Universities are asking how Brendan Nelson's expanded reforms will work, writes The Australian's Dorothy Illing -
IT was swift and unexpected. Two weeks after the Howard Government swept back into power, Education Minister Brendan Nelson slammed down his new-term agenda for universities. This was a dramatic change in style for the former "minister for consultation": in his first term as minister he went out of his way to woo the universities that some predecessors had tried and failed to reform.
Now with the Senate coming firmly on side next year and his first round of reforms in the bag, Nelson has signalled he will charge ahead with a new agenda even before the last one is bedded down.
Next year universities will be able to set their own HECS fees up to 25 per cent above current levels and admit more full fee-paying students than ever before. With this partial fee deregulation under way, Nelson this week said he wanted to lift the shackles on work practices and create a more competitive and diverse national system of public and private universities.
"The single most important thing that we have to understand is that Australian higher education is going to be measured only against international benchmarks," Nelson told The Australian this week. "And if we don't meet, if not exceed, those international benchmarks, if we are not competitive on quality -- which requires money and less regulation -- then ... we are doing a great disservice to our country."
But will Nelson's blueprint transform the sector the way he intends? The initial vision was to give students more information about the usefulness of courses, set up systems to track students' achievement through university, create a competitive fee regime and open the way for institutions to generate more private revenue.
This week he added more to his package, including voluntary student unionism, which the Government has tried to get through the Senate before to cut compulsory funding of student political activists as well as the services their unions and associations provide.
University administrations might have to charge a replacement fee for services if unions become unviable.
Nelson also wants administrations to encourage individual employee contracts and, in some cases, to consider whether or not they should largely drop research and becoming teaching institutions. The other big reform aim is to shift the last vestige of state responsibilities for universities to the commonwealth.
The most contentious of these will be industrial relations -- the ideological battleground.
Nelson argues that a more flexible industrial climate will help Australia lure and retain the best academics and reward the top performers.
Universities, says Nelson, need greater freedom to match changes in student demand with shifts in staff. This can be done with a broader mix of full-time, part-time and casual workers. And Australian workplace agreements.
"I've discovered one of the reasons why the kids are jammed in like sardines in some lecture theatres when there's one nearly empty next door is that the current industrial relations climate in the sector makes it very difficult to shift [staff in response to demand]," he says.
But it is not easy to turn an astrophysicist into a Spanish historian in institutions built on highly specialised staff, although there are ways to get around the problem. Just ask Ian Argall. He's the executive director of the vice-chancellors' national industrial association, which has had its share of clashes with the academic union. Argall says universities are not like other industries where you can transfer employees as demand fluctuates.
So another way to have staff respond to student demand is to shed them and hire new ones -- a process that is difficult with the current high level of industrial protection.
"The flexibility to move staff in and out of areas of need either has to be done by making people redundant, sacking them for under-performance -- all of which are hard -- or hiring them on fixed-term contracts or casual employment so they're not locked in permanently," says Argall.
"Another is to retrain them which, in many cases, is not a practical option."
Many universities already have financial and promotional reward systems in place for high performers but so far these tend to bunch at the senior levels.
Market loadings, bonuses, performance loadings and annual targets are now par for the course in many contracts. Nelson wants more of these. Argall says there is no industrial impediment to a university paying its high-flyers big salaries to lure them from overseas. "The thing that really is a barrier is that you've got to have the money to spend," he says.
Chief executive of the Australian Industry Group Heather Ridout says the universities, like the manufacturing sector, are dominated by powerful unions. But they have gone a long way to find measures that reward talent.
"And I think with the strictures of budgeting over the years they've had to look to more flexible modes of employment," she says. "They've felt the financial pressure on them. And the need to attract talent and retain talented people has forced them into a lot of arrangements which might look a bit messy."
Money is the big issue. Nelson has earmarked extra public money for universities through various schemes that kick in next year -- at least another $2.6 billion over the next five years -- though much of that is contingent on them meeting certain criteria.
Universities will have more opportunity to seek out private revenue. They are able to set their own HECS fees at 25 per cent of current levels and enrol up to 35 per cent of Australian undergraduates on a full-fee basis. For the first time, full-fee students will have access to deferred loans similar to HECS, a move that has already boosted dramatically enrolments in one private university, Notre Dame.
While the funding injection will lift the bottom line, it will still not stem the gradual slide in the proportion of funds that universities get from the public purse -- an amount that now hovers at about 40 per cent of their sector-wide total income -- placing greater pressure on them to find other sources of revenue. By far the biggest single source of private income is from international students, who bring $1.5 billion a year in fees to the sector.
But like government funding, fee revenue is not an assured income stream. The international student market is already looking shaky as other competitors move into Australia's traditional Asian markets. A number of established overseas universities are also likely to open branches in Australia, competing aggressively for local students. Local private institutions will expand, giving students a wider choice but also competing with public universities.
Almost on cue this week the private US university Carnegie Mellon said it would open for business in South Australia under a deal struck with the state government -- a move Nelson favours. So what will this mean for Australia's public universities in the next five years?
They will have to work harder to generate private revenue, obviously, and they will have to decide what they do best. For some that will mean focusing on teaching and restricting their research to areas where it is self-funding.
But just as there will be greater disparity in universities, so too will there be greater disparity in institutional wealth.
Education consultant and former senior higher education bureaucrat David Phillips predicts more universities will go into debt and some will be forced to close campuses -- a trend already seen in Victoria where the University of Melbourne will close several of its unviable rural campuses.
The most vulnerable will be those that choose to focus on teaching: their capacity to attract revenue from other sources is limited compared with the big players who can pull in the research dollars and attract heftyendowments.
For now the business of getting the systems in place to launch the Nelson agenda next year has university administrations working overtime. A number of senior administrators told Inquirer that although there was still much work to get the schemes up and running, the Government's intentions were sound.
The head of the University of Melbourne's administration Ian Marshman says that in the end there will be more consistent information for students and greater transparency.
"It clearly gives an opportunity for a greater level of co-ordination and planning of the higher education output," he says.
The paradox is that Nelson's aim to achieve a more deregulated sector has created a much more regulated and intrusive system to administer and monitor those changes. But, he says, he's working on that.
SOURCE - The Australian
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