Oferta y Demanda

The purpose of providing base funding is to ensure that public universities and other eligible higher education providers have sufficient resources to maintain the quality of course delivery expected from the Australian higher education system. In providing base funding to universities, the Government should provide sufficient funds for universities to deliver high-quality teaching programs that are informed by scholarship and to maintain base capability in research and appropriately resourced facilities.

Principle 1

Base funding is provided for universities to fulfil their fundamental role of providing teaching in an environment informed by scholarship, and maintaining a base research capability, in order to contribute to Australia’s economic and social development.

While acknowledging the difficulty of comparing the quality of the Australian higher education system with comparable systems overseas, the Panel nevertheless recognises that higher education is an international industry and our institutions must remain internationally competitive. It is therefore important to acknowledge, in principle, that the quantum of base funding must be adequate to enable Australian higher education institutions to remain internationally competitive, while working to improve the validity of international measures of institutional funding and quality.

Principle 2

The total quantum of base funding should support universities in the delivery of globally competitive teaching and learning in appropriately resourced facilities by adequately funding the direct and indirect costs of teaching, scholarship and base capability in research.

While the Panel acknowledges the role of base funding in supporting the general operation of universities in undertaking teaching, scholarship and research, it is important to recognise that this connects to the broader purpose of producing graduates and undertaking research that contributes to Australia’s prosperity and cultural life.

Principle 3

Investment in universities through base funding enhances national productivity by developing the skills and attributes of graduates.

The Panel concluded that one of the strengths of the Australian system is that base funding is allocated using a relatively simple formula, applied consistently across all publicly funded institutions.

Principle 4

The base funding model should be simple and transparent.

Australian universities should continue to have the autonomy to allocate base funding to activities aligned with their strategic priorities.

Principle 5

Base funding should be allocated in a manner that provides institutions with the autonomy to allocate their resources internally according to their strategic priorities.

While universities retain institutional autonomy they should remain accountable and continue to report on how public resources are spent.

Principle 6

While the base funding model should uphold the principle of institutional autonomy, institutions should be accountable for how they allocate the funding.

The introduction of a student demand driven system requires that the funding for each discipline should more closely reflect the actual costs of delivery. This is required for the efficient operation of the system.

Principle 7

The base funding model should reflect the relative costs for different disciplines or modes of teaching.

Universities have been effective at diversifying their income streams and should not be inhibited from managing investments, or seeking funds from the private sector, internationalisation, or philanthropy.

Principle 8

The provision of base funding should be consistent with diversification of funding sources by institutions.

It would be inappropriate for the Government to direct institutions to allocate base funding to anything other than the broad purposes for which it is provided; therefore pursuing specific quality or other performance outcomes by altering base funding would be problematic. A more effective method of achieving these types of policy outcomes in Australian universities would be for the Government to provide targeted resources within a performance agreement where funding is awarded to universities on the basis of measurable outcomes.

Principle 9

The Government should pursue targeted policy objectives through specific programs outside of base funding where the provision of supplementary funding is linked to transparent performance measures.

Base funding is provided to universities on a uniform basis to enable them to meet the reasonable costs associated with delivering higher education courses to an agreed standard. While this is an appropriate goal of a publicly funded higher education system, universities should also be encouraged to develop innovative approaches to teaching and learning that may involve higher costs.

Principle 10

Base funding should enable institutions to pursue innovative methods of teaching and learning.

The level of private benefits from higher education courses varies considerably according to discipline; however, the Panel considers that such variations are acknowledged by the progressive repayment schedules of the income-contingent loan scheme. There are also substantial public benefits from higher education that justify a continuing public contribution to base funding. It is therefore

appropriate for policymakers to use aggregate measures of public and private benefits in determining the appropriate balance of public and private contributions to the cost of higher education.

Principle 11

Base funding should be sourced from a balance of student and public contributions broadly consistent with the private and public benefits from higher education.

The terms of reference for the Review asked the Panel to take into account the Government’s equity agenda of increasing access and participation of disadvantaged groups. This agenda is currently pursued through the provision of deferred, income-contingent loans that remove the barrier of upfront fees and by providing universities with financial support to enrol low socioeconomic status students. The Panel considers that it is consistent with the purposes of the base funding system for it to promote access to universities and broaden participation in higher education.

Principle 12

Base funding should be supplemented through targeted programs to support social inclusion and equity of access for eligible students.

Principle 13

The base funding model should be accompanied by appropriate measures so that student contributions are not a financial barrier to participation in higher education.

chapter 2: Strengthening australian higher