text doc.14/4 14/4/98 5:22 PM Page i LEARNING FOR LIFE Final report REVIEW OF HIGHER EDUCATION FINANCING AND POLICY April 1998 text doc.14/4 14/4/98 5:22 PM Page ii © Commonwealth of Australia 1998 Department of Employment, Education, Training and Youth Affairs ISBN 0 642 23733 6 This work is copyright. It may be reproduced in whole or in part for study or training purposes subject to the acknowledgment of the source and no commercial usage or sale. Reproduction for purposes other than those indicated above, requires the written permission from the Australian Government Publishing Service. Requests and inquiries concerning reproduction rights should be addressed to the Manager, Commonwealth Information Services, Australian Government Publishing Service, GPO Box 84, Canberra ACT 2601. Editorial assistance and indexing by WordsWorth Writing, Canberra Design and typesetting by i design, Canberra Printing by J S McMillan Printing Group DEETYA Number: 6055HERE 98A text doc.14/4 14/4/98 5:22 PM Page iii 17 April 1998 The Hon. Dr David Kemp MP Minister for Employment, Education Training and Youth Affairs Parliament House CANBERRA ACT 2600 Dear Minister In January 1997, Senator The Hon. Amanda Vanstone appointed a Committee to review Australia’s higher education system in order to develop a policy and financing framework to enable the sector to meet the nation’s social and economic needs in the next two decades. We are grateful for your continuing support of this exercise. We are pleased that this has been an independent review. We have been free spirits and have been unconstrained in examining the challenges of the future. On behalf of the Review Committee, I am delighted to present the final report. It is our hope that you will find the recommendations that we make appropriate and that the Government will be able to work closely with the academic and wider community to initiate reform at the earliest opportunity. On a personal note I must pay a warm tribute to my colleagues - Gary Banks, Peter Baume, Lauchlan Chipman, Doreen Clark, Clem Doherty and Kwong Lee Dow - who deliberated endlessly on the complex issues before them, and who always gave selflessly of their time and perspicacity. To our long suffering families we extend our grateful thanks. The Secretariat - all of them - have been diligent and professional in their approach to their task. Ian Creagh was the Committee Secretary until the publication of the Discussion Paper, and Clare White has presided over the passage of the final report. Both have been admirable leaders, unfailingly cheerful, discreet and well organised. They have had the able and energetic support of all the Secretariat: Lee Archinal, Satis Arnold, Heather Dyne, Amanda Moss, Joanna Tomes (the longest serving members of the group), Nicholas Hartland, Janette Howe, Mala Kurup, Ian Lucas, Claire Paten and William Thorn. Yours sincerely Roderick West text doc.14/4 14/4/98 5:22 PM Page v Contents Introduction 1 Chairman’s Foreword 5 Acronyms and abbreviations 13 Executive Summary 15 The key changes 15 A vision for higher education 16 Why is action needed now? 17 The way forward 21 Making the commitment 34 Recommendations 35 Chapter 1: A vision for higher education 43 Introduction 43 Why is lifelong learning important? 44 The purposes of higher education 44 What should students learn? 46 How can higher education contribute to the learning society? 47 A vision for the future Principles to underpin a higher education financing and policy framework 48 Chapter 2: The future operating environment 55 Directions of change 55 Community expectations will rise 56 Technology will revolutionise higher education 59 Competition will intensify 62 Pressures for structural change will gather 63 International demand for higher education services will grow 64 Domestic demand will grow 65 Meeting the challenges 66 Chapter 3: The current policy and funding 69 framework for higher education Achievements of the current policy and funding framework 69 Sustained massive growth in student numbers 70 Innovative Higher Education Contribution Scheme 73 Emergence of a major export earner 74 Expanded research effort 75 Institutional autonomy 77 Major shortcomings of the current framework 77 Planning is too centralised 78 Regulatory arrangements are inconsistent 82 Structure of incentives is poor 87 Effective management is hindered 89 v... text doc.14/4 14/4/98 5:22 PM Page vi Some equity aims have not been achieved 91 Competition is restricted 94 Industry dimension of the higher education sector is neglected 95 A better framework is needed 96 Chapter 4: The way forward 99 A student centred funding framework for teaching and learning 99 A more responsive framework for funding research training and research 100 A world-class higher