Tertiary education in Australia

The Australian Government has the primary responsibility for public funding of higher education. The Higher Education Support Act 2003 sets out the details of Australian Government funding and its associated legislative requirements. Australian Government funding support for higher education is provided largely through:

• the Commonwealth Grant Scheme which provides for a specified number of Commonwealth supported places each year
• the Higher Education Loan Programme (HELP) arrangements providing financial assistance to students
• the Commonwealth Scholarships and
• a range of grants for specific purposes including quality, learning and teaching, research and research training programmes

The Department of Education has responsibility for administering this funding, and for developing and administering higher education policy and programs.

The federal government also plays a role in the quality and standards of higher education via the statutory agency Tertiary Education Quality and Standards Agency TEQSA.[5] The regulatory agency provides quality assurance and standards are met using various pieces of legislation for example Higher Education Standards Framework to ensure compliance.[5] It registers higher education providers and collects information to assess and evaluate performance.[5]

The first university established in Australia was the University of Sydney in 1850, followed in 1853 by the University of Melbourne. Prior to federation in 1901 two more universities were established: the University of Adelaide (1874) and the University of Tasmania (1890). At the time of federation, Australia's population was 3,788,100 and there were fewer than 2,652 university students. Two other universities were established soon after federation: the University of Queensland (1909) and the University of Western Australia (1911). All of these universities were controlled by State governments and were largely modelled on the traditional British university system and adopted both architectural and educational features in line with the (then) strongly influential 'mother' country. In his paper Higher Education in Australia: Structure, Policy and Debate[8] Jim Breen observed that in 1914 only 3,300 students (or 0.1% of the Australian population) were enrolled in universities. In 1920 the Australian Vice-Chancellors' Committee (AVCC) was formed to represent the interests of these six universities.

The 'non-university' institutions originally issued only trade/technical certificates, diplomas and professional bachelor's degrees. Although universities were differentiated from technical colleges and institutes of technology through their participation in research, Australian universities were initially not established with research as a significant component of their overall activities. For this reason, the Australian Government established the Commonwealth Scientific and Industrial Research Organisation (CSIRO) in 1926 as a backbone for Australian scientific research. The CSIRO still exists today as a legacy, despite the fact that it essentially duplicates the role now undertaken by Australian universities.

Two university colleges and no new universities were established before World War II. On the eve of the war, Australia's population reached seven million. The university participation level was relatively low. Australia had six universities and two university colleges with combined student numbers of 14,236. 10,354 were degree students (including only 81 higher degree students) and almost 4,000 sub-degree or non-award students.

In 1942, the Universities Commission was created to regulate university enrolments and the implementation of the Commonwealth Reconstruction Training Scheme (CRTS).

After the war, in recognition of the increased demand for teachers for the "baby boom" generation and the importance of higher education in national economic growth, the Commonwealth Government took an increased role in the financing of higher education from the States. In 1946 the Australian National University was created by an Act of Federal Parliament as a national research only institution (research and postgraduate research training for national purposes). By 1948 there were 32,000 students enrolled, under the impetus of CRTS.

In 1949 the University of New South Wales was established.

During the 1950s enrolments increased by 30,000 and participation rates doubled.

In 1950 the Mills Committee Inquiry into university finances, focusing on short-term rather than long-term issues, resulted in the State Grants (Universities) Act 1951 being enacted (retrospective to 1 July 1950). It was a short-term scheme under which the Commonwealth contributed one quarter of the recurrent costs of "State" universities.

In 1954 the University of New England was established. In that year, Robert Menzies established the Committee on Australian Universities. The Murray Committee Inquiry of 1957 found that financial stringency was the root cause of the shortcomings across universities: short staffing, poor infrastructure, high failure rates, weak honours and postgraduate schools. It also accepted the financial recommendations in full, which led to increased funds to the sector and establishment of Australian Universities Commission (AUC) and the conclusion that the Commonwealth Government should accept greater responsibility for the States' universities.

In 1958 Monash University was established. States Grants (Universities) Act 1958 allocated funding to States for capital and recurrent expenditure in universities for the triennial 1958 to 1960. In 1959 the Australian Universities Commission Act 1959 established the AUC as a statutory body to advise the Commonwealth Government on university matters. Between 1958 and 1960 there was more than a 13% annual increase in university enrolments. By 1960 there were 53,000 students in ten universities. There was a spate of universities established in the 1960s and 70s: Macquarie University (1964), La Trobe University (1964), the University of Newcastle (1965), Flinders University (1966), James Cook University (1970), Griffith University (1971), Deakin University (1974), Murdoch University (1975), and the University of Wollongong (1975). By 1960, the number of students enrolled in Australian Universities had reached 53,000. By 1975 there were 148,000 students in 19 universities.

