The Guardian 1 February, 2006

Australian unis:
greater cost, less access

Peter Mac

Despite rising interest in some courses, enrolments at Australian universities are falling, as the cost of tertiary education soars. The universities may now lose crucial federal funding, which is dependent on student numbers. Many universities are financially hard-pressed, and some are considering dropping their entrance levels (and their level of academic excellence) in order to boost enrolments.

Education expert Richard James described students with entry levels below 60 as having "marginal levels of readiness", but one university Vice Chancellor commented ingenuously that entry levels below 50 might be accepted because "social disadvantage" had to be considered.

Faced with a drought of funding, some universities are going into debt in order to finance their operations. The John Curtin School of Medical Research at the Australian National University has just been constructed with funds raised by issuing CPI-indexed annuity bonds*, rather than government funding. It raised $115 million through the issue of bonds for this and other capital and maintenance work — money that would previously have been provided by government.

The cost of this debt will be passed on to students and their families in the form of higher fees. Higher fees will be charged not only for studies, but for all of the facilities that students have taken for granted for years. The introduction of Voluntary Student Unionism is part of the privatisation process.

"We expect to see universities increasingly looking to access debt markets", said Brendan Flynn of the ratings agency Standard & Poor’s.

Moreover, indebted universities might be forced to sell off facilities, or even entire campuses, to repay debts, opening the door to full or partial privatisation of public universities. They could also bring in private "partners" who would not only be seeking to keep a university afloat but also make huge profits.

In the government’s brave new world, university fees will be set at the point of profit maximisation on the demand/supply curve, rather than the level which provides maximum public access to higher education.

These "partners" would also expect to have a large say in the running of the university, what courses are run (or shut down), the curriculum that is taught, appointment of staff, etc.

Meanwhile, universities are one of the first workplaces to experience the impact of the government’s new industrial relations legislation, which seeks widespread use of AWAs (Australian Workplace Agreements), casual and fixed tern employment, as well as the effective elimination of university unions.

The government has stipulated that adoption of new IR practices will be a condition for granting the universities an extra $150 million. None of the universities will know whether they are to receive any of this funding until March. The executive director of the Vice Chancellors’ Committee described this situation as "another slap in the face".

Moreover, universities which are deemed not to have met the IR reforms criteria will lose an extra 2.5 percent loading, as well as part of their existing funding.

The University of Ballarat will be one of the first hit, because they twice failed to gain their employees’ acceptance of an agreement which excluded union involvement.

However, in an attempt to curry favour with the government, the University’s Vice-Chancellor, Kerry Cox, has announced that all new employees will be required to accept AWAs as a condition of employment.

This policy contradicts government assurances that under the IR laws new employees would have a choice between permanent employment and a contract, but the government doesn’t seem at all concerned.

The recent departure of former Education Minister, Brendan Nelson (whose "reformist zeal" was greatly admired by his successor Senator Julie Bishop), was not the subject of widespread regret. Rose Jackson, President of the National Union of students commented bitterly: "To Nelson, we say good riddance to bad rubbish. What we will remember from his era will be rising cost and decreasing access."

*Annuity bonds are a form of borrowing where those purchasing the bonds (lending the money) are guaranteed interest payments. The face value of the bond is repaid at a certain date. It is used by governments and corporations to raise money.

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