I would like to begin by acknowledging the traditional custodians of the land on which we meet today, the Ngunnawal people, and pay my respects to their elders past, present, and emerging.
Almost a year ago, I stood here at the Press Club and outlined our Government’s vision for higher education.
To achieve it, I said, would require a resetting of the relationship with the higher education sector, reshaping its architecture and renewing our commitment to work together.
At that time, I made the observation that “a job is more than a vehicle to earn money. It provides a sense of self and a means to contribute to your family, your community and the nation.”
That has not changed. If anything, the economic and social disruption caused by COVID-19 has brought home the truth of that statement.
COVID-19 means we must double down on our core mission of educating Australians for the jobs that will be in demand in the future.
Our Government wants to keep Australians in jobs, and to educate the next generation of Australians to get a job.
Our nation has faced adversity before and we have risen to the challenge – we have done so by looking after each other and backing ourselves.
Australian hard work and Australian innovation will drive our recovery from COVID-19.
As the Prime Minister said in his recent Press Club address, to secure Australia’s future we must leverage and build on our strengths, including an educated and highly-skilled workforce.
We want our students to receive an education that sets them up for future success –because if graduates succeed, they will power an economic recovery that benefits all Australians.
And, when the economy is facing its greatest economic shock since the Great Depression, success looks like a job.
Projections prepared before the COVID-19 pandemic showed that over the five years to 2024 it is expected that the overwhelming majority of new jobs will require tertiary qualifications – and almost half of all new jobs will go to someone with a bachelor or higher qualification.
Health care is projected to make the largest contribution to employment growth, followed by:
- Science and Technology,
- Education, and
These four industries are projected to provide 62 per cent of total employment growth over the next five years. This is part of a long-term structural shift.
Universities must teach Australians the skills needed to succeed in the jobs of the future.
We know that people turn to education during economic downturns and we also know the Costello Baby Boom generation will begin to finish school from 2023.
So we must address the increased demand for a qualification with a renewed focus on our students.
Today, I announce our plan for more job-ready graduates.
It will only be achieved if the Government and the higher education sector work together.
Our package offers universities a strong partnership with government and business to ensure they play a key role in Australia’s recovery from COVID-19.
Crucially, it was designed in consultation with key leaders from the sector and industry.
A year ago I promised this would be a feature of my approach to reform, and today I reinforce that this will continue to be the case.
Our package provides opportunities across three objectives:
One: Increase the number of graduates in areas of expected employment growth and demand, such as teaching, nursing, agriculture, STEM and IT.
Two: Lift the education attainment for students in regional Australia.
Three: Strengthen relationships with business to drive workforce participation and productivity.
To achieve objective one we need more tertiary places for Australian students.
We also need more nurses, scientists and psychologists.
Today I announce that we will provide an additional 39,000 university places by 2023 and 100,000 places by 2030.
To do this, we will address the misalignment between the cost of teaching a degree and the revenue that a university receives to teach it.
We will reform the system so that the student contribution and the Commonwealth contribution actually equals the cost of teaching that degree.
This is consistent with the reforms we are undertaking in vocational education and training.
We will also incentivise students to make more job-relevant choices, that lead to more job-ready graduates, by reducing the student contribution in areas of expected employment growth and demand.
It’s a similar model to the one we used rolling out our microcredential initiative that offers short, online courses in areas of expected job demand.
With our reforms:
- Students who study teaching, nursing, clinical psychology, English and languages will pay 46 per cent less for their degree.
- Students who study agriculture and maths will pay 62 per cent less for their degree.
- Students who study science, health, architecture, environmental science, IT, and engineering will pay 20 per cent less for their degree.
Medicine, dental, and veterinary science students will see no change to the cost of their degree.
In total, we expect that 60 per cent of students will see a reduction or no change in their student contribution.
To deliver cheaper degrees in areas of expected employment growth, students who choose to study more popular degrees will make a higher contribution.
The student contribution for Law and Commerce will increase by 28 per cent, for the Humanities it will be 113 per cent.
Students will still pay less for those degrees in Australia than they would for a similar degree in similar countries, like the USA and the UK.
Importantly, the changes are based at a unit level not a degree level. This means that students studying Arts can still reduce their total student contribution by choosing electives in subjects like mathematics, English, science and IT within their degree.
We are encouraging students to embrace diversity and not think about their education as a siloed degree.
So if you want to study history, also think about studying teaching.
If you want to study philosophy, also think about studying a language.
If you want to study law, also think about studying IT.
Importantly, no current student will be worse off. No current student will pay an increased student contribution. Their fee contributions will be grand-fathered.
Existing students set to gain from this policy will be able to do so from next year.
From next year, students will have a choice. Their degree will be cheaper if they choose to study in areas where there is expected growth in job opportunities.
Let me be clear.
This does not mean fee deregulation.
This does not mean one hundred thousand dollar degrees.
And our Government will continue to provide record funding for higher education, including through the HELP scheme, and that funding will increase over time.
We are putting more funding into the system in a way that encourages people to study in areas of expected employment growth.