Until 1973, university tuition was funded either through Commonwealth scholarships, which were based on merit, or through fees. Tertiary education in Australia was structured into three sectors:

• Universities
• Institutes of technology (a hybrid between a university and a technical college)
• Technical colleges

During the early 1970s, there was a significant push to make tertiary education in Australia more accessible to working and middle-class people. In 1973, the Whitlam Labor Government abolished university fees. This increased the university participation rate.

In 1974, the Commonwealth assumed full responsibility for funding higher education (i.e., universities and Colleges of Advanced Education (CAEs)) and established the Commonwealth Tertiary Education Commission (CTEC), which had an advisory role and responsibility for allocating government funding among universities. However, in 1975, in the context of federal political crisis and economic recession, triennial funding of universities was suspended. Demand remained with growth directed to CAEs and State-controlled TAFE colleges.

By the mid-1980s, it became the consensus of both major parties that the concept of 'free' tertiary education in Australia was untenable due to the increasing participation rate. Ironically, a subsequent Labor Government (the Bob Hawke/Paul Keating Government) was responsible for gradually re-introducing fees for university study. In a relatively innovative move, the method by which fees were re-introduced proved to be a system accepted by both Federal political parties and consequently is still in place today. The system is known as the Higher Education Contribution Scheme (HECS) and enables students to defer payment of fees until after they commence professional employment, and after their income exceeds a threshold level – at that point, the fees are automatically deducted through income tax.

By the late 1980s, the Australian tertiary education system was still a three-tier system, composed of:

• All tertiary institutions established as universities by acts of parliament (e.g. Sydney, Monash, La Trobe, Griffith)
• A collection of institutes of technology (such as the Royal Melbourne Institute of Technology (RMIT))
• A collection of colleges of Technical and Further Education (TAFE)

However, by this point, the roles of the universities, institutes of technology and the CSIRO had also become blurred. Institutes of technology had moved from their traditional role of undergraduate teaching and industry-consulting towards conducting pure and applied research. They also had the ability to award degrees through to Doctor of Philosophy (PhD) level.

For a number of reasons, including clarifying the role of institutes of technology, the Federal Minister for Education of the time (John Dawkins) created the unified national system, which compressed the former three-tier tertiary education system into a two-tier system. This required a number of amalgamations and mergers between smaller tertiary institutions, and the option for institutes of technology to become universities. As a result of these reforms, institutes of technology disappeared and were replaced by a collection of new universities. By the early 1990s, the two-tier tertiary education was in place in Australia – university education and Technical and Further Education (TAFE). By the early years of the new millennium, even TAFE colleges were permitted to offer degrees up to bachelor's level.

The 1980s also saw the establishment of Australia's first private university, Bond University. Founded by businessman Alan Bond, this Gold Coast institution was granted its university status by the Queensland government in 1987. Bond University now awards diplomas, certificates, bachelor's degrees, masters and doctorates across most disciplines.

For the most part, up until the 1990s, the traditional Australian universities had focused upon pure, fundamental, and basic research rather than industry or applied research – a proportion of which had been well supported by the CSIRO which had been set up for this function. Australians had performed well internationally in pure research, having scored almost a dozen Nobel Prizes[9] as a result of their participation in pure research.

In the 1990s, the Hawke/Keating Federal Government sought to redress the shortcoming in applied research by creating a cultural shift in the national research profile. This was achieved by introducing university scholarships and research grants for postgraduate research in collaboration with industry, and by introducing a national system of Cooperative Research Centres (CRCs). These new centres were focused on a narrow band of research themes (e.g., photonics, cast metals, etc.) and were intended to foster cooperation between universities and industry. A typical CRC would be composed of a number of industry partners, university partners and CSIRO. Each CRC would be funded by the Federal Government for an initial period of several years. The total budget of a CRC, composed of the Federal Government monies combined with industry and university funds, was used to fund industry-driven projects with a high potential for commercialisation. It was perceived that this would lead to CRCs becoming self-sustaining (self-funding) entities in the long-term, although this has not eventuated. Most Australian universities have some involvement as partners in CRCs, and CSIRO is also significantly represented across the spectrum of these centres. This has led to a further blurring of the role of CSIRO and how it fits in with research in Australian universities.

People attending a tertiary institution as a percentage of the local population at the 2011 census, geographically subdivided by statistical local area

Total employment in tertiary education (thousands of people) since 1984

The transition from a three-tier tertiary education system to a two-tier system was not altogether successful. By 2006, it became apparent that the long term problem for the unified national system was that newer universities could not build up critical mass in their nominated research areas – at the same time, their increase in research level deprived traditional universities of high calibre research-oriented academics. These issues were highlighted by the Melbourne Institute of Applied Economic and Social Research in 2006. The available money was spread across all universities, and even the traditional universities had a diminished capacity to maintain critical mass. The Melbourne Institute figures, based upon Government (DEST) data, revealed that many of the newer universities were scoring "zeros" (on a scale of 0 – 100) in their chosen research fields (i.e., were unable to achieve the threshold level of activity required).

