I’m yet to read more than a fraction of the latest batch (though I think I am safe in predicting that ‘gimme money’ will be the dominant message), but there is at least one interesting submission – from Lawrence Cram, a Deputy VC at ANU, though for reasons that will become apparent the submission is personal rather than institutional.
What Cram does is apply econometric analysis to the expenditure of universities, along with their teaching outputs (as measured by completions) and research outputs (as measured by publications). I will have to wait on people expert in econometrics to judge the value of Cram’s model.
Cram’s finding is that expenditure per completion is around $26,600 and expenditure per publication of $226,600. Figure 2 in Cram’s paper indicates that these represent improved efficiency since 1996. This is plausible, given casualisation of staff and increased class sizes on the teaching side, and the pressures of publish or perish on the research side.
Also consistent with theory is Cram’s finding that revenue increases over this period have increasingly been devoted to research. Almost everything backs research over teaching: the financial incentives from government, the preferences of staff, and the desire for prestige.
In what will be the most controversial finding of Cram’s paper, annual teaching costs are estimated at $8,750 – much lower than current government funding rates. Through an unexplained methodology, the Victorian Auditor-General arrived at a similar estimate for the cost per international student in Victorian universities.
Though these precise figures will be disputed, it is becoming clear that this is the key issue for the funding review. The source of the financial woes of public universities is that they are running integrated teaching-research businesses which rely on profits from teaching to sustain their research. As per student Commonwealth teaching revenue was cut in real terms 1995-2004, and then again 2009-11, their teaching profit margins were reduced, leading to cost cutting and international student recruitment to maintain the teaching-research model.
On my reading of the draft higher education provider standards, the teaching-research model is mandated for universities. What level of funding is needed to meet these requirements is something the review panel will have to decide.
Whatever the figure, however, this is clearly a very expensive way to run a higher education system. Creating a lower teaching-only funding rate and letting TAFEs and private providers into the system may allow some of the forecast expansion to occur at lower cost to students and taxpayers.