Cuts to university funding will challenge international competitiveness

Infrastructure investments and university collaboration keeps South Australia and Australia competitive and changes to funding will challenge that, Flinders University, Vice-Chancellor and President, Professor Colin Stirling, has told a CEDA audience.

Speaking at the Vice Chancellors panel discussion event in Adelaide which followed the recent Federal Budget announcement that includes reform measures for the higher education sector, Professor Stirling said “the future of our country is in the hands of our young people, and we shouldn’t short change them.” 

“Universities target approximately a five per cent surplus for financial sustainability reasons,” he said.

“We use those surpluses to invest and to invest in the future; in buildings and infrastructure, in curriculum innovation, in improving the student experience.

“These investments…are keeping us competitive.

“Flinders in increasingly competitive in the international space, we are growing in terms of attracting international students faster than the national average, three times the average rate, here in South Australia.

“This is not what universities used to do, these are the things that universities are now investing in: investing in the future, the future that will help to build our economy, not just here in South Australia but in the country, broadly.”


Professor Stirling said investments, such as the Tonsley Institution, increased the competitiveness of Flinders University internationally, created jobs, and improved the capacity to compete as an institution but the reform would change universities ability to make such investments.

“Universities will have less: less to fund infrastructure, there will be inevitably job losses, fewer staff in teaching and support roles and students are therefore being asked to pay more for less,” he said.

“I and my Innovative Research Universities (IRU) colleagues don’t support that.”

Professor Stirling also discussed the balance of collaboration and competition among universities.

“The university sector in Australia is immensely collaborative and I think that’s probably part of the reason why we’re so successful,” he said.

“Now would I be so keen to do that if there was seven and a half per cent of my funding contingent on my achieving some benchmark in that level, and indeed achieving it to a better standard than my fellow universities do, because if I fall behind that benchmark they get my money?
“I’m not sure that I would tell them about the good things I do quite so freely. 

“I think the seven and a half per cent contingent funding could diminish the collective collegiality actually that exists even between the three of us here in South Australia.”

University of Adelaide, Interim Vice Chancellor and President, Professor Mike Brooks said changes to university funding would mean “students will pay more to get less.”

“Australian students right now make the sixth highest contribution in the world it is said to their education costs, and it is disappointing that these are being increased, albeit modestly,” he said.

“Cuts will challenge our international competitiveness.

“The University of Adelaide has a long tradition of translating or applying leading-edge research to generate economic or social benefit for our nation.”

Professor Brooks discussed advancements in defence technologies and agriculture as well as a recently signed multi-million-dollar deal with Mitsubishi Heavy Industries team which will utilise the University of Adelaide’s sensing technologies for gas turbines.

“Mitsubishi Heavy Industries has 82,000 employees including 1300 researchers of their own. Many of which working in (this) very area…but they had to seek us out to get the leading-edge technology and that’s a great story for South Australia and Australia,” he said.

“I met with another delegation from Japan this time from Olympus, the optics and medical devices corporation. They were looking to partner in our disruptive approaches to bio sensing…measuring the body’s function whether it be in the brain or arterial function or the foetus.

“Our research is certainly no confined to multinationals we’re partnering with dozens of local SMEs in advanced manufacturing…and we are grateful to receive catalyst support from the state government and the federal government.

“We share the federal government’s view that a vibrant and highly productive relationship between universities and industry is essential to our future. In the UK, USA and Germany, we observe that extensive industry ecosystems commonly form in the neighbourhood of universities.

“This we must replicate to a far greater extent in Australia.”

Infrastructure investment was also discussed by University of South Australia, Vice Chancellor and President, Professor David Lloyd.

“We’re delivering $300 million of new facilities all coming online in the next 12 months. Three hundred million of facilities which were financed without debt,” he said.

“Three hundred million of new infrastructure to underpin our competitiveness to underpin student experience, but also to attract greater investments to the state. Forty million came from the federal government, the rest was our so-called surplus.

“Aside from the benefits of the infrastructure to the operation of the university, the investment supported over 2000 jobs outside the university during the construction phase…in a state that needs jobs more than ever.”

Speaking on the efficiency dividend reform measure Professor Lloyd said, “let’s call it what it really is: a budget cut of two and a half per cent, which will come down to five per cent in the remaining institutes, after 2019.”

“It will erode the ability of our institutions to advance infrastructure.

“It will erode our competitiveness on the international stage and it will erode our ability to support jobs and innovation in the state, within and outside the universities themselves.

“The legislative sting in the tail has little to do with reform, it has everything to do with a budgetary claw back from a system that is already funded at lower than the OECD average.

“It takes away from what could be seen as otherwise very positive steps for reform.

“It’s not going to be good for the future economy of this state.”


Federal Minister for Education and Training, Senator the Hon. Simon Birmingham also spoke at the event, and discussed the reforms to the sector.

“Success, and particularly expansion of higher education, has come at some significant financial cost in recent years,” he said.

“Taxpayer funded student loans that ensure anybody can access university without paying a dollar upfront, now stand on the Government’s loan books at around $50 billion and the estimations are that, under the current settings for the repayment of those loans, around one quarter of them will never be repaid.

“We’re asking universities to make a contribution to a 2.5 per cent efficiency dividend purely on the Commonwealth Grants Scheme in 2018 and 2019. This equates to just 2.8 per cent on average of the total base funding for teaching and learning.

“It doesn’t apply to the research funding that universities receive, and of course it doesn’t apply to all the other external revenue sources, particularly international students or full fee paying students that universities receive income from.

“The modest efficiency dividend that we’re proposing will contribute to making taxpayer funding for universities more sustainable for the long-term and it should not significantly impact on universities’ ability to deliver high quality teaching, learning, or research.

“From next year, we propose to commence a process whereby 7.5 per cent of the teaching and learning funding through the Commonwealth Grant Scheme to universities will be contingent on agreed performance metrics.

“I want to emphasise here, though, any funding that would be withheld from an institution under these performance metrics would be put back into the sector by other means. This is in no way an attempt to create another area of budget savings. It is designed to truly be about inspiring enhanced performance.”

Mr Birmingham also discussed the increase in student fees.

“We are asking for an across-the-board increase in student fees, student fees which have not seen an increase for over a decade,” he said.

“We’re asking students to contribute around 1.8 per cent more in their fees next year. They’ll increase by 1.8 per cent for each of the next four years…about $17 a week for each of those four years’ worth of study.

“This means that across all degrees on average taxpayers will still contribute more than half – about 54 per cent, in fact – of the cost of a taxpayer-subsidised university course. And on average, of course, that means a university student will be facing having to pay back about 46 per cent of the cost of their course, but only when they’re earning an income.”