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University Challenged - The Australian Case Study

University Challenged - The Australian Case Study
 Duncan Ivison
Deputy Vice Chancellor and Professor at the University of Sydney

The French higher education and research (HER) system has been facing many challenges for several years: demographic influx, lack of autonomy of institutions, underfunding, lack of attractiveness... The Covid-19 crisis has exacerbated these structural difficulties. But is the French case unique? To answer the question, Institut Montaigne has launched a blogpost series to shed light on the challenges and opportunities faced by other HER systems worldwide. For the second article of our series, we dive into Australia's HER system and what to learn from it.

A paradox has emerged in the wake of the Covid-19 pandemic for higher education globally. On the one hand, the pandemic has demonstrated just how extraordinarily important innovative and high-quality research is. The development of a vaccine in less than 12 months was a remarkable vindication of the work universities do, given it emerged on the back of years of basic scientific research. The success in many countries - such as Australia - in suppressing the community spread of the virus was also due, in no small measure, to the public health and social science expertise deployed through collaborations between universities, governments and local health experts. And yet, at the same time, in both Australia and France, the impact of Covid-19 on our students and staff has been devastating. In Australia, our international borders remain shut after 14 months, meaning the over 400,000 international students who are so vital to the dynamism and financial sustainability of our higher education system must continue their studies online. Our domestic students have only recently been able to come back onto campus. 

In the midst of this crisis, the government has refused to include universities in their emergency support programs. Moreover, they have implemented a new funding model that has reduced the share of funding the government provides per student overall, on the premise of seeking to promote more "job-ready" degrees. Just when you think higher education would be seen as essential to helping us to recover from the pandemic, we find ourselves struggling to maintain our funding and relevance to the government. 

In the midst of this crisis, the Australian government has refused to include universities in their emergency support programs.

It is thus fascinating to compare what is happening in Australia with the current situation in France and the bold recommendations made in Institut Montaigne’s report. On one level, it makes for depressingly familiar reading. Investment in R&D in Australia has sunk to 1.79% of GDP, well below the OECD average of 2.37% (and significantly lower than Germany, and especially rising research powerhouses such as South Korea and Israel). 

As in France, investment in higher education in Australia has been declining. In 1990, almost 60% of the University of Sydney’s funding came directly from the federal government. Today, less than 30% does, the gap made up increasingly by tuition fees, industry funding and philanthropy. But each of these alternative sources of funding has its risks and means our business model is more vulnerable than ever before. 

Unlike in France, Australian students pay roughly half of the cost of their education. However, they don’t have to pay any tuition up front and only start to pay it back once they begin earning income above a certain threshold (around €30,000 per year). Australia pioneered this "income-contingent" student loan scheme and it is probably the most just way of supporting access to higher education. The policy has broad community and bipartisan political support. In essence, it is a form of progressive taxation - those who benefit the most from their education are asked to pay back sooner than those who work in less well paying but essential roles. 

When it comes to research, we do not have access to funding at the scale of the European Research Council, and Institut Montaigne’s report makes a strong case for leveraging the contributions France is making much more effectively. This should be a major priority. In Australia, although funding for applied medical research has increased in recent years, funding for basic and non-medical research is declining in real terms. The government has asked Australian universities to seek out greater support from our industry and non-governmental partners, including focusing on the commercialization of research. Australian universities have responded to this challenge and industry funding is at record highs. However, it comes nowhere near plugging the funding gap for research and - for the most part - industry is interested in applied research, which ultimately depends on continuing to conduct the highest quality basic research. 

University philanthropy too has been transformed in Australia. For a long time, Australians were thought to be unwilling to donate to universities and giving was relatively modest. This has changed. The University of Sydney became the first Australian University to raise $1 billion for our recent "Inspired" fundraising campaign. Other leading universities are now chasing similar targets. However, like industry funding, philanthropy tends to be targeted at specific projects, as opposed to providing broad discretionary funding. 

One of the major challenges facing Australian higher education at the moment is the future of research funding. 

In fact, one of the major challenges facing Australian higher education at the moment is the future of research funding. Until now, Australia’s leading research-intensive universities - like Sydney - have used the tuition fees earned from international students to cross-subsidise our research efforts. That is now under severe threat due to the closure of our borders and a sense that the international student market is likely to change forever. Australia has been remarkably successful in attracting international students to our universities. At the University of Sydney, they make up almost 42% of our total student population. Higher education has become one of Australia’s leading "export" industries (after iron ore, coal and natural gas). But this now looks extremely precarious given border closures and uncertainty around when they will ever fully reopen. The government, so far, has been unwilling to help - and, in fact, is blaming universities for getting ourselves into this situation!

Although we don’t have the same fragmentation of the higher education system as in France, we do suffer from almost the opposite challenge: a lack of diversification. For a relatively small country, our universities tend to look very similar, without the kind of specialization, for example, between educationally focused and research focused institutions, and a diversity of research focus, that you see in the US or indeed Europe. This can result in already stretched research funding being spread even more thinly, and thus often disastrously low success rates in our major funding schemes. However, at the same time, like France, we also need to pull together our various funding agencies to create a more powerful entity that can drive research excellence across the country. 

There is no question that French universities are subject to even more central control than Australian ones are - which is saying something, as we are subject to over 120 legislative and regulatory regimes of one kind or another. This must be a serious drag on innovation and creativity in the French higher education system. Universities need the ability to play to their strengths, develop their strategies, cultivate an identity and recruit the staff and students that can help realise their ambitions. 

What France still has, though, is extraordinarily talented researchers, high-quality students and a remarkable history of higher education - the Sorbonne is, after all, one of the oldest in Europe. And that is why the University of Sydney has developed a close working relationship with some of France’s leading universities over the past five years, including joint degrees with Sciences Po and a priority research partnership with Sorbonne University. We see enormous opportunities in working more closely with French universities in a post-Brexit world and where Europe is turning towards the Asia-Pacific in new ways - and especially the Indo-pacific. Perhaps we can now also work together on reforming our fragile higher education systems. 



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