A three-year period of policy uncertainty for universities was brought to an abrupt close in December 2017 when the Federal Government used its MYEFO statement to announce the freezing of Commonwealth Grant Scheme funding for two years. In doing so, the statement finally laid to rest the failed de-regulation reforms announced in the May 2014 Budget. It also ended the Demand Driven System, under which universities were funded for as many domestic undergraduate students as they could recruit.
There was something of a stunned silence over the Summer but we are now seeing the first signs of the sector’s response. On February 6, John Ross of The Australian reported that the Australian Catholic University had announced course cancellations as little as two days after the MYEFO statement. In the same edition of the paper Simon Birmingham was quoted as arguing that universities should not cut key courses:
“There’s no reason universities cannot adjust their offerings in low-cost courses to offer higher-cost degrees that align to areas where there are, for example, strong employment outcomes.”
Only of course there is a reason. The clue is in the low cost / high cost thing. Most universities use the margins they generate from low cost subjects such as Business to cross-subsidise high cost subjects in Science and Health. They can’t afford to run the latter without revenue from the former. You will rarely see a for-profit private provider offering courses in Science or Health.
The potential threat to Science was the point made by Professor Emma Johnson in what Stephen Matchett (Campus Morning Mail February 15) identified as the first example of post-MYEFO special interest lobbying, when he reported on her address to the National Press Club. The University sector, always a rather fragile alliance of institutions, has a habit of dissolving into special interest groups when the going gets tough. It will be interesting to see exactly where the fracture lines emerge as the lurking debate about teaching only universities begins to shape up.
In February we have also seen the first chink in the armour of Federal determination, with the announcement that the University of the Sunshine Coast will be given the student numbers it needs to launch a new campus in 2020. We can be sure that other universities will be carefully nurturing exploitable political promises and relationships.
What we haven’t seen publicly of course are the discussions going on behind closed doors about strategic responses to the new operating environment. Some universities will be urgently reviewing their international student recruitment targets, others may feel comfortable embracing a greater level of student selection, but all will need to become much more strategic about their disciplinary mix and their curriculum management. In a situation where student numbers are significantly constrained, decisions about which courses to grow, which to cut and how to compete in the new environment will require reliable information, powerful insight and strong levers to drive change.