Australian Universities Accord – Interim Report0Image Description
The image of the echidna on the front cover is to signify that there are ‘spikey’ ideas in the report.
But it has another special symbolism.
In the Eualeyai/Yuwaalaray nation of panel member Larissa Behrendt, the cultural story of theechidna (biggibilla) is one that speaks to the importance of sharing and reciprocity. These are values
that have guided the Accord Panel’s process and values.

With the exception of the Commonwealth Coat of Arms, the Department’s logo, any material
protected by a trade mark and where otherwise noted all material presented in this document isprovided under a Creative Commons Attribution 4.0 International.
The details of the relevant licence conditions are available on the Creative Commons website(accessible using the links provided) as is the full legal code for the CC BY 4.0 International
The document must be attributed as the Australian Universities Accord Interim Report.
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Contents
The Review story at a glance… .......................................................................................... 6
Executive Summary .......................................................................................................... 9
Why this Review? ........................................................................................................................................... 9
The scope of the Review .............................................................................................................................. 10
The role of the Interim Report ..................................................................................................................... 11
Building an enduring Accord ........................................................................................................................ 23
Next steps and further engagement ............................................................................................................ 24

A vision for Australia’s future higher education system ................................................... 25
Ten possible ‘system shifts’ to improve Australia’s higher education system .................... 28
Part 1 ............................................................................................................................. 29
Chapter 1 Powering Progress: the future of Australian higher education ......................... 29
1.1 Introduction ........................................................................................................................................... 29
1.2 The education imperative to meet Australia’s future needs ................................................................. 29
1.3 Key challenges for the future higher education system ........................................................................ 31
1.4 First Nations at the heart of Australia’s higher education system ......................................................... 35
1.5 There are critical first steps to be taken now ........................................................................................ 37
1.6 Consultation, engagement and next steps ............................................................................................ 39
1.7 Building an Accord ................................................................................................................................. 39

Part 2 ............................................................................................................................. 40
Chapter 2 Evolving the mission for higher education ....................................................... 40
2.1: A larger, fairer system.............................................................................................. 41
Issues............................................................................................................................................................ 41
2.1.1 New targets to drive action ................................................................................................................ 41
2.1.2 Alignment between funding and overall objectives ........................................................................... 46
2.1.3 Meeting attainment targets requires increased equity cohort participation ..................................... 47
2.1.4 A universal learning entitlement to support access to a high-quality tertiary education .................. 51
Considerations for change ........................................................................................................................... 51

2.2: Meeting Australia’s future skills needs ..................................................................... 53
Issues............................................................................................................................................................ 53
2.2.1 Getting the balance of skills right ....................................................................................................... 54
2.2.2 Serving the professions ....................................................................................................................... 54
2.2.3 Moving towards an aligned tertiary system ....................................................................................... 57
2.2.4 Supporting students to undertake placements .................................................................................. 59
2.2.5 Increased industry engagement in learning ....................................................................................... 60
2.2.6 Fast, stackable and portable skills pathways ...................................................................................... 62
2.2.7 National skills passport ....................................................................................................................... 64
2.2.8 Helping students understand and navigate pathways........................................................................ 65
2.2.9 The role of migration in addressing skills needs ................................................................................. 65
Considerations for change ........................................................................................................................... 662

2.3: Equity in participation, access and opportunity ........................................................ 69
Issues............................................................................................................................................................ 69
2.3.1 A system-wide approach to increasing access and equity .................................................................. 69
2.3.2 Opening the doors of opportunity ...................................................................................................... 73
2.3.3 Addressing financial barriers to study ................................................................................................ 77
Considerations for change ........................................................................................................................... 79

2.4: Excellence in learning, teaching and student experience ........................................... 81
Issues............................................................................................................................................................ 81
2.4.1 Learning and teaching that is personalised and scalable .................................................................... 81
2.4.2 Inclusive and high-quality teaching that embraces technological advancements.............................. 82
2.4.3 Curriculum design and delivery that is responsive and collaborative ................................................ 84
2.4.4 Committing to teaching excellence and collaboration ....................................................................... 86
Considerations for change ........................................................................................................................... 89

2.5: Fostering international engagement ........................................................................ 91
Issues............................................................................................................................................................ 91
2.5.1 Promoting global connectivity ............................................................................................................ 91
2.5.2 Optimising use of Australian research expertise ................................................................................ 94
2.5.3 Leveraging research and international education to advance Australia’s interests ........................... 95
Considerations for change ........................................................................................................................... 95

2.6: Serving our communities .......................................................................................... 97
Issues............................................................................................................................................................ 97
2.6.1 Keystone institutions across local, regional and national communities ............................................. 97
2.6.2 Community-led research................................................................................................................... 101
2.6.3 The importance of alumni ................................................................................................................. 103
2.6.4 A stronger civic agenda ..................................................................................................................... 103
Considerations for change ......................................................................................................................... 104

2.7: Research, innovation and research training ............................................................ 105
Issues.......................................................................................................................................................... 105
2.7.1 Getting the foundations right and protecting the basics .................................................................. 106
2.7.2 Sharing and translating university research ...................................................................................... 110
Considerations for change ......................................................................................................................... 113

Chapter 3 Foundations of a high functioning national system........................................ 116
3.1: National governance: towards a coherent tertiary system ...................................... 117
Issues.......................................................................................................................................................... 117
3.1.1 Dynamic and responsive institutions ................................................................................................ 117
3.1.2 An aligned tertiary system ................................................................................................................ 121
3.1.3 A modern approach to regulation .................................................................................................... 123
3.1.4 National leadership for a new system .............................................................................................. 124
Considerations for change ......................................................................................................................... 127

3.2: Institutional and collaborative governance ............................................................ 129
Issues.......................................................................................................................................................... 129
3.2.1 Strengthening institutional governance structures .......................................................................... 129
3.2.2 Universities as good employers ........................................................................................................ 130
3.2.3 Institutions have duty of care to students ........................................................................................ 132
3.2.4 Enhancing and empowering the student voice ................................................................................ 136
Considerations for change ......................................................................................................................... 137

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3.3: Sustainable funding and financing ......................................................................... 139
Issues.......................................................................................................................................................... 139
3.3.1 Guiding principles for a new funding model ..................................................................................... 139
3.3.2 University sector revenue ................................................................................................................. 140
3.3.3 The Job-ready Graduates (JRG) package ........................................................................................... 143
3.3.4 A student-centred, needs-based funding model .............................................................................. 147
3.3.5 Improving affordability for students ................................................................................................. 150
Considerations for change ......................................................................................................................... 155

Chapter 4: Building an Accord ....................................................................................... 157
Issues.......................................................................................................................................................... 157
4.1 Implementing an ambitious, enduring Accord .................................................................................... 157
Considerations for change ......................................................................................................................... 158

Glossary ....................................................................................................................... 159

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Letter to the Minister2023 Australian Universities Accord
The Hon. Jason Clare MP
Minister for Education
Parliament House
Canberra ACT 2600

Dear Minister
Interim Report – Australian Universities Accord
In November 2022, you appointed a panel to conduct a review to “drive lasting reform in Australia’s
higher education system ... to deliver a higher education system that meets the current and futureneeds of the nation, and targets to achieve this”.
We now present the Interim Report of this Review.
The Interim Report makes five recommendations for priority action. It also raises a wide variety ofissues to promote public discussion and debate to inform the panel’s final recommendations.
We look forward to submitting our Final Report in December.
Yours sincerely

Mary O’Kane
Chair
Australian Universities Accord Review Panel
30 June 2023
On behalf of Larissa Behrendt, Barney Glover, Jenny Macklin, Fiona Nash, Ben Rimmer andShemara Wikramanayake

5The Review story at a glance…
The Accord process that has driven this Interim Report has been an important reminder of thefundamental public good of higher education. Higher education is transformative for individuals andfor the nation, bringing countless social and economic benefits, as well as constituting one of ourmost crucial export industries. As the analysis in these pages demonstrates, there is simply no
getting away from the stark fact that a high-quality and equitable higher education system is now
essential.
In February 2023 the Review released a Discussion Paper that outlined the crucial role higher
education must play if Australia is to achieve its full potential as an economy and society in thedecades to come. To develop fresh ideas to advance this profoundly important objective, the Review
has met with stakeholders from across higher education and the broader tertiary sector, along withgovernments, businesses, community and professional groups. It also received more than 300
submissions. The Review has engaged with a range of experts, including Emeritus Professor Bruce
Chapman AO, the architect of the Higher Education Contribution Scheme (HECS), who has been
assisting and will continue to advise the Review’s considerations in relation to funding and theHigher Education Loan Program (HELP).
This Interim Report calls for five modest, sensible priority actions to be considered immediately andlists a number of larger scale issues for further policy consideration which will be discussed in the
Final Report in December.
It is strongly believed that a high-quality and equitable higher education system is now a must-havefor Australia and there can be no room for complacency. To successfully tackle our big national
priorities – including lifting economic productivity, making a clean energy transition, building a caring
society, meeting the defence and security challenges of our region, and strengthening our
democratic culture – our higher education sector must become much, much stronger. Scientists,
engineers, qualified carers and others will be needed in larger numbers. So will cutting-edge
research that can be more easily absorbed by government and industry.
The sector currently lacks the institutional resilience and ‘metabolic rate’ required for this vital task.
So much needs to be done and higher education policy must respond. System-wide change isessential and must get underway as soon as possible.
Achieving success won’t be easy. Higher education is a big system and one whose direction isstrongly contested. To be successful, change must have a predictable pathway that can unite
stakeholders and be convincing to the wider population.
The overall goal of reform must be growth for skills through greater equity.
Too few Australians are beginning and completing qualifications. While it is predicted that 90% ofjobs created over the next five years will require a post-secondary qualification and 50% a higher
qualification, completions and demand for places are actually falling, with completions of a firstbachelor degree at their lowest since 2014. This combined with existing skills shortages means asense of urgency for change is needed.
Setting and meeting more ambitious enrolment and equity targets will be crucial and will require asignificant increase in the number of people enrolling in higher education. To achieve 55% higher
6education attainment, we would need around an additional 300,000 Commonwealth supported
students in 2035 and an additional 900,000 Commonwealth supported students in 2050.
The answer lies in large part in increasing the higher education participation of Australians fromunderrepresented groups – including First Nations people, lower socio-economic groups, people
with disability and those from rural, remote and outer suburban communities. To reach population
parity, as much as 60% of this future enrolment increase in 2035 would need to come from theseequity groups.
It also lies in removing disincentives to higher study, and the Review believes changes to student
contribution amounts and HELP repayment arrangements are worthy of examination, as is doing
more to make campuses safer places for students. As a starting point, the Job-ready Graduates (JRG)
package needs to be redesigned before it causes long-term damage to Australian higher education
by increasing the cost of gaining a qualification and penalising equity groups through its unfair andunnecessary 50% pass rule.
The potential for a student-centred, needs-based funding model (similar to that used for
determining school funding) to encourage institutions to seek out currently underrepresented
groups of students should also be explored.
While the measured standard of university teaching remains high, questions were raised about thequality of the teaching some domestic and international students are receiving. Greater priority
must therefore be given to educational development and experimentation to produce more
student-focused teaching. Across the world, teaching and learning are undergoing a profound shift,including a trend towards more online learning and more affordable courses, like microcredentials,
tightly tailored to individual student need. Australia should be at the forefront of suchdevelopments.
The Review sees international education less as an industry and more as a crucial element ofAustralia’s soft diplomacy, regional prosperity and development. This makes the quality of theeducation we provide even more important.
University research, which accounts for 36% of Australia’s overall research and development (R&D)
output, has become too reliant on uncertain international student funding and needs to be put on asounder and more predictable footing. The JRG package has also reduced the funding available forresearch, adding another reason to replace it with something better.
Our higher education system itself may need to look different in the future.
It is the Review’s belief that Australian higher education would benefit from having a wider range ofcomplementary institutions differentiated by their unique missions. We need to create moreinnovation and diversity between institutions by expanding the scope of mission-based compacts
and possible mission-based funding for universities and exploring the creation of a second ‘national
university’ – a National Regional University – plus innovative university study centres with the task of
attracting and making it easier for more Australians from rural, remote and outer suburban
communities to study at university.
To oversee these big changes to Australia’s higher education system, the Review suggests
Government explore the possible merits of re-establishing a Tertiary Education Commission and how

7it might work. And to help close the gap in First Nations participation in higher education,
consideration should also be given to the creation of a First Nations Higher Education Council.
University governance could also be improved by drawing more members of governance bodies
from people who deeply understand the functions of universities. One big priority of university
governance should be making universities better employers, especially following recent serious
incidents related to underpayment and insecure employment of academic staff.
The analysis and possible ways forward identified in this report are designed to stimulate discussion
and debate. The Review invites feedback and insights through a further submissions process, to help
refine directions for change and to ensure that the Review’s final recommendations achieve the best
possible outcomes for the future.
Therefore, this Interim Report, and the Final Report, of the Review should be seen as a platform for
the Accord process to build consensus for change across the whole spectrum of higher education in
ways that will benefit all Australians well into the future.
The Review thanks all those who have assisted its deliberations or made submissions. It also thanks
the Accord Taskforce in the Department of Education for its energetic and diligent support.
The Review will deliver a Final Report in December 2023.

The Review acknowledges the Traditional Owners of the lands and waters on which Australians live,
work and study, and pays respects to their Elders, past, present and emerging. Australia’s First
Nations peoples are the custodians of the world’s oldest continuous cultures of learning and thepassing down of knowledge. The Review also acknowledges the determination of First Nations
leaders over generations to ensure that higher education is accessible to First Nations people, reflects
knowledges and law, and supports research led by First Nations people about their community, landand culture.
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Executive Summary
Why this Review?
We live in an era of profound intellectual, technological, economic and cultural change, in which
complacency is dangerous and our egalitarian values need to be defended and renewed. In thisenvironment, higher education is our best asset. It transforms lives and underpins our nation’s
wellbeing and security. It delivers education, research, community engagement and industrial
capability. It powers social mobility, economic prosperity, security, creativity and innovation. It helps
us understand the central place of First Nations people in our history – through the generous sharingof their knowledge, language, culture and sense of community and place. Higher education does all
this and more by creating new knowledge, dispersing it widely and applying it to the many welcome
and unwelcome challenges that confront us.
Higher education’s mission is to make a better future possible for Australia.
How does it do this? It empowers Australians to pursue productive, creative and caring work thatutilises the best available knowledge and skills; it allows Australian-created knowledge to play auseful part in the world’s affairs; and it equips Australian industries and governments to build asecure, innovative, productive and inclusive economy. Just as a university degree leads to higher
average wages and wider opportunities for individuals, it leads to increased prosperity and social
cohesion for our country.
A high-quality and equitable higher education system is now essential for Australia.
Australian universities and other higher education providers are high performing, enduring andcapable organisations. They educate a sizeable proportion of our population and undertake research
on a globally significant scale. The sector is characterised by excellence, talent and commitment
from staff, students and university leaders. But in this rapidly changing world, in which higher
education gains new importance every day, there can be no room for inertia.
Many important problems need to be addressed, some urgently.
• While the demand for graduates grows ever stronger, too few Australians are going to university.
It is projected that over the next five years more than 90% of new jobs will require post-school
qualifications, with over 50% requiring a bachelor degree or higher.1• Preliminary analysis prepared by BIS Oxford Economics (BIS OE) for the Review suggests that byaround 2050 approximately 55% of all jobs will require higher education qualifications.
• This means that the system will need to grow significantly, with implications for the number,
location and capital infrastructure of higher education institutions.
• Despite sustained efforts over many years, universities suffer from social inequity, preventing
talented people from attaining life-changing qualifications and depriving our nation of crucial
knowledge and skills. First Nations students and those from low socio-economic (low SES)

1 National Skills Commission (NSC), Employment outlook (five years to November 2026), NSC, Australian Government, 2021,

accessed 7 June 2023.

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•
•
•
•

•
•
•

backgrounds and students with disability participate in higher education at far lower rates thanthey should.
Location affects higher educational opportunities. People from regional, rural, remote and outersuburban areas can find it difficult to access higher education.
While the importance of lifelong learning has been well understood for some time, our systemneeds to be better at providing a more flexible and adaptive approach to learning.
Persistent workforce shortages in crucial areas expose a historical lack of forward planning
relating to jobs and skills.
Australia’s research excellence is well known, but it is built on uncertain financial foundations.
These threaten Australia’s sovereign capability and cause us to miss opportunities to adapt,develop and localise knowledge to the benefit of industry, communities and the wider economy.
Perverse financial incentives can cause institutions to make funding-driven rather than missiondriven choices.
Employment conditions for university staff are often precarious, impairing future teaching andknowledge creation.
Students sometimes experience poor quality learning and teaching and encounter risks to theirsafety and wellbeing. Support services are often insufficient to enable them to achieve their best.
The recent Job-ready Graduates (JRG) changes to funding and finance arrangements risk
damaging the sector if left unaddressed.

Only by addressing these issues and producing more skilled people and a stronger research capacity
can we address the big challenges ahead of us: making the clean energy transition; building a careeconomy to meet ageing, early childhood, and disability support needs; addressing our rapidlychanging security environment; and achieving national reconciliation. To be successful in these andother endeavours, Australia’s universities and TAFEs will have to produce many more engineers,
qualified carers, high-level technicians and others.
In short, the Australian higher education sector lacks the institutional resilience and ‘metabolic rate’
needed to prepare our nation for the future. There is so much that needs to be done and higher
education policy must respond.

The scope of the Review
This Review, the first since the 2008 Review of Australian Higher Education led by the late Professor
Denise Bradley AC (the Bradley Review), examines the vital role of higher education in contributing
to Australia’s future.
The Accord Terms of Reference are broad. They ask the Review to consider current and future skills
needs, learning and teaching, access and opportunity, research, innovation, international education,
funding and regulatory settings, employment conditions and strengthening engagement between
the higher education and vocational education and training (VET) sectors.
The Review has benefited from many high-quality, thoughtful submissions, and from engagementwith a wide range of students, staff, university leaders and stakeholders. Consistent with the Accord
Terms of Reference and the Review’s approach, this consultation and engagement will continue as
the process progresses towards the Final Report due in December 2023.

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The role of the Interim Report
The Terms of Reference require an Interim Report from the Review on priority actions, and thisforms the first part of this document.
The second, more exploratory part of the Interim Report, sets out the Review’s initial views about
larger issues that will appear in the Final Report. The Review’s conclusions will follow further
consultations, submissions, studies and testing. Engagement with the sector and elsewhere isongoing.

Part 1: Immediate actions
The Review believes that bold, long-term change is required to fulfil the mission of higher
education in Australia. Change in the sector must be significant. Complacency cannot betolerated.
The Review’s priority actions focus on a limited number of proposals that address immediateproblems, build momentum for wider change, and can be implemented while larger-scale andsystem-wide governance and funding issues are being resolved. These actions would start to growstudent numbers and the higher education system through increased participation and engagementfrom equity cohorts.
Several immediate issues stand out for urgent action. University funding needs greater certainty,
higher education is too unequal, the Closing the Gap target for First Nations tertiary attainment stillneeds to be narrowed and closed, and the public’s concerns about student safety and staff
underpayment need to be addressed. This Interim Report offers five modest, sensible priority
actions to address these immediate issues. The Review’s Final Report will address them further,following wider consultation.

Priority Action 1
Extend visible, local access to tertiary education by creating further Regional University
Centres (RUCs) and establish a similar concept for suburban/metropolitan locations.
RUCs have been found to be effective at improving student participation, retention andcompletion rates in regional and remote areas and should be expanded.
The Review believes similar place-based and community-led solutions – New Tertiary Study Hubs
– could improve participation, retention and completion for students in outer metropolitan andperi-urban areas, especially those from low SES backgrounds. These Hubs should be based on
the specific needs of each local community and have tailored wraparound support to help
students succeed.

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Priority Action 2
Cease the 50% pass rule, given its poor equity impacts, and require increased reporting on
student progress.
Introduced as part of the JRG package, the 50% pass rule disproportionately disadvantages
students from equity backgrounds. Enhanced reporting on student progress will increase thefocus on improving the success rates of at-risk students. While the Review believes other aspectsof the JRG package need reform, this change should proceed at the first possible opportunity.

Priority Action 3
Ensure that all First Nations students are eligible for a funded place at university, byextending demand driven funding to metropolitan First Nations students.
Consistent with the principle behind the introduction of guaranteed funding for First Nations
students from regional and remote areas in 2021, this funding arrangement should apply to allFirst Nations people undertaking higher education, including in metropolitan areas.

Priority Action 4
Provide funding certainty, through the extension of the Higher Education Continuity
Guarantee into 2024 and 2025, to minimise the risk of unnecessary structural adjustment tothe sector. Interim funding arrangements must prioritise the delivery of supports for equity
students to accelerate reform towards a high equity, high participation system.
Universities’ and eligible higher education providers’ Commonwealth Grant Scheme (CGS)
funding is currently guaranteed to December 2023 through the Higher Education Continuity
Guarantee (HECG). The Final Report will propose new funding arrangements for consideration
by Government. Extending the guarantee into 2024 will avoid unnecessary disruption to staff,
students and the sector.
The Review recommends that universities and providers should be expected to direct any
funding resulting from this guarantee to support greater equity outcomes. This should bedirected towards a range of assistance, such as increased support for students in enablingcourses, improved academic advice and learning support, wraparound support and services(such as mental health services), scholarships or other equity-related services.

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Priority Action 5
Through National Cabinet, immediately engage with state and territory governments anduniversities to improve university governance, particularly focusing on:• universities being good employers• student and staff safety• membership of governing bodies, including ensuring additional involvement of people withexpertise in the business of universities.
Australian governments should work together to strengthen university governing boards by
rebalancing their composition to put greater emphasis on higher education expertise. Governing
bodies must as a priority do more to improve student and staff wellbeing and become exemplary
employers.

Part 2: Areas for further consideration
The Review is considering three main categories: (1) evolving the mission for higher education; (2)creating the foundations for a high functioning national system; and (3) building an enduring Accord
process. The remainder of this Interim Report outlines the results of the Review’s discussions andpreliminary findings to date on these issues. Final conclusions and recommendations will appear in
the Final Report.
From the start, the Review wants to be clear that it seeks to build a big and broad platform forchange across the entire spectrum of higher education in ways that will benefit all Australians.

Evolving the mission for higher education
A. Putting First Nations at the heart of Australia’s higher education system
First Nations students, culture, knowledge, research and communities should be at the heart of theAustralian system of higher education. Participation in higher education is a pathway to success forFirst Nations families and their communities, and building First Nations cultures and knowledge
more strongly into the fabric of our national institutions will enrich our whole society.
The knowledge, understanding and power inherent in higher education will help build a nationof reconciliation and equality.

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For these reasons, the Review is giving further consideration to the following policy areas:a. creating a new First Nations Higher Education Council to give voice to the needs, aspirations
and know-how of community
b. moving towards a self-determined approach to national funding and policy settings inrelation to First Nations students, employment, teaching, research and engagement, with
universities mirroring this approach within their institutions, as is the case in someinstitutions today
c. supporting a First Nations-led review of access, participation and outcomes for First Nations
students and staff, research, teaching, use of First Nations knowledges, and First Nations
governance and leadership within universities
d. enhancing research capability for First Nations knowledges and for collaboration andpartnerships between First Nations communities, governments, universities and industry.

B. More students enrolled in higher education, a fair system that ensures access and attainment,
and a larger system that better meets national jobs and skills needs
Australia needs to significantly increase tertiary education participation and attainment levels tocreate a stronger economy and a fairer society over the next three decades.
The Australian higher education system includes domestic students enrolled in both Commonwealthsupported and full-fee paying places across a range of higher education institutions. The bulk ofheavy lifting in growing higher education domestic enrolments will need to be through increased
Commonwealth supported enrolments. The latest data indicates that Australian universities enrol
around 900,000 Commonwealth supported students, including 760,000 bachelor students.
Based on Departmental projections, to reach 55% attainment for people aged 25 to 34 years by
2050, the Australian higher education system would need to have at least 1.2 million
Commonwealth supported students in 2035 and 1.8 million in 2050. This requires the higher
education system to grow by at least 300,000 Commonwealth supported students by 2035 and an
additional 900,000 Commonwealth supported students by 2050.
While these projections focus on attainment for people aged 25 to 34 years, the changing nature of
the workforce will mean we can also expect increased participation and attainment from older age
cohorts as they upskill, reskill, or even gain their first qualification.
Enrolling more students will also require substantial growth in participation from groups currently
underrepresented in Australian higher education. Given the increase needed in 2035, and to meet
population parity, around 60% of the additional students in the system will need to be from low SES
backgrounds, around 53% from regional and remote areas, and around 11% would need to be First
Nations students.
Our goal must be growth for skills through greater equity.
More ambitious enrolment and equity targets will be crucial.

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For these reasons, the Review is giving further consideration to the following policy areas:a. setting targets for tertiary education participation and attainment, including for higher
education, through consultation with Jobs and Skills Australia (JSA) and the VET sectorb. setting targets to raise First Nations participation and completion rates in higher educationc. creating specific higher education participation targets for students from underrepresented
backgrounds and equity groups to achieve parity by 2035. These groups will include
students from low socio-economic, regional, rural and remote backgrounds and students
with a disability
d. developing a universal learning entitlement to ensure Australians can gain the qualifications
and credentials as they need or desire
e. as a priority element of the universal learning entitlement, ensuring that all students fromequity cohorts are eligible for a funded place at university.
All such targets must be tightly monitored to ensure accountability and delivery. Long-term targets
could be supported by short-term step-change targets, disaggregated by state, region, provider andother relevant criteria.
C. Meeting Australia’s future skills needs
To meet Australia’s future skills and workforce needs, the Review is investigating further actions toimprove the way skills are developed, described and recognised within a more integrated tertiary
education system.
Australia’s skills needs will only be met if the higher education system and an expanded VET system,with TAFE at its core, work together within a more integrated system to deliver the flexible,
transferable skills people want and need.
A national skills passport provides a possible way to do this – by enabling Australians to have theirfull range of qualifications, microcredentials, prior learning, workplace experience and generalcapabilities recognised across the education and training system and in the employment market.

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For these reasons, the Review is giving further consideration to the following policy areas:a. new policy levers to enhance capability across the tertiary education sector, enabling it torespond rapidly to Australia’s skills needs and deliver the necessary numbers of graduateswith professional, disciplinary and high order generic skills
b. the creation of a universal learning entitlement that helps all Australians access high-quality
tertiary education and makes lifelong learning a realityc. examining new and effective mechanisms for rapid reskilling, including microcredentials
d. improving the integration of higher education and VET to create new types of qualifications–starting in areas of national priority – like clean energy, the care economy, and defence
e. improving skills pathways by creating qualifications that are more modular, stackable andtransferable between institutions and institution types
f. addressing barriers that prevent VET and higher education working together, especially incourses and institutions that involve both sectors
g. using arrangements between industry, unions and governments to progress therecommendations of the Review of the Australian Qualifications Framework (AQF) – thisshould be a matter of priorityh. extending CSPs at some AQF levels to the TAFE sector in areas of crucial skill needi. improving the Recognition of Prior Learning (RPL)2 and relevant work experience through anational skills passport or similar mechanism
j. increasing the absorptive capacity of new knowledge by Australian employers throughgreater collaboration with universities
k. improving Work Integrated Learning (WIL) and placements by providing participating
students with better incentives and financial support
l. establishing a national jobs broker system, to assist students to find work placements andpart-time jobs in their fields of study.
D. Equity in participation, access and opportunity
Australia aspires to be a nation that is equitable and provides equal opportunity for all members ofsociety. Education – and higher education – are powerful vehicles for transformative socio-economicchange at individual, community and societal levels. It so happens we can’t progress without
addressing equity in participation – it is not only desirable, but also necessary.
To gain the skilled people we need for the future, we must significantly increase the participation of
students from underrepresented groups – First Nations students, students from equity cohorts andregional, rural, remote and outer suburban locations. Existing policies are not working well enough.
Australia’s signature policy, the Higher Education Loan Program (HELP), is now over 30 years old andneeds a refresh. As a result of this lack of policy attention, access to student income support is
declining, and services that might support student success are lacking.
New ideas must be explored to prevent excessive debt and rising student cost of livingpressures from discouraging people of all ages from pursuing higher education and completing
their qualifications.

