A 5/10 budget for undergraduate teaching

The interest groups at last night’s education budget lock-up (I went along representing the U of M) were pretty happy with what they heard. It’s true that with expectations having been managed down for months, what was actually delivered significantly exceeded them, particularly for research, infrastructure and student income support.

But on the core of the system – undergraduate education – the government deserves no more than 5 out of 10.

As announced earlier, they are going to exclude from the demand-driven system the private providers of higher education and the TAFEs offering degrees. While there is a commitment to consult with private providers about their future role, the demand-driven system is not going to deliver its full potential benefits without them being incorporated from the start.

The government has recognised – as per my Issue Analysis paper from February – that it needs to look at the prices received by providers. They are setting up a review to report by 2011. But I think their conceptual framework is mistaken; there is not an appropriate ‘internationally competitive’ funding level, but rather multiple funding levels for different students, courses, and institutions.

Nor am I confident that they can implement the findings of this review within their current constraints: the federal budget and no increase in student contribution amounts. Let’s not forget that the Rudd government’s first term in office is by this budget confirmed as a shocker for the higher ed sector’s provision of undergraduate education: real cuts in Commonwealth contributions for every year; real cuts in student contributions for all disciplines except teaching and nursing, which will get an increase next year; loss of additional income via domestic full-fee students; and (if the Senate passes the legislation) unfunded new spending obligations via Kate Ellis’s bungled reintroduction of amenities fees. This is worse than anything the Howard government ever did, and much worse than the last few Howard years.

If people who profess to great support for higher education deliver so little for so long, including one budget in which they had more money than they knew how to spend, what confidence can higher education providers have that they will get a reasonable price for their services? These are crippling uncertainties that rule out any innovation that would incur significant costs.

Despite claims from Julia Gillard that she wants to reduce red tape, so-called mission-based compacts are going to create yet more of it. Universities will have to meet various ‘agreed’ performance targets in order to get an additional 2.5% in Commonwealth teaching funding. This is the other insidious effect of price caps; that they so impoverish universities that they are preparated to accept this kind of micromanaging and jumping through hoops to get relatively small sums of money.

In a demand-driven system there is a possible role for government in providing information to students about the performance of higher education providers, but it should be up to students to decide what weight to put on them, rather than for government to determine institutional priorities.

Yes, the policy could have been worse. But it could also have been much better.