Higher education funding at odds with skills gap shortages and future workforce requirements

Funding for the higher education sector is at odds with skills gap shortages and future workforce requirements, a CEDA audience has heard at the higher education sector review in Adelaide.

The higher education review saw the Vice Chancellors’ from University of Adelaide, University of South Australia, Flinders University as well as the recently appointed TAFE South Australia CEO join CEDA for a discussion on the future of the sector, with the speakers agreeing that the current funding model does not align with plugging current skills gaps or building a workforce for future jobs.

University of South Australia Vice-Chancellor and President, Professor David Lloyd discussed ramifications from the 2017 federal government funding changes.

“In December 2017 as part of MYEFO measures which were intended to save $2.2 billion, the federal government introduced an unlegislated change which froze the demand driven system in universities. The measure means that the funding for the demand driven places was frozen at December 2017 levels for the subsequent two-years’ intake,” he said.

“If your student population grows, you don’t get any additional government investment.

“The foundation of domestic investment in higher education has been incredibly, and I think foolishly, eroded.
“We know we need to increase numbers of healthcare professionals and we need many more engineers and technologists in the near term to deliver sovereign capability in defence and aerospace, just to retain the opportunity in our state for this generation.

“Under the cap every additional engineer will be funded at 33 per cent of the cost of the delivery of their education.

“Every additional nurse is funded at 31 per cent.

“How do you propose we produce a skilled workforce for the future under this economic constraint?

“Universities are not-for-profit organisations. At least one in five Australian universities has posted a deficit in the last two years, including one in this state.

“Uni SA has already lost almost $14 million since the cap was introduced. That loss, which is a loss to our state and our state income, can only continue to grow and is compounded year-on-year.

“We need to grow the skills of the existing workforce, as well as the skills of the future workforce and we have to attain this within a constrained tertiary education system.

“This is a problem which has been engineered through poor policy decisions. It’s fixable but requires clear articulation of the issue and the willingness to move on from ad-hoc intervention to truly joined up thinking.

“We need to stop thinking about a homogenous higher institute sector and we need to embrace differentiation.
To get to that end point is going to require the unravelling of a one-size fits all policy and that type of mentality.

“Blunt instrumentation of intervention is putting the vulnerability of the Australian higher education sector at risk. It is limiting the potential of young South Australians in particular.”

Flinders University, President and Vice Chancellor, Professor Colin Stirling said the proportion of students studying more expensive courses including STEM subjects, has been rising.

“The current grant…will negatively impact or halt that shift, to those economically very important disciplines unless the policy framework does something to mitigate it…and free up our institutions…to better meet the life-long learning requirements of a rapidly evolving world of work,” he said.

“We’re also interested in creating a workforce that is compatible with the needs of industry moving forward. I don’t know of any university that isn’t seeking to produce graduates with the skills that industry needs, not just today but for tomorrow.

“Terms like work ready, career ready, they’re often used, and I see universities working tirelessly to meet what is an ever-changing need.

“Universities and VET will play a role in this skills gap by a new breed of short intensive courses.

“The Federal Education Minister Dan Tehan has indicated that he sees that universities have an important role to play ‘in educating a future workforce to boost jobs and boost productivity’.

“He also expressed thankfully his commitment and desire to work with the sector to achieve this. 

“The current funding model is a large very well-oiled machine. It’s one that is designed around traditional university degrees, traditional bachelor degree structures.

“Make no mistake these bachelor degrees are worth as much as they have ever been if not more, and a key part of our future will be to educate those bachelor programs.

“But we also need a funding mechanism that enables universities to break away from the constraints of this one-size fits all funding model that universities live by.

“If you design a small number of rules that determine the manner in which a university will be funded, it will be of no surprise to any of you to then discover that very single university is pulling precisely the same levers to become precisely the same type of institution as our neighbours.

“There has never been a time when education has been more important to our competitive position as a country, as a state, in the global knowledge economy and our institutions need to seize the opportunities and help deliver the skilled workforce that we need for the future.”

TAFE SA CEO David Coltman said graduates requiring just in time training relevant to their worlds of work have continued to look towards TAFE, but changes in funding for VET had affected enrolments and participation rates.

“We have seen significant policy reform in both higher but also vocational education,” he said.

“While universities have experienced growth, vocational education has struggled to keep up with this change.

“The transitions from VET FEE-HELP to VET Student Loans just over three years ago, led to lowering lending limits for vocational education students and a dramatic drop in vocational education students.

“In the South Australian context, just over 20 per cent of TAFE’s 65,000 students each year path way to higher qualifications. This means we are, or we can be, an incredible enabler of participation in higher education.

“Traditional ways of offering programs are changing more rapidly than what has been in the past, and so must we.”

Discussing the role of international education for the state, South Australia Minister for Trade, Tourism and Investment, the Hon. David Ridgway announced the release of the International education 2030 strategy which he said aims to double the size of the industry to be worth $3 billion with approximately 71,000 students by the year 2030.

Commenting on the International education 2030 strategy the University of Adelaide Vice Chancellor and President, Professor Peter Rathjen said “I think we have done a silly thing making our universities addicted or dependent on international student revenue but I do want to indicate that those new targets are very welcome as is the governments’ strong support for international students generally.

“It’s important recognition of the value of international students to this state.”

Professor Rathjen said while the economic benefits and value of international students was often discussed, it was also important to discuss the cultural benefits and richness that international students add to cities.

“They live work and play in the CBD and have brought a cultural vibrancy that we did not have before. It’s improved us,” he said.

“That same cultural diversity and vibrancy, we welcome also for our domestic students.

“They gain much from being exposed to people from all over the world.

“We now have about 31 per cent of international students at the University of Adelaide.

“In a globalised economy I think we give our students a much better experience and a much better education as a consequence.

“The links that are formed endure as well.

“As a state we know…we need to do business internationally and that can start with our young people.”