2 Recognition of prior learning (RPL) is when an individual’s previous training, work experience and/or study is recognisedand counted toward their qualification as credit.

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This should include giving consideration to revising student contribution amounts and HELP
repayment arrangements and providing remuneration for mandatory work placements.
For these reasons, the Review is giving consideration to the following policy areas:a. encouraging students from underrepresented groups to aspire to higher education and fulfil
their potential
b. making it easier for students to enter, exit and return to higher education through aconsistent national approach to tertiary education admission and the recognition of existinglearning experience and credentials
c. increasing access to preparatory and enabling programs to provide more pathways intohigher educationd. providing scaffolded learning support to help students achieve their qualification inminimum time and with minimum debt
e. through a national jobs broker system, helping students find part-time work in their areas ofstudy
f. exploring the potential for a student-centred, needs-based funding model (similar to thatused for determining school funding) that recognises the additional costs involved inteaching students from equity groups and underrepresented communities
g. reducing the cost of living barriers to higher education through improved income support
measures and more opportunities for part-time study
h. revising student contribution amounts and HELP repayment arrangements to ensure
students are not being overly burdened with debt and that repayment arrangements arefair and integrate more effectively with the wider tax and social security system.
E. Excellence in learning, teaching and student experience
The Review heard that learning and teaching approaches worldwide are undergoing a profoundshift, including a trend to more affordable courses that are more tightly tailored to individual
student need. A glimpse of this was provided during the COVID-19 pandemic when learning rapidly
moved online.
Greater priority now needs to be given to educational development and experimentation.
The Review also heard that learning and teaching for both domestic and international students issometimes falling short of students’ expectations.

17For these reasons, the Review is giving further consideration to the following policy areas:a. encouraging and rewarding effective learning and teaching practices, including best practicefor digital and hybrid delivery modes and use of new technologies and structures,
particularly artificial intelligence and knowledge repositories
b. enhancing the professional development of academic staff in teaching, especially for those
newly employed to teachc. promoting collaboration and shared best practice in learning and teachingd. ensuring the system encourages improvements in quality learning and teaching, responds
to new curriculum approaches that take account of the pace of new knowledge production,and provides for appropriate teaching infrastructure.
F. Fostering international engagement
The Review is considering how best to create a sustainable and globally connected international
education sector that is central to the mission of institutions, that benefits Australia and its regions,that builds country to country connections through teaching and research, and that remains
internationally competitive for decades to come.
The Review sees international education less as an industry and more as a crucial element ofAustralia’s soft diplomacy, regional prosperity and development.
This makes the quality of the education we provide even more important.
For these reasons, the Review is giving further consideration to the following policy areas:a. ensuring that international education supports broader Australian foreign policy objectives,
for example, strengthening relationships with India and the Pacificb. making international education more embedded within the mission of the Australian
tertiary education system and to the mission and purpose of individual institutions
c. ensuring the integrity and accessibility of visa pathways for international students
d. promoting flexibility and innovation in international education, including digital andoffshore delivery options
e. providing a high-quality university experience for international students
f. improving overseas skills and qualification recognition and expanding international
professional qualification accords
g. promoting international commercial use of Australian research capability
h. building closer connections between institutions and their international alumni.
G. Serving our communities
Higher education providers play a crucial role in their communities, particularly in parts of Australia
beyond the inner suburbs, delivering local jobs, building economic and social connections, providing
relevant applied research and bringing many other tangible benefits.

18

For these reasons, the Review is giving further consideration to the following policy areas:a. recognising and formalising the crucial role institutions play in their communities throughthe Accord process and mission-based compacts
b. the creation of stronger links between industry and education, particularly in regional areas
and other areas with low participation and attainment ratesc. encouraging institutions to draw on the strengths of their alumni communities.
H. Research, innovation and research training
Submissions argued that Australia should strengthen its higher education research, and encourage
its greater use by government, industry and the community. Australia’s R&D reputation depends toa large extent on strong performance in R&D by universities, and this strong performance could
benefit from sharper focus in areas where research capability is closely connected to sovereign risk.
A concern raised repeatedly in the Review’s consultations and submissions was the unhealthy
degree to which core research capability in Australia’s universities is funded through volatileinternational education revenue. Research capability needs to be protected and the sharing andtranslation of university research improved.
Many have been arguing for some time that research funding needs to be put on a sounder andmore predictable footing.

To protect research basics, the Review is giving further consideration to the following policy
areas:
a. developing a funding mechanism that explicitly recognises the importance of research,innovation and scholarshipb. how best to ensure sufficient funding for the Australian university research sector to meetnational research priorities
c. moving over time to ensure National Competitive Grants cover the full cost of undertaking
researchd. developing a national, holistic policy for research training
e. improving the measurement of the quality and impact of Australian research, including bydeploying advances in data science to develop a ‘light touch’ automated metrics-based
research quality assessment systemf. making the cost of university R&D, innovation and scholarship activities across all
universities transparent
g. ensuring ongoing investment in critical research infrastructure and its maintenance.

19

To share and translate university research more effectively, the Review is giving further
consideration to the following policy areas:a. developing metrics to understand industry/university and government/university researchcollaboration and translationb. encouraging government to become an exemplary user of university research, using it toaddress nationally significant complex problems and enhance sovereign capabilities andbecoming an example to industry on how to use university research capabilityc. exploring mechanisms that keep universities, industry and government informed ofnationally significant research problems, and of nationally significant research capabilities in
the higher education systemd. extending the use of research brokers and research challenge mechanisms and bodies
e. encouraging academic consulting, and improving university capability to do such workf. establishing a target for the number of PhD candidates employed in industry undertaking a
PhD relevant to their firm.

Creating the foundations of a high functioning national system
A. A coherent national tertiary system
The Review is exploring the need for stronger, adaptable and responsive governance and structuresthat help to build a coherent national tertiary education system.
The Review considers that Australian higher education would benefit from having a wider rangeof complementary institutions differentiated by their unique missions.
The Review notes that Australian higher education comprises a big and at times strongly contested
system. Changing it requires a predicable pathway and stable funding system capable of uniting
stakeholders and convincing them that substantial improvements are possible. There is growing
discussion in the sector of the possible merits of re-establishing a Tertiary Education Commission.
The Review is considering how such a commission might work.
Other large changes to the structure of the system are also being investigated, including how wecreate more innovation and diversity between institutions by expanding the scope of mission-based
compacts and possible mission-based funding for universities and exploring the creation of a second‘national university’ – a National Regional University.

20

To develop a more coherent tertiary education system, the Review is giving further
consideration to the following policy areas:a. the benefits of establishing a new national body, a Tertiary Education Commission,working with the Minister and Department, which could:ibe based on the principles of independence and expert decision-making to provide
oversight, coordination and expert advice to the higher education sector
ii lead relevant analysis, including with other agencies, to provide advice togovernment on policy and funding settings to enhance student, teaching andresearch outcomesiii function as a pricing authority for Commonwealth higher education funding for the
purposes of a potential student-centred, needs-based funding modeliv negotiate new mission-based compacts with institutions to deliver against local,
regional and national priorities and needsv over time, and in partnership with the states and territories, be expanded fromhigher education to encompass the whole tertiary education system to pursue
greater opportunities for alignment and collaboration between the higher education
and VET sectors.
b. how to facilitate and encourage change and evolution in the type, diversity, size andnumber of tertiary education institutions, including:ithe merits of a new National Regional University as Australia’s second national
university
ii encouraging and incentivising new models of delivery and collaboration to increase
tertiary education and research provision, particularly in regional and under-serviced
areas
iii facilitating the emergence of institutions specialising to a greater or lesser extent inteaching or researchc. ensuring tertiary education regulation, including the role of the Tertiary Education
Quality and Standards Agency (TEQSA), enables innovation in the tertiary education
systemd. continually working towards an aligned tertiary education system, including encouraging
parity of esteem between the VET and higher education sectors.

B. Strengthening institutional governanceTo build the workforce necessary to drive teaching, research and community engagement priorities,
higher education institutions need to be better and safer places to work, consistently and reliably
meeting workplace obligations. The Review acknowledges that great progress towards this has been
made by many institutions, but that more obviously needs to be done. Staff and student safety,
including in relation to sexual assault and sexual harassment, requires concerted action.
University governance in general needs reforming to more effectively embed collaboration, include
First Nations leadership and expertise, and include more leaders in teaching and research.

21

For these reasons, the Review is giving further consideration to the following policy areas:a. improving student wellbeing and safety, including empowering students on matters that
affect themb. improving operational practices and supporting governing bodies to improve theireffectivenessc. enhancing wellbeing for staff, and appropriate workforce arrangements
d. ensuring higher education institutions develop appropriate governance frameworks to
avoid underpayment of staff
e. through an ongoing Accord process, bringing together staff, unions, institutions andgovernments to consider policy settings, awards and institutional workforce structures
f. providing explicit support for tutors, research trainees and others on the boundary between
student and staff status, and enhancing career stability for early career academic staff
g. considering improvements to the voluntary national code of practice and governance foruniversity councils, and council composition to recognise the importance of expertise andleadership in teaching and researchh. examining whether current reporting arrangements demonstrate effective and efficient useof government funds by higher education institutions
i. considering development of a national student charter to ensure a consistent national
approach to the welfare, safety and wellbeing of all students.
j. encouraging academic consulting, and improving university capability to do such workk. establishing a target for the number of PhD candidates employed in industry undertaking a
PhD relevant to their firm.
C. Sustainable funding and financing
The success of the Australian higher education system relies on a secure, predictable, enduring andsustainable funding system. Over the past 15 years, there have been a number of significant changes
to the funding system, including the introduction and subsequent removal of demand driven
funding.
The Review heard significant concerns about these rapid policy shifts, including the JRG package,
which had a significant effect on student fees and funding for teaching, learning and research. The
JRG package introduced increases in student contributions of 113% for students in social sciences,humanities and communications, which have meant higher average increases for females and First
Nations students.3
The 50% pass rule implemented through the JRG package is also causing undue stress for many
students. Most of the students affected by this rule are from underrepresented groups, includingFirst Nations students, who are around twice as likely to be affected as other students.
It is clear the funding system, as changed through the JRG package, needs to be redesigned
before it causes long-term and entrenched damage to Australian higher education.

3 Department of Education, Higher Education Statistics –Student Data [unpublished data], Department of Education,

Canberra, 2023.

22

The Accord process is examining these recent policy changes and the need for significant
improvement in the way funding, student contributions and HELP repayments operate.
It is also investigating proposals to support infrastructure needs and other national priorities. This
could include considering a levy on international student fee income.
For these reasons, the Review is giving further consideration to the following policy areas:
a.
b.

c.

stablishing a framework of strong values and clear principles for public and private
investment that underpins the higher education funding system
how best to design a funding model which provides longer-term stability, that is dynamic
in responding to changes in student mix and demand, and that protects against rapid
shifts in funding that are beyond the capacity of institutions to adapt
how to establish a new funding model for higher education, that:iis student-centred, needs-based, ensuring the funding available is sufficient toprovide access to high-quality higher education for students from equity backgrounds
and from different locations
ii helps achieve attainment and equity targets, and recognises the different costs ofdelivery in regional Australia
iii strengthens Australia’s higher education research capacity
d. developing a stronger understanding of the true costs of the core activities in higher
education, increasing transparency and improving pricing, quality, performance andefficiency
e. ensuring the ongoing affordability of higher education for students, including adjusting
student contributions instituted by the JRG package
f. examining changes to HELP to make it fairer and support growth in participation
g. identifying ways to support and maintain critical teaching and research infrastructure
h. reducing the extent to which core higher education functions rely on funding from
insecure income streams, and decreasing the extent of cross-subsidisation throughout
the system
i. examining a funding mechanism such as a levy on international student fee income. Sucha mechanism could provide insurance against future economic, policy or other shocks, orfund national and sector priorities such as infrastructure and research.

Building an enduring Accord
Delivering the kinds of opportunities envisaged in this Interim Report, and ongoing cycles ofcontinuous improvement and sector development, will require collaborative effort across a range ofstakeholders including universities themselves, governments, unions, staff, students, business
representatives and community organisations. This could take the form of an ongoing Accord toensure Australia’s higher education sector continues to grow and develop, as part of a broader
tertiary education system and as part of a wider innovation and research ecosystem. The Review isconsidering this area further as it prepares for its Final Report.
The Review will be offering its Final Report as a platform to gain consensus for change acrossthe whole spectrum of higher education in a way that will benefit Australians well into the
future.

23

Next steps and further engagement
The Review considers that bold reform will be required, which means that substantive debate,
discussion and dialogue will be important as it continues its task. The Review has chosen to present
ideas and areas for further consideration to continue engagement, test the Review’s thinking andbuild consensus for change. In this spirit, the Review now welcomes feedback, ideas and insights
through a further submission process.
Submissions in response to this Interim Report will help to ensure that the Review’s final
recommendations provide clear direction for change and can achieve the best possible outcomes forthe future.
For further information on how to make a submission, see the Accord website.
Bold reform will require ongoing, collegiate and constructive leadership. In an environment where
fiscal resources are limited, and where human and institutional capacity has constraints, reformmust be prioritised and sequenced over time, and individual institutions and stakeholders must be
encouraged to put overall change in the higher education sector above narrower sectional interests.
The Review seeks feedback on its views about areas for further consideration, including how best tobuild and sustain a successful and enduring reform agenda.
The Review also looks forward to further engagement and dialogue with other reform processes
underway, including the Employment White Paper commissioned by the Treasurer, The Hon Jim
Chalmers MP, work led by The Hon Brendan O’Connor MP to build a new National Skills Agreement
between the Australian Government and the states and territories, the Review to Inform a Betterand Fairer School System, and the Productivity Commission Inquiry into Australia’s Early Childhood
Education and Care.
During the remainder of 2023, there will be further opportunities to engage with the Review,provide feedback, and participate in debate. The Universities Accord Ministerial Reference Groupwill play a key role during this period. Information on further engagement opportunities will bemade available on the Australian Universities Accord website as the year progresses.

24

A vision for Australia’s future
higher education system
To provide greater clarity about an overall approach to reform, the Review offers the following
vision for the future of Australian higher education for consideration. This vision will develop andchange through the remaining period of the Review, including in response to feedback through theconsultation process.
By 2035…
Targets for attainment and participation have been met and recommendations made by the Review
have helped Australia to become a highly skilled, productive and knowledgeable nation. Higher
education is creating opportunities for socio-economic transformation to people from all sectors of
the Australian community. We are producing enough graduates to meet our skills needs and drive a
globally competitive, knowledge-intense economy. The great majority of the community now has
tertiary-level skills and qualifications, and Australia sits within the top group of the Organisation for
Economic Co-operation and Development (OECD) nations in terms of attainment and performance.
There is population parity in Australian higher education participation by equity groups.
The higher education sector, working closely in partnership with the VET sector in the tertiary
education system, has expanded significantly to deliver this. The sector has become adept atensuring its graduates have generic skills of a high order. It has developed ways to adapt its courses
quickly and offer new styles of courses, including flexible stackable microcredentials, to cover highend skills when there is demand. It is also good at meeting the needs of business and industry byproviding much needed work experience through effective placement and WIL arrangements at
scale.
There is strong scaffolding in place for those requiring academic and other support, helping all
students access, move through and succeed in Australia’s tertiary system wherever possible, andwithout financial or other forms of hardship. First Nations students who seek higher education totransform their lives and communities have the opportunity to do so and to find a place in Australia’s
workforce. This is also true for many equity graduates, who now play senior leadership roles acrossindustry, community and the public sector. Through these alumni, but also through industry and thecultural sectors, universities are vitally connected to their communities. The ongoing involvement ofhigher education in the community has been vital to the nation’s social fabric, particularly in theregions.
The quality of learning and teaching has been, and continues to be, enhanced by technologicaldevelopments and an approach to pedagogical change that is evidence-based, data-driven andstudent-focused. The sector effectively collaborates to innovate and share best-practice teaching
methodologies, knowledge repositories, and evolving, contemporary curricula. The commitment of
academics to high-quality course offerings, teaching excellence and innovative practice, is matchedby the esteem in which they are held by their students, institutions and the wider community. This isreflected in attractive career pathways and opportunities for professional development. Increased
investment in workforce, teaching and research capability has enabled effective recruitment andretention of talented staff, and Australian universities are seen as exemplary employers andattractive places to work.
25

A stronger, more engaged workforce and increased investment have also seen universities become
even better at leveraging their research knowledge and expertise. Research expertise is built onstronger financial foundations, allowing more stable employment and ensuring continued sovereign
capability. As a result, Australia is very strong at solving complex and wicked problems – we now
rank in the top ten nations on the Global Innovation Index. This success is underpinned by continuing
strong fundamentals in basic, strategic basic and applied research and a newfound ability totranslate innovation inputs to outputs. Australian Governments and industry have become exemplaryusers of Australia’s excellent university research capacity and are increasingly using universities for
consulting and advice. Australia’s regional universities are important participants in the national
research effort, and regional communities benefit from local, applied research with real impact.
Our long-term success in joint research with neighbouring countries and international researchcollaborations has become even stronger, and many firms from around Asia are commissioning
research from Australian universities. Australia’s international education sector has helped Australia
pursue its global priorities, including through soft diplomacy. Our deep connections and partnerships
with a range of countries have grown investment, trade, and knowledge exchange, and reinforced
our strong reputation as a global leader in international education.
Education of international students is highly valued as a core component of the mission of the sector
and continues to be a significant source of revenue for Australian universities. There is increased
diversity of source markets and delivery methods. Educational enrolment and pathways are alignedwith the migration settings and visa system to ensure that international students can contribute toAustralia’s skills needs and participate successfully in a growing international community. Australian
tertiary education providers have also extended their success in providing transnational education
services and partnerships, especially across the Indo-Pacific region.
The sector’s success in delivering skills, knowledge and equity is underpinned by enduring and stable
funding and governance architecture. Governing bodies, notably university councils, proactively
foster positive institutional cultures that are transparent and able to deliver strategically, whilst
retaining a strong commitment to staff satisfaction and student experience, safety, and wellbeing.
Councils comprise members with business expertise, but also those who know and appreciate theunique characteristics of higher education. Students are recognised as integral stakeholders andtreated as partners in decision-making processes. The obligations and needs of students areembedded in the day-to-day operations and strategies of institutions.
Policy, funding and regulatory settings align across governments, regulators and industry bodies,enabling institutions to specialise in and deliver to their areas of strength and advantage. Whilehigher education and VET institutions continue to be identified by their highly distinct missions andcharacteristics, the tertiary education sector works effectively as a whole system to meet theeducation, skills, and research needs of the nation.
A new system of national governance has driven greater alignment across the tertiary education
system. HELP remains a major feature of higher education funding, but the reforms arising from the
Accord review process have meant that it is seen as fairer, simpler and more equitable.
The learning and teaching funding system has helped ensure that Australia produces the graduates it
needs in the fields and geographical locations they are most needed, while also ensuring equity ofopportunity for all by transforming lives and communities. Funding relates to national skills needs,
student characteristics and choices, rather than historical allocations. Universities receive sufficient26

funding to enable their ongoing financial health and continued high-quality delivery, including toprovide appropriate scaffolding support to students who were once underrepresented in the system.
Higher education research is funded sustainably ensuring a strong research and innovation base forAustralia with adequate workforce capacity and infrastructure, underpinning national andinternational collaboration. Governments and industry make heavy use of higher education researchand research capability to solve large, complex problems.
Importantly, all stakeholders – higher education institutions and providers, their students, staff, andalumni; governments; businesses; unions; professional bodies; and community organisations – haveshared stewardship of Australia’s higher education system through the Accord process facilitated by
the Tertiary Education Commission. This has been the bedrock of deep change and reform toAustralia’s higher education. Australia is a stronger nation as a result.

27

Ten possible ‘system shifts’
to improve Australia’s higher
education system
A review of this kind necessarily highlights and addresses areas of underperformance to indicate
where improvements are needed.
In this section of the Interim Report, we take a look at the Review’s analysis from another and morepositive angle: How will the changes being proposed combine and work their way through the higher
education system to help meet our knowledge and skills needs?
The goals of this improved system are straightforward. Over the next decade, if Australian higher
education is to play its role of ‘powering progress,’ it must find ways of:• increasing the creation and use of knowledge to solve complex problems in every sector andevery part of Australia• sharing this knowledge rapidly and effectively to lift the skills of the Australian workforce,
including through continuous reskilling• lifting participation in higher and tertiary education for every part of Australia’s community,
including those currently missing out• developing partnership across communities, to strengthen a culture of respect for truth andevidence, and to foster inclusion, trust and democratic culture.
Success is going to require changes in the way the higher education system operates. The Review
has identified ten emerging ‘system shifts’ that would help bring this positive change about overtime. We therefore propose the question: What might the higher education system look like in 2035
as a result of possible changes?
1. It will be an integrated tertiary system, with a commitment to access for everyone with thepotential and application, achieving significant growth in pursuit of ambitious national skills
and equity targets.
2. First Nations will be at the heart of higher education.
3. There will be population parity in participation by 2035, supported by student-centred, needsbased funding.
4. There will be systematic investment in student support and equitable, efficient HELP
arrangements.
5. Research will be reprioritised, to strengthen its foundations and bring about widespread
impact through translation and use.
6. Learning and teaching will be transformed, with an ambitious commitment to student
experience and use of technology.
7. Higher education and vocational education will be connected through pathways, partnershipand an up to date qualifications framework.
8. Re-skilling and lifelong learning will be provided through more modular, stackable
qualifications, including microcredentials, with full scaffolding and pathways.
9. A new approach to mission-based compacts will address future planning, distinctive placebased impact, and institutional governance responsibilities.
10. National governance will be coordinated and forward-looking through a new Tertiary
Education Commission.
28

Part 1
Chapter 1 – Powering Progress: thefuture of Australian higher
education
1.1 Introduction
The Review has been asked to examine the higher education system to ensure it can meet
Australia’s future knowledge and skills needs; expand access and opportunity to people currently
underrepresented at university; and continue to deliver new knowledge, innovation and capability
to benefit our society and economy.
These priorities are essential for the creation of a fairer, more equitable society, where all
Australians can achieve their potential and enjoy socio-economic mobility. They will also help
Australia create new knowledge and absorb it into our economy. In a world that is changing rapidly,with total knowledge increasing at a very fast rate,4 a better and more equitable higher education
system is now essential, and we need a major step-up in our efforts to create it.
Australia needs its people and industries to be able to absorb new discoveries and ensure enoughworkers have the high levels of skills and knowledge required to drive growth in productivity,
produce the export industries of the future, and provide high-level services in the domestic
economy. Without significant change to our higher education system, success will not be possible.
There is zero room for complacency.

1.2 The education imperative to meet Australia’s future needs
Higher education is about knowledge creation, diffusion and application. Our higher education
system has stepped up in the past to contribute to accelerating change and now must do so again. It
must help prepare Australia for the paradigm shifts we expect in global scientific, environmental,
demographic and geopolitical conditions.
Without change, Australia’s higher education system will rapidly become unfit for purpose.
The starting point is having a more knowledgeable and skilled population.
Significant structural shifts are already underway in our economy. The future economy will need amore skilled and qualified population. The Review has commissioned analysis from BIS Oxford
Economics (BIS OE) to explore the number of higher education graduates required to meetworkforce and economic needs over the next 30 years. The preliminary analysis shows that
4 P Chamberlain, ‘Knowledge is not everything,’ Design for Health, 2020, 4(1):1-3, doi:10.1080/24735132.2020.1731203.

29

Australian labour market demanded an additional 490,000 people with higher education
qualifications in 2022. This is expected to grow to around an additional 696,000 higher education
qualifications on average, per year, in the decade from 2042 to 2052.5 All in all, an additional 5.8
million people will need a higher education qualification in 2052, roughly doubling the number ofpeople with a higher education qualification,6 as the share of all jobs requiring a higher education isestimated to increase from 36% to 55% of the working population over that period (note thisanalysis is based on a broader cohort than that covered by the Bradley attainment target which
related only to 25-34 year olds).7 55% of all jobs implies an even higher proportion of young people
attaining a higher education qualification. While some of this demand for skills will be met throughskilled migration, Australia’s higher education sector will need to produce more skilled graduates
and will play an increased role in upskilling the current working population.
Population growth means greater demand for infrastructure, housing and services, including
education. At the same time our population is ageing and living longer, increasing overall demandfor higher quality health, disability and aged care services. Without urgent action, as Australia’s
population ages, a greater number of jobs requiring higher education will be left vacant, leading toskills shortages that need to be addressed through domestic upskilling and migration.
Australia is already facing serious skills shortages. The May 2023 JSA Labour Market Update showedthat registered nurses, general practitioners, engineers, early childhood teachers andphysiotherapists are among the occupations in shortage across the country.8 Australia’s skills
shortages hold us back as a nation. They diminish our wellbeing through under-staffed hospitals,
shackle our prosperity to low productivity growth, and obstruct personal ambition and achievement.
These skills shortages are everyday news and widely understood. Despite this, current trends inhigher education attainment and demand are heading in the wrong direction. Trends in first-timecompletions of bachelor degrees have been decreasing since 2018, with 2021 completions at theirlowest since 2014. Concerningly, demand for higher education is falling – which will lead to evenfewer graduations a few years from now.9 Australia’s declining skills trends must be reversed. A
sense of urgency is needed.
The answer is growth for skills through greater equity.
To meet our higher education attainment needs, the system will need to rapidly and substantiallyseek out and include students from historically underrepresented backgrounds. To reach parity,
growth in students from underrepresented backgrounds will need to be significantly higher than forother students. The Department of Education’s initial analysis of potential enrolment growth tomeet a potential attainment target of 55% by 2050, suggests that by 2035, Commonwealthsupported enrolments need to increase by 33% compared to 2021. Given the already high levels ofparticipation in some communities, this additional growth in enrolments will need to come from
communities that are traditionally underrepresented in higher education. Reaching parity would
require around 60% of the additional students in the system to be from low SES backgrounds.
5 BIS Oxford Economics (BIS OE), Higher Education Qualification Demand: Preliminary Report Produced for Department of

Education [unpublished report], BIS OE, Sydney, April 2023.
6 Australian Bureau of Statistics (ABS) census data shows 5.5 million people in Australia had a bachelor degree or higher
qualification in 2021. ABS, Education, ABS website, n.d., accessed 26 June 2023.
7 BIS OE, Higher Education Qualification Demand [unpublished].
8 Jobs and Skills Australia (JSA), Labour market update - May 2023, JSA, Australian Government, 2023, accessed 8 June2023.
9 Department of Education, Administrative data [unpublished data], Department of Education, Canberra, n.d.

30

Similarly, around 53% would need to be from regional and remote areas, and around 11% would
need to be First Nations students.
This will mean addressing a greater divide between rich and poor,10 and an ongoing inability to close
the gap on Indigenous disadvantage. The equity targets that were set in the 2008 Bradley Review
have still not been met 15 years after they were first proposed. This means that thousands ofstudents continue to miss out on the life changing benefits of higher education. Not only does thisaffect those students’ economic and social wellbeing, but it also means our stock of knowledge is
not representative of the myriad and diverse experience of Australians from all walks of life. To close
the gap for First Nations people and drive towards equal wellbeing for all Australians, the higher
education system must make an urgent commitment to improve access and outcomes for
traditionally underrepresented cohorts.
Today’s skills shortages and mismatches are already costly and increasingly disruptive for our lives,
and they are expected to be exacerbated by paradigm shifts in Australia’s operating environment.
Climate change, the rapid development of artificial intelligence, the transforming strategic relations
in our region and other factors will speed up the demand for new knowledge and skills.
The rate of knowledge production and technological change is intensifying across the world.
Creating, sharing and applying knowledge through technologies and complex systems is critical to
our security, prosperity and wellbeing. It touches every sector of our society. Australia must keep up
with, and participate successfully in, these global movements.

