How defensible were the government’s JobKeeper decisions for public universities?

The Australian Government’s JobKeeper program was intended as a temporary scheme to keep people in jobs during COVID lockdowns and business restrictions. It was originally scheduled to run until late September 2020. With some more limited extensions it finished at the end of March 2021. The government made several decisions that reduced the chance that a public university would qualify for JobKeeper support. This post evaluates those decisions from a public policy perspective. A subsequent post assesses how the various decisions affected public university JobKeeper eligibility.

In the rush to implement JobKeeper, the public university aspects were not well implemented or explained. University hopes were raised only to be dashed, feeding a sense of persecution as well as cutting off potential funding. I will argue, however, that the final policy position reached by the government, except for the time period for comparing 2019 and 2020 cash flows, was not wrong in principle.

More importantly, JobKeeper was never the right response to the higher education sector’s COVID-related problems. It was a short-term program aimed at helping employers maintain staff through domestic lockdowns and restrictions on activity. Regulations affecting the day-to-day activities of people in Australia were, and remain, very disruptive to universities but are not leading to a major loss of income. The financial problem is an international border closure that will last for more than two years. This will cause significant continuing revenue losses from international students into the mid-2020s.

The eventually announced extra government money for research and temporary new student places were more like what is needed. My critique of the government’s higher education response to COVID is that these policies were only announced late in 2020, and largely terminate before borders are predicted to re-open. Additional assistance for 2022 should be arranged.

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The ‘model code’ on academic freedom and freedom of speech and higher education law

In his speech to the Universities Australia conference yesterday, Education Minister Alan Tudge expressed frustration that some universities had still not, after 26 months, complied with the model code on academic freedom and freedom of speech devised by Robert French. He told delegates that:

If it becomes apparent that universities remain unable or unwilling to adopt the Model Code, I will examine all options available to the Government to enforce it – which may include legislation.

This post updates an earlier one on the relevant law and legal options around academic freedom and freedom of speech. It argues that, at this point, the government cannot legally require full implementation of the model code. Additional legislation is therefore needed.

A policy on academic freedom and freedom of speech

The most important legal change since my summary last September is that the Higher Education Support Act 2003 has been amended to remove a requirement for universities to have a policy on the undefined concept of ‘free intellectual inquiry’ and instead have one on ‘academic freedom and freedom of speech’. The amended section reads:

19‑115  Provider to have policy upholding freedom of speech and academic freedom

 A higher education provider that is a *Table A provider or a *Table B provider must have a policy that upholds freedom of speech and academic freedom.

Table A means the public universities, Table B is the other universities. The amendment also includes a definition of academic freedom:

academic freedom means the following:

                     (a)  the freedom of academic staff to teach, discuss, and research and to disseminate and publish the results of their research;

                     (b)  the freedom of academic staff and students to engage in intellectual inquiry, to express their opinions and beliefs, and to contribute to public debate, in relation to their subjects of study and research;

                     (c)  the freedom of academic staff and students to express their opinions in relation to the higher education provider in which they work or are enrolled;

                     (d)  the freedom of academic staff to participate in professional or representative academic bodies;

                     (e)  the freedom of students to participate in student societies and associations;

                      (f)  the autonomy of the higher education provider in relation to the choice of academic courses and offerings, the ways in which they are taught and the choices of research activities and the ways in which they are conducted.

This is a revised version of the definition of academic freedom that appears in the French review. It does not, however, include all the issues covered in the model code.

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Can performance penalties reduce university maximum basic grant amounts?

The current university funding agreements change the nature of performance funding. Previously performance funding was configured as a reward scheme, providing additional funds in exchange for meeting performance-related criteria. Now it is a penalty scheme, deducting money from teaching grants if universities don’t meet performance criteria. The performance benchmarks are assumed to align with the pre-Job-ready Graduates performance funding policy, but this has not been publicly confirmed.

This post explores whether a performance deduction from teaching grants is legally permissible under the Higher Education Support Act 2003. It is clearly not the kind of performance incentive envisaged by HESA 2003, and there are grounds for thinking that a court might find that it is partially or entirely invalid.