In 2006 Campion College was opened in Sydney as Australia's first liberal arts tertiary college.

In 2008, Canberra lifted restrictions on university enrolments, in order to make tertiary education more accessible to students from socioeconomic groups which had previously had relatively low levels of education. However, since federal funding to each university is largely determined by student numbers, this created an incentive for universities to increase their enrolments by accepting students with weak academic skills. In response to falling graduation rates and academic standards, along with rising grants to the tertiary sector, Canberra will freeze grants at 2017 levels for two years, followed by increases according to population growth and university performance. Graduates in high-paying jobs will have to put a certain percentage of their income toward repaying their student debts.[10]

The Coronavirus pandemic of 2020 has impacted the Australian tertiary education sector by reducing revenue by A$3 – 4.6 billion.[11] Australian universities depend on overseas students for their revenue.[11] Federal Education Minister Dan Tehan announced a $18 billion package to support the sector by allowing universities to offer short courses of 6 months duration with at least 50 per cent reduction in fees.[11][12] Tehan announced that 20,000 places short-term courses in nursing, teaching, health, IT and science.[11][12]

With a larger proportion of university turnover derived from non-Government funds,[30][31] the role of university vice chancellors has moved from one of academic administration to strategic management. Accompanying this shift has been a massive rise in the remuneration of these officials to as much as $1.5 million per year.[32] However, university governance structures remained largely unchanged from their 19th-century origins. All Australian universities have a governance system composed of a vice-chancellor (chief executive officer); chancellor (non-executive head) and university council (governing body). However, unlike a corporate entity board, the university council members have neither financial nor vested specific interests in the performance of the organisation (although the state government is represented in each university council, representing the state government legislative role in the system).

The late 1990s and early years of the new millennium therefore witnessed a collection of financial, managerial and academic failures across the university system – the most notable of these being the Melbourne University Private venture, which saw hundreds of millions of dollars invested in non-productive assets, in search of a 'Harvard style' private university that never delivered on planned outcomes. This was detailed in a book (Off Course)[33] written by former Victorian State Premier John Cain (junior) and co-author John Hewitt who explored problems with governance at the University of Melbourne, arguably one of the nation's most prestigious universities.

The Australian Federal Government has established two quality systems for assessing university performance. These are the Tertiary Education Quality and Standards Agency (TEQSA) and Excellence in Research for Australia (ERA).

The TEQSA reviews of universities essentially look at processes, procedures and their documentation. The TEQSA exercise, largely bureaucratic rather than strategic, is currently moving towards its second round of assessments, with all Australian universities having seemingly received mixed (but generally positive) results in the first round. TEQSA's shortcoming is that it does not specifically address issues of governance or strategic planning in anything other than a bureaucratic sense. In the April 2007 edition of Campus Review,[34] the Vice Chancellor of the University of New South Wales, Fred Hilmer, criticised both AUQA (the agency before it became TEQSA) and the Research Quality Framework (a precursor to the ERA that was discarded before rollout):

"... singling out AUQA, Hilmer notes that while complex quality processes are in place, not one institution has lost its accreditation – 'there's never been a consequence – so it's just red tape...'"

"...The RQF is not a good thing – it's an expensive way to measure something that could be measured relatively simply. If we wanted to add impacts as one of the factors, then let's add impact. That can be achieved simply without having to go through what looks like a $90 million dollar exercise with huge implementation issues."

The RQF (scrapped with the change in government in 2007) was modelled on the British Research Assessment Exercise (RAE) system, and was intended to assess the quality and impact of research undertaken at universities through panel-based evaluation of individual research groups within university disciplines. Its objective was to provide government, industry, business and the wider community with an assurance that research quality within Australian universities had been rigorously assessed against international standards. Assessment was expected to allow research groups to be benchmarked against national and international standards across discipline areas. If successfully implemented, this would have been a departure from the Australian Government's traditional approach to measuring research performance exclusively through bibliometrics. The RQF was fraught with controversy, particularly because the cost of such an undertaking (using international panels) and the difficulty in having agreed definitions of research quality and impact. The Labor government which scrapped the RQF has yet to outline any system which will replace it, stating however that it will enter into discussions with higher education providers, to gain consensus on a streamlined, metrics-driven approach.

Australian universities consistently feature well in the top 150 international universities as ranked by the Academic Ranking of World Universities, the QS World University Rankings, and the Times Higher Education World University Rankings. From 2012 through 2016, eight Australian universities have featured in the top 150 universities of these three lists.[35][36][37][38] The eight universities which are regularly ranked highly are Australian National University, the University of Melbourne, the University of Queensland, the University of Adelaide, Monash University, the University of Western Australia, the University of New South Wales, and the University of Sydney. These universities comprise Australia's Group of Eight, a coalition of research-intensive Australian universities.[39]