1.3 Key challenges for the future higher education system
The Review has considered whether our current higher education system can produce theknowledge, skills and equity outcomes that this rapidly changing situation requires.
The status quo will not suffice. Fundamental changes in tertiary education participation will beneeded.
We have been here before. Many of these challenges were identified by the 2008 Bradley Review:
The measures supported in this report are designed to reshape the higher education system toassist Australia to adapt to the challenges that it will inevitably face in the future. However,
because the world is in a period of rapid and unpredictable change, it is not clear if they will be
sufficient to enable the higher education system to meet these challenges adequately.
Because other countries have already moved to address participation and investment in tertiary
education, as a means of assisting them to remain internationally competitive, therecommendations in this report, if fully implemented, are likely to do no more than maintain therelative international performance and position of the Australian higher education sector.11

10 University of New South Wales (UNSW) Media, 'New Report: Wealth inequality in Australia and the rapid rise in house

prices', UNSW Newsroom, 22 July 2022, accessed May 11 2023.
11 D Bradley, P Noonan, H Nugent and B Scales, Review of Higher Education: Final Report [PDF], Department of Education,
Employment and Workplace Relations (DEEWR), Australian Government, 2008, accessed 7 June 2023.

31

Some progress had been made since then, but not enough. Despite the sector’s warnings, long-termplanning has been completely inadequate and there has been too much complacency at the national
level.
The impacts of the COVID-19 pandemic have also increased the pressure on students, academics andprofessional staff, disrupted enrolments and revenues; depleted financial resources for providers
and for governments; intensified short-term demand for domestically produced goods and services
in key areas; and forced innovation and adaptation in the delivery of curriculum, research, services
and support.
As a result, the current higher education system is in a stressed state.
In the face of long-term challenges requiring sustained, predictable pathways and planning, policymaking has often focused on the short term. This causes uncertainty for institutions, making it
difficult to invest where they need to. A long-term vision is essential. Student numbers take time tobuild, and investing in staff and infrastructure to support expansion where it is required needs
careful planning. Too many people are missing out on the opportunities of higher education, andthere is no straightforward way to help more people to succeed immediately.
Governments have a clear role to play in setting this vision, but it needs to reflect the views of thewider community and achieve their buy-in to be enduring.
Lack of coherent long-term policy and investment, compounded by the effects of the COVID-19
crisis, has led to a situation where the number of people studying and the structure of courses inmany disciplines in tertiary education is not keeping up with fast-changing workforce and industry
demand, and with the areas of Australia where the population is growing fastest.
The system is inequitable. Opportunity and attainment are influenced by location and student
background. Higher education participation rates for low SES and regional, rural and remotestudents have gone backwards since 2016. First Nations participation has increased but remains
around 40% below population parity.12
The higher education system, including the funding apparatus, hasn’t facilitated the increase in
students from equity groups needed to ensure parity of access and degree completion, meaning thatmany communities are missing out on the transformative change higher education offers. The
increases to student contributions through the JRG package affected Indigenous and female
students more than others and will only worsen this situation. The 50% pass rule included in the JRG
package has had greater impact on students from underrepresented backgrounds, compounding thenegative effect JRG had on students, particularly those from equity groups. The impact of the JRG
package is directly risking the affordability of the system for students and putting stress on the HELP
system.
Australia’s skills needs are growing and changing fast, with industry needs evolving and requiring
skills and knowledge that cross the boundaries of our education sectors. Higher education is not
currently well aligned with the VET system. Places, pathways, credit for prior learning and

12 Department of Education, Higher Education Statistics –Student Data – 2021 Section 11 Equity groups [data set],education.gov.au, 2023, accessed 16 June 2023.

32

articulation, funding and regulation are fragmented across different institutions, levels ofgovernment, industries and places.
The Review has heard from industry peak bodies, JSA, and diverse other stakeholders throughsubmissions and consultations, that Australia’s structural skills shortages are becoming more acute.
Without major changes, Australia’s economy will be unable to source the skills and knowledge
needed to become a more knowledge-intense economy. Shortages in nursing and teaching are
persistent and there are now shortages of ICT and other engineering professionals across Australia.
These are skills which are expected to be in even higher demand in the future.13
Without increasing participation from equity cohorts, Australia will find it harder to reach theeducation attainment levels needed to boost social mobility and equality and address the forecast
skills gaps and shortages.
“This is because an Australia where all parts of society have increased skills andeducation is a more productive and dynamic one. We cannot have the degree ofknowledge and participation we need to compete in the future economy if large
segments of the population are not participating. Increasingly diverse
participation in higher education is not something that “should be done”, it is animperative because it is a key source of strength for our future. … consideration
should be given to increasing the number of Commonwealth supported places
available to those from a disadvantaged background.”– Business Council of Australia
The success of the Australian higher education system relies on a secure, enduring and sustainablefunding system. Over the last decade, policy shocks, competing interventions and volatility inincome, especially associated with the pandemic, have eroded the ability of the sector to plan in asecure way and exposed vulnerabilities in its core activities and workforce development.
It is imperative that a predictable pathway forward for higher education policy and funding befound and a consensus be built around it to give it adequate time to be implemented.
The current system does not adequately recognise the added costs involved in achieving success forsome student cohorts, meaning there is insufficient funding for institutions to expand access easily,especially for equity groups, to the extent required to meet the Government’s skills ambitions. This
will only be exacerbated if the full impact of the overall reduction in per place funding introduced
through the JRG package is felt by the sector.
The increased costs associated with new contribution rates for many degrees, together withincreased costs of living and increased rates of inflation affecting student loans is causing
unnecessary stress for students and graduates and may affect other parts of their lives.
Infrastructure, workforce development, and research in our universities are not sustainably fundedin their own terms. The ability of Australian universities to be sustainable is dependent on theirability to generate income above and beyond government funding.

13 JSA, Labour market update - May 2023.

33

Some universities are consequently over-reliant on international students and their revenue, withthe benefits and risks of educating international students uneven across the sector. International
students enrich our culture, bolster our skills supply and increase our influence in the global
community, but the volatility of these enrolments and income streams threatens to undermine thestability of some institutions, and their ability to maintain research capability and quality.14 The
growth of international student revenue has become so important to the sector that its volatilenature is now a risk to our national research effort. Relying on funding core research capability andfunctions from volatile revenue sources has inherent risks and variability.
Some Australian universities benefit from substantial endowments, high international rankings
which help attract larger numbers of international students, and valuable property holdings.
However, many do not have access to these benefits and face challenges to their financial stability.
As a result, many universities are in a precarious financial position. One of the few levers available is
to increase scale, and to increase provision of courses that can be managed to generate a surplus –neither of which is necessarily in line with the needs of students and will not necessarily address
skills shortages. This is further compounded by subdued levels of student demand as unemployment
remains at record lows and living costs soar. A rethink of how university operations are financed isurgently needed to better provide stability and maintain sustainability of the sector.
The higher education workforce is also stressed, and some higher education providers rely too
heavily on short term contracts and a highly casualised workforce, in part because their funding
security from year to year is unpredictable or at best subject to cyclic volatility. The funding of higher
education and its workforce structure are inextricably linked. Too much short term and casualised
work threatens the quality of institutions and is undermining the long-term capability of theteaching, research and innovation workforce. Among academic staff, women are over-represented
in casual roles, with significant gender equity impacts. The recent instances of staff underpayment in
the sector, particularly of casual and sessional academic staff, are patently unacceptable, especiallyfor a sector funded largely by the public and that relies on its reputation to a substantial degree.
That the Fair Work Ombudsman believes these issues are entrenched in the sector is of great
concern to the Review.15
We must ensure all Australian universities are exemplary employers.
Institutions and industry need the capability to work in a fast-changing knowledge economy.
Research and innovation are critical for driving this change, both through developing a highly-skilledworkforce, and through effective R&D systems in every sector. University research activity iscurrently underwritten by international student revenue and other cross-subsidies, and this createsunacceptable risk to the future. Yet the success of Australian higher education as an international
industry has led to a situation where the funding it provides is so great it cannot realistically be
replaced by public sources.
The above strains on Australia’s higher education system have meant it faces urgent pressures thatthreaten its ability to meet current and future challenges.

14 Department of Education, Higher Education Providers Finance Tables [data set], education.gov.au, multiple years,

accessed 7 June 2023.
15 Fair Work Ombudsman (FWO), Fair Work Ombudsman letter to Prof Mary O'Kane, FWO, 8 May 2023, accessed 7 June
2023.

34

1.4 First Nations at the heart of Australia’s higher education system
Before outlining immediate recommendations, the Review wants to specifically address the vitalneed to centre the experience of First Nations peoples in higher education.
Australia is home to the world’s oldest continuous living culture. Creating space for the knowledges
and perspectives of First Nations people in matters that concern them is crucial to Australia’s
development as a more equal nation.
Knowledge, understanding, education and scholarship produced by First Nations people, along withcommitment to their success through education, employment, research and community partnership,needs to be at the heart of the Australian system of higher education. This requires a commitment
to empowerment of First Nations people with a self-determined approach developed in relation tofunding and policy settings at both a national and institutional level.
Education, pedagogy, knowledge and innovation have always been part of First Nations culture, andenshrining these knowledge systems and practices in Australia’s higher education institutions is key
to the success of First Nations people in higher education, to the institutions themselves and in the
broader community. This inclusion also enriches Australia’s knowledge base. Australia’s commitment
to the success of First Nations people in higher education and beyond is a national priority and the
Review has considered this throughout the chapters of this report and in the considerations forchange.
Educational institutions are among many key sites of this cultural preservation, sharing anddevelopment, and First Nations cultures and knowledge need to be built into the fabric of these
institutions. First Nations students, educators and researchers are working to realise this vision inAustralia’s higher education sector – from re-awakening languages to creating culturally safe modesof medical care to educating the next generation of First Nations leaders.
Participation in higher education is a pathway to success for First Nations families and increased
capacity for their communities, yet First Nations people continue to be underrepresented across thehigher education system.16 A smaller student population manifests as fewer Aboriginal and Torres
Strait Islander researchers and academics, and in the broader community, where Australia misses
out on the knowledge, expertise and talent of First Nations people across our society and theeconomy.
The 2012 Behrendt Review of Higher Education Access and Outcomes for Aboriginal and Torres Strait
Islander People set a target for parity for First Nations students and staff in the higher education
sector. While First Nations participation has been increasing steadily over the last decade, from 1.3%of domestic students in 2008 to 2.1% in 2021, Indigenous student enrolments would need toincrease by 44% to be at population parity in 2021.17 Similarly, First Nations staff members make up
just 1.2% of academic staff, and 1.6% of non-academic staff in Australian universities.18 The Accord
process gives Australia a chance to determine what needs to be done to meet this target and to

16 Department of Education, Higher Education Statistics –Student Data – 2021 Section 11 Equity groups.
17 Department of Education, Higher Education Statistics – Student Data – 2021 Section 6 Indigenous students [data set],education.gov.au, 2023, accessed 8 June 2023.
18 Department of Education, Higher Education Statistics – Staff data – 2021 Staff Indigenous [data set], education.gov.au,
2022, accessed 8 June 2023.

35

continue the conversation about First Nations participation, success and self-determination in higher
education.
In the words of Wesley Enoch, Indigenous Chair in Creative Industries at Queensland University ofTechnology, “education has given us choices and the power to make change on our own terms.”19
Finishing high school at a time “when universities were actively recruiting and supporting Indigenous
students,”20 Enoch touches on the crucial role Governments and institutions need to play in enabling
First Nations students to succeed in higher education.
This Review aims to identify the actions and commitments needed to create better opportunities forFirst Nations students, supported by a funding system that drives positive outcomes for thosestudents. To achieve this, this Review has proposed to ensure all First Nations students areguaranteed funded places at university – by extending demand driven funding to metropolitan First
Nations students – and to consider ways forward to support those students to succeed at university
and to increase representation of First Nations researchers and leaders in the higher education
sector, and beyond.
Higher education outcomes are fundamental to Closing the Gap. In the Uluru Statement from theHeart, First Nations people generously invited all Australian people to work together to build abetter future. The Statement envisions that First Nations children “will walk in two worlds and theirculture will be a gift to their country.”21 Australia’s higher education sector is a site of opportunity torealise the partnership articulated in the Uluru Statement from the Heart. Heeding this call,
Australia’s educators, researchers, and institutions have a role to play in realising this vision by
ensuring First Nations people have a greater say in the decisions that affect them.
Improving Closing the Gap outcomes in higher education requires full and genuine partnership
between First Nations people, higher education institutions, the Australian Government, and otherpartners in the Accord.
For these reasons, the Review is giving further consideration to the following policy areas:a. creating a new First Nations Higher Education Council to give voice to the needs, aspirations
and know-how of community
b. moving towards a self-determined approach to national funding and policy settings inrelation to First Nations students, employment, teaching, research and engagement, with
universities mirroring this approach within their institutions, as is the case in someinstitutions today
c. supporting a First Nations-led review of access, participation and outcomes for First Nations
students and staff, research, teaching, use of First Nations knowledges, and First Nations
governance and leadership within universities
d. enhancing research capability for First Nations knowledges and for collaboration andpartnerships between First Nations communities, governments, universities and industry.

19 W Enoch, ‘To stop myself from losing hope, I focus on the positive stories of change in my own family’, The Guardian, 26

May 2021, accessed 7 June 2023.
20 Enoch, ‘To stop myself from losing hope, I focus on the positive stories of change in my own family’.
21 First Nations National Constitutional Convention, Uluru: Statement from the Heart, Uluru Statement from the Heart,
2017, accessed 17 May 2023.

36

1.5 There are critical first steps to be taken now
Without decisive action on higher education, Australia’s economic and social progress will suffer.
While the majority of the Review’s longer-term recommendations require more discussion in thelead up to its Final Report in December, some warrant immediate action by government. These
concern equity of access, student safety, funding certainty for universities and the proper paymentof university staff.

Bringing university education to under-serviced communities
The Review has heard that proximity and connection to a place of learning is a critical decisionmaking factor for students when determining future study options and is a significant barrier toaccess to higher education. Evidence has been positive of the benefits of RUCs for participation in
the areas that they operate. However, the Review has also heard that place-based need is not
restricted to regional areas. Students in outer metropolitan and peri-urban areas can face similar
challenges to accessing physical higher education infrastructure, compounded by long or costly
commutes. Bringing place-based solutions informed by the RUC model to these areas could improveaccess for current and prospective students in these areas including First Nations students. It is
recommended that government:
Extend visible, local access to tertiary education by creating further Regional University
Centres (RUCs) and establish a similar concept for suburban/metropolitan locations.
RUCs have been found to be effective at improving student participation, retention andcompletion rates in regional and remote areas and should be expanded.
The Review believes similar place-based and community-led solutions – New Tertiary Study
Hubs – could improve participation, retention and completion for students in outer
metropolitan and peri-urban areas, especially those from low SES backgrounds. These Hubs
should be based on the specific needs of each local communities and have tailoredwraparound support to help students to succeed.

Preliminary improvements to the JRG package
The Review heard concerns of the effect of the JRG package on the system and students. This
Interim Report includes a number of significant issues for future change, including changes tofunding, student contributions and HELP repayments. These require additional research andconsultation prior to final recommendations being made. However, there is one area of the JRG
package that is causing undue harm to students and can be immediately addressed ahead of theseideas being considered. It is recommended that government:
Cease the 50% pass rule, given its poor equity impacts, and require increased reporting on
student progress.
Introduced as part of the JRG package, the 50% pass rule disproportionately disadvantages
students from equity backgrounds. Enhanced reporting on student progress will increase thefocus on improving the success rates of at-risk students. While the Review believes otheraspects of the JRG package need reform, this change should proceed at the first possible
opportunity.

37

Equity and First Nations people
Australia is not on track to achieve the Closing the Gap target that by 2031, 70% of First Nations
people have a tertiary qualification.22 At the moment, 47% of First Nations people aged 25-34 years
have completed a tertiary qualification.23 Addressing these targets is crucial. It is recommended thatgovernment:
Ensure that all First Nations students are eligible for a funded place at university, byextending demand driven funding to metropolitan First Nations students.
Consistent with the principle behind the introduction of guaranteed funding for First Nations
students from regional and remote areas in 2021, this funding arrangement should apply to
all First Nations people undertaking higher education, including in metropolitan areas.

Providing funding certainty in advance of the Final Report
The Review considers that the end of the HECG in December 2023 in the absence of a new funding
approach may cause unnecessary disruption to staff, students and the sector. New funding
arrangements will be proposed in the Final Report. Interim funding arrangements are needed inadvance of a possible new funding system. Given the imperatives identified by the Review withregard to growth for skills through greater equity, universities and providers should be expected todirect any funding resulting from this guarantee towards supporting and enhancing equity
outcomes.
Provide funding certainty, through the extension of the Higher Education Continuity
Guarantee into 2024 and 2025, to minimise the risk of unnecessary structural adjustment
to the sector. Interim funding arrangements must prioritise the delivery of support for
equity students to accelerate reform towards a high equity, high participation system.
Universities and eligible higher education providers’ Commonwealth Grant Scheme (CGS)
funding is currently guaranteed to December 2023 through the HECG. The Final Report willpropose new funding arrangements for consideration by Government. Extending theguarantee into 2024 will avoid unnecessary disruption to staff, students and the sector.
The Review recommends that universities and providers should be expected to direct any
funding resulting from this guarantee to support greater equity outcomes. This should bedirected towards a range of assistance, such as increased support for students in enablingcourses, improved academic advice and learning support, wraparound support and services(such as mental health services), scholarships or other equity-related services.

The safety and wellbeing of students and staff
The Review received submissions and testimony about the safety and wellbeing of students andstaff. It considers issues of underpayment and student safety in particular warrant immediate action
from governments and institutions. Governing bodies have the power to act on these concerns
immediately, and governments have the power to strengthen university governance arrangements
further. It is recommended that government:

22 Productivity Commission, Closing the Gap Information Repository, Productivity Commission, 2023, accessed 16 June

2023.
23 Productivity Commission, Closing the Gap Information Repository.

38

Through National Cabinet, immediately engage with state and territory governments anduniversities to improve university governance, particularly focusing on:• universities being good employers• student and staff safety• membership of governing bodies, including ensuring additional involvement ofpeople with expertise in the business of universities.
Australian governments should work together to strengthen university governing boards by
rebalancing their composition to put greater emphasis on higher education expertise.
Governing bodies must as a priority do more to improve student and staff wellbeing andbecome exemplary employers.

1.6 Consultation, engagement and next steps
The Universities Accord Review process coincides with a number of major reviews with relevance tohigher education. These include the Productivity Commission Inquiry into Australia’s Early Childhood
Education and Care System led by Emeritus Professor Deborah Brennan AM, and the Review toInform a Better and Fairer Education System led by Dr Lisa O’Brien AM.
The Review believes that strong collaboration between these three reviews, and with thedevelopment of the new National Skills Agreement between the Commonwealth, states andterritories and with the review of national research priorities, Revitalising Australia’s Vision for
Science and Research, being led by the Chief Scientist is vital. Ensuring that all aspects of theeducation and research systems pull together toward a common vision of an educated and informed
Australia will help achieve the step-change in skills, knowledge and participation that our society
urgently needs.
Following the release of this Interim Report, the Review will consult widely to inform its Final Report,
which will include recommendations and a roadmap for the future.
The Final Report is due to be submitted to the Minister for Education in December 2023.

1.7 Building an Accord
A collective effort, with great ambition, will be required to achieve the step change described in thisreport. This will take a sustained commitment over multiple decades. Governments from all levels
will have a role to play in the future skills system. Local governments as leaders of theircommunities, states and territories in their role in the higher education system as well as stewardsof the VET system, and the Australian Government as the funder and regulator of higher education,
will need to work together as part of this process.
A dynamic partnership must be forged between governments, institutions, students, industry,
unions and communities, among others, to drive genuine engagement and collaboration in planningfor the future. This is the work of an Accord.
Considerations for next steps in the process to design and implement an Accord to deliver against
the opportunities and priorities outlined in this report, and as part of the Final Report, is containedin Chapter 4.

39

Part 2
Chapter 2 – Evolving the mission forhigher education
This chapter sets out ideas to evolve the mission for higher education and achieve the Review’svision of a high-functioning system.
It describes how our higher education system can address Australia’s skills and knowledge needs tomeet generational challenges, including climate adaptation, energy transformation, health and care,
Closing the Gap on First Nations disadvantage, buttressing our inclusive democratic culture andcreating stronger and more prosperous communities.
It explores barriers and gaps in Australia’s current higher education system, describes opportunities
for change and identifies possible ways forward.

40

2.1: A larger, fairer system“…to deliver an Australian higher education system that ‘delivers equal access tohigher education for all, irrespective of location, financial circumstance, cultural
background, gender or other factors’ ... more ambitious targets forunderrepresented groups must be set”
– Equity Practitioners in Higher Education Australasia

IssuesThe Bradley Review set a target that 40% of Australians aged 25 to 34 have a bachelor or higher
degree, and a participation target that 20% of undergraduates should be from low SES
backgrounds.24 The first target has been met – although it no longer reflects the projected skills
needs of Australia’s economy, which have risen substantially. The second target has not. In fact,
participation rates for low SES students have barely increased over the past decade.25
More ambitious targets in both areas are now needed.
This section discusses the need to increase higher education attainment to meet Australia's futureskills needs and how doing so will require an increase in enrolments from students historicallyunderrepresented in the higher education system. It proposes setting new targets for attainment
and a commitment to parity in participation for students from underrepresented backgrounds.
Our direction is clear: to succeed in the future, Australia needs to grow skills through greater equity.
To achieve this, the Review’s Final Report will set higher targets for higher education
participation and equity.

2.1.1 New targets to drive action
The Terms of Reference for the Review ask it to:• “Include recommendations for new targets and reforms recognising that more than nine in ten
new jobs will require post-school qualifications, and 50% of new jobs are expected to require abachelor degree or higher.”• “Include recommendations for new targets and reforms to support greater access andparticipation for students from underrepresented backgrounds.”
In considering what these targets might be, it is necessary to estimate the number of skilled workers
required in the future and what this means for a new attainment target. Given current participation
and attainment rates and patterns, this requires substantial growth in participation from cohorts
currently underrepresented in Australian higher education.

24 In Australia, the population benchmark for low SES is 25%. Bradley et al., Review of Higher Education: Final Report.
25 Low SES domestic undergraduate enrolments accounted for 15.1% of all domestic undergraduate enrolments in 2011. In

2021 this was 17%. Department of Education, Higher Education Statistics – 2021 Student Data [data set], education.gov.au,
2023, accessed 7 June 2023.

41

We look here at how the system needs to change over the coming decades to achieve its desired
targets.

2.1.1.1 Considering future demand and attainment
The Bradley Review set a target of 40% of 25-34 year olds having a bachelor degree or higher. This
served us well at the time. There are a range of issues to be considered in determining new targets
for participation and attainment.
New jobs in the labour market are already tilted heavily towards tertiary and higher education as arequirement: JSA projects more than one million new jobs will be generated by 2026, with 90% of
these requiring a post school qualification. More than half of these jobs will require a bachelor
degree or above.26
This shift towards higher qualification requirements will persist into the long-term. The Review
commissioned analysis from BIS OE to provide estimates of the number of higher education
graduates required to meet future demand over the next 30 years.
BIS OE’s preliminary analysis suggests that by around 2050, 55% of all employed persons will requirea higher education qualification, up from 36% of the entire working population at present (this isdifferent to the cohort covered by the Bradley target which relates to 25-34 year olds).27 Achieving
this level of attainment across the working population will require more young people going intohigher education and more upskilling of the existing workforce.28 Skilled migration will also continue
to play an important role. Given the amount of time it takes to train graduates and the scale of the
expected future skills needs, we must increase participation quickly.

2.1.1.2 Current levels of higher education attainment
As shown in Figure 2.1-1, the proportion of Australians aged 25 to 34 with a bachelor degree orabove has increased from 31.9% in 2008 to 44.6% in 2022.29 In achieving this, Australia has met the
Bradley target of 40%. However, these qualifications are not evenly distributed across the nation,with both Queensland (35.8%) and Tasmania (37.7%) still below 40%.30 The Review’s analysis
suggests further action is required to increase this attainment level to meet demand for
qualifications in the future.

26 NSC, Employment outlook (five years to November 2026).
27 BIS OE, Higher Education Qualification Demand [unpublished].
28 BIS OE, Higher Education Qualification Demand [unpublished].
29 Australian Bureau of Statistics (ABS), Education and Work, Australia, ABS, 2022, accessed 7 June 2023.
30 ABS, Education and Work, Australia.

42Figure 2.1-1: Proportion of people with a bachelor or above qualification by year (1986 to 2022) and by jurisdiction (2022).

Source: Australian Bureau of Statistics (ABS), Education and Work, Australia [data set], 2022, accessed 8 June 2023.

More broadly, the proportion of people with a Certificate 3 or higher qualification has also
increased. In 2022, 73% of people aged 25 to 34 years old had a Certificate 3 or higher.31
According to the OECD’s measurement of tertiary attainment, which focuses on diploma or higher
qualifications, Australia sits above the average, but trails comparator countries such as Korea,
Canada and Japan (see Figure 2.1-2).32 Many of the countries with high tertiary attainment,
especially Korea and Japan, are industrial powerhouses and have strong cultural commitments tofurther education. Canada has significant numbers of highly-skilled migrants: from 2016 to 2021
recent immigrants made up nearly half of the growth in the share of Canadians with a bachelor
degree or higher.33

31 ABS, Education and Work, Australia.
32 Organisation for Economic Co-Operation and Development (OECD), Population with tertiary education [data set],

data.oecd.org, 2023, accessed 7 June 2023
33 CanApprove, Immigrants make Canada the G7's most educated country: StatsCan report, CanApprove website, 2022,
accessed 7 June 2023.

43

Figure 2.1-2: Proportion of the population with a tertiary education* (25 to 34 year olds), 2021.

* Tertiary education includes diploma or above degrees (diploma, advanced diploma, bachelor, graduate certificate,graduate diploma and postgraduate degree).
Source: Organisation for Economic Co-Operation and Development (OECD), Population with tertiary education [data set],
2023, accessed 7 June 2023.

2.1.1.3 Risk of slower and falling attainment
Without significant change, there is a risk that Australia’s attainment levels may falter and even fall
over the next decade. There are early signs of this deceleration. As shown in Figure 2.1-3, an
increase in the number of domestic students (particularly those in the 19 to 24 years age range)
completing a bachelor degree for the first time from 2008 to 2018 drove the increase in attainment
over the last decade. However, the most recent graduations data shows a fall in the number ofdomestic students graduating with their first bachelor degree, with completions in 2021 at theirlowest since 2014. To make matters worse, demand for higher education has fallen in recent years,
and this will likely produce a further fall in graduations over the next few years.34
Figure 2.1-3: Number of domestic students completing a bachelor degree for the first time, 2005 to 2021.

Source: Department of Education, Higher Education Statistics –Student Data [unpublished data], Department of Education,
Canberra, 2023.

2.1.1.4 What magnitude of growth is needed?
To support the development of a new target, the Review has sought analysis from BIS OE, whichsuggests that Australia will require a workforce-wide higher education attainment rate of 55% by
34 Department of Education, Administrative data [unpublished data].

44

around 2050. This implies an even higher attainment rate for young people. This is a good starting
point to consider what an appropriate attainment level could be and the magnitude of growthrequired in the higher education system.35
In recent years, enrolment growth has slowed and, as shown in Figure 2.1-3 above, the number ofpeople completing a bachelor degree is falling. 2023 demand for higher education has also fallen, inline with the strengthening economy and strong employment growth. If Australia is to achieve an
attainment level of 55%, these trends need to be reversed and a significant increase in enrolments isrequired – starting now and continuing over coming decades.
Preliminary analysis by the Department of Education (see Figure 2.1-4) suggests that Australia willneed to increase the size of the higher education system significantly over the next three decades.
Latest data indicates Australian universities enrol around 900,000 Commonwealth supported
students, including 760,000 bachelor students. To reach 55% attainment for people aged 25 to 34
years by 2050, we would need to have at least 1.2 million Commonwealth supported students in
2035 and 1.8 million in 2050. However, further growth would be needed to support older students
deciding to enrol for the first time, or to upskill and reskill.
This is well above the growth in CSPs projected by the Department of Education under existing policy
settings and population growth, which indicate that the Australian higher education system willgrow to one million Commonwealth supported students in 2035 and 1.2 million by 2050.
Figure 2.1-4: Possible total projected CSPs (headcount) to reach 55% attainment by 2050.