The maximum basic grant amount and the performance penalty

The most important grant provision in HESA 2003 is the maximum basic grant amount (MBGA) for higher education courses. This establishes the maximum amount the government will pay from the Commonwealth Grant Scheme (CGS) for Commonwealth supported student places in coursework courses, other than demand driven enrolments for regional and remote bachelor-degree Indigenous students and medical courses. The total value of this grant for 2021 is about $6.8 billion.

Under HESA 2003 each university is to be paid the lesser of the higher education courses MBGA, as set out in their funding agreement, or the total Commonwealth contribution value (relevant discipline funding rates * full-time equivalent students) of student places delivered. Any enrolments above the cap are funded at the student contribution rate only.

The funding agreements include total MBGA amounts for the next three years. The example below is from Macquarie University’s funding agreement, but all agreements have the same or similar formats.

Another clause in the funding agreements, however, purports to take away an element of the MBGA in the event of poor performance. The example below is again Macquarie but all other other agreements have the same format.
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New allocations of money and student places in the university funding agreements

Update 7/7/21: Some of the data in this post has been updated here.

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Last month I wrote an overview and critique of the new university funding agreements. This post looks at new allocations of funding for student places, while a subsequent post will look at total funding allocations. Not all my numbers match previously announced total funding for the relevant program, so that is a caveat on both posts.

Under Job-ready Graduates universities are free of sub-bachelor and postgraduate student places being allocated by funding cluster, but the funding agreements show that universities have significant additional work to do in applying for and reporting on a range of small programs.

Numbers of universities getting different allocations

Job-ready Graduates introduced several new or substantially revised pots of money. Not all universities receive each of these. As the chart below shows, programs driven by criteria or formulas set out in legislative instruments (NPILF and transition funding) or the legislation itself (demand driven funding for Indigenous students from regional and remote areas) benefit the largest number of universities. Apart from the general grants for higher education courses (sub-bachelor through to masters coursework, except medicine), the ministerial/departmental discretion programs benefit fewer universities.

Short courses funding

According to the funding agreements, 27 of the 37 public universities have received once-off 2021 funding for undergraduate certificate and/or graduate certificate short courses. When a university’s funding agreement reported $0 for short courses I cross-checked against CourseSeeker with its ‘short course’ filter on and found three more universities. I am not sure whether this is because those universities adopted the ‘short course’ brand without a specific funding allocation, or because their funding agreements are yet to be updated, or because CourseSeeker is wrong. My adding up of the value of funding agreement short courses gets me to $213 million, out of the $252 million allocated for 2020-21 in the October 2020 Budget.
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Academic freedom as a principle and a practice (a review of Open Minds: Academic Freedom and Freedom of Speech in Australia)

Open Minds: Academic Freedom and Freedom of Speech in Australia is an accessible overview of the subjects in its sub-title. It covers rationales for academic freedom and freedom of speech, the current law, historical controversies, and emerging threats.

Its authors are two law academics, Carolyn Evans and Adrienne Stone, with Evans now a vice-chancellor. Jade Roberts, a legal researcher, assisted them.

As a general concept few people are against academic freedom. Nobody is calling for powerful figures – ministers, bureaucrats, or vice-chancellors for example – to direct the detail of what Australian academics research, teach or say. Yet the historical chapters of Open Minds report many cases through the decades raising issues of ‘academic freedom’. People regularly see exceptions to this otherwise widely-supported idea.

In judging disputed situations first principles can help. Yet these are also the subject of disagreement and grey areas. Academic freedom is not a clear and unchanging principle but instead a practice that has evolved over centuries, originally as institutional autonomy from church and state, with the current idea of academics personally having freedom developing from the late 19th century.

Only this year, after Open Minds was published, have the precise words ‘academic freedom’ with a definition been inserted into university funding legislation. Until then, as the Open Minds chapter on law explains, the language was of ‘free intellectual inquiry’, with universities and regulators left to decide what that meant. Even this terminology is recent, dating from 2011 in funding legislation and accreditation regulation, with ‘free inquiry’ used from 2000 in national legal definitions of a university. Australia has had universities since the 1850s.

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University-Commonwealth funding agreements and the rule of law in higher education

The 2021-23 funding agreements between universities and the government, the first of the Job-ready Graduates era, were put on the DESE website earlier this year. In this post I compare them to the pre-JRG agreements.

