ahead of Wales (Scotland operates a slightly different system). The experience in Australia seems to indicate that though fee loans have supported a significant increase in participation levels, they have not led to a noticeable change in the make-up of the study body: the proportion of those entering HE from under-represented groups has barely changed over the last twenty years. While the aggregate numbers of student from relatively less well off backgrounds has increased significantly over this time period, this is still a disappointing outcome. Nevertheless, the Australian Government and Australian universities appear not to have given the same attention as UK legislatures and institutions to ensuring that bursaries and grants are available to students from disadvantaged backgrounds. This is one area of difference that may in time produce more positive outcomes in the UK.

In other respects, however, the UK has much to learn from the Australian approach to funding and student finance. For example, the Australian system of fees and income contingent fee loans makes no distinction between full-time and part-time study but allocates costs and benefits strictly in proportion to credit load and on identical terms. As a result, the Australian Government has created a flexible, fair and robust system of funding that enables students to mix periods of full-time and part-time learning over the course of a lifetime and to adjust study loads to changing circumstances. In addition, in introducing the Student Learning Entitlement, it has created a system of support for lifelong learning that is vastly superior to the English model. The Australian system also seems to be leading the way in blurring the boundary between domestic and international students, consistent with its demonstrable commitment to the internationalisation of its HE system.

In Australia as in the UK, there is a strong commitment to the internationalisation of the curriculum and to the teaching of international students, though the extent of engagement and the degree of success varies between institutions. The UK has much to learn from the long and active engagement of Australian universities in recruiting, teaching and supporting overseas students, and especially in running ‘off-shore’ programmes in South-East Asia. A number of Australian universities are currently expressing concerns about the risks to reputation of some partnership arrangements overseas, especially in China. Some are beginning to harbour doubts about the financial viability of many overseas ventures, and particularly off-shore campuses. Several are becoming anxious about the regulatory burden imposed by governments at home and overseas. It is perhaps a salutary observation that some (but not all) Australian universities are withdrawing from offshore teaching in south-east Asia at the very time that UK universities are exploring the opportunities for developing a presence there.

There is some shared experience, too, in relation to governance. In both places, Government is seeking reforms of Council structures. In Australia, the Commonwealth Government is also encouraging Chancellors to take stronger executive roles within their universities. And in Australia, too, Government itself is taking a more interventionist line. Because there is no equivalent in Australia of the higher education funding councils for England, Wales and Scotland, Ministers can and do intervene directly in the affairs of universities – they have powers to stop the closure of specialist and nationally significant courses, they have blocked research grants approved by the Australian Research Council, they have offered incentives to universities to introduce new

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governance protocols, and they have legislated to reduce the influence of student unions. This has led inevitably to friction between vice-chancellors and ministers, with vice-chancellors accusing ministers of operating solely on the basis of ideology and prejudice and ministers publicly questioning the managerial competence and academic standards of universities. There is much to be valued in the relative high degree of autonomy enjoyed by UK HE institutions.

What, then, of the future? Australian universities have ambitions to increase participation rates so that at least 60 per cent of Australians have access to HE during their lifetimes. They also wish to widen participation further so that indigenous Australians in particular have better access to higher education. They wish to secure Australia’s pre-eminent place in global education and training and they aim to expand the international experience of students so that 20 per cent of students undertake part of their study abroad. And they wish to create more centres of world class research. In all this, Vice-Chancellors look to Government, and also to other stakeholders, for funds to help realise their vision.

The Australian Government, for its part, is looking to create a more diverse and better regulated HE sector. It is currently consulting on whether there is a role for teaching-only universities and specialist colleges. It is inviting views on whether the Australian Government should have a stronger role in regulating commercial activities, governance and management, and recognition and accreditation. And it is looking at models for maintaining and assuring high quality provision in offshore operations.

This interplay of expectations between government and universities, and vice-versa, suggests that the debate on the future course of higher education and the fortunes of universities will continue to be as active in Australia as it is in the UK.

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Institutional web sites ANU – Australian National University (Canberra) www.anu.edu.au Founded in 1946 as Australia’s only national university with a unique mission in relation to fundamental research. It houses top research centres and Australia’s most powerful computer and has 5 Nobel laureates. 13,487 students. www.anu.edu.au/cabs/council/members. Council: 15 members. University of Canberra www.canberra.edu.au Established in 1967 as the Canberra College of Advanced Education. On 1 December 1997 jurisdiction for the University was passed to the Australian Capital Territory. Specialises in professional education, located about 8km from the City centre. 10,000 students. http://www.canberra.edu.au/university/council.html Contact: Jenny Coggins. UNSW –The University of New South Wales, Sydney www.unsw.edu.au Founded in 1949, UNSW is one of the largest universities in Australia in north Sydney with 40,000 students, including 8,800 from overseas. It is a founding member of the Group of Eight leading research universities and Universitas 21. It includes the Australian Defence Force Academy. http://www.secretariat.unsw.edu.au/council/Council_member_biographies_Jan05.htm UTS – University of Technology, Sydney www.uts.edu.au UTS is a metropolitan university with 26,000 students and a focus on professional practice and industry links. It was established in 1990 through the amalgamation of the former University of Technology, Sydney and other colleges. The Council comprises 3 official members (Chancellor, Vice-Chancellor, Chair of Academic Board), six externally appointed members with experience in particular categories, one or more externally appointed by the Council members and at least 6 elected members (2 academic staff, 1 non-academic staff member, 1 postgraduate student, 1 undergraduate student plus one or more external people from convocation (i.e. alumni). www.gsu.uts.edu.au/council Dr. Jeff FitzGerald, Director, Governance Support Unit. Co-ordinator: Matthew Boble [email protected] University of Adelaide www.adelaide.edu.au Founded in 1874, this is Australia’s third oldest university with 18,000 students, 3,000 are from overseas. It has 5 Nobel laureates, 100 Rhodes scholars and the highest per capita research performance in South East Asia. It includes the National Wine Centre and the Waite Agricultural Research Institute, the largest in the southern hemisphere. www.adelaide.edu.au/governance/council Secretary: Heather Karmel UniSA – University of South Australia, Adelaide www.unisa.edu.au Established in 1991, UniSA has 32,000 students and concentrates on educating professionals using flexible technologies and with an emphasis on equity (access to disadvantaged groups). It is Australia’s largest provider of higher education to international students. It is a member of Open

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Learning Australia and the Global University Alliance. www.unisa.edu.au/unicouncil Charles Darwin University, Northern Territory www.cdu.edu.au Established in 2004 from a merger between Alice Springs’ Centralian College and the Northern Territory University, the only Australian university to offer the full spectrum of education options from senior secondary through to Vocational Education Training (TAFE) and higher education programmes. It has 15,000 students covering a broad range of studies in a multi-campus environment with a strong equity remit. www.cdu.edu.au/governance. 15 member council. Secretary: Peter Garrigan.

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Australia (2005 study tour)

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