Source: Department of Education internal analysis based on ABS, Population and Housing, Census 2021; Population
Projections, Australia [data sets], 2021, accessed 6 June 2023; Centre for Population, Budget 2023-24, population
projections, Australia [data set], accessed 6 June 2023 and Department of Education, Higher Education Statistics –Student
Data [unpublished data].
Assumptions based on current completion profiles.

While it is clear that the number of people completing bachelor degrees must increase, completion
numbers for the next 3 years are tracking lower, the outcome of policies of the recent past. This is inaddition to the fall in first time bachelor completions outlined above.
Based on the above scenario that sees a 33% increase in enrolments by 2035 and 55% attainment by
2050, it is projected that around 150,000 people will need to complete a bachelor degree for the
35 BIS OE, Higher Education Qualification Demand [unpublished].

45

first time in 2035 (see figure 2.1-5) – 27% higher than in 2021. By 2050, this is projected to increase
to around 275,000 people.
Figure 2.1-5: Projected bachelor completions to reach a 55% attainment target by 2050.

Source: Department of Education internal analysis based on ABS, Population and Housing, Census 2021; Population
Projections, Australia [data sets], 2021, accessed 6 June 2023; Centre for Population, Budget 2023-24, population
projections, Australia [data set], accessed 6 June 2023 and Department of Education, Higher Education Statistics –Student
Data [unpublished data].

2.1.2 Alignment between funding and overall objectives
Achieving attainment targets requires a funding system that supports enough students to enrol andgain a qualification. The funding needs to be effectively distributed across the higher education
sector to meet a range of priorities and objectives – to ensure students can access a CSP at an
institution of their choice, to meet anticipated surge in demand in some locations due to population
growth, to meet new attainment and participation targets, and to ensure critical skills pipelines.
It will be important that the funding system reflects the future patterns of enrolment desired bynational policy – and particularly the need to have higher levels of participation in equity cohorts,
regional areas and outer suburbs. As shown in Figure 2.1-6, the largest absolute growth in 9 to 16
year olds between 2016 and 2021 is in major city outer suburbs, with some inner regional areas also
showing significant growth. Funding and growth provision will need to respond to these changes.

46

Figure 2.1-6: Population growth in 9 to 16 year olds between 2016 and 2021.

Source: Department of Education internal analysis based on ABS, Population and Housing, Census 2016 and 2021 [dataset], 2021, accessed 6 June 2023. Reproduction based on Andrew Norton's Submission to the Australian Universities Accord
Terms of Reference.

2.1.3 Meeting attainment targets requires increased equity cohort participation
An increase in the number of people gaining a higher education requires an increase in enrolments
by students from traditionally underrepresented backgrounds. In 2021, 17% of undergraduate
students were from a low SES background, well below 25% which would attain parity based on thepercentage share of the population.36
Figure 2.1-7 demonstrates that a similar pattern is true for students from regional and remote areas
and First Nations students, all of whom remain underrepresented in the higher education system. It
also shows that there has been recent positive increases in students with disability participating inhigher education.37 This positive increase has been due to increased accessibility to higher education
as a result of moving to online learning during the pandemic, and increased reporting of mental
health conditions. There is a risk that this positive increase might stall or reverse if universities don’tallow ongoing hybrid learning to continue.

36 Department of Education, Higher Education Statistics –Student Data – 2021 Section 11 Equity groups.
37 There has been a significant increase in the reporting of students experiencing mental health conditions and associateddisability from 2020 to 2021. This peak coincides with the COVID-19 pandemic.

47

Figure 2.1-7: Participation ratio for underrepresented groups at Table A institutions, 2005 to 2021.** Prior to 2011 low SES was based on postcode, and subsequently it was based on Statistical Area 1. From 2016 onwards,
low SES and regional/remote data is based on First Address.
Source: Department of Education, Higher Education Statistics – 2021 Student Data [data set], 2023, accessed 7 June 2023.

Meeting attainment targets requires increased equity participation.
We need to start increasing participation in higher education now to reach our future attainment
needs. The BIS OE analysis suggests that Australia will require an attainment rate of 55% by around2050. Initial analysis by the Department of Education suggests Australia would need to increase
Commonwealth supported enrolments by around 33% from 2021 levels by 2035 to get on a
trajectory to achieve this potential target.
As shown in Figure 2.1-8 below, increasing attainment levels will require significantly higher
enrolments of students from equity backgrounds to achieve parity of participation. Given theincrease needed in 2035, and to meet population parity, around 60% of the additional students
would need to be from low SES backgrounds, while 46% will need to be from regional areas and 7%
from remote areas. Around 11% of these extra students would need to be from First Nations
communities. This would require a significant increase in the proportion of commencing students
from traditionally underrepresented backgrounds compared to the current situation. Within ourcities, this would also require a change in the geographic distribution of higher education
participation, with areas currently underrepresented receiving additional attention.

48

Figure 2.1-8: Share of additional enrolments by equity students to reach population parity by 2035.

Source: Department of Education internal analysis based on ABS, Population and Housing, Census 2021; Population
Projections, Australia [data sets], 2021, accessed 6 June 2023; Centre for Population, Budget 2023-24, population
projections, Australia [data set], accessed 6 June 2023 and Department of Education, Higher Education Statistics –Student
Data [unpublished data].

People from equity groups are currently less likely to apply to go to university. For example, only
20% of applicants are from low SES backgrounds, while 2.4% are First Nations. Achieving theambitious growth targets this Review is considering will require significant growth in applications
from such students.
To meet any attainment targets that are set, the system must both attract enrolments and support
the success of participants who fully reflect Australia's diverse and talented population. A stronger
commitment to parity in access, participation and outcomes, requires a significant renewal ofefforts, underpinned by a funding system that supports such an increase in enrolments. This will taketime and require institutions to embed equity more effectively in their institutional missions, policies
and programs.

2.1.3.1 Setting and meeting ambitious new targets
Submissions to the Review offered mixed views on how to set new attainment and participation
targets. Several submissions suggested that while the Bradley Review targets had been met inaggregate, more focus should be given to targets aimed at expanding access to people who want togain a higher education. These submissions also called for specific attainment targets for
traditionally underrepresented groups, including regional, low SES and First Nations students.38
Other submissions argued that there are inherent difficulties in predicting Australia’s skills needs,
and that promoting arbitrary targets risks creating an oversupply of graduates.39
In the context of future skills needs, the Review supports establishing a new, higher target for higher
education attainment within an ambitious tertiary target. An overall tertiary attainment target isappropriate as both VET and higher education will need to play a role in meeting future skills need. A
national target could be a mechanism to draw the tertiary system together in pursuit of a common
goal. Monash University proposed a tertiary attainment target of 75%.40

38 Regional Universities Network (RUN), Submission to the Australian Universities Accord Discussion Paper, 2023;

Universities Australia, Submission to the Australian Universities Accord Discussion Paper, 2023.
39 A Norton, Submission to the Australian Universities Accord Discussion Paper, 2023.
40 Monash University, Submission to the Australian Universities Accord Discussion Paper, 2023.

49

A high tertiary attainment target is consistent with the National School Reform Agreement (NSRA),
which set a target of 90% year 12 (or equivalent) or Certificate 3 or above attainment for people
aged 20 to 24 by 2020.41 Australia met the NSRA target in 2021 with a 90% year 12 (or equivalent) or
Certificate 3 or above attainment for people aged 20-24.42
The make-up of an overall tertiary attainment target between VET and higher education needs to be
dynamic and responsive to changing skills needs and therefore needs to be subject to ongoingexpert advice. Research shows that a growing proportion of the workforce will require tertiary
qualifications, driven by factors such as the transition to a clean economy and a growing care
workforce. Jobs that previously required VET qualifications will also require higher order thinking
and people to engage in lifelong learning; likewise, jobs that previously relied on higher education
may increasingly value specific vocational skills.
Increased attainment targets for both tertiary and higher education will see growth in student
numbers and hence require additional funding for both sectors. From a higher education
perspective, it is likely the sector will have to grow, particularly as lifelong learning becomes more
popular and necessary.
Additionally, and to ensure the benefits of higher education are distributed across the community,
the Review is considering creating specific higher education participation targets for students fromunderrepresented backgrounds and equity cohorts. This includes low SES, regional, rural and remotestudents, and students with disability. The sector should aspire to achieve parity of participation by
2035. This achievement of parity in participation would need to be underpinned by meaningful andachievable interim targets. It would also require a more coordinated and fully integrated national
approach to equity, in addition to an effective long-term national evidence-based strategy.

2.1.3.2 More granular and practice-relevant data to inform policy and track progress
The adoption of new targets would require the Government to focus on broadening the adoption ofevidence-based approaches to addressing barriers across the student lifecycle. This will requireinstitutional and system-level data collection to capture information more effectively on existing andemergent equity cohorts (such as improved data on disability, being the first in family to attend
university, carers, care leavers, children from a single parent family, children of asylum seekers, etc)
and cumulative disadvantage.
“[T]here are some fundamental issues with the way [existing] data is collected …
These issues include: the use of blunt indicators such as participation andattrition rates which do not account for nuanced and complex analysis needed
for analysing equity target groups and especially the categories of disability.”– Australian Disability Clearinghouse on Education and Training

41 Council of Australian Governments, National School Reform Agreement, Council of Australian Governments, 2021,

accessed 16 June 2023.
42 Productivity Commission, Review of the National School Reform Agreement – Study Report, Productivity Commission,
Australian Government, 2022, accessed 16 June 2023.

50

2.1.4 A universal learning entitlement to support access to a high-quality
tertiary education
The Review is examining public and private funding mechanisms to ensure individuals can gain thequalifications and credentials they seek (including beyond an initial qualification), and the system as
a whole is meeting national skills needs.
This could be achieved through a universal learning entitlement – an appropriate combination of apublic subsidy, a student contribution that would be paid through an income contingent loan (ICL) as
in the current HELP scheme, and, for some lifelong learning, an appropriate employer
contribution. The aim is, in part, to build a culture of high expectations, where all Australians can
expect to attain a tertiary qualification.
This is seeking to achieve multiple objectives:• meeting skills priorities through significant growth• achieving that growth through population parity targets, and• ensuring as many Australians as possible can gain one or more tertiary qualifications in anaffordable way.
Such an entitlement would also move beyond traditional targets (e.g., the percentage of schoolleavers who go to university or complete a VET or TAFE qualification) and build a commitment where
governments, industry, unions and education providers come together to meet a range of skills andother objectives.
While such a change would have similarities with the previous demand driven funding system, theReview sees the concept of ‘demand driven funding’ as no longer reflective of current requirements.
An active focus is required to aim for better planned tertiary education provision across regional andmetropolitan areas, including the option to translate the advice about economy-wide skills
requirements into necessary action from the higher education sector, and monitor progress against
participation and attainment targets.
This proposed harmonised national commitment to tertiary education attainment, and sharedcommitment by all governments and industry to these goals therefore needs to be the focus offurther discussions and considered alongside other relevant national reforms.

Considerations for change
Given existing patterns of participation, a larger system necessarily requires substantial growth inparticipation from cohorts currently underrepresented in Australian higher education. For the Final
Report, the Review will continue to give consideration to the following policy areas:a. setting targets for tertiary education participation and attainment, including for higher
education, through consultation with JSA and the VET sectorb. setting targets to raise First Nations participation and completion rates in higher educationc. creating specific higher education participation targets for students from underrepresented
backgrounds and equity groups to achieve parity by 2035. These groups will include students
from low socio-economic, regional, rural and remote backgrounds and students with disability
d. developing a universal learning entitlement to ensure Australians can gain the qualifications andcredentials as they need or desire
e. as a priority element of the universal learning entitlement, ensure that all students from equity
cohorts are eligible for a funded place at university.

51

If established, new targets would need to be tightly monitored as a national priority, to ensureaccountability and delivery on time. Long-term targets could be supported by short-term stepchange targets set in a jurisdictional and institutional context, for example disaggregated bystate, region and provider.

52

2.2: Meeting Australia’s future skills needs“With the right settings in place, Australia can strengthen its post-secondary
education and training system so it’s set up to facilitate lifelong learning andsupport Australia’s future economy.”– Business Council of Australia

IssuesAustralia is not producing enough graduates with sufficient skills and knowledge to meet current andfuture workforce needs. Without intervention, skills shortages will persist in many professions andother highly-skilled occupations including health, education, IT and engineering, and the nation will
be unable to support emerging skills needs and improve productivity as our population grows in size
and age. In an increasingly globalised and competitive international economy, we need the skills
required to take advantage of future growth opportunities in emerging areas. There is more to do tosupport more people to be educated at various levels, and for these people to upskill and reskill.
BIS OE preliminary analysis suggests that Australia will require an additional 5.8 million people withhigher education qualifications by 2052, with the share of employment that requires higher
education increasing from 36% to 55% of all jobs.43
Rising to this challenge is made all the more important, considering that in 2022, 35% of all
occupations generally requiring a bachelor degree or higher qualification were in shortage, anincrease from 19% in 2021.44 In many of these fast-changing workforce sectors, paraprofessional andadvanced technical jobs are also growing rapidly, and need to be served effectively by fit-forpurpose qualifications and opportunities.
The Review has heard graduates need a mix of transferable work-related skills and learning
capabilities to participate effectively in the workforce. While new approaches to skills acquisition are
emerging in the form of microcredentials, cadetships and other short courses, inconsistent funding
arrangements and regulatory frameworks are stifling further innovative course design.
The Review has also heard that transitions between VET and higher education are fragmented andmisaligned, making it difficult for students to navigate across sectors and obtain the skills they need.
Universities’ credit transfer, advanced standing and RPL practices are inconsistent and can act as abarrier to further study.
The Review is exploring how industry and the higher education and VET sectors can establish parityof esteem and collaborate more effectively in the development of innovative course content, and inproviding more quality placements and WIL across more courses.
Innovation and collaboration in higher education delivery – for example, throughmicrocredentials that reflect industry input – is a must.

43 BIS OE, Higher Education Qualification Demand [unpublished].
44 NSC, Skills Priority List: Key Findings Report, NSC, Australian Government, 2022, accessed 16 June 2023.

53

Innovation in the way that we design and deliver higher education, support students and open up
more pathways to learning will promote access and opportunity for all students (but particularly
those from disadvantaged backgrounds) to gain the skills they, and the nation, need. If we don’t,
Australia will miss out on key economic and social development opportunities.

2.2.1 Getting the balance of skills right
Numerous consultations and submissions to the Review noted the need to better prepare graduateswith the ability to think critically, research and solve complex problems, and to supplement thesegeneric skills with more discipline-specific and job-relevant knowledge. At the same time,
submissions noted that the higher education and VET sectors aren’t sufficiently responsive totechnical, industry needs. Improving the mix of skills taught in tertiary education, and the quality andapplicability of these skills, will require greater collaboration between all stakeholders in the system.
Maximising the opportunities, learning pathways and environments through which students canobtain the mix of skills they need in the future is essential to Australia’s future prosperity.
"Industry and universities must be intertwined to ensure graduates exit with thetechnical knowledge and generic skills needed. This is key to linking learning withcurrent industry strategies and practice, knowledge and skill needs."- Australian Industry Group
Courses must be designed with the skills needs of industry in mind. The Review notes that thedevelopment of a shared skills taxonomy, through JSA’s work building on the Australian Skills
Classification (ASC), will assist in mapping course design to identified skills needs and will be a useful
workforce planning tool. The ASC offers a common language of skills which enables stakeholders to
identify and articulate skills consistently. Agreement on this is an essential component in the buildout of short-form qualifications and the identification of generic and high-level skills across all typesof qualification.
JSA is currently working to map higher education curricula to this common taxonomy so that
qualifications can be defined by the specific skills that are taught. Matching this framework with theskills needs of occupations will allow for better matching of skills demand and supply and will be auseful tool in course design. It could facilitate the expansion of more flexible, timely and modular
forms of learning, that could be more readily updated to reflect changing workforce needs.
It may also increase the confidence of employers and professional accreditation bodies that
graduates are equipped with skills at the right levels of attainment for different jobs. This could beattested through a national skills passport – discussed further in Section 2.2.7.

2.2.2 Serving the professions
One of the major functions of higher education is to produce the skills required for the professions.
Critical professions including teaching, medicine, engineering, dentistry, nursing, veterinary scienceand allied health are all experiencing significant skills shortages nationally, many of which areparticularly acute in regional and remote areas.45 These professions are also where greater numbers
are needed in the future. Figure 2.2-1 shows that health care and social assistance (which includes
nurses and medical professionals); professional, scientific and technical services (which includes IT

45 NSC, Skills Priority List.

54and engineering) and education and training (including teachers and early childhood workers)
provide over half of the total projected employment growth to 2026.46
Figure 2.2-1: Projected employment growth by industry, November 2021 to November 2026.

Source: Department of Education reproduction based on JSA, Employment Outlook: Industry and occupation trends overthe five year to November 2026, [data set], 2021, accessed 8 June 2023.

With a growing and ageing population, the need for health professionals and paraprofessionals,
particularly nurses and aged and disability carers, will continue to grow. Australia is expected torequire more than 40,000 additional registered nurses over the period to 2026, a growth rate of
13.9%.47 It is expected to require an additional 98,600 ICT professionals (including cybersecurity
professionals) over the same period, a growth rate of 26.3%.48 A growing population will also require
greater levels of infrastructure and housing, and the transition to cleaner energy will change the way
our energy and industrial sectors operate, driving demand for engineers and planning professionals.
In addition to addressing existing and continuing skills challenges, Australia also needs to address
demand for emerging professions and skills in areas of national priority like clean energy, advanced
manufacturing, critical technology, minerals and defence.49
We need more First Nations people represented in professions like medicine and teaching,recognising the value of specific cultural knowledge when providing these services to First Nations
people.
While there have previously been attempts to encourage students into particular courses, skills
shortages have continued to persist. The latest attempt was through the JRG package adjusting
student contributions, though widespread consensus suggests that students have not responded.

46 NSC, Employment projections, NSC website, 2022, accessed 7 June 2023.
47 NSC, Skills Priority List.
48 NSC, Employment outlook (five years to November 2026).
49 NSC, Skills Priority List.

55

“Currently, governments set subsidies based on targeting public benefits and skill
needs, but these have little impact on student choice and many students receive
large subsidies despite large private benefits.”50– Productivity Commission
Education for professional, paraprofessional and advanced technical occupations has some specificfeatures and challenges which necessitate greater industry involvement in learning and teaching, as
well as research. This includes the need to teach students the skills associated with leading-edge
practice in that profession, education in professional ethics, placement, and quality control throughaccreditation with the professional body. JSA analysis suggests that students aren’t graduating withenough of the professional skills required to address the skills needs of business. Their analysis
shows that in the first quarter of 2023, employers received around 4.3 qualified candidates pervacancy, but less than half of that number were deemed suitable (2.1 applicants per vacancy).51
Increased collaboration, and enhanced WIL (see Section 2.2.4), is necessary to ensure that students
are graduating with the specific skills required to do the jobs that are required of them.
A greater number of academic staff should be chartered and/or active in the profession they areteaching. This will bring contemporary industry experience to teaching, where relevant, withprofessional registration. Increased industry engagement will be essential to ensure that curricula
can be updated regularly to reflect rapidly changing skills needs.
From submissions and Review consultations, it is clear there is a need to:• secure greater levels of co-design of the curriculum between industry and higher education• recognise that professional bodies will be an important part of the ongoing Universities Accord
process• recognise that the funders of professional skills development are also major industry
stakeholders, particularly state and territory governments as employers of teachers andhealthcare professionals and state, territory and local governments through urban and regional
planning professions• recognise that changing technologies, including artificial intelligence, will impact on both thenature of professional skills and the delivery of education for these occupations• enhance the dialogue between higher education providers and the professional bodies to ensure
graduates are being produced with the right skills for a commencing practitioner but
accreditation requirements are not unduly onerous financially on institutions and do not inhibit
students from studying broader subjects that also benefit their education• require academics working in education for the professions to maintain more active contact withthe professions to ensure they are equipping students with up-to-date skills and knowledge• ensure education for the professions includes education in generic skills to a high level ofattainment.

50 Productivity Commission, 5-year Productivity Inquiry: From learning to growth, Vol. 8, Productivity Commission,

Australian Government, 2023, p 51, accessed 16 June 2023.
51 JSA, Labour market update - May 2023.

56

These issues will be given further consideration for inclusion in the Final Report.

2.2.2.1 Professionally accredited graduates
Demand for professionally accredited graduates is also outpacing supply in many other professional
areas. Appropriate reform of pathways to registration, accreditation and placement requirements
has major potential to streamline the training of professionals and ensure sufficient workforce
supply into the future.
To ensure learning, competency and registration standards are met, several factors must be
addressed. For example, restructured course design to recognise competencies and prior experience(instead of meeting mandatory minimum hours of practice) could accelerate completions and free
up training and placement opportunities. In some fields, the use of pre-vocational roles, cadetships
or extended clinical training blocks could integrate students more quickly into the workforce tomake important contributions in their field of study. Alternative approaches, such as learning using
simulation and virtual reality could also be used more widely to accelerate acquisition competencies
and reduce clinical practice requirements.
The Review notes these are complex issues, intersecting with jurisdictional responsibilities,
professional accreditation standards, and federal financing arrangements. Better coordination andfunding of workplace training and enabling innovation in training pathways requires stronger
engagement across governments and with unions and industry.

2.2.2.2 PhD graduate researchers
Australia’s research training is also relevant to Australia’s transition to a more knowledge intense
economy, especially in critical fields, including critical technology fields such as biotechnology,
quantum computing and clean energy generation and storage technologies.52
In certain fields there is an urgent need to train enough highly-skilled researchers. For example,
supporting the AUKUS nuclear submarine program will require a significant increase in the numberof locally trained nuclear engineering doctoral-level researchers, and expansion of specialist andtargeted programs and qualifications.53 In the short term, Australia may have to rely on experts fromthe United States and United Kingdom to assist with this endeavour.54
Beyond their deep technical expertise, Australia’s researchers and higher degree by research (HDR)
graduates should also have transferable critical thinking and problem-solving skills.55

2.2.3 Moving towards an aligned tertiary system“Students, employers and the Australian economy require an integrated tertiary
education system…where skills training and higher education sectors operate as
one but retain their separate strengths and identities.”– Independent Tertiary Education Council Australia

52 Department of Industry, Science and Resources (DISR), List of Critical Technologies in the National Interest, DISR website,2023, accessed 16 May 2023.
53 B Packham, ‘Subs need 108 PhD-level nuke scientists a year’, The Australian, 6 March 2023, accessed 15 June 2023.
54 N Martin, ‘Three tiers and more than 8000 new engineers: what it will take to deliver AUKUS nuclear submarine
program', UNSW Newsroom, 31 March 2023, accessed 16 May 2023.
55 Australian Technology Network of Universities (ATN) and Nous Group, Enhancing the Value of PhDs to AustralianIndustry, ATN website, 2017, accessed 16 May 2023.

57

Many students move between the higher education and vocational education sectors during their
lifetime, using VET as an entry pathway into higher education or supplementing their higher
education with more job-specific skills from VET. These transitions should be as seamless as possible.
Professions expected to be in demand, such as nursing and early childhood teaching, require skills
commonly acquired across both VET and higher education, and qualification pathways exist forpeople to further their careers (enrolled nurse to registered nurse and early childhood carer to earlychildhood teacher). Likewise, graduates studying across all professions may benefit from tradespecific VET qualifications, or general workforce qualifications in project management and training
and assessment.
Higher education to VET pathways are particularly important for supporting more underrepresented
students to participate and succeed in higher education. Low SES, regional and First Nations students
are more likely to use VET as a pathway into higher education.
Students are increasingly engaging in multidirectional and non-linear learning pathways. For
example, the number of students choosing to enrol in VET after completing a higher education
qualification is growing. The proportion of students enrolled in VET courses with a bachelor degree
or higher qualification has steadily risen from 7.4% in 2015 to 10.3% in 2020. In 2020, the proportion
was highest in education (20%), health (18%), natural and physical sciences (15%), and management
and commerce (14%).56
Collaboration between VET and higher education is essential for improving skills development.
Increasingly skills development in many areas of study will require both the best elements of VET
and higher education. An Accord for the future of the tertiary sector needs to bring together
governments, education providers, employers, regulators, peak bodies for the professions and thelabour movement in a shared purpose to better align skills development across the tertiary sector
with the skills needs of employers and workers. We need to eliminate some of the cultural barriers
that have historically existed between the VET and higher education sectors and see both sectors as
distinct but equally important parts of the skills development system. The Review considers thatreforms to the AQF (see Section 3.1) are also necessary to facilitate this collaboration.
Funding arrangements for VET and higher education need to be more unified and consistent. The
Review heard of circumstances where funding and regulatory inconsistencies have stood in the wayof innovation across the tertiary sector. Funding arrangements should not act as a barrier toeffective collaboration between VET and higher education providers, or to course delivery for dual
sector providers. The Review is giving further consideration to suggestions of extending CSPs atsome AQF levels to the TAFE sector in areas of key skill need.
We need to encourage innovative methods of course delivery, particularly in areas of national
priority such as health care, clean energy and defence. Industry providers should be engaged incourse design with VET and higher education providers to identify key learning requirements acrossboth sectors. Some stakeholders, including the University of Newcastle, have suggested that
Cooperative Skills Centres could be established in key areas of urgent need. These would bemodelled on the successful Cooperative Research Centres (CRC) program, and could link with similarcentres of skills excellence, developed through collaboration with Vocational Education providers,through the National Skills Agreement. These centres would bring together higher education, VET,
56 National Centre for Vocational Education Research (NCVER), VET student outcomes 2022, NCVER website, 2022, accessed

7 June 2023.

58

industry and unions to develop and deliver courses that rapidly upskill people in areas of industryneed.
The Review will explore the concept of Cooperative Skills Centres, linking higher education, VET andindustry, as a way to develop new skills and qualification pathways in priority areas such as energy.

Case study: Deakin University guaranteed entry pathway
Deakin University is not a dual-sector university, but nevertheless in 2021 it had a relatively highproportion of VET admissions and provided amongst the most credit for previous VET study.
The Deakin University Guaranteed VET entry pathway provides guaranteed entry into higher
education qualifications for students who have successfully completed a related VET
qualification at a partnered TAFE. Pathways exist for higher education qualifications in design,business and commerce, construction management, communications, creative arts, IT andengineering.
These arrangements are facilitated through study partnerships with various TAFEs acrossVictoria and NSW, with RPL built into the course structures. The pathways are well mapped out
for students, with clear criteria for admission and RPL.

2.2.3.1 Better standards for admission practices and credit recognition
Evidence suggests admission practices and RPL differ markedly across universities. While somedifferentiation is justified to reflect the courses that different universities teach and thecompetencies required from students, it should not act as an undue barrier to further study. For
example, it should not create inefficiencies, whereby students are duplicating skills and learning
experience they have already obtained, or transaction costs as students have to navigate complexity.
This also creates unnecessary costs in terms of time and funding.
Practices also differ substantially across different fields of education. Nursing, early childhood
teaching and social work have well developed pathways between VET and higher education as theytie directly to accreditation requirements within occupations. But pathways in other fields ofeducation are less developed or concentrated in a limited number of universities.
Achieving greater consistency and RPL in admission practices requires greater collaboration between
tertiary providers. Pathways need to be developed and curated with RPL and credit built into course
design. The Review believes that there should be acknowledgement of innovation and a wider
adoption of best practice in this area, and that consideration could be given to the development of
guiding principles for RPL.

2.2.4 Supporting students to undertake placements
The Review has heard that difficulties supporting sufficient placements in healthcare (particularly
nursing, allied health and psychology) and education are exacerbating shortages in these criticalprofessions (with similar effects in other professions). These occupations are also facing challenges
of attrition, which further reduces the ability of the workforce to support increasing placements. The
cost to universities of providing placements is increasing faster than funding. Without addressingthese issues, initiatives to boost the number of students entering the system in critical healthworkforce areas will fail.