We are facing the biggest employment challenge since the Great Depression. And the biggest impact will be felt by young Australians. They are relying on us to give them the opportunity to succeed in the jobs of the future.
A cheaper degree in an area where there’s a job is a win-win for students. And as I said earlier, when graduates succeed our country succeeds.
It’s common sense. If Australia needs more educators, more health professionals and more engineers, then we should incentivise students to pursue those careers.
Students will always have the freedom to choose what they want to study – and because the Government continues to offer one of the world’s best student loan schemes, no student will be denied a place because they do not have the capacity to pay.
For the sector, this means a return to indexing of all Commonwealth Grant Scheme funding by CPI, maintaining the real value of funding for domestic students.
For the taxpayer, it means we can fund additional places that can be distributed to areas of workforce need or areas of low attainment and high population growth.
To achieve objective two, we must address the discrepancy where young Australians in regional areas are half as likely to obtain a university qualification as Australians who live in the city.
These reforms will also allow us to support more regional, rural and Indigenous students to access higher education, because our Government believes that every Australian should have access to a world-class education.
This is vital for our cohesion as a nation going forward.
Halving the gap in attainment and participation rates in regional and remote areas by 2030 will increase GDP by 0.6 per cent by 2050, or around $25 billion a year.
We will support regional, remote and Indigenous students to undertake high-level tertiary studies.
We will grow university places in regional Australia by 3.5 per cent a year.
And we will also support regional universities to better serve their local communities.
We will introduce a new Tertiary Access Payment of $5,000 to support students from outer regional, remote and very remote areas who relocate to study a Certificate IV or higher, for at least one year.
This was a key recommendation made by Dr Denis Napthine in the National Regional, Rural and Remote Education Strategy, which our Government made an election commitment to implement.
In addition to this new payment, we are making improvements to Fares Allowance, to make it easier for relocated students to travel home during their first year of study.
Our Government will also establish a new fund to provide $500 million a year to universities for programs that support Indigenous, regional and low SES students to get into university and to graduate.
Universities can access funding to design and run their own programs suitable to their local conditions.
Indigenous Australians from regional and remote areas have the lowest rates of higher education participation and attainment.
We will support more Indigenous students from regional and remote areas to go to university by providing a guaranteed bachelor-level Commonwealth supported place at any public university.
Regional universities train the next generation of professionals who work in regional Australia, including in health care, teaching and agriculture.
The Government will establish a $48.8 million research grants program to fund regional universities to partner with industry and other universities to boost their research capacity.
The Coalition will provide an additional $21 million to establish more Regional University Centres so people can get a tertiary education while living and working in regional Australia.
We have already committed more than $53 million to establish 25 Regional University Centres across regional Australia, from the west coast of Tasmania, to Kadina in South Australia and Balonne in south west Queensland.
We will continue to provide leadership when it comes to regional education.
Today, I can announce the Government will establish the role of Regional Education Commissioner.
The Commissioner will oversee the implementation and monitoring of the Government’s Regional Education Strategy.
In summary, we will be providing an additional $400 million over four years for regional students, universities and communities to lift higher education attainment.
To achieve objective three we will strengthen the relationship between all universities and business.
We are encouraging universities and industry to work together. Doing so will make our graduates even more job-ready, and drive productivity improvements, innovation and discovery.
Our Government has funded four projects that bring together universities and business on research innovation and workforce preparation.
For example, the Government is funding a pilot program in Adelaide where 50 ASC Shipbuilding employees are learning new digital skills and defence contract requirements to better prepare them to work on Australia’s continuous naval shipbuilding project.
The pilot is focusing on work-integrated learning to upskill employees in engineering tools and systems relevant to the new ‘digital shipyard’.
Today, I can announce the Coalition Government will provide a further $900 million to establish the National Priorities and Industry Linkage Fund — with a strong focus on investment in STEM industries — to support universities to produce job-ready graduates for their local industries and communities.
Similar to the co-creation of the performance-based funding model, we will work with representatives from the sector to develop performance metrics, such as:
- Increasing the number of internships and practicums;
- Increasing the number of STEM graduates and improving their employment outcomes; and
- Rewarding formal research partnerships with industries and advanced apprenticeships.
We will also address the current disincentive where less funding is provided for units that involve students undertaking certain types of work experience.
Improving how we connect graduates to employers, as well as tailoring education and training to ensure young peoples’ skills meet industry demand, is critical to the recovery of the youth labour market.
Getting on-the-job training as part of your degree is invaluable and leads to better job outcomes when you leave university.
The Prime Minister has challenged the vocational education and training sector to strengthen its focus on industry needs, and our universities must do likewise.
The package announced today sets students and our universities on a clear course for success.
We are providing more university places for domestic students in areas of expected employment growth.
We are forging a stronger relationship between universities and industry to drive innovation, productivity gains and produce highly-skilled graduates.
We are providing more support for students outside the capital cities because every Australian should have access to a world-class education.
The reforms announced today will interact with the other reforms our Government is delivering as it reshapes the architecture of higher education.
