International Higher Education, Fall 2001

Australia: Higher Education Moves up the Political Agenda

Simon Marginson
Simon Marginson is Professor and Director of the Monash Centre for International Education, Monash University, Australia, and co-author with Mark Considine of The Enterprise University (Cambridge University Press, 2000). Address: PO Box 6, Monash University, Vic 3800, Australia; E-mail: <simon.marginson@education.monash.edu.au>.

The build-up to a federal election in Australia, expected in November, has seen renewed public attention to higher education. Polls rank education and health as the two most important issues to voters. Business organisations are talking up higher education and research. Polls also show that there is significantly more support for increases in education funding than for tax cuts, though none of the leading parties has departed from the small tax-spending politics which have dominated in Australia since the mid 1980s.

Education issues have sustained considerable media attention, particularly debates over the funding of private schools and about the state of the universities. Led by Ian Chubb from the Australian National University, and Gavin Brown (University of Sydney) and John Niland (University of New South Wales), vice-chancellors are talking about a ‘crisis’ in university resources, pointing to an increase in average student-staff ratios from 13 in 1990 to 18 in 1999. The federal government vigorously denies there is a problem. But whether there is a change of government or not, it is apparent that the education debate has reached a turning point, with a growing momentum for renewed public investment in education.

Both sides of politics are attempting to ride this shift in national mood. In February John Howard’s Liberal-National Party coalition, which has held power since 1996, gestured modestly in the direction of the knowledge economy with a USD $1.5 billion package of ‘Innovation’ measures, to be spent over five years. The Innovation policy largely reflected a high-science conception of the knowledge economy, centred on selected industry development in ICTs and biotech. The main items in the package were a doubling of the budget for Australian Research Council project grants – again, to be phased in over five years. The main non-science item was subsidization of the market in fee-based postgraduate vocational courses, mostly in Business. This benefits a relatively small cohort. The government’s package might be too little too late as it fails to restore the cuts to government outlays instigated in the second half of the 1990s. If Howard loses government then it is likely that education will be seen as one of the decisive issues.

In July the Opposition Labor Party issued An Agenda for the Knowledge Nation, a broad set of policies covering all forms of education and research, but lacking detail on spending programs or implementation machinery. This is a broader conception of the knowledge economy, talking in terms of a wholesale cultural transformation. Nevertheless it remains largely rhetorical. Labor Party leader Kim Beazley has emphasized that the Knowledge Nation policies would be introduced over a decade or more and would be subject to the prevailing fiscal constraints. He states that education would take second place to Labor’s promise to ‘roll back’ indirect taxes and maintain a budget surplus. Clearly the Opposition hopes to mobilize dissatisfaction with the government’s record on education, while at the same time sustaining the confidence of national and international finance. It is a difficult juggling act, and there is a danger is that neither trick will be pulled off. Electorally the risk that Labor is running is that too many voters will see it as no different to the government.

Nevertheless, the Labor Party has also tabled research findings indicating that investment in knowledge in Australia has declined significantly since the 1980s. These research findings are contained in Australia’s Comparative Performance as a Knowledge Nation by Mark Considine, Simon Marginson and Peter Sheehan, commissioned by the Chifley Research Centre.* The decline in investment in knowledge shows itself both in absolute terms (that is, in relation to past Australian efforts), and in relation to international comparators. These data help to explain the electoral volatility of the education issue, and suggest that it will be difficult for future Australian governments to sustain the highly restrictive fiscal regime that has dominated education policy for a decade and a half.

The OECD index of investment in knowledge is composed of three quantities, expressed as percentages of GDP–public investment in education, private and public investment in R&D, and spending on software (which is a proxy for the ICT sector). Using this index, in 1985 Australia invested 6.47% of GDP in knowledge compared to 7.60% in the USA and 7.46% in the 11 leading OECD economies. By 1998, investment in knowledge in the USA had reached 8.73% and in the eleven OECD countries was at 8.22%. In Australia it had slumped to 6.15%, with declines in both education and R&D. Unlike some other OECD economies, including those of the USA and the UK, Australia invests considerably more in physical plant and dwellings than it invests in knowledge, and this gap between ‘old economy’ and ‘new economy’ investment has increased over time.

In 1998, Australia invested 5.46% of GDP in education, just below the OECD country average of 5.66%. However public investment--once above OECD average levels--was at 4.34% of GDP, which was 21st out of 28 OECD countries (the OECD average was 5.00%). Private investment in education at 1.11% was the 6th highest in the OECD. In a nutshell, in the neo-liberal era, Australia has successfully shifted investment from the public side to the private side. However, private investment mostly takes the form of fee payment by students and families. Fees are relatively high in Australia, especially at university level, though the impact is modified by the system of deferred payment through the tax system (the Higher Education Contribution Scheme). Thus while high private investment provides fiscal relief for government, it has failed to generate a knowledge economy relationship between education and industry. Industry investment in both research and training falls well short of OECD norms. Correspondingly, the production of public goods has been weakened. The public sector is the main provider, especially at tertiary level; and all three public systems--schools, universities and training--are in unprecedented financial difficulties. Given the decline in public goods, it is not surprising that there is also a growing and evident bifurcation between educational haves and educational have-nots.

The pattern of public neglect and bifurcation begins early. Australia spends only 0.1% of GDP on pre-school education, and participation of four-year olds is at one third compared to an OECD average of 60%. In the school years, one third of students are located in the private sector. Private schools, which on the whole are attended by more affluent families, are largely funded by the federal government; while the public schools are dependent on more fiscally constrained state governments. The private schools have been favoured by recent funding allocations. Tertiary participation is above average, but the rate of early school leaving is also above the OECD average; and retention till the end of school has fallen from 77% in 1992 to 72% in 1999. Between 1995 and 1999 tertiary funding fell in Australia, one of very few OECD countries where this happened. Tertiary enrolment rates increased by an average of 23% in the OECD but only 6% in Australia. University enrolments have now stopped growing altogether, except for fee paying foreign students. These issues will keep higher education on the political agenda for some time to come.