Minister Clare recently announced the creation of 9,500 “extra” places at University for 2026.  Unfortunately, all is not as it might seem.

A causal reader might naturally assume that these “extra” places come with Government funding.  Would that this were true.  For universities already at their government funding cap, these extra places come with no increase in the Government contribution, only the student contribution.  Universities currently nominally below their funding cap are currently receiving the full amount anyway under the Higher Education Continuity Guarantee scheme, so they won’t receive addition government funding for these places either. The sector is taking on additional load with only partial funding for these students.

Moreover, these “extra” places don’t really exist in any meaningful sense.  Minister Clare states that this purported increase comes from ATEC “allocating” these places “on top of 2025 levels”.  The problem with this is that ATEC as currently constituted has no authority to allocate places.  This is because the legislation that will authorise it to do so has not even been published, let alone passed by Parliament.

The terms of reference for the interim ATEC are restricted to consultative and advisory functions. 

The critical point here is that these “extra” places are actually an informal and unlegislated restriction on new enrolments.  Under the current legislation, universities can theoretically enrol as many Commonwealth-Supported students as they like, albeit only receiving the student contribution once they reach their government contribution cap.  The 9,500 places are not an increase; they are a restriction on this capacity.

The Interim ATEC has negotiated these restrictions with individual universities, but they currently have no legislative force and are certainly not an “allocation of places”.

Indeed, in the absence of the legislation, there are important questions to consider about how these restrictions comply with consumer and competition legislation, as they could be seen as forcing cartel-type behaviour on the sector by restricting competition.

This post appeared as an opinion piece in The Australian on 20 November, 2024

In the run-up to the last election, Labor made big transformative promises about the higher education sector.

Foreshadowing what became the Universities Accord, then education spokeswoman Tanya Plibersek positioned Labor as ­establishing a once-in-a-gen­eration transformation of higher education, rising above the party political fray; they would “stop the bickering”, “dial down the politics” and “end uncertainty” for students and the sector.

After the election, new Education Minister Jason Clare ­echoed those sentiments when he announced the Accord. He was focused on “resetting the relationship” between government and the sector; “rebuilding” international education and making “real long-lasting change” to improve equity and stability for universities and their students.

There have certainly been some positives: 20,000 government-funded places were created for equity students, although those places expire for next year’s commencements. The introduction of “prac payments” for some students undertaking practicals as part of their studies is a welcome relief for those students, although the eligibility net could have been cast wider. The reform of the Australian Research Council to remove political interference in decision-making is likewise welcome.

Yet the reality of the past three years has been very different from the promises of the accord.

Instead of greater stability, support and transparency, universities face more uncertainty, increased bureaucracy and micro­management, and greater politicisation of the sector.

Imagine a situation in which a government – any government – introduced export caps on individual companies in the resources sector, with no consultation with the sector on those caps, and hadn’t modelled the impact of the caps on GDP or on jobs. This is the situation higher education faces, our largest non-resource-based export industry.

Universities are often criticised for their reliance on international student revenue, but the reality is this revenue is used to a large degree to make up for under­funding of research. Australian government funding of research and development is around a third lower than the OECD average, and less than a third of that goes to universities.

There is a conversation to be had about the level of internationalisation we want in universities and the impacts that might have on housing and the economy, but arbitrary restrictions – first through ministerial diktat then through proposed, if ultimately unsuccessful, legislation – is not the kind of conversation the accord promised.

Universities also face increased government reporting and oversight on issues from student support to preventing gender-based violence, despite an regulatory framework that already addressed these issues. In the absence of better funding, this can only divert resources from student-facing activities to increased compliance obligations.

And while the headline intent of the accord was to support increased participation and outcomes, particularly for equity students, the funding mechanism to achieve this is yet to be announced. Proposals released for consultation earlier this year, however, did not inspire, with further increased bureaucracy and reporting. Realistically, any revised funding mechanism is unlikely to be implemented before 2027 at the earliest.

The next parliamentary term looks to be one of peak uncertainty for universities. We know the bad: drastic cuts in revenue through restrictions on international students. We have no certainty about the potential good: funding mechanisms to support equity and growth ambitions. It is ­little surprise many universities have announced significant cuts and job losses.

As we enter the election cycle, we need to stop using higher education as a political football for debates over immigration.

We need certainty over funding so we can continue to deliver the world-class education and research of which Australia is rightly proud. We need to trust universities to deliver this without constant bureaucracy and reporting, while holding them accountable for outcomes.