education industry 101 Regulating the industry 102 Chapter 5: Funding teaching and learning 113 Student centred funding for teaching and learning 113 The Review Committee’s long-term goal 120 The key decisions for the Government 122 Risks 136 Chapter 6: Research and research training 149 Research training 149 Getting better value from the investment in research training 156 Priority setting for allocating funds for research training and research 157 Research infrastructure 159 Research Quantum 163 The structure and administration of research funding programs 164 Chapter 7: Making the transition 167 Taking the long view 167 Impact on students 167 Impact on institutions 168 Implementing the Review Committee’s Recommendations 169 Appendix 1: Terms of Reference 177 Appendix 2: List of Submissions 181 Appendix 3: List of Responses to the Review 193 Committee’s Discussion Paper Appendix 4: Visits and Consultations 199 Bibliography 211 Index 223 ...vi text doc.14/4 14/4/98 5:22 PM Page 1 Introduction In the decade that has passed since the last major review of higher education in Australia there have been sustained and far-reaching changes to higher education. These changes have included the abolition of the ‘binary divide’ between universities and colleges of advanced education and the transformation of the sector from an elite to a mass higher education system. Over the next two decades, the increasing globalisation of education services and advances in communications technology are likely to have a profound impact on the nature of teaching, learning and research. Against this background, the Government announced in the 1996 budget its intention to establish a major independent review to examine the processes shaping the future of higher education and to develop a policy and financing framework to enable the higher education sector to meet the nation’s economic and social needs in the long term. In January 1997, Senator the Hon. Amanda Vanstone, the then Minister for Employment, Education, Training and Youth Affairs, announced the terms of reference for the Review of Higher Education Financing and Policy and membership of the committee that would undertake that review. Since his appointment to the position of Minister, the Hon. Dr David Kemp, has endorsed the Review and stressed its independence as a key source of advice to the Government. Terms of Reference The central elements of the terms of reference for the review are as follows. • The Review Committee will undertake a broad ranging review of the state of Australia’s higher education sector, the effectiveness of the sector in meeting Australia’s social, economic, scientific and cultural needs, and the developments which are likely to shape the provision of higher education in the next two decades. • The Review Committee will develop a comprehensive policy framework for higher education that will allow universities to respond creatively and flexibly to change, and will ensure that the sector meets the needs of students, industry and society in general as these are likely to develop over the next two decades. • Within this framework, the Review Committee will identify options for the financing of higher education teaching and research, and for providing Commonwealth funding to higher education institutions for these purposes. The complete terms of reference are in Appendix 1. Review Committee membership The Review Committee comprised: Gary Banks The Hon. Professor Peter Baume AO Professor Lauchlan Chipman Dr Doreen Clark AM Clem Doherty Professor Kwong Lee Dow AM Roderick West, Chair 1... text doc.14/4 14/4/98 5:22 PM Page 2 Learning for Life: Review of Higher Education Financing and Policy How the Review Committee undertook its task The Review Committee recognised that the terms of reference require a long–term, visionary perspective. We have therefore focused on developing broad principles, goals and strategies rather than a detailed blueprint for the sector. As a small group, with members drawn from diverse backgrounds, the Review Committee chose to function without a sub-committee or working party structure. Committee members met formally as a group 22 times over a 16-month period and many more times on a less formal basis throughout the course of the review. The Review Committee, however, could not perform its task on its own and we recognise the tremendous body of expertise, experience and commitment of people already associated with the sector. The Review Committee took every opportunity to inform its views by meeting with people, listening, consulting and exploring ideas. Many provided us with written material which we read, considered and have drawn on in preparing this document. We are most grateful for the contributions, efforts and assistance that have