59

Mandatory WIL and clinical training requirements often require students to forego paid work toundertake these unpaid placements. This places significant pressure on students, exacerbated forstudents from low SES and regional backgrounds and students (most commonly women) who havecaring responsibilities. Issues of transport and accommodation costs, especially for regional students
required to travel to undertake placements, are yet other barriers. This is discussed further in
Section 2.3.
The Review will explore the possibility of requiring some form of financial support for students
undertaking mandatory placements.
The Review considers there is merit in exploring the development of principles and standards forsome level of support or stipend for students undertaking mandatory placements – with particularurgency for teachers and nurses (working with states’ and territories’ departments and agencies
employing the bulk of these nurses and teachers). Careful consideration of these arrangements isneeded, including whether changes are required to provisions within the Fair Work Act relating to
payment for vocational placements.

2.2.4.1 Further support for workforce retention
The Review notes that a range of factors contribute to workforce shortages, beyond the interactionsof the higher education ecosystem. These include occupation-specific issues of attrition and pay, as
well as higher prevalence of part-time work and casualisation, particularly in female-dominatedindustries like nursing and teaching. Current economy-wide supply constraints are being
exacerbated by high demand for engineering in construction and infrastructure.57
The Review is exploring new HELP policies to encourage graduates to remain in valued
occupations and in priority communities.
The Review considers that options to encourage students to enter and stay in valued occupations
should be explored. One example could include covering a proportion of HELP debt for every year
they stay. These options have been utilised through the HELP system to allow doctors and nurse
practitioners who work in rural, remote and very remote areas and teachers who work in very
remote areas to receive reductions in HELP debt, such as reductions in accumulated HELP debts or
waivers of indexation. There have been calls to expand similar arrangements to other criticalprofessions, particularly in remote and regional areas. As the states and territories are the mostsignificant employers of nurses and teachers, for example, government employers waiving HELP
debts through existing payroll mechanisms may be an effective approach to supporting theseworkforces. It will be important to avoid upfront mechanisms that have little practical effect like the
JRG package, or result in different jurisdictions competing for the same workforce in a costly way, forexample by states and territories paying the fees of nursing and teaching students upfront.

2.2.5 Increased industry engagement in learning“Placement and WIL is essential to ensure that graduates are ready andemployable. The more ‘real world’ skill application that is incorporated into
57 Engineers Australia, Strengthening the engineering workforce in Australia: Solutions to address the skills shortage in the

short, medium, and long term, Engineers Australia, 2022, accessed 7 June 2023; Infrastructure Australia, Infrastructure
workforce and skills supply: A report from Infrastructure Australia’s Market Capacity Program, Infrastructure Australia,
Australian Government, 2021, accessed 7 June 2023.

60

tertiary programs, the better.”– Association of Australian Medical Research Institutes
The 2021 Industry University Collaboration Review identified that access to high-quality industry
experience is vital to ensuring that future graduates are work ready. It also highlighted that
universities and businesses need to work together to give students access to practical work
experience and real-world technology so they can develop the skills that industry needs.58
New models of WIL delivery include Advanced Apprenticeships, which are being trialled by theAustralian Government through the Women in STEM and Industry 4.0 programs at AQF 5 and 6
levels, and Degree-Apprenticeships programs which combine study with paid employment andwork-based learning. Degree Apprenticeships are widely used in the United Kingdom and are
currently being explored by several Australian universities and TAFE institutes. A growing range ofproviders are also developing and trialling the use of cadetships and work-based learning programs
that combine work-based learning with study and bring together elements of both higher andvocational education course designs. Recent examples include the Flinders University partnershipwith BAE systems to develop a Diploma of Digital Technologies to support the ship building
workforce for Defence projects in South Australia.

2.2.5.1 Lifting the quality and availability of WIL
Reports produced over the past 10 years have shown a strong link between WIL and positive
student, university and industry outcomes.59 WIL builds stronger connections to the workforce while
studying and improves employability and career satisfaction. Young graduates (aged 25) in fields
with a high prevalence of WIL learning report a higher level of satisfaction in their careers.60"For Australia to remain competitive now and into the future, our university
graduates need to be work-ready, graduating with industry-relevant knowledge
and skills, with the ability to apply them to add value in professional workplaces
immediately upon graduation. Work Integrated Learning (WIL) supports students
to do just that, by applying and deepening their degree learning in authentic
work settings and contexts."– Swinburne University of Technology
The benefits of WIL are clear but there are numerous barriers preventing its uptake and broader
implementation. Developing the necessary mutual understanding and meaningful relationships
between universities and industry can require time, expertise and resources that are not always
available. Both universities and industry have reported on the difficulty of managing multiple
relationships that have individual requirements.

58 M Bean and P Dawkins, Review of University-Industry Collaboration in Teaching and Learning, Department of Education,

Skills and Employment (DESE), Australian Government, 2021, accessed 7 June 2023.
59 Universities Australia (UA), Australian Chamber of Commerce and Industry (ACCI), AiGroup, Business Council of Australia(BCA) and Australian Collaborative Education Network Limited (ACEN), National Strategy on Work Integrated Learning in
University Education, ACEN website, 2015, accessed 7 June 2023; Office of Teaching and Learning, The impact of work
integrated learning on student work-readiness [PDF], Office for Learning and Teaching, Australian Government, 2014,
accessed 7 June 2023; D Edwards, K Perkins, J Pearce and J Hong, Work Integrated Learning in STEM in Australian
Universities, report to the Office of the Chief Scientist, Australian Council for Educational Research (ACER), 2015, accessed
7 June 2023; Universities Australia, Work Integrated Learning in Universities: Final Report [PDF], Universities Australia,
2019, accessed 7 June 2023.
60 AiGroup, Connecting the Dots: Exploring young Australians’ pathways from education and training into work, AiGroup,2023, accessed 7 June 2023.

61

Commonwealth, state and territory governments could support innovative models of WIL withflexibility in relation to regulatory and funding settings and willingness to allocate Commonwealthsupported and funded training places to them in areas of priority skills demand. In particular, newmodels in higher education seeking to combine study and paid employment do not have the same
support as VET apprenticeships that are underpinned by National Training Contracts and industrial
relations protections.
Industry funding, capacity and uptake is another important consideration in increasing theprevalence of WIL. In fields with lower WIL participation, such as commerce, humanities and science,
there is scope to increase industry engagement to provide more WIL experience.
There is also a need to find more effective methods of organising placement in WIL, possibly throughplacement brokers working with students, employers (especially small and medium-sized enterprises(SMEs)), and higher education institutions. Such a broker could be arranged to cover specific regions
or disciplines.
"One of the major hurdles to student completions in critical areas such as
nursing, allied health and teaching is the successful completion of student
placements. Too often this represents a key attrition trigger for students,
particularly low SES students, who need to pause or give up paid work andsometimes relocate in order to complete the required hours."– Charles Darwin University

2.2.6 Fast, stackable and portable skills pathways
Traditional degree qualifications do not always supply graduates with all the skills they need. A
model of linear progression mainly through three- and four-year degree programs is not sufficient tosupport the growing demand to update and refresh skills throughout a working lifetime.
The Review has heard evidence that there is growing need for people to update and refresh theirskills, along with whatever foundational and enduring knowledge they develop from existing higher
education and vocational qualifications. Over the next two decades Australian workers will change
jobs an estimated 2.4 times and it is estimated that tasks within Australian jobs will change by 18%
every decade, requiring workers who stay in their jobs to update their skills to navigate thesechanges.61 We cannot expect that people will take significant time out of the workforce to obtain thequalifications they need.
"Currently there is no incentive for mature age persons in full-time work toaccess education and reduce their income. Most mature age persons remain
outside of the higher education system or do not take the opportunity to reskill
because they have no other means of financial support outside of paid work."– La Trobe University
The tertiary sector must adapt to facilitate growth in lifelong learning. Higher education will need toprovide multiple entry and exit points that allow people to develop skills and build to recognised
credentials or qualifications in a modular, more ‘stackable’ way. This could encompass a wide rangeof qualification types across the tertiary sector, including undergraduate short courses,
microcredentials, cadetships or WIL, associate degrees, diploma-level qualifications and advanced
degrees.

61 JSA, Employment Projections.

622.2.6.1 The role of microcredentials
Microcredentials have significant potential to provide stackable learning and training. Nationally andinternationally recognised microcredentials are already being developed for this purpose and arestarting to be incorporated into Australia’s tertiary system. In New Zealand, the national
qualification authority accredits microcredentials as well as assigning them credit points.62 In the
United Kingdom, the Government is trialling higher education short courses as part of its approachto delivering a new student finance product, designed to provide learners with shorter, flexible
options to develop their skills.63

Case study: NSW Institutes of Applied Technology
Following the 2020 Gonski-Shergold Review into the New South Wales (NSW) VET sector,64 the
NSW Government has supported the development of two Institutes of Applied Technology(IATs) focusing on the digital and construction industries, which are both underway. The IATs
are established in partnership between industry, universities and TAFE to co-develop and codeliver microcredentials with a focus on industry skills requirements and attracting students
through innovative course design. Students merge the knowledge gained through university
study with hands-on technical skills acquired through vocational education.
Submissions to the Review have illustrated the early successes of these programs. The IATDigital Foundation partners noted that through the IAT-D program there have been 11,968
enrolments with 5,100 students currently undertaking micro-skills in data analytics, cybersecurity, cloud computing and artificial intelligence (all critical and emerging areas of need).65
The Review welcomes this success and supports this level of innovation as a successful model
for future collaboration between the education sector and industry partners.
The Review proposes to further consider what changes should be made to the funding, credit andregulatory systems required to support students to undertake quality, stackable microcredentials inpriority skills areas. Similarly, the Review is considering how best to recognise the need for
microcredentials so learners can be confident that the skills they gain are recognisable and portable.
The Review proposes to further consider what changes should be made to the funding, credit
and regulatory systems required to support students to undertake quality, stackablemicrocredentials in priority skills areas.
To be a viable option for people to upskill and reskill, students and employers must be certain thatthe microcredentials are reputable. Public subsidies, including HELP, should only be provided for
microcredentials that have proven quality and which address areas of skill need. The work toestablish a strong funding framework could be guided by the 2021 Australian Government
Microcredentials Framework which provides guidance on the definition and quality standards ofaccredited microcredentials, including those that may receive public support.

62 New Zealand Qualifications Authority (NZQA), Micro-credentials, NZQA website, 2023, accessed 24 May 2023.
63 Office for Students (OfS), Higher education short course trial, OfS Website, 2023, accessed 7 June 2023.
64 D Gonski and P Shergold, In the same sentence - bringing higher and vocational education together, Department of

Education, New South Wales Government, 2021, accessed 7 June 2023.
65 Institute of Applied Technology – Digital, Submission to the Australian Universities Accord Discussion Paper, 2023.

63

2.2.6.2 Providing nested qualifications
The Review notes the recommendation of the Productivity Commission that opportunities to exit
higher education with a nested qualification should be expanded.66 The Review believes there issubstantial merit in shorter, formally recognised qualifications that can provide upskilling
opportunities for people, and which can also articulate into longer qualifications if people wish.

Case study: Undergraduate Certificate
The Undergraduate Certificate (UC) was introduced as an AQF qualification in 2020 to support
Australians to reskill or upskill in anticipation of an expected economic downturn during the
COVID-19 pandemic. UCs are 6 months of full-time study. To date, 8,865 have commenced a UC
qualification and 3,229 have been completed. The most popular fields of study have been ineducation, health, agriculture and environmental studies and IT.67
UCs can also be awarded as an exit qualification for people who have completed therequirements of qualification nested within a longer course of study. This has the potential for
people who attrite from a full course of study to nevertheless obtain a formal qualification.68
UCs are still relatively new and are due to be formally reviewed by the end of 2024 todetermine their suitability to become a permanent part of the AQF.

2.2.7 National skills passport
Being able to navigate sectors and pathways will become increasingly important as people
undertake more learning across their lifetime and engage more with shorter and modular forms oflearning. We should facilitate an individual’s ability to build a portfolio of credentials, potentially inthe form of a skills passport. This could be used to demonstrate their skills to potential employers, aswell as identify potential opportunities for further study.
The Review supports the idea of a national skills passport to help graduates impress their
qualifications on employers, become more employable and achieve career progression.
A national skills passport could build on the National Credentials Platform (NCP) which aims to be asecure digital platform for students and graduates to access, compile, display, and share their higher
education qualifications, microcredentials and general capabilities. Preliminary work on the NCP
commenced in 2019, and included research to identify the needs of learners, employers and tertiary
education providers in a potential NCP. Further development of the NCP would progress Australia
towards international best practice, exemplified by Singapore’s unified credentials platform
MySkillsFuture.69

66 Productivity Commission, 5-Year Productivity Inquiry: Advancing Prosperity. Recommendations and Reform Directives,

Productivity Commission, Australian Government, 2023, accessed 7 June 2023.
67 Department of Education, Higher Education Statistics – 2021 Student Data.
68 TEQSA, Applications for accreditation of Undergraduate and Graduate Certificate courses, TEQSA website, 2023,
accessed 7 June 2023.
69 Dawkins and Bean, Review of University-Industry Collaboration in Teaching and Learning.

64

Case study: Singapore Government’s MySkillsFuture
MySkillsFuture is a comprehensive government portal that enables Singaporeans to makeinformed learning and career choices to pursue their skills and career development throughout
their lifetime. The online portal connects learners with information on education and training
opportunities, employment resources and job opportunities as well as providing insights on
industries and potential educational pathways into gaining careers in those industries.
The Skills Passport is part of MySkillsFuture which allows students’ skills (language, technical,
competencies), certificates (education and/or professional) and licences (driving, vocational).
Information stored in the Skills Passport can be used to build a professional profile which can beshared with employers.
The Review considers that a similar approach that brings together the disparate information
available to learners in one platform and links to a national skills passport could be adopted inAustralia.

2.2.8 Helping students understand and navigate pathways“By supporting those students who may not otherwise have attended university,
TAFEs are both enhancing the diversity of and expanding the tertiary education
sector through the provision of new and innovative pathways into higher
education.”– TAFE Directors Australia
Navigating pathways in and across the tertiary education sector is needlessly complicated forstudents. Information available to students is spread across too many disparate platforms to be
useful. Linkages to careers advice or occupational information is inconsistent and difficult for
students to identify potential skilling needs and opportunities. More accessible and navigable
information, including digital platforms that identify learning opportunities, could be unified acrosshigher education and VET to better support students better pursue pathways across the tertiary
education sector that suit their circumstances. Government websites that identify upskilling andreskilling options across VET and higher education, and which identify potential links to careers,
must also connect better. This will improve learners’ ability to navigate available options and identify
potential occupations of interest, and then understand the skills required and how these can beobtained.
Over time, the ASC integrated with a unified national credentials platform would allow digital accessto targeted information about different credentials and learning opportunities and the job
opportunities they could be applied to.

2.2.9 The role of migration in addressing skills needs
Skilled migrants play an important role in addressing Australia’s skills needs and will continue to do
so in the future.
The extension of post-study work rights (PSWR) for international graduates with degrees
corresponding to areas of skills shortage was announced at the Jobs and Skills Summit and will be
implemented by the Department of Home Affairs from 1 July 2023. This will contribute to addressing

65Australia’s critical skills shortage, and also contribute to the broader network of Australia’sinternational connections.
"[Overseas] students offer a significant source of talent to address the social
needs of Australia particularly in terms of skills shortages and the development of
new knowledge"- International Education Association of Australia
The Government’s Migration Review outline sets out policy directions regarding international
students such as providing faster pathways to permanent residence for the skilled migrants andgraduates Australia needs and increasing integrity in the visa system.70 Ongoing investment in andsupport for educational pipelines that support key sectors and priorities for the government will
ensure the ongoing safety and security of the workforce.
Industry attitudes towards hiring international students and graduates requires significant attention.
Universities play a pivotal role in connecting industry with international students, including
communicating the benefits of employing international students and addressing misinformation
regarding international visa limitations. They also play a role in supporting international students
who may not always be aware of what employment opportunities exist for them both during andpost-study. Ensuring international students, particularly those studying in areas of Australia’s skills
needs, are connected to industry throughout their education will facilitate better pathways into
employment and therefore help meet workforce shortages.

Considerations for change
To ensure Australia’s skills and workforce needs can be met now and into the future, and tosafeguard our national prosperity, the Review will continue to give consideration to the following
policy areas:a. new policy levers to enhance capability across the tertiary education sector, enabling it torespond rapidly to Australia’s skills needs and deliver the necessary numbers of graduates withprofessional, disciplinary and high order generic skills
b. the creation of a universal learning entitlement that helps all Australians access high-quality
tertiary education and makes lifelong learning a realityc. examining new and effective mechanisms for rapid reskilling, including microcredentials
d. improving the integration of higher education and VET to create new types of qualifications –starting in areas of national priority – like clean energy, the care economy, and defence
e. improving skills pathways by creating qualifications that are more modular, stackable andtransferable between institutions and institution types
f. addressing barriers that prevent VET and higher education working together, especially incourses and institutions that involve both sectors
g. using arrangements between industry, unions and governments to progress therecommendations of the Review of the Australian Qualifications Framework – this should be amatter of priorityh. extending CSPs at some AQF levels to the TAFE sector in areas of crucial skills needi. improving the RPL and relevant work experience through a national skills passport or similar
mechanism

70 M Parkinson, J Howe and J Azarias, Review of the Migration System Final Report, Department of Home Affairs, AustralianGovernment, 2023, accessed 14 June 2023.

66

j.

increasing the absorptive capacity of new knowledge by Australian employers through greatercollaboration with universities
k. improving WIL and placements by providing participating students with better incentives andfinancial support
l. establishing a national jobs broker system, to assist students to find work placements and parttime jobs in their fields of study.
Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:
Increasing our understanding of future skills needs:
a. utilising advice from JSA through a Tertiary Education Commission on Australia’s futureskills needs and actions needed to meet themb. improving workforce planning through mapping all AQF qualifications across higher
education and VET, building on the ASCc. expanding and updating flexible modular qualifications and programs in key areas ofworkforce demand, with increased development of microcredentials, associate degrees andadvanced diplomas.
Driving greater alignment and enhancing coordination and collaboration between the higher
education and VET systems:
a. governments, regulators, employers, labour movement, peak bodies for the professions
and education institutions, working under an Accord process to increase systemic
investment (from multiple sources)
b. increasing student mobility and pathways across sectors through cultural and institutionalarrangements, enabling consistency in RPL and credit recognition and greater levels ofcourse co-design with RPL built inc. extending eligibility for CSPs to other institutions, notably TAFEsd. developing better models of RPL and experience as part of training pathways, including
establishing competency-based standards to accelerate skills development
e. introducing Cooperative Skills Centres (modelled on the Cooperative Research Centres
Program) as university/industry/union joint ventures for fast skilling up in areas of urgent
industry needf. requiring higher education and VET sectors to work together under a more aligned system.
Ensuring rigorous, consistent levels of skill, knowledge and transferability of courses:
a. progressing the intent of the recommendations from the Review of the Australian
Qualifications Framework through arrangements with industry, unions and governments, asa matter of priority
b. providing more flexible approaches to qualifications design that allows skill levels to bebetter recognised, including for microcredentials
c. developing a modular, stackable, integrated approach to qualification design, credit andarticulation processes.

67Ensuring Australia’s workforce is absorbing and utilising new knowledge:a. encouraging higher education providers working with industry and leading-edge
researchers to revise curricula on a regular basis to check for new knowledge inclusion
especially in high priority disciplines (utilising data and analysis from JSA and others as
appropriate
b. increasing the absorptive capacity of Australian businesses through greater universityindustry collaboration.
Providing better access to, and support for, students undertaking WIL and placements:
a. co-designing a framework to guide WIL and placement experience with higher education
institutions, VET, industry, employers, professional accreditation bodies and governments
b. providing appropriate financial support to students on compulsory placements, particularly
to address urgent skills shortagesc. exploring pre-vocational ‘cadetship’ roles in key industries and models and pathways which
support ‘earning while learning’ models in key industry sectors, such as advanced
apprenticeships.

68

2.3: Equity in participation, access and opportunity“Australia needs a higher education system that offers the same opportunities
regardless of someone’s location, financial circumstances, or cultural
background.”– Verity Firth AM, Pro Vice-Chancellor, University of Technology Sydney

IssuesAustralian higher education attainment has risen significantly over the last 30 years, allowing
millions of people who would otherwise have missed out to experience the transformative power ofhigher education. This is a magnificent national achievement, but too many people are still missingout. Australia’s increasingly diverse population is a major asset and to succeed as a nation we mustensure that everyone, regardless of their background, financial circumstances or where they live, canparticipate in, and be empowered by, higher education.
This section discusses several crucial issues. How can our higher education institutions provide astrong foundation for First Nations people to succeed and help us meet currently stalling Closing the
Gap targets? How do we increase participation and advance student success for disadvantaged
groups? What can we do to tackle the dismayingly high cost of living that deters many students andmakes it difficult to continue their important and potentially life-transforming studies?

2.3.1 A system-wide approach to increasing access and equity
With a bigger higher education system, it must be made more accessible and equitable as a matterof urgency. Old approaches are not working, and innovation and evidence must be employed in thisimportant task. The challenge is stark. While 44.6% of people aged 25 to 34 years currently havebachelor-level knowledge and skills, this falls to 32% for the whole population (those aged over15).71 Only 17.3% of people aged over 15 living in low socioeconomic areas, 15.2% of people living inregional and remote Australia, and only 7.4% of First Nations people have a bachelor degree.72 Thisinequity is unsustainable in a fast-evolving, knowledge-based global economy and society.
Increasing participation rates requires a deep commitment to student success. Too many students
with lesser means do not complete their studies due to financial and family pressures that combine
to lure them back to full-time work. In 2020, 16% of low SES commencing bachelor students left
study without completing their course, compared to 14% for medium SES and 9% for high SES
students.73 Students from underrepresented backgrounds are not spread evenly across institutions(refer Table 2.3-1).
Tackling this participation problem will require all institutions to actively support students fromall backgrounds to enrol and succeed. Every part of the higher education system must set out toachieve greater equity.

71 ABS, Education and Work, Australia.
72 ABS, 2021 Census Data, ABS website, 2023, accessed 8 June 2023.
73 Department of Education, Higher Education Statistics –Student Data [unpublished data].

69

Table 2.3-1: Equity participation and representation in 2021 domestic undergraduate student population by institutionaffiliation.

University
Network

Low SESRegional andRemoteStudents withdisability

First Nations

Total Domestic
Undergraduate
Students

Group of
Eight

10.4%

11.0%

11.8%

1.1%

20.3%

Innovative
Research
Universities

22.2%

22.5%

9.1%

2.8%

16.4%

AustralianTechnology
Network of
Universities

17.7%

11.6%

11.1%

1.2%

13.4%

Regional
Universities
Network

27.0%

48.3%

11.3%

4.1%

12.0%

Unaligned

15.7%

19.8%

9.6%

2.1%

33.4%

NUHEPs
***

16.4%

13.6%

7.3%

1.9%

4.5%

Total

17.4%

20.5%

10.3%

2.1%

-

Population
parity*

25.0%

26.1%

**

3.4%

-

* Population parity figures indicate the proportion of the total Australian adult population (20-64 years) who belong toeach group and are derived from the 2021 Census of Population and Housing, except for low SES which by definition is one
quarter of the population.
** Census collections for data relating to people with a disability use alternate definitions to higher education datacollection. A parity figure for disability needs to be determined in consultation with the higher education sector to ensure
the data and value is robust.
*** Non-university higher education providers.
Source: Department of Education internal analysis based on Department of Education, Higher Education Statistics - 2021
student data [data set], 2021, accessed 8 June 2023.

2.3.1.1 A new funding system to support students from all backgrounds
The Review is giving consideration to the need for funding for learning and teaching to support more
equitable participation and attainment. Current equity funding is inadequate and will become moreso as the need for greater equity increases. As part of the JRG package, funding for the Higher
Education Participation and Partnerships Program (HEPPP) was reduced by over $200 million (202021 to 2023-24), with the program becoming part of a broader fund – the Indigenous, Regional and70Low SES Attainment Fund (IRLSAF). Its focus was broadened from assisting students from low SES
backgrounds to assisting First Nations students and those from regional and remote Australia.
“It [HEPPP] has never reached the amount recommended in the Bradley Review,which was originally proposed as 4% of the Teaching and Learning Base Funding
Grant. HEPPP funding was cut in the 2011–12 Budget and 2016–17 Budget andnow sits at approximately 1.8% of CGS (including enabling and regionalloadings).”– Equity Practitioners in Higher Education Australasia
The Review has heard that the cost of supporting students from underrepresented and educationallydisadvantaged cohorts has risen, making current funding levels increasingly insufficient.
Broader changes to the level of base funding for CSPs introduced through the JRG package have also
reduced the resources available to universities to provide the academic support needed to facilitate
student completion of degrees. This is further discussed in Section 3.3.
To increase retention, institutions need to ensure students receive appropriate pastoral support.
This includes measures that generate social inclusion and foster a sense of belonging: mentoring,extra-curricular activities, tutoring, and foundational skills and academic preparedness programs.
This is further discussed in Section 3.2.
There is also a growing body of evidence pointing to the positive effects of learner-centred learning
design and pedagogical models and increasing differentiation as noted in Section 2.4.
Measures to ensure equitable access for people with disability are also expensive, including theidentification and implementation of reasonable adjustments and support mechanisms. The Review
considers that any new funding system must reflect the additional costs incurred by institutions inteaching particular cohorts of students. This is explored further in Section 3.5.
“Support for people with disability in tertiary education has been largely
overlooked in terms of appropriate strategy, policy and funding settings which
properly support access, participation, retention and success.”– Australian Disability Clearinghouse on Education and Training

2.3.1.2 Boosting First Nations participation
First Nations people remain underrepresented in universities, comprising 2% of the domestic
undergraduate student population in 2021, despite making up 3.8% of the total Australian
population at the 2021 Census.74 The introduction of demand driven funding for this cohort from2021 guarantees a fully funded university place for First Nations people from regional and remoteareas accepted into a bachelor-level course. This positive initiative removes one crucial barrier tohigher education for First Nations people. Extending this measure to all First Nations people,
regardless of where they live will, the Review believes, have a positive effect.
There is clearly demand for higher education from First Nations students, with the number of First
Nations people commencing a bachelor degree more than doubling since 2008 to 5,687 in 2021.75 In
2021, full-time equivalent enrolments by First Nations students in metropolitan areas saw strong
74 Department of Education, Higher Education Statistics –Student Data – 2021 Section 11 Equity groups.
75 Department of Education, Higher Education Statistics –Student Data – 2021 Section 11 Equity groups.

71

growth (6%).76 This suggests that extending guaranteed CSPs to metropolitan First Nations students
has the strong potential to boost participation and contribute to the Closing the Gap targets. Initial
estimates by the Department of Education indicate that this could result in funding for an additional
5,423 places for First Nations students by 2034.
While the introduction of demand driven funding for regional and remote First Nations students
under the JRG package provides further opportunities for university, the changes to student
contributions implemented unfairly affected First Nations students. On average, student
contributions for First Nations students increased by 14%, compared to 10% for all students.77
Changes to student contributions under the JRG package are further explored in Section 3.3.

Immediate action:
Ensure that all First Nations students are eligible for a funded place at university, by extending
demand driven funding to metropolitan First Nations students

This is a first step towards ensuring access to higher education for students fromunderrepresented backgrounds.

2.3.1.3 Supporting students to succeed
As the higher education system grows, a more diverse student cohort will require additional support
to succeed.
As well as better learning and teaching (see Section 2.4), timely and targeted institutional support
will make a big difference. Stakeholder feedback points overwhelmingly to the discouraging effectsof the 50% pass rule, introduced under the JRG arrangements.
Under this rule, students who fail more than 50% of their units of study are no longer eligible toaccess Commonwealth assistance for their course. The measure is causing undue stress for students
and advice suggests that more than 8,000 students have been or are at risk of being affected by thisrule.78 Students from underrepresented groups at university make up the majority of those affected
and First Nations students are around twice as likely to be affected as their non-First Nations
counterparts.
Any changes to these arrangements need to be accompanied by stronger accountability andreporting processes to better track students’ learning and engagement, as part of their progress at
key milestones in their units. This holds institutions to account for identifying at-need students as
early as possible to implement tailored strategies. This is also to ensure students do notunnecessarily accrue debt without gaining a qualification.

