Finance Finance News New government model ‘shaves’ $900 million from university funding
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New government model ‘shaves’ $900 million from university funding

The government's funding model could shortchange universities by $900 million. Photo: TND
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Universities will lose $900 million in funding under the federal government’s plan to divert students from humanities to science and technology, new modelling shows.

It comes as separate research by the Productivity Commission shows young people could become trapped in low-skilled, low-paying jobs for years, with the coronavirus crashing into a jobs market that has yet to recover from the global financial crisis.

Announced by federal Education Minister Dan Tehan last month, the government’s Job-ready Graduates Package is aimed at moving students into “disciplines and regions where they are needed most”.

In the eyes of the Coalition, that means directing students into science, technology and engineering (STEM) courses by lowering the price of these courses and increasing the cost of others, such as the arts.

But new analysis from the Bankwest Curtin Economics Centre (BCEC) shows the government’s plan will take away more than $1.7 billion from the sector, based on current enrolments and course selections.

Factoring in an expected increase in student payments of $800 million, that would result in a total funding fall of roughly $900 million, at a time when closed international borders have already delivered a massive financial blow.

The cost of government’s plan

“While total funding from both student and Commonwealth contributions will be closer to the median cost for most courses, student contributions have increased substantially for a number of courses [under the model],” researchers Dr Steven Bond-Smith and Associate Professor Rebecca Cassells wrote. 

“Most courses will have lower total funding overall relative to current median costs, with the exception of Medicine and Agriculture.”

The researchers noted although the package included a commitment to an extra 39,000 university places to combat a weakened jobs market, it would only add roughly $1 billion per year in funding.

But that boost would not be enough to replace the substantial revenue lost from dwindling international student numbers, they said.

Funding model exacerbates ‘pink-collar recession’

Under the proposals, the BCEC modelling found courses with some of the highest female enrolments would be hardest hit.

The greatest increase in student contributions would be for Society and Culture Courses, where students would on average be expected to pay $7696 more in tuition fees.

Women comprise more than two-thirds of total enrolments.

However, students will pay an average of $1998 less for male-dominated courses such as architecture, engineering and IT.

If current education patterns and costs remain stable until the changes are implemented, the modelling found young women would pay almost half a billion dollars more each year towards their education.

That’s roughly $160 million more than their male counterparts.

Government ‘misses the mark’ on stated aims

The research also found the government’s proposal may undermine its intent to equip students with skills for the “jobs of the future”.

Despite the heavy emphasis on subjects within science and technology, the researchers said the funding could be better directed.

For instance, it could be funnelled into Society and Culture courses that improve people’s communication skills and are thus “more transferable when jobs and tasks are disrupted by automation”.

And although funding within health, nursing and psychology will receive a healthy boost, the BCEC researchers said worker shortfalls within the industry would not be solved by lower university costs.

“The full-time equivalent workforce of registered nurses in aged-care facilities in Australia was 85 per cent of required levels in 2016, and for enrolled nurses it was only 38 per cent of required levels,” they wrote.

“Even if lower course costs do encourage more students to enrol in Nursing degrees, the sector faces significant worker retention problems, which require policy to be focused on employment conditions in order to resolve current and future skill shortages.”