My main concern is that the funding agreements are being used for matters that should be based on clear legal rules, not DESE discretion based on a one-sided ‘agreement’.

My concern reflects both the general political principle that policy decisions should be subject to parliamentary scrutiny and the practical problems caused by lack of certainty. Important funding conditions or criteria are not included in any legal document and DESE is given wide scope to interpret vague terms.

A broader scope

The most immediately obvious change is that the new funding agreements include more content than previously. They contain an overall summary of Higher Education Support Act 2003 institutional funding, including the Commonwealth Grant Scheme (CGS) funding that is the legal purpose of the funding agreements; rules around course closures, professional training, and the provision of information on costs and admissions; research, engagement and equity funding; and some background information and principles. The research, engagement and equity material is new and derives its legal standing from separate legislative instruments.

Putting key information in one place is helpful, and I would encourage the government to collate the summary funding tables combining teaching, research, equity and engagement funding for each university into a publication. But funding agreements with parts of varying legal status are not desirable. A mixed document makes it less clear for universities what they must do according to law and what is just the government/Department taking advantage of the sector’s culture of compliance. With such a large share of their income depending on their funding agreement, universities are reluctant to push back against the government’s demands.

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The complexities of new student places (again)

Tuesday’s Budget announced two lots of funding for new student places, for short courses and for ‘national priority’ courses. But in the complex Job-ready Graduates funding system it is hard to work out what will really happen. As with other policies that are intended to create new places, it is not clear that there is a financial incentive to increase enrolments.

The difficulties of introducing new money into a transitioning system

Between them, the two new allocations total about $550 million over the next four years, with the short course money lasting for two years.

The question is how this relates to the Job-ready Graduates transition fund. This fund is designed to leave universities with the same Commonwealth student-related funding for the next three years as if JRG had never happened.

The draft Commonwealth Grant Scheme Guidelines released at the end of last month set out how the transition fund will work. The Guidelines have several unclear and seemingly contradictory elements, which I discuss in a footnote.* But this is the basic formula for transition funding:

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Can universities just close loss-making courses?

As international student fee revenues fall universities are closing loss-making subjects and courses. Musicology at Monash. Maths and gender studies at Macquarie. Arts and social science subjects at Sydney. Neuropsychology at La Trobe.

Generally, universities have significant autonomy over what they teach. Changes in courses and subjects occur every year, in good as well as bad economic times.

But the funding agreements universities sign with the government impose some controls over course closures.

For courses leading to occupations deemed to be experiencing a skills shortage, and subjects teaching ‘nationally strategic’ languages, universities have to get government approval prior to closure.

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What are the academic freedom laws that Pauline Hanson wants?

As a condition of her vote for the Job-ready Graduates bill, One Nation Senator Pauline Hanson wants to add a new academic freedom provision to higher education legislation. According to yesterday’s media reports, the amendment would be in line with the wording recommended by the French review of freedom of speech in Australian higher education providers.

This change was already on the political agenda in early 2020, with consultations on the draft amendments. However, COVID-19 and perhaps Job-ready Graduates intervened and little has been heard of the issue recently, other than ex-Deakin VC Sally Walker being asked to look into implementation of the model code on university free speech proposed by Robert French.

I put in a submission to the legislation consultation, which recommended various amendments to the draft provisions, along with strengthening academic freedom to ensure that it was protected from government decisions.

This post is a slightly modified extract from the submission that explains the proposed amendments, with the aim of informing discussion if the Hanson amendment is introduced.

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Notes on the Job-ready Graduates bill, as introduced

The Job-ready-Graduates bill was introduced in the House of Representatives this morning. A couple of points on the funding floor and the social work/mental health deal with the National Party:

Funding floor

One unpleasant surprise in the draft Job-ready Graduates bill of earlier this month was that, with each funding agreement, the minister could reduce a university’s funding without parliamentary scrutiny or approval.

The bill as introduced has a clear fix of this problem – but from 2025: amending section 30-27(3)(b) of the Higher Education Support Act 2003 (HESA 2003). From then, the minister cannot reduce the university’s maximum basic Commonwealth Grant Scheme funding for higher education courses below what it was the previous year.

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