76 Department of Education, Higher Education Statistics –Student Data [unpublished data].
77 Department of Education, Higher Education Statistics –Student Data [unpublished data].
78 Advice to the Accord Panel from Universities Australia [unpublished], 2023.

72

“Low SES student cohorts are generally more adversely impacted than others
through these measures. An increase in proactive student learning support andguidance intervention mechanisms would be more effective in enabling thesestudent cohorts.”– Arts, Education and Law Group, Griffith University

Immediate action:
Cease the 50% pass rule, given its poor equity impacts, and require increased reporting on
student progress.

2.3.2 Opening the doors of opportunity
Increasing higher education participation rates can’t be achieved by universities alone. Early
learning, schooling, and VET systems have a big role to play. Efforts at the higher education levelmust be matched by these other institutions.

2.3.2.1 Increasing aspiration and confidence
To increase participation from underrepresented groups, universities must look outwards anddevelop stronger links to the school and VET systems and the wider community. The aim must be todevelop the aspirations of potential students and encourage the self-belief they need to pursue
further education. There is an important role for pathway programs, alternative entry provisions,and innovative community outreach activities.
There are numerous examples of strong outreach initiatives, including collaborative approaches
between institutions such as the Queensland Widening Participation Consortium.

Case study: Queensland Widening Participation Consortium79
The Consortium is a collaborative initiative between CQUniversity, Griffith University, James
Cook University, Queensland University of Technology, the University of Queensland, theUniversity of Southern Queensland, the University of the Sunshine Coast and the Australian
Catholic University.
The Consortium works with students, parents and caregivers, community members, schools,
vocational education institutions, industry and employers to increase participation andaspiration. In 2022, the Consortium partnered with 288 schools (67 primary and 221 secondary)as well as adult learners, First Nations organisations, and other community groups. Two-thirdsof the schools were located in regional and remote locations, and 14% of their enrolments were
Aboriginal and Torres Strait Islander students.

79

Queensland Widening Tertiary Participation Consortium, Submission to the Australian Universities Accord Discussion
Paper, 2023.

73

As the Napthine Review noted,80 improved connections are needed to build aspiration among
regional, rural and remote students. For example, Charles Darwin University’s Bidjipidji School Camp
provides a culturally safe university-taster experience for year 10, 11 and 12 First Nations students.
Evaluation of the program’s first year, which attracted 35 First Nations students from seven highschools across the Northern Territory, showed a marked increase in students’ confidence in theirability to attend university.81
There is also a need to broaden outreach activities more effectively to engage non-school cohorts:“The majority of institutional widening participation activities focus on schoolleavers. However, to achieve significant growth in participation of equity groupstudents, the sector also needs to reach out more effectively to non-schoolleavers to enable aspirations for further education and training post a Certificate
III qualification.”– Equity Practitioners in Higher Education Australasia
The Review has also heard of the importance of quality career advice, particularly for first-in-family
students and those in regional and remote areas, where career advice is often delivered informallyby school teachers. There is a need to consider how the provision of personalised career advice canbe strengthened, including through a coordinated national approach. The move towards lifelong
learning will increase the importance of good career advice across all life stages.

2.3.2.2 Building and improving pathways for students
As noted in Section 2.2, pathways into higher education from vocational education and enabling
programs are fragmented and uneven. This can be a barrier to higher education for students fromequity cohorts who are more likely to enter via VET pathways, as shown in Figure 2.3-1. This figure
also highlights that a number of students commencing in a course come from other parts of higher
education, either from other institutions or changing courses within the institution.
Figure 2.3-1: Basis for admission for domestic commencing bachelor students, 2021.

Source: Department of Education, Higher Education Statistics – 2021 student data [data set], 2021, accessed 8 June 2023.

80 D Napthine, P Lee, C Graham and M Wills, National Regional, Rural and Remote Education Strategy final report,

Department of Education and Training (DET), Australian Government, 2019, accessed 7 June 2023.
81 Charles Darwin University (CDU), Inaugural CDU Bidjipidji School Camp Report 2021 [PDF], CDU, 2021, accessed June 14
2023.

74

Good practice examples, including the partnerships between South Australian universities and TAFE
South Australia, could be emulated in other jurisdictions.
Encouraging dual sector provision would improve pathways to higher education. One possibility could
be to give more TAFEs (where they are registered higher education providers) access to CSPs. Less
divergent funding arrangements would also help foster parity of esteem between the two sectors.
The Review heard of the important role played by enabling courses. Evidence shows that students
who enter a bachelor degree after an enabling course typically achieve better outcomes than thoseadmitted via other sub-bachelor pathways.82 Increasing the provision of enabling courses andrecognising them formally as part of the credentials framework, would support higher levels ofequity participation.

2.3.2.3 Creating accessible places of learning for communities
One way of reaching more students is through more inclusive, place-based course delivery. The
higher education sector should be encouraged to be more prominent, including having appropriate
infrastructure and programs to support students close to where they live and work.

82 T Pitman, S Trinidad, M Devlin, A Harvey, M Brett and J McKay, Pathways to higher education: The efficacy of enablingand sub-bachelor pathways for disadvantaged students, report to the Australian Government DET, National Centre forStudent Equity in Higher Education (NCSEHE), 2016, accessed 8 June 2023; NCSEHE, Submission to the Australian
Universities Accord Terms of Reference, 2022.

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Case study: Regional University Centres (RUCs)
The RUC program takes an innovative approach to improve access to tertiary education forregional and remote students. They provide facilities that regional students can use to study
tertiary courses locally delivered by distance from any Australian institution.
RUCs aim to:• enable students in rural, regional and remote Australia to access and complete higher or
vocational education without having to leave their community• meet a demonstrated gap in support for study in a regional, rural or remote community• support students who wish to stay in their community while they complete their course ofstudy• enhance the experience of students studying within their own community• encourage strong links between the Centres and other organisations in the area, including
other support services that students may access and industry• complement, rather than replace, existing and planned university investments and activities
in regional areas, such as satellite campuses and study centres.
Early analysis of the RUC model shows higher education participation has increased in regions
where centres operate, and these regions have outperformed comparable regional and remoteareas without centres (controlling for population growth).83
Data collected by the Department of Education shows, as of November 2022, RUCs had
supported approximately 3,300 students studying more than 1,000 different courses throughwith over 200 tertiary education providers. Approximately, 74% of these students werestudying a university-level degree and 26% of students studied VET and other courses.84
In 2022, 11% of students supported by the RUC program identified as First Nations people,
compared to 2.11% of higher education students nationally. The RUC program is making a
difference for students in our regions. Communities across regional and remote Australia haveexpressed interest in having a RUC in their region.85
The Review has heard that proximity and connection to a place of learning is a critical decisionmaking factor for students and is a significant barrier to accessing higher education for students inregional, rural and remote areas. Students in outer metropolitan and peri-urban areas can facesimilar challenges.
The Review considers the concept of the RUCs should be expanded to other areas of need, including
outer suburban areas, where accessing higher education can also be difficult. While many
prospective students in outer metropolitan and peri-urban areas have access to universities,
including remotely through online delivery, such students typically seek to enrol internally at ‘local’
institutions. This can result in lengthy, expensive, wearying and increasingly prohibitive commutes.
Students who choose to study online face obstacles including the cost of appropriate internet and IT
equipment, and a lack of peer networks and study support.

83 Based on analysis of Department of Education, Higher Education Statistics –Student Data [unpublished data].
84 Department of Education, Administrative data [unpublished data].
85 Department of Education, Administrative data [unpublished data].

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As noted in Section 2.1, the highest absolute growth in 9 to 16 year-olds between 2016 and 2021
occurred mostly in major city outer suburbs. Learning from the success of the RUCs model, theReview considers that Tertiary Study Hubs (the outer metropolitan and peri-urban analogue of theRUCs) should be introduced in these areas, and in locations with traditionally lower attainment
rates. These hubs should bring several institutions together to provide options for students in theirlocal area. This could include tailored wrap-around assistance based on the needs of the local
community to support students to succeed.

Immediate action:
Extend visible, local access to tertiary education by creating further Regional University Centres(RUCs) and establish a similar concept for suburban/metropolitan locations.

2.3.3 Addressing financial barriers to study
One of the obvious barriers to studying is the cost of participation – something which affects
underrepresented groups the most. The Universities Australia 2017 Student Finances Survey foundFirst Nations students and students from the poorest quarter of Australian households were more
likely to experience financial hardship.86 Recent inflation can only have made this situation worse. In
the absence of relief, more students are likely to defer or discontinue their studies.
“In recent discussions, students have raised concerns regarding the current stateof higher education in Australia. One of the key issues highlighted is the need for
greater equity, specifically in terms of financial support for students. The
government has a critical role to play in this regard by increasing [Y]outh[A]llowance and [ABSTUDY] payments, as these actions would directly benefit
students from low socio-economic backgrounds and Indigenous students."– University of Melbourne Student Union

2.3.3.1 Addressing the need for adequate financial support
In 2020-2021, 2% of Australians (around 390,000 people) wanted to enrol in a bachelor degree orabove in the previous 12 months but could not. Almost a third of those – 31% (120,900 people) –cited financial reasons for the inability to enrol.87 These additional potential enrolments would makea significant difference to meeting Australia’s skills needs.
Most students work to support themselves while they study, with around four in five domestic
students now in paid employment.88 The Review has heard many students struggle to balance their
paid work and study commitments, as cost of living pressures, including rising rents, require them totake up additional hours. This is particularly concerning for regional students and those without family
financial support, who may have no choice but to move away from home and relocate to study.

86 Universities Australia, 2017 Universities Australia Student Finances Survey [PDF], Universities Australia, 2018, accessed

13 June 2023.
87 ABS, Work-related Training and Adult Learning, Australia, ABS website, 2022, accessed 15 June 2023.
88 Four in every five domestic bachelor degree students worked while studying between the 2010–11 and 2015–16
financial years (80–84 %). DESE, Factors affecting higher education completion [PDF], DESE, n.d., accessed 6 June 2023. Thisis consistent with the 2017 Universities Australia Student Finances Survey. In May 2022, the ABS found that 77 % of the 2.1
million people currently studying for a certificate, diploma or degree were also working. ABS, Education and Work,
Australia.

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“Full-time university is now a luxury many students can’t afford.”– National Union of Students“The hours worked by young people supported by The Smith Family to undertake
tertiary education are often beyond what is generally considered compatible
with tertiary study. For some young people we support, the financial pressure towork has resulted in them deferring their study, at least for a period of time.”– The Smith Family
The Review has heard from some students who are unable to access financial assistance, because oftargeted eligibility (particularly low parental income thresholds). The Review will give further
consideration to support for these students who may otherwise struggle to access and participate inhigher education.
The financial barriers to participation need to be addressed if we are to meet our equity targets.

2.3.3.2 Modernising the income support architecture to increase eligibility and sufficiency
Current income support arrangements are complex, create perverse incentives for some students
and leave others missing out. Stakeholders have reported restrictions on part-time study andindependence rules stop some students from accessing financial assistance. Students also needeasier access to clearer information about financial assistance, including income support andscholarships.
The number of higher education students meeting income support eligibility requirements has
trended down since 2015 (excepting COVID-19 related spikes in 2020 and 2021).89 Several
stakeholders note current eligibility criteria exclude broad categories of students, such as part-timestudents and students under 22 who do not meet independence tests. Stakeholders have also raised
concerns about the adequacy of payment rates, which the Review recognises is connected to theadequacy of payments across Australia’s income support system. Many students, including thoseaccessing Youth Allowance and the Aboriginal and Torres Strait Islander Study Assistance Scheme(ABSTUDY), receive a lower rate than people in similar circumstances on other payments, such as
Jobseeker.
HELP-style ICLs for student living expenses could offer an additional approach to financial support for
students while they study. The option to borrow money to help meet their living costs could help
students balance paid work and study commitments, reduce financial hardship, and enable more
students, especially those who need to relocate, to participate successfully in higher education. ICLs
could also assist students undertaking a mandatory placement away from home, or where they needto temporarily stop part-time work to complete a full-time placement. However, the Review is also
aware of the implications of adding to student debt levels, with some stakeholders indicating that aloan may not be the best way to address cost of living challenges.90
The Review is also deeply aware of poor outcomes for some participants in the previous Student
Financial Supplement Scheme which was closed in 2003 due in part to the high rates of non-

89 Department of Social Services (DSS), Data from the Department of Social Services [unpublished data], DSS, Canberra,

2023.
90 M Warburton, Submission to the Australian Universities Accord Discussion Paper, 2023.

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repayment, especially by low income and First Nations students.91 Eligibility criteria, loan amounts
and effects on student debt would require serious investigation before such a scheme iscontemplated.
As noted in Section 2.2, there are requirements for unpaid work placements in many courses.
Students often must take time out of paid work for these placements which can take place overmulti-week blocks away from home. Additional support for students to undertake block placements,
and to be paid while on placement, should be developed.
Many students also need to work to support themselves while studying. Working while studying canbe beneficial for many students, however, the Review considers it is important students are notbeing required to work excessive hours. The Review heard that finding suitable work can be difficult
and that students would prefer to work in areas related to their field of study – something
supported by employers needing to address serious skills shortages. A new jobs broker program was
one idea proposed to the Review that could help match students with employment opportunities
related to their current area of study.
A more detailed analysis of the strengths and limitations of HELP is outlined in Section 3.3.

Considerations for change
To increase participation and attainment for students from underrepresented backgrounds andequity cohorts, the Review will continue to give consideration to the following policy areas:a. encouraging students from underrepresented groups to aspire to higher education and fulfil
their potential
b. making it easier for students to enter, exit and return to higher education through a consistentnational approach to tertiary education admission and the recognition of existing learning
experience and credentials
c. increasing access to preparatory and enabling programs to provide more pathways into higher
educationd. providing scaffolded learning support to help students achieve their qualification in minimum
time and with minimum debt
e. through a national jobs broker system, helping students find part-time work in their areas ofstudy
f. exploring the potential for a student-centred, needs-based funding model (similar to that used
for determining school funding) that recognises the additional costs involved in teaching
students from equity groups and underrepresented communities
g. reducing the cost of living barriers to higher education through improved income support
measures and more opportunities for part-time study
h. revising student contribution amounts and HELP repayment arrangements to ensure students
are not being overly burdened with debt and that repayment arrangements are fair andintegrate more effectively with the wider tax and social security system.

91 Senate Employment, Workplace Relations and Education References Committee, Inquiry into student income support,

Senate Employment, Workplace Relations and Education References Committee, Australian Government, 2005, accessed 7
June 2023.

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Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:
Supporting aspiration and potential:
a. aligning and improving outreach programs across early childhood, primary and secondary
education, including with local governments and use of role models
b. improving the availability of accurate, appropriate and timely careers advice and improving
familiarity with higher education.
Improving entry and exit processes, and better scaffolding of support for students:
a. increasing delivery of preparatory programs, including across VET and universities, as
pathways into higher education, with consistent recognition across all institutions
b. increasing access to enabling programs across all institutions, ensuring these programs
remain free for students and institutions receive sufficient funding for deliveryc. ensuring tertiary admission arrangements are facilitative (especially for First Nations andequity groups) while maintaining entry quality
d. focusing on student success, emphasising completion in minimum time so they do not incur
more HELP debt than necessary
e. increasing recognition of early exit pathways (with appropriate credentialling of study todate) as leading to positive outcomes for students
f. improving ease of student transfer between education sectors and institutions
g. encouraging new pedagogies which provide greater scaffolded learning and student
engagement.
Reducing barriers and increasing access to financial support:
a. changing income support payment arrangements, including eligibility tests around
independence, part-time study and unpaid work placements
b. exploring the advantages and disadvantages of ICLs to help students meet living expenses
c. reforming the Higher Education Loan Program to ensure students do not experience longterm financial burden.

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2.4: Excellence in learning, teaching and student experience“Universities need to inspire and engage all their students and proactively engage
with new and changing cohorts with different educational needs… Our teaching
methods and courses must grow and adapt with changing needs and demands.”– Australian Technology Network of Universities

IssuesIf Australia is to achieve the Review’s vision of educating many more students from all walks of life
to various skill levels, then our higher education system must deliver a world-leading learning
experience. The Review is considering how the tertiary education system can continually respondand embed innovations and new approaches to ensure students are prepared for a constantly
changing world. This includes rapid updates to curricula and improving the higher education
system’s capacity to absorb, adopt, share and apply new knowledge in the classroom.
As student cohorts become more diverse, a new focus on student-centred models of delivery andsupport will be required. This could include teaching in ways which are better tailored to the specificneeds of each student, and which leverage opportunities for online and collaborative teaching. To
deliver a better student experience, we also require a highly skilled, professional workforce enjoying
attractive career pathways.
This section discusses current issues in learning and teaching and student experience, including more
inclusive student-centred approaches, digital teaching technologies, cutting edge curricula andgreater collaboration in course offerings.

2.4.1 Learning and teaching that is personalised and scalable
A more student-centric approach to teaching, tailored to the cultural, social and academic needs ofthe individual student, will deliver a superior education. What’s needed is innovation and scalability.
“Often students are dealing with complex disadvantage, where as one challenge
is addressed, another emerges. To respond to this, each of these students needs
a form of individualised learning plan.”– University of Tasmania
Preparatory and enabling programs are proven ways to build academic preparation and provide a
supportive pathway to further study for students, particularly students from equity cohorts as
discussed in Section 2.2.92 The Review believes such programs should be expanded.
There are many examples of providers developing student-focused learning and support programs.
This includes those universities implementing the Universal Design for Learning framework,93 which
adopts a learner-centred approach to pedagogy. Related pathways include the fast, stackable andportable credentials explored in Section 2.2.

92 Pitman et al., Pathways to Higher Education.
93 CAST, The Universal Design for Learning (UDL) Guidelines, CAST website, n.d., accessed 7 June 2023.

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Case study: Innovative delivery models
The Victoria University Block Model is an alternative study model where students study one
subject at a time in a shortened timeframe, rather than several subjects over a typical semester.
Each subject takes four weeks to complete, and students attend multiple classes per week,
usually three-hour classes three times a week.
This model has proven to be successful, particularly with students who require more support.94
Victoria University has reported increased student retention and pass rates, with special
consideration requests reduced by 80%. Success rates for equity group students are at 90.4%,
with first generation students having a 91.1% success rate.
Victoria University notes that the success of the Block Model is due to a combination of factors,
including smaller classes with significant engagement, quality learning resources, student
support and assessment methods.95
Southern Cross University offers a slightly different model in which students study up to two
subjects at a time, across a six-week term. There are six terms in an academic year, providing
flexibility for a full-time student to complete up to twelve units in one year, or take a term off
when they prefer. Other institutions are trialling similar programs, including Western Sydney
University’s foundation diploma program.
Innovative student-focused learning and teaching programs are showing promising results and the
Review believes they have the potential to be used at scale across the sector.

2.4.2 Inclusive and high-quality teaching that embraces technologicaladvancements
Online learning broadens access to education, especially for time poor and remote students.
“These students are often mature age, in full-time work and studying part-time –choosing the online modality in order to accommodate their work and family
while seeking to attain the skills and qualifications that will allow them toadvance in their current or new careers.”– University of New England
The COVID-19 pandemic accelerated the steady expansion of online learning. While it has been afeature of higher education for many years, educators and learners are still learning to adapt anduse it to best advantage. Some universities, like the University of New England and Charles Sturt
University, were early adopters, educating high numbers of students through online and distanceeducation. Many students with disability studied online or through hybrid options during the COVID19 pandemic, and participation for this cohort rose over the period, demonstrating the success ofthese models (see Figure 2.1-7 in Section 2.1).
Recent advances in artificial intelligence including machine learning platforms have also seen
universities adapt their learning and teaching environments. When done well, online and hybrid

94 G Samarawickrema and K Cleary, ‘Block Mode Study: Opportunities and Challenges for a New Generation of Learners in

an Australian University,’ Student Success, 2021, 12(1):13-23, doi:10.5204/ssj.1579.
95 Victoria University (VU), VU Block Model, VU website, n.d., accessed 8 June 2023.

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learning arrangements can be more inclusive, allowing students with caring or work responsibilities
or from regional and remote areas to participate more equitably in higher education.
The Review has heard that our universities are not doing enough to adapt and keep pace with thischange:“The current experience of online delivery is still largely focused on asynchronous
delivery (with recorded lectures) but there is an opportunity to develop newmodels with a rich student experience through technology-enabled universities.”– Innovative Research Universities“[D]espite its importance in nurturing a culture of lifelong learning, online
teaching is often poorly remunerated and inadequately accounted for in staff
workloads, which reduces the quality of the student experience… Urgent
investment is required to enable staff to provide a high-quality education in
online settings.”– Australian Historical Association
While student ratings of experience are not uniformly lower among online students, they do
consistently rate their engagement with learning at lower levels than students studying on campus(refer Figure 2.4-1).
Figure 2.4-1: Student experience by study mode, 2022 (% positive rating).

Source: Quality Indicators for Learning and Teaching (QILT), Student Experience Survey [data set], 2022, accessed 26 June2023.

2.4.2.1 Utilising knowledge from across the sector, Australia and the world
To meet student and industry demand, higher education providers need a more targeted approach
to online delivery, designing content and learning activities with digital and hybrid delivery in mind.
It will also need to draw from online resources and shared content repositories to keep pace withthe most recent innovations in a field of study.
“Quality online education requires the design, development and deployment ofhigh-quality online-specific learning materials that focus on the active
engagement of the learner – it is insufficient to simply record and broadcast a
lecture.”– Online Education Services
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2.4.2.2 Embracing new tools and methods for teaching
Online learning can be challenging when students do not have access to scaffolded learning support.
Embracing technological advancement will assist educators and providers to support and empower
learners to use these platforms and to share best practice, encouraging the rapid evolution of highquality digital delivery. The growth in online platforms, like Zoom and Microsoft Teams, bring
opportunity for a new, more engaged approach to online learning. As these platforms grow andcontinue to develop this could help drive a better online learning experience for students.
The Review notes some providers are already implementing innovative and effectively scaffolded
support models for online cohorts. These could be modified and implemented across the sector.

Case study: Digital Solutions to student engagement and performance atCharles Sturt University96
The Embedded Tutors Program has enabled equitable access to support for students regardlessof their location. The program was established at Charles Sturt University in 2021 and delivered
digitally. The program supported first-year undergraduate students by providing access to afaculty-specific tutor who could give timely feedback on a draft assignment. Some 428 students
met with a tutor at least once. This group of students received an average cumulative subject
mark 6.2% higher than students who had not met with a tutor. The benefits of an increased
average mark were seen across cohorts including students from low SES backgrounds, First
Nations students, regional, rural and remote students and first-in-family students.97

Improving online learning capability also presents an opportunity for Australia to expand its teaching
footprint and reach new students and overseas markets. Current regulatory and policy settings arelimiting innovation by restricting access to offshore online delivery for international students.

2.4.3 Curriculum design and delivery that is responsive and collaborative
No matter what its mode of course delivery, a quality learning experience requires engaging
teaching that is highly responsive to students' needs. This means teachers who are compelling
communicators and who design and deliver robust curricula in engaging and stimulating ways,
teaching students what they need to know and challenging them to engage critically and creatively
with their field of study. A quality learning experience also means well-designed methods ofassessment and straightforward access to academic advice and learning support when needed. As
discussed in Section 3.2, a positive experience outside of the classroom is also crucial to student
success.

96

Charles Sturt University (CSU), Student Retention, CSU website, n.d., accessed 8 June 2023.

97 K Linden, S Teakel and N Van der Ploeg, 'Improving Student Success with Online Embedded Tutor Support in First-Year

Subjects', Student Success, 2022, 13(2):42-50, doi:10.5204/ssj.2338.

84

While the Review heard about phenomenal teachers, it was also presented with evidence suggesting
variability in teaching practice across the sector, leading sometimes to intense student
disappointment.
“Students feel that the fast-paced in and out structure of university lectures andtutorials, combined with how much academics have to manage, leaves themfeeling like a gear in a machine. Students want a system that enables them todiscuss with tutors and subject coordinators their degree structure. They want
services and people who are able to adequately support them in changing a
degree or subject...”– National Union of Students
Improving university-industry engagement will ensure graduates leave the higher education systemwith the capabilities, skills and experience needed to succeed in the workforce, helping them to fillexisting and emerging skills gaps in industry, and help increase national productivity.
“Enhanced engagement with industry will improve the quality of the curriculumand ensure graduates are career-ready with industry-relevant experience.”– South Australia Government
There are many good examples of providers working with industry to develop new models oflearning and teaching. Some universities enable students to study under the direct supervision ofindustry experts. Others have developed courses in collaboration with industry and provide students
with the opportunity to undertake WIL.
More can be done, however, to boost university-industry collaboration and course co-design, for the
benefit of student learning. This could include a strong commitment from universities, industry,
unions and community to increase collaboration, and to provide the time, resources and expertise todeliver current and meaningful curriculum.

85Spotlight: Cooperative Skills Centres
Cooperative Skills Centres are a proposal from the University of Newcastle to enable rapid
upskilling managed cooperatively by industry and universities. This proposal is based on theexisting Cooperative Research Centres. Education providers and employers would bid together
for funding to develop education entities in specific areas of skills needs.
Long-term funding agreements of around seven years would provide flexibility for TAFEs,
industry and universities to co-develop and deliver both university-style courses andcompetency-based training. The content of the programs could continually evolve to meet thechanging needs of regions and industries experiencing rapid growth and transition. Scale would
also be flexible, from a single university, TAFE or business partner focused on a particularindustry, up to regional or national footprints involving multiple education and industry
partners.98
A similar initiative is already underway through the New Education and Training Model (NETM),
developed by Western Parkland City Authority to meet the skills needs arising from theconstruction of the Western Sydney International Airport and surrounding business precincts. In
partnership with industry, VET providers, universities and government, up to 100
microcredentials will be developed by 2025. There is a focus on technical skills required by
employers, in fields such as supply chains, automation and advanced manufacturing.99
This proposal would complement the development of new TAFE Centres of Excellenceannounced as part of the establishment of the new National Skills Agreement.

2.4.4 Committing to teaching excellence and collaboration
2.4.4.1 Moving beyond a minimum standards benchmark
The regulatory regime overseen by the Tertiary Education Quality and Standards Agency (TEQSA) isbased on a threshold standards approach, which has been successful in maintaining quality as thesystem has expanded in recent years. But for Australia to deliver world-leading learning experiences,
the Review is considering what would encourage the sector to move beyond the minimal standards
approach and to pursue systemic excellence in learning and teaching. Student ratings of their study
experience have been consistently strong for some time, though declining sharply during the COVID19 closures, as shown in Figure 2.4-2. The Review notes that student experience ratings recovered
substantially in 2022, closer to pre-pandemic levels.

98 University of Newcastle, Submission to the Australian Universities Accord Discussion Paper, 2023.
99 Western Parkland City Authority, New Education and Training Model (NETM), Western Parkland City Authority website,n.d., accessed 13 June 2023.

86Figure 2.4-2: Quality of entire educational experience by study level, 2012 to 2022 (% positive rating).

Source: QILT, Student Experience Survey [data set], 2012-2022, accessed 26 June 2023.

The funding and regulatory systems, discussed in Chapter 3, could be incentivised to reward
excellence in learning and teaching, whilst ensuring institutions have the resources and flexibility todevelop innovative approaches to course delivery.

2.4.4.2 Sharing best practice and driving high-quality learning and teaching
Currently, improvements in teaching practice and the student experience are often left to individual
institutions and educators, rather than any systemic or collaborative approach to raising quality. This
fails to capitalise on the many elements of good teaching within individual institutions that could beshared across the sector.
“Australia is a world leader in higher education research but notably lags
internationally in collective translation to practice. Despite pockets of excellence,
Australia has no national mechanisms for translation to practice that unite
diverse expertise across learning and teaching and the student experience.”– Professor Liz Johnson, Professor Sally Kift and Associate Professor Jason Lodge
The Review believes consideration could be given to an office or committee for quality teaching toenable collaborative and innovative models of learning and teaching and advise government on
structural issues. Some of these functions were undertaken by the Office for Learning and Teaching(OLT) before it was abolished in 2016. A potential new body could include a focus on equity of accessand outcomes as participation widens and should prioritise evidenced-based approaches andinnovative use of data.
“Collaborative effort is particularly urgent to respond to a changing external
environment. The demands of digital education, life and work, challenges toconventional career paths for graduates and increasing pressure on the academic
workforce are wicked problems that are not easily solvable by individual
institutions. An independent national centre creates a national mechanism todevelop and share effective responses which are otherwise fragmented.”– Universities Australia DVC-A Network
Alongside the work of this potential body, centres of excellence for teaching could be establishedacross universities and VET providers, modelled along the lines of the ARC Centres of Excellence for87research. These centres would act as focal points for building leading edge knowledge repositories
and developing high-quality pedagogical material for particular disciplines (such as is available forfirst year economics through CORE Econ).