This reshaping is taking place through the implementation of a series of thoughtful and methodical reviews led by eminent Australians, and produced in close consultation with the sector.
- In just two months we have opened the door to the recognition of microcredentials and other short courses through the Australian Qualifications Framework.
- We are encouraging greater provider diversity by creating ‘university colleges’ that could lead to the establishment of teaching only institutions.
- We are providing more money through increased places where universities are producing job-ready graduates, through the performance-based funding model.
- We have a model code to ensure free speech and academic freedom as well as a framework for universities to address foreign interference.
- And, last week, the Review of Senior Secondary Pathways by Peter Shergold was presented to Education Council. The review sets out ways to help young people and potential students make better informed decisions about whether to choose higher education, vocational education, employment or a mixture of the three.
Our reforms are being implemented to support universities to strengthen their focus on domestic students, and strengthen the mutually beneficial relationship with business and government.
We are introducing flexibility and we are rewarding success.
Universities have demonstrated that they can be innovative and flexible.
We saw that in their response to our Government’s microcredential initiative, where higher education providers were incentivised to create short, online courses in areas of skills shortage.
These microcredentials were introduced to give Australians the opportunity to learn new skills quickly that, in turn, would make them more employable in areas of national demand.
The courses are significantly discounted for students, with up to 74 per cent of the total course fee paid by our Government.
A key feature of this initiative has given universities the flexibility to adjust the number of bachelor, sub bachelor and postgraduate places within their funding allocation.
The response from universities has been overwhelming and demonstrates their capacity for innovation.
Right now, there are 54 providers offering 344 short courses.
Our Government has supported this further by adding ‘Undergraduate Certificate’ as a recognised qualification.
We want short courses to be a permanent fixture of the Australian higher education system, and lock in the flexibility for providers.
To encourage more flexibility and diversity, we opened our microcredential initiative to non-university higher education providers, and our Government provided $7 million to subsidise 1,015 places.
To further support private providers, we will lower the FEE-HELP loan fee for students studying at private providers to align with the charge for VET providers.
The development of microcredentials will drive innovation within higher education, making providers more efficient, relevant to industry and responsive to the requirements of domestic students.
Microcredentials also present an opportunity for universities to become global leaders in an emerging form of education, opening new markets and potential revenue streams.
Universities will need to call on that innovation again, in our response to COVID-19.
When it comes to international students, there are reasons to be positive.
Analysis by consultants EY cites industry observers and participants in major source countries who expect demand for international education will remain strong post COVID-19, if borders start to open by 2021.
And Australia is in a strong position because of the success of our response to the coronavirus.
On top of the myriad of reasons why international students choose to study in Australia, we can add three more:
- One: A country that is successfully suppressing COVID-19
- Two: Access to a world-leading health system, and
- Three: Political and social stability.
EY’s high-level analysis predicts Australia could potentially gain a two per cent share of new international enrolments as students shift their study preference to countries that have successfully managed COVID-19.
And we are taking our first cautious steps towards international students returning much earlier than anyone would have predicted a few months ago, with National Cabinet last week agreeing to work closely and carefully on the return of international students through small, controlled pilot programs, provided internal borders are open and students are back on-campus.
This is important because international education builds our connections to the rest of the world, supports 250,000 Australian jobs and contributed $40 billion to our economy last year.
But even as we safely re-open to international students, the fallout from the COVID-19 pandemic shows us that the sector must adapt.
I want to work with the sector to develop a strategy to mitigate against future disruptions, for example, by putting in place improved prudential requirements.
We have seen how revenue from international students helps fund research in this country.
One of the key challenges in a post-COVID economy will be to provide a sustainable pipeline of funding for research. I want to work with the sector to achieve this.
Our Government wants universities to be even more entrepreneurial and engaged with industry.
In the post-COVID world, universities need to re-focus on domestic students and offer greater alignment with industry needs.
They will be required to retrain or re-skill current workers through new and targeted programs that help them get back to work.
Our educated and highly-skilled workers will need a mixture of certified skills, university degrees, graduate qualifications, apprenticeships and advanced diplomas.
This means, once and for all, resetting the relationship between the two streams of education: higher education and vocational education and training.
We must enhance and improve how the two systems interact so students can move more seamlessly from one to the other over the course of their education.
National Cabinet will play a central role in delivering this key reform.
The package announced today continues our Government’s consistent approach to reform in higher education as a reshaping of the architecture.
If we give universities the right tools now, they will educate the next generation of job-ready graduates to help power our economic recovery.
As I said at the start of this speech, our nation has faced adversity before and we have risen to the challenge.
When Australia was rebuilding after World War II, then Prime Minister, Sir Robert Menzies, recognised the important role of universities in educating Australians to power our economic recovery.
Funding and enrolment growth for universities increased sustainably under Menzies, and more Australians were given the opportunity to obtain a degree.
Australia harnessed its higher education system to drive its recovery from World War II and make our nation stronger than before the war started.
By harnessing our higher education system once again we can drive our recovery from COVID-19.