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‘We’re no drain on the budget’: Vice-chancellors hit out at government fee hikes, funding cuts

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University leaders have lashed out at the Turnbull government’s proposed cuts to higher education funding and student fee increases while saying its higher education changes are a “big improvement” on those in the 2014 budget.

The government has also been warned its plan to link university funding to student completion rates and employment outcomes could have “perverse outcomes” and “unintended consequences” if not carefully implemented.

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University cuts announced

It’s not as harsh as 2014, but the government is still looking to save billions of dollars in higher education costs in the budget.

Education Minister Simon Birmingham on Monday announced the government planned to save $2.8 billion from higher education spending over the next four years by slashing the HECS repayment threshold to $42,000, raising student fees by 7.5 per cent and hitting universities cuts to be achieved via a 2.5 per cent efficiency dividend.

Senator Birmingham presented his plans to university leaders at a tense meeting in Canberra on Monday night where he was peppered with questions about why the government was targeting the sector for savings. 

Universities Australia chief executive Belinda Robinson said: “These further cuts of $2.8 billion in higher education are a false economy given the crucial role of universities in economic growth and job creation.

“The proposal for two cuts of 2.5 per cent to public investment in universities in 2018 and 2019 runs counter to the government’s innovation and skills agenda, which aims to keep highly-skilled jobs in Australia in a competitive global economy.”

Group of Eight universities chief executive Vicki Thomson – representing sandstone universities such as the University of Sydney and University of Melbourne – said the sector was “frustrated” with the government.

“It feels as if we are being ask to laud the 2017 package for hurting us less than had been intimated,” she said. 

Minister for Education and Training Simon Birmingham presented his higher education plans to university leaders at a ... Minister for Education and Training Simon Birmingham presented his higher education plans to university leaders at a tense meeting on Monday night Photo: Alex Ellinghausen

“But the most important facts are there is no pain relief and no reform.”

Ms Thomson said universities were fed up with being treated as a “drain on the budget” when they are one of the country’s biggest service export industries.

Mr Birmingham announces details of the Turnbull government's plan for higher education on Monday. Mr Birmingham announces details of the Turnbull government’s plan for higher education on Monday. Photo: Alex Ellinghausen

“We cannot welcome a package which is characterised by cuts to university funding and increase fees for students, especially given our contribution to the broader economy,” she said.

“The success of our thriving education export industry rests on its quality and quality requires investment for the long term.

“This package does not provide a long-term vision for the future which will sustain this success or Australia’s standing.” 

Monash University vice-chancellor Margaret Gardner said she did not agree with Senator Birmingham that the package was “fair, reasonable and necessary”.

Targeting universities for savings showed the government’s priorities were wrong, she said. 

University of Sydney vice-chancellor Michael Spence said the package was “a disaster averted, and the disaster was the 20 per cent cut to university operating budgets”.

“But it’s also a budget that in some ways is an opportunity missed because the government’s done nothing about the significant cost of research,” he told ABC Radio.

Cutting funding and increasing fees, he added, “doesn’t seem like a good formula for preparing for a knowledge future”.

Ms Robinson said it was “regrettable” students were being asked to pay more but said the package was a “big improvement” on the 2014 budget and contained “some very positive elements”.

These include extended support for programs to help disadvantaged students succeed at university and new funding for sub-bachelor places, she said.

But she expressed concern about the plan to link 7.5 per cent of university funding to success at hitting completion or employment targets.

“This is a complex area that will need to be handled with great care so as to avoid unintended consequences and perverse outcomes,” she said.

“This is particularly true for universities that serve the most disadvantaged students and communities.”

Ms Gardner said universities have strong completion rates and graduate outcomes so it is unclear what problem the government is trying to solve.

Senator Birmingham told vice-chancellors on Monday night he believed their universities had become more efficient over recent years so the “modest” funding cut should not have an adverse effect.

Education correspondent Matthew Knott and higher education adviser Andrew Norton will discuss the changes on Facebook Live at 12.30pm Tuesday on the Australian Politics – Fairfax Facebook page. Reader questions can be sent to @knottmatthew on Twitter or Matthew.Knott@fairfaxmedia.com.au​

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