Move to private revenue

January 14, 2000

MELBOURNE.

Australia's universities will increasingly be forced to rely on private sources of revenue, according to federal government spending figures for higher education over the next three years.

The funding statement, issued as universities closed for the Christmas break, showed that from 1996 - when the conservative government of prime minister John Howard was elected - to 2002, universities will have suffered cuts of almost Aus$1 billion (Pounds 400 million) in federal grants. In the same period, fees and charges will have nearly doubled from around Aus$1 billion to Aus$2 billion.

Vice-chancellors said the government was about to become a minority shareholder in higher education for the first time in two generations. If the trends continued, government funding as a proportion of total university income would reach a historic low this year.

Stuart Hamilton, executive director of the Australian Vice-chancellors' Committee, said universities were more entrepreneurial, earning more private income, but at the same time the government "was putting the clamps on".

"If the trends of the past four to five years continue, the Commonwealth will become the minority funder of universities for the first time since the 1950s," he said.

Although total university revenue is expected to exceed Aus$9 billion next year, up from Aus$8.5 billion in 1996, almost all the increase will come from fees and charges. By 2002, money from student fees via the Higher Education Contribution Scheme will account for about a third.

As part of the plans to deregulate the university sector further, the funding statement also relaxed the limits on the number of full-fee places universities could offer Australian students.

Previously, full-fee-paying students could not comprise more than 25 per cent of all enrolments in a faculty. But the changes mean universities offering combined degrees will be able to apply the limit to each faculty to increase the number of full-fee payers.

With more students taking double degrees because they believe it increases their chances of employment, this represents a significant area of funding growth.

Michael Lee, the Labor Party spokesman on education, said the funding statement showed that Commonwealth spending on higher education would fall to just over Aus$4 billion in 2002 - down from Aus$5 billion in 1996.

Federal education minister David Kemp said more people were participating in higher education and universities were increasing revenues from all sources.

"The government has shifted the balance of funding between taxpayers and direct beneficiaries, while maintaining operating grants." This was fair, he said, given the benefits of university education.

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