Higher education has not been a feature of the current election campaign. That is a problem.
There is a huge and unsustainable cross-subsidy in higher education in Australia. The subsidy is from international students to domestic students. In areas such as business, an international student can be paying three or four times as much as the university receives for a domestic student. Same seat, same lecture, vastly different price.
This cross subsidy has enabled successive governments to ignore their funding obligations to Australian universities. Australian students in undergraduate courses in business, arts or law simply do not pay the average cost of their education. As capacity constraints come into play – as they do in many business courses – Australian students do not even pay the marginal cost of their place.
Why is this a problem? Because Australian universities are competing in a highly competitive international market for education. We have been very lucky – in our geographic location, in our multi-cultural society and in the perceived intolerance of the US and Europe. But the GFC has led US and European universities to look more aggressively at attracting Asian students. And recent events, together with the ongoing debate about population and immigration, have undermined the view of Australia as a tolerant and open society.
Put simply, our competitors are playing hardball and we are throwing away our competitive advantages.
So two conclusions:
- whoever is in government after August 21 needs to address the funding shortfall in Australian tertiary education. We cannot expect China and India to keep underwriting our domestic students; and
- if you are an undergraduate HECS students and you are sitting next to a foreign fee paying student, turn to them and say ‘thank you’. After all, they are paying for your education.