Case study: CORE Econ100
CORE (Curriculum Open-access Resources in Economics) Econ is a foundational economics
curriculum developed by an independent editorial board in collaboration with business anduniversity partners.
Following the Global Financial Crisis of 2007-8, CORE Econ emerged in the early 2010s as aninternational collaborative project among academics concerned about an overly narrow focus
within the standard economics curriculum on theoretical models which lacked connection toreal world developments.
CORE Econ offers a student-centred curriculum that aims to “change economics education
globally to a focus on the most important problems faced by our societies including climatechange, injustice, innovation and the future of work.” Incorporating a range of open-source
materials, CORE Econ has been adopted by nearly 400 institutions worldwide, including severalin Australia.

2.4.4.3 Incentivising and valuing all academic roles
Highly skilled educators are needed to help students succeed. As the student participation inAustralia’s higher education system grows in size and diversity, so must its academic workforce. The
Review has heard evidence of under-investment and under-prioritisation of teaching capability andesteem for teaching across the sector, driven by several interrelated factors.
More needs to be done to promote higher education teaching capability and to attract the besttalent from both academia and practice. This should include better recognising and incentivisingteaching excellence through internal and external performance structures, enhancing industry
mobility and recognition of non-academic career achievements, strengthening professional
development for the teaching workforce, and implementing better long-term workforce andcapability planning.
An important part of the higher education workforce are academics who are both excellent teachersand cutting-edge researchers. These academics can be particularly inspiring in exposing students tothe process of knowledge breakthroughs. This is a vital contribution for graduates hoping to work in
the knowledge economy. Another important though smaller workforce cohort are academics whoare both excellent teachers and active practitioners in their profession. These academics teachstudents about leading-edge professional practice.
Addressing the issues raised above will involve action by staff, unions, institutions and government.
This could include discussion of whether existing industrial settings support strengthening teachingcapability across the higher education workforce. These discussions ideally could revisit the current
settings connecting teaching and research workloads across many positions in academia.

100 Curriculum Open-access Resources in Economics (CORE Econ), CORE Econ: Economics for a changing world, CORE Econ

website, n.d., accessed 8 June 2023.

882.4.4.4 Measuring excellenceStudent experience and learning and teaching need to be monitored to encourage improvements. It
is inherently difficult to measure teaching quality or student experience. The current measure ofquality, the Student Experience Survey (SES), is conducted using a well-defined methodology which
compares well with international best practice.
The wider Quality Indicators for Learning and Teaching (QILT) survey suite has focused attention onteaching quality by publishing indicators at the institution level and provides an evidence base forcontinuous improvement. However, there is no triangulation of survey results against othermeasures of quality and no clear correlation between high student ratings and employmentoutcomes.
The Productivity Commission suggests using peer review of teaching methods to address some of
the biases that arise from surveys and to complement and corroborate the SES.101
Irregular and frequently delayed timing of publication of higher education administrative and survey
data reduces the ability of institutions and educators to use data-driven approaches to quality
improvement. It is the Review’s view that higher education administrative and survey data should be
released on a regular, publicly available schedule, agreed with institutions, to allow timely
submission and then analysis of high-quality data.

Considerations for change
To promote high-quality learning and teaching across the higher education system, the Review willcontinue to give consideration to the following policy areas:a. encouraging and rewarding effective learning and teaching practices, including best practice for
digital and hybrid delivery modes and use of new technologies and structures, particularly
artificial intelligence and knowledge repositories
b. enhancing the professional development of academic staff in teaching, especially for those
newly employed to teachc. promoting collaboration and shared best practice in learning and teachingd. ensuring the system encourages improvements in quality learning and teaching, responds to
new curriculum approaches that take account of the pace of new knowledge production, andprovides for appropriate teaching infrastructure.

101 Productivity Commission, 5-year Productivity Inquiry: From learning to growth.

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Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:
New and more collaborative approaches to learning and teaching:a. establishing a National Learning and Teaching Committee (within the Tertiary Education
Commission)b. encouraging all institutions to provide high-quality accredited professional development inteaching for academic staff, especially new appointments, and including casual academics
and postgraduate students involved in sessional teaching.
New funding incentives and programs:a. launching a competitive funding program across multiple institutions (universities andTAFEs) with material produced to be available under open access. This concept could bemodelled in terms of collaboration and advisory boards on the ARC Centres of Excellenceb. rewarding institutions taking a leadership role in learning and teaching, fostering excellence
and improved performance across the sector.

902.5: Fostering international engagement“International education is critical for Australia. The international educationindustry and international students are key contributors to the Australianeconomy and society. … Given the varied and significant contribution of theinternational education industry and international students, it is critical that
Australia’s strong reputation is maintained and the sector continues to thrive.”– Navitas

IssuesThough strong, Australia’s international education enterprise is deeply affected by global events.
Shocks to the global economy in recent years have been compounded by political fragmentation andnew alliances that have increased uncertainty and turbulence across the world. Higher education
providers have a key role to play in helping Australia craft its place in this sometimes dangerous newworld.
The Review is considering how best to meet changes in the global environment over the coming
decades. It heard that higher education providers and governments need to consolidate past
successes and adapt to evolving student expectations, national and international labour market
needs, and approaches to overseas collaboration.
This section examines the importance of Australia’s international collaboration as a core element ofhigher education’s teaching and research mission. It explores options to balance an expansion of ourinternational student market with the upkeep of world-leading student experience and theimportance of staying on the forefront of innovation while helping our neighbours through research
partnerships and offshore teaching models, especially contributing to our neighbours’ efforts togrow their own education offerings.
While the Review acknowledges international education’s role as a crucial export industry, italso sees it as a crucial element of Australia’s soft diplomacy and the generation of relationships
and reputation across the world. This makes the quality of the education we provide crucially
important.

2.5.1 Promoting global connectivity
Australia’s international education sector is a major national success story. There has been rapid
growth in the number of students choosing to come to Australia for higher education. Student
numbers almost doubled from 249,454 in 2014 to 440,824 in 2019.102 While this growth was
impacted by the COVID-19 pandemic, there has been significant improvements in 2023. Current
indications suggest that by the end of 2023 international student enrolments will have recovered to

102 Department of Education, International student monthly summary and data tables, Department of Education website,2023, accessed 7 June 2023.

91near pre-pandemic levels. In 2020, Australia was positioned as the world’s third largest provider ofinternational tertiary education.103
Figure 2.5-1: International student enrolments across all Australian higher education providers, top 5 nationalities, 20142022.

Source: Department of Education, Year to date international student higher education enrolments [data set], 2014-2022,
accessed 10 June 2023.

This growth has been driven in part by higher education providers and has led to deep and richpartnerships with our regional neighbours, expanded opportunities for international students toaccess quality and trusted education, while supplying providers with a substantial independent
revenue base.
Australian universities are also strong international research collaborators. In 2021, 60.5% of all
research publications with an Australian author included an international co-author. This was anincrease from 42.6% in 2012 and demonstrates significant progress over the last decade.104 Not only
does international research collaboration deepen Australia’s engagement and influence on the
global stage, helping us work with partners overseas to meet common goals, it also means Australia
has access to cutting-edge global research and discoveries.

2.5.1.1 Ensuring a world class student experience"We also see the Accord as a process to communicate to audiences at home andabroad the excellence of our university system. This includes welcominginternational students for the many benefits they bring to Australian society andculture."- University Chancellors Council
The presence of international students in our universities should enrich the educational experienceof all students. A high-quality Australian education benefits our global community and international
students return home as powerful champions for Australia. International students who stay in

103 United Nations Educational, Scientific and Cultural Organisation (UNESCO) Institute for Statistics, Other policy relevant

indicators: Net flow of internationally mobile students [data set], data.uis.unesco.org, n.d., accessed 15 June 2023.
104 Scival, Collaboration by Australia, Scival website, 2023, accessed 17 May 2023.

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Australia to pursue work opportunities help alleviate national skills shortages and make an ongoing
contribution to Australia’s communities and way of life.
The Review is considering how Australia can improve student experience, or risk undermining its
foothold as a destination of choice. Doing what has always been done will no longer meet student
needs, noting the international education market is increasingly competitive. Other countries areinvesting heavily in developing their own universities and research capacity, including offering
bespoke student experiences.
Australia’s higher education system is incentivised to maximise the intake of international students
and produce large student cohorts. This can be detrimental to the student experience for bothinternational and domestic students, with large class sizes potentially diminishing students’ ability toconnect with their peers and make lasting relationships throughout their studies. This is exacerbatedwhen there is a lack of diversity within classes, leading to cohorts of international students feeling
further isolated. Greater professional development of staff, including cross-cultural competency inteaching and learning, is also relevant.
If the growth of international student numbers is not sustainable, it can make these issues worse.
While the sector is concerned with the sustainability of this growth, it has advised that funding stressin the higher education sector is a strong motivator for continued growth in the number ofinternational students.
Higher education institutions also need to consider community perceptions of large international
cohorts. This includes exploring greater engagement with community services, such asaccommodation and social support, to better integrate international students into their local
communities, help improve the student experience and support an educationally sustainable
increase in the international student intake.
The Review has heard concerns from a number of stakeholders about low levels of English language
proficiency (ELP) among some international students, consistent with observations in the Australian
Migration Review which found students need the language skills that are necessary to actively
participate in the classroom and community, and to achieve successful career outcomes.105
Improvements to language testing and admissions benchmarks could be considered to protect highquality education experiences for all students and Australia’s education reputation and provide
adequately tailored support where required.

2.5.1.2 Expanding to new international student markets
Market analysis from Navitas indicates Australia’s attractiveness as a study destination is behind theUnited Kingdom and Canada. There is increasing competition from universities in our region that arecloser and less costly, which have ambition to attract international students by offering a highquality education in an English language environment. To achieve sustainable international
education growth and protect Australia’s future interests, Australian providers need to diversify
their source markets and modes of delivery while upholding a quality education and positive student
experience.
“Policy changes, changes in macro-economic circumstances or negative
sentiment towards international students can also result in significant redirection
105 Parkinson et al., Review of the Migration System Final Report.

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of student choice away from particular source countries and towards others. It istherefore important Australia actively manages its reputation and competitive
position.”– Navitas
Diversifying new international student cohorts requires institutions to continue to innovate anddevelop their online and transnational education offerings (notably offshore education). This
presents an opportunity to access different cohorts of students in new and existing markets from awider range of locations and demographics through innovative delivery models. This will allow for amore robust and resilient higher education sector by mitigating the risks of overreliance on a small
number of student markets. Providers’ ability to deliver international education must be
underpinned by the ability to deliver a high-quality education and student experience, rather thangrowth to achieve revenue gains.

2.5.2 Optimising use of Australian research expertise
While, as noted above, Australian researchers over the last decade have significantly increased theirinternational research collaboration, this success in collaborative publications has not led tosignificant research funding from international sources. OECD data shows that, based oninternational comparisons, Australia sourced only 3.5% of its higher education research income fromthe rest of the world compared to 4.5% for Germany, 5.0% for the United Kingdom and 14.6% forIsrael.106 Strategic partnerships and research collaborations are a potentially lucrative source ofknowledge exchange and revenue.
Australia is a key partner in the Indo-Pacific, and our research strengths are an opportunity tocontribute to the strategic goals of these partnerships. International collaboration opens doors andcreates opportunities for Australian expertise to solve problems around the world. In turn, Australia
benefits from innovative ideas from our neighbours that can be tested and developed in theAustralian system. There is increasing opportunity for further engagement with countries in our
region as they invest more in R&D and building partnerships.
"[T]hrough their international research partnerships, universities act as gateways
for Australian ... global engagement priorities."- Victorian Government
Australia’s research strengths provide a means to address regional priorities. Many of Australia’s
strengths can address key issues for the Indo-Pacific, such as readiness for climate extremes, foodsecurity in a changing climate, being prepared for new disease outbreaks, and developing
institutional resilience. Australia’s geographical location and research strengths position the nation
well to drive innovation in areas that strengthen our work with our Indo-Pacific neighbours withoutcompromising Australia’s technological advantages in critical defence technologies.

106 OECD, OECD Main Science and Technology Indicators - HERD financed by the rest of the world as a percentage of total

HERD, OECD website, 2023, accessed 9 June 2023.

942.5.3 Leveraging research and international education to advance Australia’sinterests
Deepening Australia’s education partnerships with our region is a key Australian Government
commitment. It has commissioned a Southeast Asia Economic Strategy to 2040 with education as a
key focus. The government is also deepening its engagement with the Pacific.
The government’s multilateral engagement, spanning forums such as the Group of Twenty (G20),
Asia-Pacific Economic Cooperation (APEC), Association of Southeast Asian Nations (ASEAN), East Asia
Summit (EAS) and the United Nations Educational, Scientific and Cultural Organization (UNESCO),
helps Australia to maintain its reputation as a world-class destination for high-quality education andresearch, contributing to our global influence and prosperity.
Ongoing government engagement lays a solid foundation for higher education providers to continue
to expand into markets, by broadening their transnational education offerings in alignment with
Australian and regional priorities. For example, Australia played a leading role in the development of
the new Global Convention on the Recognition of Qualifications concerning Higher Education which
was ratified in January 2023.

Case study: Australia’s education partnership with India
Recent initiatives with India have showcased how Australia could play a greater role educating
people on a global scale. India’s new National Education Policy, which has set an ambitious
target for 50% of young people to have a tertiary qualification by 2035, presents a significant
opportunity for collaboration.107
On 2 March 2023, Australia and India signed the Mechanism for the Mutual Recognition of
Qualifications between Australia and India. Recognition of qualifications provides a robust
foundation for further cooperation, mobility and linkages between students, researchers,
academics, and institutions of both countries.
The mechanism will allow for the growth of student and academic flows between our two
countries. For a graduate, this mechanism means they can be confident their qualification will
be recognised and can be used as a ticket to achieve their further study goals.108

Considerations for change
To create a sustainable and globally connected international education sector that benefits Australia
and its regions, and to ensure Australia remains internationally competitive, the Review willcontinue to give consideration to the following policy areas:a. ensuring that international education supports broader Australian foreign policy objectives, forexample, strengthening relationships with India and the Pacificb. making international education more embedded within the mission of the Australian tertiary
education system and to the mission and purpose of individual institutions
c. ensuring the integrity and accessibility of visa pathways for international students
107 Ministry of Human Resource Development, National Education Policy 2020 [PDF], Government of India, n.d., accessed 7

June 2023.
108 Mechanism for the Mutual Recognition of Qualifications between Australia and India, Department of Education website,2023, accessed 7 June 2023.

95

d. promoting flexibility and innovation in international education, including digital and offshore
delivery options
e. providing a high-quality university experience for international students
f. improving overseas skills and qualification recognition and expanding international professional
qualification accords
g. promoting international commercial use of Australian research capability
h. building closer connections between institutions and their international alumni.
Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:a. new opportunities to increase the scope and mobility of Australian scholarships andprograms
b. city- and state-based partnerships, and greater recognition of Australian qualifications
through regional cooperation agreements.
Encouraging international use of Australian research capability could involve a greater role forAustrade in promoting Australian university research capability to international business andpublic sector partners.
Fostering closer connections could include explicitly recognising the global engagement role ofAustralian higher education providers (through education and research) and building andmaintaining international alumni networks through their individual mission statements.

962.6: Serving our communities“Beyond producing graduates and research, the purpose of the modern
Australian university needs to be more explicitly connected to civic outcomesthat advance Australian society and this should be intrinsically tied to theengaged teaching, research, and outreach functions of the university.”– Engagement Australia

IssuesAs Australia’s higher education systems grow, so does their importance to their local communities.
They are brilliantly positioned not only to create local economic activity and jobs, but also to
encourage intellectual enrichment, civic engagement, reconciliation and other social goods.
Community engagement is a central part of university missions, and the Review considers thisshould be better recognised and sufficiently resourced. Community activities, R&D, and place-based
strategies that focus on social and economic inclusion and development are occurring right acrossthe sector.
Universities are looking for ways to evaluate the size and worth of their community-focused
activities and the Review suggests that wider adoption of classification measures that aim toincrease community engagement efforts should be considered.
This section outlines the important role institutions play as anchors, for their region and local
community, and for the nation. It explores options to formalise this critical role, including through a
new approach to mission-based compacts and a stronger focus on the important role that regional
universities play.

2.6.1 Keystone institutions across local, regional and national communities
The Review is considering mechanisms for universities and other higher education providers to drive
towards greater engagement with the community, foster an environment of knowledge sharing, andidentify and incentivise their distinctive contributions to national objectives. Institutions must be
closely connected with and delivering for their communities.
As well as addressing national skills shortages, many institutions train the future workforce to meetthe needs of their local and regional communities, playing a crucial role in economic development.
Across Australia there are many communities which are far from a university campus. For many, thisis a matter of physical distance, but it also affects communities where social and economic barriers
prevent engagement with a university that may be relatively close by.
Community engagement is essential for these communities and institutions should have a visible
presence, especially in areas where many people have not had the chance to attend or even visit
higher education institutions. Further work will be needed to support the development of placebased strategies, between and across sectors, to progress and develop the communities that higher
education institutions serve. Strengthened mission-based compacts are a good avenue for this, and97

could bring together community leaders, universities and other providers, and local business,
services and governments to solve problems.
The 2022 Local Government Workforce Skills and Capability Survey highlighted the ability of local
governments to develop ‘future-ready adult learning systems’, by understanding local skills demand,
cultivating and promoting inclusive cultures of lifelong learning, strategically tailoring needs andbridging gaps.109 Engagement with local government and communities can help institutions to
identify and forecast skills shortages and respond through course design and delivery in real time,
without waiting for national direction.

2.6.1.1 Highlighting First Nations connections
Recognising, supporting and listening to the voices of First Nations people is an essential task for ourcontemporary higher education system. The Review considers that engaging with these voices andperspectives on a deeper level will not only increase the numbers of First Nations students entering
the system, but also ensure the value of First Nations knowledge is recognised and incorporated into
all institutional operations.
“We urge the Accord Panel to fortify the leadership already demonstrated by
Indigenous Australians, through careful consideration of not just the equity
concerns for Indigenous peoples, but the significant contributions Indigenous
Australians bring to the sector as scholars and professional staff.”– Western Sydney University Indigenous Professoriate“Education alone is not sufficient; a culturally appropriate, holistic, community
supported, strengths-based approach will provide the best foundation for young
First Nations people to prosper and succeed in higher education.”– National Indigenous Australians Agency
There needs to be more effort to foster this connection, by delivering course content in culturally
safe, local settings, and with tailored student support services aimed at boosting completions andsuccess. This could include new campus models, or centres of excellence led and developed by First
Nations people.

Case study: Munarra Centre for Regional Excellence (MCRE)110
A not-for-profit centre of First Nations excellence based in Shepparton, the Munarra Centre for
Regional Excellence will be a space of cultural affirmation, identity and strength, in addition to auniversity campus. It will provide a culturally safe space for multiple education and training
providers, including the University of Melbourne, La Trobe University and GOTAFE.
Formed in partnership between the University of Melbourne, the Kaiela Institute and the
Rumbalara Football and Netball Club, the centre will celebrate cultural identity, and improvehealth, education and employment outcomes for First Nations people in the region through thedelivery of a broad range of VET and higher education courses.

109 SGS Economics and Planning and G Sansom, Local Government Workforce Skills and Capability Survey Final Report,

Australian Local Government Association, 2022, accessed 7 June 2023.
110 Rumbalara Football and Netball Club (RFNC), Munarra Centre for Regional Excellence, RFNC Website, n.d., accessed 7
June 2023.

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First Nations-led institutions that can deliver course content and conduct research focussed on
furthering First Nations pedagogy and knowledge also play an important role in delivering forcommunity. These institutions could be supported by culturally engaged approaches to regulationand funding that ensure decision-making can be truly led by First Nations communities.

Case study: Batchelor Institute of Indigenous Tertiary Education (BIITE)111
As a specialist institute and the only First Nations dual sector tertiary education provider inAustralia, BIITE serves a unique role in providing provides education, training programs andcourses for First Nations Peoples. BIITE also provides facilities and resources to allow students
and staff to conduct research and study. The majority of students reside in remote communities
in the Northern Territory, with some students also traveling from interstate.

2.6.1.2 Recognising the role of universities in the regions
Universities play an important role in regional Australia and the social and economic contribution
they make to their local communities and regions is significant.
“Australia’s regional universities… operate under a distinct social charter todevelop highly skilled regional workforces, to deliver world-class research andinnovation outcomes for regional industries, and perhaps most importantly, tolift retention and attainment rates of traditionally under-represented student
cohorts.”– Regional Universities Network
Regional universities provide essential infrastructure and facilities which might not be present
otherwise, with consequences for communities beyond university staff and students. As large‘beacon’ locations in the regions, universities play a key role in the stewardship of their region,
especially in times of crisis, even when they might not have the capacity to do so. They can provide
the critical mass of a highly skilled workforce to bolster and lead R&D projects with ties to local
industry and community. Regional universities’ social and economic contribution to regional
Australia needs to be better measured, valued and celebrated.
Regional universities face unique challenges. The diseconomies of scale inherent in regional
universities inhibit growth, investment and social impact.112 Additionally, it can be hard to attract
staff from outside the region. Despite these challenges, these institutions do a large amount ofheavy lifting for the sector and for their communities. The Review notes there are many positive
examples of regional universities building capability and strength within their local communities andresponding to issues that directly affect their region.

111 Batchelor Institute of Indigenous Tertiary Education, Annual Report 2020 [PDF], Batchelor Institute of Indigenous

Tertiary Education, 2020, accessed 13 June 2023.
112 RUN, Submission to the Australian Universities Accord Discussion Paper.

99

Case study: Southern Cross University supporting flood impacted
communities113
When the catastrophic 2022 floods hit the region in February and March, Southern Cross
University’s Lismore campus became the main evacuation centre for residents and a rallying
point for many relief efforts.
More than 20 local organisations used the Lismore campus as their base in the aftermath of thefloods, with a range of service providers remaining on campus this year.
These include:• 30 consulting rooms for Primary Health Network mental health practitioners, generalpractitioners, and a pop-up pharmacy and pathology• Trinity Christian College and The Living School establishing their schools on campus• TAFE NSW delivering programs from the Lismore campus• Business NSW establishing the Northern Rivers Business Hub as it continues to support local
enterprise• a suite of more than 50 pod homes constructed as emergency housing on the university’s
football fields.
Southern Cross University’s work is just one of the many of universities helping their community
in times of need. Other examples include the Tropical Cyclone awareness and preparedness
work undertaken by James Cook University each cyclone season in North Queensland, theUniversity of New England and Charles Sturt University providing support for the region during
the 2019-20 Black Summer Bushfires, and the irregular and essential work undertaken by many
regional universities in responding to COVID-19.

The geographic realities of operating in regional, rural and remote areas require strong collaborationand partnerships, bringing together institutions, all levels of government and organisations to meet
specific local needs. For example, as the only university located in the Northern Territory, Charles
Darwin University helps to drive development in the territory, through partnerships and engagement
across Northern Australia and into the broader Asia-Pacific region. The Cyber Territory Skills Hubdelivers vocational and short courses in cyber security, drawing on Charles Darwin University’s
research in this field, and is aimed at upskilling local small-medium enterprises.114

113

Southern Cross University (SCU), ‘Seeds of hope sprout one year on from 2022 floods’, SCU News, 3 March 2023,
accessed 20 June 2023.
114 CDU, ‘New cyber security training hub planned for Charles Darwin University’, CDU Newsroom, 7 February 2023,
accessed 16 June 2023.

100

Case Study: Regional Medicine
Regional universities are playing a critical role in training the future regional medical workforce.
The Murray-Darling Medical Schools Network consists of five rurally based university medical
school pathway programs in the Murray-Darling region. The network allows medical students tostudy and train in the Murray-Darling, reducing the need for them to move to metropolitan
areas. Forming the basis of this program is evidence that suggests that students are more likely
to work in rural areas after graduating if they come from a rural background or undertake longterm rural training.115
There are also several joint programs in regional medicine, including:• The Northern Territory Medical Program, which provides training for Flinders University andJames Cook University medical students based at Charles Darwin University and the Royal
Darwin, Alice Springs and Katherine hospitals.116• The University of Newcastle and the University of New England partnership to deliver a Joint
Medical Program, so students can undertake placements in urban, regional and rural
settings across the Central Coast and Hunter New England regions.117• Charles Sturt University in partnership with Western Sydney University has established a
Joint Medical Program for the training and education of doctors in regional, rural andremote Australia.118
The Review believes there is merit in considering a national industry linkage into regional education
program, which would provide a broker in designated regions to facilitate collaboration andinnovation between industry, schools, VET, providers, local governments and community. It would
aim to improve aspiration for further education in the regions, improve retention and completion
rates in tertiary education through purposeful education, and address regional workforce issues.
Given the unique contributions made by regional universities, with consideration of the specificchallenges they face, the Review will further consider methods of funding for regional universities.
This could include, but not be limited to, a universal service obligation and a reframed regionalloading, designed to identify, measure and fund those characteristics specific to regional universities.

2.6.2 Community-led research
Local regions also significantly benefit from community-led research, which seeks to makecommunities equal partners and co-leads in the R&D process. Community-led research projects areoften driven by the needs of the community, aim for sustainable change beyond the life of the
project and break down traditional power imbalances between researcher and community.119

115 Department of Health and Aged Care, Murray-Darling Medical Schools Network, Department of Health and Aged Carewebsite, 2023, accessed 7 June 2023.
116 Northern Territory (NT) Health, Training and education for health professionals, NT Health website, 2023, accessed 7
June 2023.
117 The University of Newcastle and University of New England, Find your path to medicine: the joint medical program 2024
[PDF], The University of Newcastle and University of New England, n.d., accessed 7 June 2023.
118 Charles Sturt University (2022) Charles Sturt and Western Sydney University celebrate the success of the Joint Program in
Medicine, CSU News, accessed 18 June 2023.
119 V Rawlings, J Flexner and L Riley (eds), Community-Led Research: Walking New Pathways Together, Sydney University
Press, Sydney, 2021.

101

Community-led research is particularly important for First Nations communities, which havehistorically been the subject of, rather than partners in the research process.

Case study: Community-led approaches to First Nations health researchFirst Nations community-led health research, such as Education programs for Indigenous
Australians about sexually transmitted infections and blood-borne viruses, has produced anumber of frameworks that identify a need to reorient current research approaches with First
Nations communities, and has led to multifaceted approaches to community education andhealth promotion.120 Reorienting sexual health research with First Nations communities
towards community-led frameworks increases the potential for better data collection andsignificant improvements in sexual health outcomes for communities.121
Regional universities also have a crucial role to play in delivering applied research. Regional
universities deliver research that can have considerable impact in their communities, bringing
innovative and new approaches to the unique and important challenges of their region.

Case study: University of Southern Queensland’s Barley Breeders
Program
Australian barley growers needed help in their fight against a fungal disease that has beencausing $177 million in yield losses each year. They received this help from a group of university
researchers, led by Associate Professor Anke Martin of the University of Southern Queensland.
The research undertaken in the University of Southern Queensland’s Barley Breeders program
will produce fungal strains with multiple virulence genes for fast and cost-effective testing ofbarley lines, untangle the fungal/host gene interaction for resistance breeding and identify new
sources of resistance.
This research aims to help in developing disease resistant barely varieties, preventing millions ofdollars of crop losses for the barley industry.122 The research to equip Australian growers withnovel biological and genetic tools is a result of a collaboration between university researchers,
industry partners led by InterGrain Pty Ltd. This has been successful in obtaining funding underthe Australian Research Council Linkage Grants program.123 The research partnership could leadto commercialisation of barely varieties with durable fungal resistance by Australian breedingcompanies.

