Australia: move Towards a Student Demand Driven System
Despite the structural reforms over the last decade (merging of institutions, various funding reforms) it has been felt that Australia requires a Higher Education system that is adaptive to the needs of a modern society and the consequential challenges of a global economy. The 2008 Australian review of Australian Higher Education (the ‘Bradley Review’)’was set up because the system was felt inflexible to the demands of the modern economy.
This review recognised the close links between tertiary skills and economic and social progress10: Only citizens who are resilient, informed, adaptable and confident will manage the consequences of the new global economy with all its opportunities and threats. A strong education system designed to ensure genuine opportunity for all to reach their full potential and to continue to improve their knowledge and capacities throughout their lives will build such people In response to the finding and recommendations of the Bradley review, the Australian Government presented a comprehensive 10-year reform package for the HE sector11.
This includes Government’s commitment to ensuring Australia’s higher education system better meets future needs. Additional funding should support high quality teaching and learning, and improve access and outcomes for students from low socio economic backgrounds. An important target is that 40 per cent of all 25 to 35 year olds will by 2025 hold a qualification at Bachelor level or above. To support this target the Government will fully fund a place for all undergraduate domestic students accepted into a recognised public higher education provider. One of the key factors reshaping higher education provision in Australia is the policy to implement a demand-driven funding and enrolment system, as stated in Australia’s higher education policy blueprint: ‘From 2012, Australian public universities < will be funded for student places on the basis of demand’12. This means that there will be no need for agreements on the number of funded places, as currently is the case. Instead, the preferences of students and the restrictions of universities determine student numbers. This will enable the sector to grow in response to demand from students and the needs of the society for more graduates. It is anticipated that this new system will produce an estimated 217,000 additional graduates by 2015.
The new, open-ended, student centred funding system will encourage universities to respond to student demand and to be more responsive to attract students from non-traditional social backgrounds. The precise impact of this policy has not yet been fully understood, as are the added complexities of high university attainment targets. The evidence shows a marked expansion in the number of students in the system, but several questions have been raised about the feasibility and the practicalities of reaching the 40% attainment target as set by Government. Although current data provides evidence to suggest some growth, it is uncertain whether it is sustainable . According to Angela Magarry the targets are ambitious and risks will be in expecting rapid adaptation and expansion without an adequate regulator to provide scrutiny over quality; and in not clearly articulating workforce requirements to balance institutional responsiveness to student demand against the national interest, and other needs of the society .
Following Magarry’s scepticism, two questions in particular need further attention:
- How is the demand justified from the perspective of the workforce? Would the labour market be able to absorb a larger number of graduates?
- To what extent can /should demand be absorbed by the current system as a whole or should new institutional structures be needed.
Degree qualifications, of course, are not confined to persons holding professional occupations. A recent projection prepared by Access Economics for Skills Australia (the Commonwealth Government’s advisory body on skills policy) concluded that there was likely to be rapid increase in the degree intensity of workers across a range of occupations. Access Economics based its projection on recent trends in skill intensity by occupation and on its estimates for productivity growth. The assumption was that the more rapid the growth in productivity, the greater would be the need for persons with post-secondary qualifications. Under the high-productivity scenario, the proportion of employees holding degree qualifications would need to increase from 24.0 per cent in 2007 to 33.8 per cent in 2025 . Chandra Sha’s study on economic changes and their implications for future demand for skills points in the same direction. In his report prepared for the Department of Education, Employment and Workplace Relations (DEEWR) he shows how the qualifications profile is shifting towards higher levels. In particular, the number of people holding diplomas as their highest qualification increased more than 10 per cent per year. Overall the total increase in employment of persons with qualifications is due to growth in employment, the shift to employment in high-skill occupations, and skills deepening.
The qualifications requirements are expected to increase sharply in the VET sector, but also in higher education. Additional skill needs could arise as a result of a change in the tasks that are to be performed in an occupation. In his view reforms that reduce barriers to participation would be one possible way to lift growth and reduce future pressures17 . Although a direct connection between these studies and the recent government policies has not been made, it is quite clear that the Australian Government’s 40 per cent target for the proportion of 25 – 34 aged persons holding degree qualifications is in tune with these trends.
The State Government of Victoria makes a more rigorous step and argues that Victoria will need a higher attainment, around 47 per cent at Bachelor level and above, both to meet industry and workforce needs in this State and to contribute effectively to the attainment of the Australia-wide target. As Victoria’s economic future is changing towards a knowledge economy, based on high-technology and high value-added goods and services, a more highly-skilled workforce is required. Victoria’s universities ‚provide the education and training required to develop the knowledge, skills and opportunities graduates need to enter the workforce and they deliver appropriately prepared workers to industries competing in the global economy‛.
The Panel based its views on a DIIRD publication (Industry Demand for Higher Education Graduates in Victoria 2008-2022) that stated that in order to meet Victoria’s workforce needs, there would need to be a significant expansion of the higher education system, especially in certain disciplines, to meet Victoria’s changing economic needs. Ad (b) Capacity of the higher education sector Questions have been raised in the extent to which the existing arsenal of higher education institutions would be able to meet the high participation targets and how universities would deal with the growth targets particularly regarding non-traditional students (low SES backgrounds, ethnic and mature students). Policy documents indicate that it is a significant challenge to create structures that also cater for the needs of mature-aged students and students who have not had a conventional pathway to higher education. These students may require tailored support and more flexible delivery options.
The Higher Education Participation and Partnership program (HEPPP) for example provides funding based on their respective share of indicator of students from low SES. In order to attract these students, higher education providers may develop more flexible delivery options regarding length and nature in an attempt to diversify their student cohorts. Another issue is whether the public system is well positioned to accommodate an ever larger number of students, or whether this system should be expanded. While currently about 95% of all students are enrolled in public universities, it has been the policy of successive Australian governments to encourage the growth of other higher education providers. It is likely that a significant proportion of the sector’s future growth may be in newer, privately funded providers which will operate alongside the established institutions that receive public funding. The Bradley Review is clear when it states that the initial roll-out of a demand-driven system be limited to Table A higher education providers and to undergraduate courses - but that ‚consideration be given to expanding this to postgraduate courses and to other providers in due course‛. The aforementioned Victorian Expert Panel takes the position that in order to accommodate a larger number of students more effective use of existing assets and infrastructure in the whole of the tertiary sector will be required.
The Panel goes on to state that (The Panel)< sees no short-term need for any new universities, but expects that new institutional structures may emerge over time. These may be completely new, independent institutions or they may arise out of collaborations between public and private providers and/ or with industry19 . The Panel is not very explicit how new institutional structures can be achieved. One recommendation is that the Victorian Government supports the further development of an open higher education market including the flow of Commonwealth funding to non-A providers as envisaged by the Bradley Review. Another is that the Panel emphasises that in an expanding system, it is important to pay particular attention to the maintenance of quality provision. Students need to be assured they will hold a credible qualification at the end of their studies and employers need to be assured that the graduates they employ have the knowledge and skills associated with a bachelor degree. However, the quality regime must not act as a barrier to diversity and innovation, nor should it inhibit the emergence of new quality-assured institutional structures or a wider range of private providers. For the Australian Government a strong demand-driven system would require a shift in direction for regulation and quality assurance of Australian higher education. For the latter purpose the Tertiary Education Quality and Standards Agency (TEQSA) has been established.