Bill Shorten warns of international student addiction
Former Labor leader Bill Shorten warned that universities were having to take “morphine drops” of international student income to stay afloat on decades of dwindling public funds as he proposed a new sovereign wealth education fund to help stabilize the sector.
In a speech calling for a major reset of Australia’s higher education model, the University of Canberra vice-chancellor said a 1 per cent tax on corporate profits could raise around $5.2 billion a year to fund universities and ease pressure on students.
Delivering his annual Aitkin Lecture on Wednesday night, Shorten said the current funding model had led universities to rely heavily on overseas enrollments, passing more of the cost of higher education on to graduates through the HECS loan system.
“This ignores the economic signal that successive governments are sending tertiary institutions…if universities want more funding from government rather than what they expect to receive, they need to rely on the morphine drip of international student income to ease the funding pain of reduced investment,” he said.
The warning comes as universities face increasing political scrutiny over immigration levels and international student numbers in one of Australia’s biggest export industries.
Shorten said international student fees had quietly become the financial backbone of the sector, subsidizing domestic teaching and research.
“To maintain the quality of education provided, fund innovation and produce high-quality research, universities have had to rely on revenues from international students,” he said, adding that international student fees effectively cross-subsidize the education of Australian students.
But he warned that the model was becoming increasingly fragile as governments turned international student numbers into a tool of immigration policy.
At the same time, the burden of financing higher education had steadily shifted to students through the HECS loan system.
The income-contingent program, introduced in 1989, was initially designed to pay about 20 percent of graduates’ educational expenses. That balance has changed dramatically, Shorten said.
“Insurance of the higher education system has fallen from a situation where the government paid 90 percent of a student’s course in 1990 to less than 50 percent on average now.”
The result is rising student debt and increasing pressure on universities.
“Some students’ debts are ballooning just because of accrued interest,” he said.
Shorten said the burden fell particularly on the shoulders of women who spent time outside the workforce to care for children, with repayments slowing as interest continued to accumulate.
He argued that while student demographics and study patterns were changing significantly, Australia was trying to run a modern university system with a funding model designed four decades ago.
The new funding he proposes would be jointly managed by government, industry and universities and directed at national priorities such as research capacity and critical skills.
“We can do this in Australia with one prerequisite, left and right meeting in the middle. Where we get big thinkers who care about Australia, not partisanship,” Shorten said.
He added that the sector must address the efficiency and quality of education if universities demand changes in the funding model.
In a major speech last year, Education Minister Jason Clare said it was “critical to break down the invisible barrier” that leaves Australians feeling like university is “just another place for someone else”.
He argued that 80 per cent of jobs will require a TAFE qualification or university degree by 2050, compared to 60 per cent today.
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Rob Harris is a national correspondent for The Sydney Morning Herald and The Age, based in Canberra. He is a former European correspondent.Connect via email.