120 Australian Institute of Health and Welfare (AIHW) and Australian Institute of Family Studies (AIFS), Education programsfor Indigenous Australians about sexually transmitted infections and bloodborne viruses, AIHW and AIFS, AustralianGovernment, 2012, accessed 13 June 2023.
121 S Rosenberg, R Lobo, J Hallett and M Roberts, An evidence review from Australia, Aotearoa/New Zealand and Canada
for the WA Aboriginal Sexual Health and Blood-borne Viruses Strategy, Department of Health, Government of Western
Australia, 2019, accessed 6 June 2023.
122 University of Southern Queensland (UniSQ), ARC project helps barley breeders in fight against disease, UniSQ website,2023, accessed 21 June 2023.
123 Australian Research Council (ARC), Research Management System - Funded Projects - Linkage Projects 2022 round 1,
ARC website, 2022, accessed 21 June 2023.

102

2.6.3 The importance of alumni
A university’s graduates are a valuable part of its community, forming a bridge between the
educational institution and the networks within which they operate. Institutional capability can bebuilt through alumni engagement and philanthropy, while alumni also promote the benefits of their
institutions. Alumni networks can also provide opportunities for WIL and other opportunities forindustry engagement.
As discussed in Section 2.5, international students spend some of their most formative years inAustralian universities and can be powerful champions for Australia across the world. And close
connection to a cohort can be a positive part of student life for both international and domestic
students. Cohorts often help each other to succeed in their studies.
The Review is considering options to drive greater encouragement and leveraging of alumni
networks to provide opportunities for WIL and industry engagement, as well as a greater focus on
helping students find a cohort of connected students in larger institutions or while studying online.

Case study: The Indigenous Alumni Network124
Established by First Nations alumni from the 1980s and 1990s, the objective of the Australian
National University Indigenous Alumni Network is to enable Indigenous students and alumni toengage and remain connected with each other and the Australian National University.

2.6.4 A stronger civic agenda
Higher education is strongly associated with civic engagement. It advances students’ civic
mindedness and engagement, thus increasing the active citizenship and democratic strength of oursociety. The Review suggests that community engagement classification measures should beconsidered by higher education institutions, given the stated difficulty in quantifying the efforts ofproviders in this regard. A growing range of evaluation, ranking and analysis is being built
internationally across higher education (for example, the Times Higher Education Impact
rankings),125 and all sectors, as the world focuses more intently on environmental, social andgovernance outcomes alongside economic output.

Spotlight: A community focussed mission-based compact
The Review heard of the need for renewed mission-based compacts that recognise thecommunity engagement work of universities. Such agreements would enable institutions to
specialise and align their missions and activities to the communities they serve. Mission-based
compacts would be an avenue for universities to demonstrate engagement with their uniquecommunity and detail plans to further advance their civic functions.

124 Australian National University (ANU), Indigenous Alumni, ANU Website, n.d., accessed 7 June 2023.
125 Times Higher Education (THE), Impact Rankings 2023, THE website, n.d., accessed 7 June 2023.

103

Considerations for change
To ensure higher education providers deliver for their communities and make distinctive
contributions at a local, regional and national level, the Review will continue to give consideration to
the following policy areas:a. recognising and formalising the crucial role institutions play in their communities through theAccord process and mission-based compacts
b. the creation of stronger links between industry and education, particularly in regional areas andother areas with low participation and attainment ratesc. encouraging institutions to draw on the strengths of their alumni communities.

104

2.7: Research, innovation and research training“Australia has a world-class research system, which is why it is critical that we get
the policy settings right to continue to support universities in their research
efforts. … To realise the full potential of Australia’s research efforts and capacity,
investment in research and development must be lifted to meet the average of
our international competitors.”– Universities Australia

IssuesThe Australian R&D system is unlike the R&D systems in most leading OECD nations. Here,
universities play a larger than normal role compared to international economic peers.
Industry R&D expenditure in Australia is low by OECD standards (at 0.90% of gross domestic productin 2019-20) and has been stagnant in recent years.126 Government investment, although growing,has been marginally declining relative to economic growth.127
But Australia’s universities are significant R&D contributors, accounting for 36% of the nation’s R&D
expenditure, high by OECD norms.128 Much of that work has significant economic benefits – fromsolar cells to fully automated mines to COVID-19 virus sequencing. The university sector also does
the underpinning work for our innovation and R&D systems, training PhD students, carrying out thebulk of our basic and strategic basic research and producing the majority of our scientificpublications – a big task given Australia produces 4% of the world’s published research with only
0.3% of the world’s population.129
Despite this strong performance, it is frequently asserted that Australian higher education research
is not being used for economic or social benefit. There is evidence for and against this. The evidence
for includes the following:• only 33% of university research income comes from industry and 27% from ‘public sector other’sources (that is, commissioned research not won through formal competitive research grantschemes)130• in terms of international innovation rankings such as the Global Innovation Index, Australia hasfor many years scored poorly compared to OECD peers, with Australia ranking 37th in knowledge
and technology outputs, behind such countries as Switzerland (first), the United States (third),
the United Kingdom (eight) and Japan (11th).131 While Australia, ranking 19th, has reasonable
innovation inputs (stable business and legal systems, good education and research systems), it
fails to translate these into high impact innovation outputs (new processes, products andservices).

126 ABS, Research and Development (various) [data set], abs.gov.au, 2022, accessed 7 June 2023.
127 DISR, Science, research and innovation (SRI) budget tables 2022–23 [data set], industry.gov.au, 2023, accessed 8 June

2023.
128 OECD, Main Science and Technology Indicators – Percentage of GERD performed by the Higher Education sector [dataset], oecd.org, 2019, accessed 7 June 2023.
129 DISR, Australian Innovation System Monitor, DISR, 2021, accessed 15 June 2023.
130 Department of Education, Research income time series [data set], education.gov.au, 2022, accessed 9 June 2023.
131 World Intellectual Property Organisation (WIPO), Global Innovation Index 2022, WIPO, 2022, accessed 9 June 2023.

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The case against includes:• it is only in our universities that Australia has research capability in several areas of sovereign risk
• many examples of university research having a transformative economic or social impact – thinksolar cells, fully automated mines, the Jameson cell, new wheat varieties and COVID-19 virus
sequencing• all formal university/industry grant schemes are heavily oversubscribed and all have rated well informal evaluations of the schemes.
We need clear measures to indicate how useful our university research actually is to end-users.
In summary, the Review considers that given how much of Australia’s R&D reputation depends on
the university sector’s strong performance in R&D and the need to ensure Australia has researchcapability in areas of sovereign risk (communications, medicine, climate extremes, Antarctica and soon).
The research strength of our universities should be protected and increased. The Review is alsoof the view that mechanisms for sharing and translating university research should be improved
significantly, starting with establishing a baseline and then continuing to measure how useful
university research actually is to end-users.

2.7.1 Getting the foundations right and protecting the basics
2.7.1.1 The importance of international peer-reviewed competitive research
Producing excellent university research enables Australia to solve complex and wicked problems,
make ground-breaking discoveries, and train its research workforce to be at the forefront of global
breakthroughs.
The Australian Research Council (ARC), the National Health and Medical Research Council (NHMRC)
and other organisations running National Competitive Grants play a pivotal role in Australia’s
research ecosystem, providing funding for critical basic and strategic basic research and ensuringhigh-quality research through selecting grants using rigorous international peer review. Researchsupported by these grants has considerable impact, with high levels of fundamental discovery alongwith solving hard problems, thereby improving the lives of Australians. Funding for the ARC has notgrown significantly for many years and this puts our capacity for breakthrough research at risk.132

2.7.1.2 Funding National Competitive Grants
Even though the National Competitive Grants are awarded in fierce competition, these granting
bodies provide only part of the funding on any given grant (though a contribution to the difference
between the amount awarded and the full cost is provided through a block grant mechanism, theResearch Support Program); the host university needs to supply the rest. Finding that difference isdifficult for universities. Often this funding gap has to be covered from non-government sources
with many universities funding the difference from international student fees. This is possible foruniversities that have significant earnings from international student fees, but harder for those that
don’t. Whatever source they have (or don’t have), winning National Competitive Grants costs
universities money. The British have a term for this – ‘the burden of matched funding’.133

132 DISR, SRI budget tables 2022–23.
133 T Cutler, Alliances for innovation and economic development: the Australian experience [PDF], Cutler & Company, 2008,

accessed 9 June 2023.

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The size of this issue is best illustrated by noting that research income reported through the Higher
Education Research Data Collection (HERDC) across all Australian universities was $5.1 billion in
2020,134 but they expended $12.7 billion on R&D in the same year.135
This situation is less than ideal – universities are potentially disincentivised from applying for themost prestigious grants that are associated with producing the bulk of the country’s basic andstrategic basic research. The fact that the grants are fiercely competed for illustrates how importantresearch is to universities. Of course, there is the reputational benefit to universities from strong
research performance which significantly influences rankings. This in turn affects the recruitment ofinternational students.
Many submissions have argued that the National Competitive Grants should be fully funded. If thishappens and the total funding for the National Competitive Grants is held constant, the successrates for the grants will fall. This could mean that good researchers would likely leave the sector andAustralia which would, in turn, lead to less inspiring teaching and a diminished perception of thequality of the system. The unsustainability of the current arrangements leads the Review toconsider, on balance, that teaching and research may need to be funded separately and thatconsideration should be given to ensuring National Competitive Grants cover the cost of undertaking
the research.

2.7.1.3 Embedding and promoting First Nations research and knowledge systems
Australia is home to the oldest living culture, a culture with its own diverse epistemologicalpractices, including deep and enduring histories of oral tradition, as well as storytelling, cultural,scientific, medical and agricultural practices. Valuing and embedding First Nations knowledges inAustralia’s university research sector is an opportunity Australia should not miss. Not only will thisenable First Nations people to take a leading role in shaping and producing knowledge, but it will
also improve understanding in the community – both domestically and globally – of First Nations
knowledge, culture and history.
“We encourage the Government to prioritise advancing research andcollaborations in Indigenous knowledge systems across the higher education
sector.”– Pro Vice-Chancellor Indigenous, University of Melbourne
Embedding and promoting First Nations research and knowledge systems will require growing thepipeline of First Nations research students. First Nations students are currently underrepresented in
PhD enrolments, making up only 1.7% of total enrolments.136 Programs should be targeted atincentivising and supporting First Nations students to undertake and complete HDR programs. These
programs could be developed and designed in collaboration with First Nations people andacademics. There are already many great examples of this across the sector.

134 Department of Education, Research income timeseries.
135 ABS, Research and Experimental Development, ABS website, 2022, accessed 8 June 2023.
136 Department of Education, Domestic PhD student enrolments (by equity group) [unpublished data], Department of

Education, Canberra, 2023.

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"Indigenous scholars … are injecting re-oriented life into the crevices and silent
spaces of disciplines and the research landscape has been transformed by
Indigenous-led scholarship, raising the ethical and obligatory benchmarks forgood practice. Indigenous leaders, both in role and function, propel innovationand creative, generative networks within our universities."– Western Sydney University Indigenous Professoriate
First Nations scholars from all disciplinary practices should be empowered to thrive within the
research sector. Beyond deepening Australia’s understanding of First Nations culture and history,
involving First Nations voices across all disciplines – from medical care to astrophysics to languages –provides a unique, and ultimately beneficial, perspective to Australia’s research system. Universities
have a role to play in creating culturally safe and inclusive environments in which First Nations voices
can be heard.
Industry and government also have a role to play in being model users of First Nations research,embracing unique perspectives to solve wicked problems. An example of such is the consideration ofFirst Nations practices in mitigating the local impacts of climate change.

2.7.1.4 Building our research capacity through research training and developing our research
workforce
To provide critical and advanced skills in key sectors of the economy, Australia needs to train enoughpeople to doctoral level. Data on exactly how many are needed at this level are not readily available,
but there needs to be enough doctoral graduates to cover demand for roles in the academic
workforce (where a PhD is the default entry qualification) and a high proportion of the nonuniversity research sector including industry and government research agencies.
Building the research workforce delivers benefits for the wider society, as many of these individuals
will work outside higher education, helping to drive new and innovative ways of approachingproblems, based on the expertise they gained in their research training.
Just as we do not have data on industry supply and demand at this level, there is little information
about whether we are producing sufficient PhDs in the right disciplines. There is no national researchtraining policy or framework driving this data collection or forward research workforce planning.
The PhD in Australia generally takes the form of an apprenticeship with a more experienced
researcher or research group, with the major output for assessment being a thesis. PhD students
supply much of the ’grunt’ in our research system, which raises the question of whether we pay
enough attention to their education as opposed to seeing them as a welcome labour source. Our
PhD offerings do not typically involve the deep coursework that characterises the PhD in the UnitedStates. Nor do we often offer PhD students training in cognate fields (such as education or
entrepreneurship qualifications) that would enhance their prospects of good careers beyond
academia.
Domestic enrolments in HDR programs have recently trended slightly downward, with a 5% decline
in enrolment numbers between 2016 and 2020.137 Many submissions to the Review have indicatedthat a key factor contributing to this decline is the PhD stipend, which is often below the minimum
wage and therefore uncompetitive with industry or public sector salaries. This places significant
financial pressure on HDR students, especially those with dependents.
Another factor cited is the lack of research positions available at the next training level, thepostdoctoral level. Many early career researchers at postdoctoral level, while valuing postdoctoral
experience, are extremely stressed as they seek a research career but, as there is relatively little
137 Department of Education, Higher Education Statistics – 2021 Student Data.

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research funding available, the number of postdoctoral positions is limited so the next job for theseresearchers is rarely guaranteed.
Given this, further consideration needs to be given to the future of research training programs,
including the financial support and career structure necessary to build the next generation ofresearch leaders, and empower a more diverse cohort of early career researchers. In addition to theunderrepresentation of First Nations PhD students, those with disability and those from low SES
backgrounds are not adequately represented in recent PhD student cohort figures (making up 7.8%
and 9.7% of total PhD enrolments respectively).138 Research training pathways could be refined to
improve accessibility for all Australians wishing to undertake research, which in turn will lead to amore diverse range of PhD graduates and researchers in the workforce.
Research training in the form of tailored career development for teaching-and-research andresearch-only academics could also be enhanced. Such training needs to complement training inuniversity education.
Clarity of approach to research training and support for early career researchers is vital and needs tobe addressed with some urgency.

2.7.1.5 Strengthening research infrastructure
Research infrastructure is a major contributor to high-quality Australian research, and subsequently
the contribution that research makes to addressing national and global problems. Several
submissions to the Review have argued that there is insufficient funding for both research and otheruniversity infrastructure, risking Australia’s ability to undertake leading-edge experimental R&D.
Australia has had research and broader infrastructure mechanisms that have worked well in thepast, notably the Education Investment Fund (EIF), which funded general university infrastructure(discussed further in Section 3.3). Currently, the Government’s main programs for funding research
infrastructure are the National Collaborative Research Infrastructure Strategy (NCRIS) and the
Medical Research Future Fund (MRFF).
NCRIS provides critical research infrastructure on a national scale, promotes strong collaboration
across research institutions, and strategically targets funding for national priorities. However, most
NCRIS funding is currently due to end in 2028-29, and greater certainty is required for the future of
the program. It is important that this source of funding continues to ensure that necessary, cuttingedge research infrastructure can be constructed, operated and made accessible to researchers
conducting research that meets national priorities.
“While Australian research has been well served by the National Collaborative
Research Infrastructure Strategy (NCRIS), this does not provide a holistic orguaranteed sustainable source of research funding.”– The Group of Eight
While there is strong support for funding through NCRIS, this provides only a proportion of theneeded higher education infrastructure. Submissions have argued that adequate funding is needed
to meet the demand for both research infrastructure and contemporary learning and teachingfacilities.
The Review suggests consideration be given to NCRIS moving to sustainable, ongoing funding.

138 Department of Education, Domestic PhD student enrolments (by equity groups) [unpublished data].

1092.7.1.6 The importance of measuring research quality
The Australian university system is internationally recognised for its high-quality researchcapabilities. Research performance evaluation plays an important role in preserving Australia’s
research bedrock, demonstrating that the significant level of investment in university research isleading to strong outcomes for the nation. However, many universities argue that the recent
research assessment exercise, Excellence in Research for Australia (ERA), came with too high an
administrative burden. Accordingly, the recently completed Review of the Australian ResearchCouncil Act 2001 has recommended that ERA, along with the ARC’s Engagement and Impact
assessment, be discontinued.139
The Review, after consulting TEQSA, notes national research performance evaluation is vital not
least for providing research funders evidence of value for money and notes that recent
developments in data technology offer opportunities to move toward less labour-intensive
processes for collecting performance data and assessing performance, though these data-driven
approaches will not remove the need for some peer review and expert analysis of data to measure
Australia’s research outcomes fully.

2.7.2 Sharing and translating university research
Effective sharing and translation of university research and research expertise is important for a
successful knowledge economy. Understanding what is being achieved (through measurement) is
vital, as are pull and push factors.

2.7.2.1 Measure how useful university research is – establish the baseline and monitor overtime
There are many examples of Australian higher education research translating into tangible, realworld benefits – from fewer deaths and disease prevention to improved processes and efficiencies.
However, as noted above, there is conflicting evidence on how much end-users in industry,
government and the community are drawing on and using university research expertise. Given theamount invested in university research, it is important to settle this with quantifiable evidence. The
Review considers that a measure could be constructed of the interaction between Australian
university researchers and end-users, and of the impact and value of that interaction. The initial
calculation of this measure would provide a baseline and then re-calculation, perhaps at two-yearlyrests, would provide information on any improvements or otherwise.
The very act of measuring this will almost certainly have the effect of improving the interactions as
the higher education sector, especially its research part, is inherently highly competitive.
Measuring interactions and their impact is not trivial but it is an area where a lot of work has been
done both in Australia and overseas. An example that could be adapted to this purpose is narrativeCVs used by the NHMRC and UK Research and Innovation to enable researchers to showcase a rangeof skills and experience when applying for research funding. In turn, the information collected
through this process can be used to demonstrate research impact.

139 M Sheil, S Dodds and M Hutchinson, Trusting Australia’s Ability: Review of the Australian Research Council Act 2001,

Australian Government, 2023, accessed 9 June 2023.

1102.7.2.2 Show how it’s done – government to become an exemplary user of research (pullmechanism)
University research can be drawn on by governments to address not only the grand challenges ofsolving the nation’s wicked problems but also the more routine policy issues. There are alreadyexamples across jurisdictions where governments have enlisted the expertise of university
researchers to help drive policy development and community engagement, but this needs tobecome more widespread.
Finding ways for governments to optimise how they draw on university research will be useful initself but it will also provide a guide for industry and communities to do likewise, hopefully leading toa broader culture shift by signalling to industry that academic research is highly valuable.

Case study: State government collaboration with the University of
Tasmania
The Tasmanian Government has a long-standing relationship with the University of Tasmania asa significant contributor to the economic, social, and cultural development in the state. Since
the 1990s there has been a formal partnership between the state government and the
University under which the university carries out the majority of the state’s agriculture andaquaculture research through two specially created entities, the Tasmanian Institute for
Agriculture (TIA) and the Institute of Marine and Antarctic Studies (IMAS). The agreements
governing these partnerships have been reviewed and renewed several times.140

2.7.2.3 Research broker bodies (pull mechanism)Research broker bodies, such as AMIRA in the private sector, and the rural research corporations
and the Chief Scientists’ Offices in the public sector, have shown that they can deliver good results
through identifying challenges, pulling together the right researchers, project managing, andmanaging funding to achieve targeted research outputs. Broker bodies such as these could be used
more widely to bolster use of university research further.

2.7.2.4 Increase academic consulting (pull mechanism)
Academic consulting fills a gap in the consulting market and is most successful when deep researchknowledge and expertise is needed to solve a problem. The Productivity Commission has
recommended processes to facilitate academic consulting arrangements to make use of university
research expertise and specialist knowledge, including that universities should reduce barriers toacademic consulting and enable further avenues for university researchers to consult with businessand government.141 As outlined above, there is also a role for government to play in becoming an
exemplary user of academic research, including consulting. Increasing academic consulting would
further break down barriers between academia and industry.

140 Tasmanian Government and University of Tasmania, State of Tasmania and University of Tasmania - Making the FuturePartnership, Department of Premier and Cabinet, Tasmanian Government, 2015, accessed 7 June 2023; Fishing Tasmania,
Sustainable research agreement renewed, Fishing Tasmania website, 2023, accessed 7 June 2023.
141 Productivity Commission, 5-Year Productivity Inquiry: Advancing Prosperity. Recommendations and Reform Directives.

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University think tanks bring academic expertise to public policy and enhance public sector/university
collaboration. Several universities are working with governments and industry to create think tanks
which provide advice on major issues. Good examples include:• the Grattan Institute, which provides advice across a range of social and economic policy issues• the James Martin Institute for Public Policy, which provides public policy advice to government• the Melbourne Centre for the Study of Higher Education at the University of Melbourne (formerly
the LH Martin Institute), dedicated to policy and practice in higher education• the Mitchell Institute for Education and Health Policy at Victoria University, a health andeducation policy think tank.
Also, the NSW Innovation and Productivity Council makes a point of sourcing expertise from NSW
universities in providing its advice to government.

2.7.2.5 Keep encouraging universities to move towards research translation andcommercialisation (push mechanism)
University researchers are good at refining and solving hard problems. To drive research impact andstrong economic outcomes, the Review is considering ways in which university and industry
collaboration could be incentivised and promoted further to tackle major industry problems.
Universities have signalled their strong interest in doing this, with many of them establishing Deputy
or Pro Vice-Chancellor (Industry), or similar, roles in recent years. And they are enthusiastic
participants in university/end-user collaborative schemes. These schemes, including the ARC Linkage
Grants, the Cooperative Research Centres, Australia’s Economic Accelerator, and the National
Reconstruction Fund, have been successful in bolstering research translation and commercialisation.
Industry is indicating that it too is more interested in using university research. The amount ofindustry-funded research in the higher education sector has grown over the last five years,
increasing from $481 million to $666 million.142 This growth, which has been spurred in part byuniversity-industry funding schemes, could continue to be incentivised further to boost collaboration
and research translation.

2.7.2.6 Upskill the research workforce – training intranslation/commercialisation/entrepreneurship (push mechanism)
As outlined above, alternative pathways for researchers could be made clearer to ensure that thebroader research workforce and economy has the skillset and number of PhDs required for Australia
to be competitive on the global stage. Increasing the share of researchers including PhD graduatesworking in parts of the economy other than higher education and government research jobs,
particularly in leadership roles, may also be an important contributor to the development of an
ecosystem that promotes research translation and adoption.
Internationally, there are many good examples of structured PhD programs. These programs aredesigned to equip PhD candidates for careers outside higher education and could be adopted here.

142 Department of Education, Research income timeseries.

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Case study: The US National Institutes of Health (NIH) Broadening
Experience in Scientific Training (BEST) program
In 2013 and 2014 the NIH in the US developed a program to support training for doctoralcandidates and post-doctoral researchers to equip them to address the greatest challenges andopportunities in biomedical research, recognising that traditional research-intensive positions
are not the only means by which PhD graduates can meaningfully contribute to the biomedical
research enterprise. The NIH provided support for training opportunities for early career
scientists to prepare them for a variety of career options in the dynamic biomedical workforce
landscape.
The BEST awards supported a variety of programs in US universities to offer broadened training
programs that would provide skillsets that reflected the many careers outside academia orother public research organisations, such as entrepreneurial, leadership and other business andmanagement skills. The programs supported “culture changes at academic institutions” toenhance how early career researchers approached their career options.143

2.7.2.7 Proportion of PhD students from industry (pull mechanism)
Australia has recently commenced a formal scheme, referred to as the industry PhD, where PhD
students work on problems nominated by industry. Other countries have taken this further and havefirms assign employees to PhD programs where the PhD candidate typically works under joint
university/industry supervision on problems nominated by the firm, often submitting a thesis that is
a collection of published scientific papers on these problems. The advantage of this approach is thatthe candidate is working on issues directly of interest to their employer and is receiving theirstandard salary rather than subsisting on a PhD stipend. Australia could move to educating asignificant proportion of its PhD students in this way.

Considerations for change
To strengthen Australia’s capacity to produce high-quality and high-impact research, and encourage
greater use of university research and research expertise by government, industry and thecommunity, the Review will give further consideration to the following principles:••

how the research strength of our universities could be protected and increased (protecting thebasics), given how much of Australia’s R&D reputation depends on the university sector’s strong
performance in R&D and the need to ensure Australia has research capability in areas ofsovereign riskmechanisms for sharing and translating university research should be improved significantly,
starting with establishing a baseline and then continuing how to measure how useful university
research actually is (sharing and translating university research).

To protect research basics, the Review is giving further consideration to the following policy areas:a. developing a funding mechanism that explicitly recognises the importance of research,innovation and scholarshipb. how best to ensure sufficient funding for the Australian university research sector to meetnational research priorities
c. moving over time to ensure National Competitive Grants cover the full cost of undertaking
research
143 National Institutes of Health (NIH), Strengthening the Biomedical Research Workforce, NIH website, 2021, accessed 7

June 2023; D Chatterjee, JK Ford, JW Rojewski and SW Watts, ‘Broadening Experiences in Scientific Training (BEST): Do
biomedical faculty members want institutional help?’, SN Social Sciences, 2021, 1(27), doi:10.1007/s43545-020-00029-x.

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d. developing a national, holistic policy for research training
e. improving the measurement of the quality and impact of Australian research, including bydeploying advances in data science to develop a ‘light touch’ automated metrics-based research
quality assessment systemf. making the cost of university R&D, innovation and scholarship activities across all universities
transparent
g. ensuring ongoing investment in critical research infrastructure and its maintenance.
To share and translate university research more effectively, the Review is giving further
consideration to the following policy areas:a. developing metrics to understand industry/university and government/university researchcollaboration and translationb. encouraging government to become an exemplary user of university research, using it toaddress nationally significant complex problems and enhance sovereign capabilities andbecoming an example to industry on how to use university research capabilityc. exploring mechanisms that keep universities, industry and government informed of nationallysignificant research problems, and of nationally significant research capabilities in the higher
education systemd. extending the use of research brokers and research challenge mechanisms and bodies
e. encouraging academic consulting, and improving university capability to do such workf. establishing a target for the number of PhD candidates employed in industry undertaking a PhD
relevant to their firm.

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Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:
Protecting the basics:
a. significantly increasing immediate investment in the ARC
b. increasing funding for First Nations knowledges and for collaboration and partnerships
between First Nations communities, governments, and universities
c. moving NCRIS to a future fund style of funding.
Improving the research training system to support and attract students to research careers:
a. increasing PhD stipend rates
b. offering postgraduate and postdoctoral researchers extra skills-oriented training in parallelwith PhD study or postdoctoral workc. creating research training targets for equity groups
d. encouraging taxation adjustments to make industry-linked and part-time research training
scholarships tax free, in line with full-time scholarships
e. encouraging institutions to offer innovative PhD and professional doctorate models,
including using portfolio, project, and multi-part dissertation formats and revitalising HDR
coursework offerings.
Better sharing and translating research:a. developing a mechanism that keeps universities, industry and government informed ofresearch capabilities in the higher education system and research problems faced at anational levelb. incentivising university/end-user collaboration programs, such as the ARC Linkage Grants,
the Trailblazer Universities Program, Australia’s Economic Accelerator, the Cooperative
Research Centres Program, National Reconstruction Fund and the R&D Tax Incentive.

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Chapter 3 – Foundations of a highfunctioning national system
As Australia’s economy and society evolve rapidly, our higher education system must be capable ofadapting to serve growing demand, expanding to deliver new knowledge and capability, and helping
to address complex generational challenges.
The responsive and aligned system described in the Review’s vision requires deep renewal andwidespread changes to the foundations that support Australia’s current higher education system.
This chapter explores these foundations, including current funding and governance and regulatory
mechanisms, and identifies options for change to make these foundations agile, stronger and more
fit for purpose.

1163.1: National governance: towards a coherent tertiary system“There is… a critical need for the sector to be supported in offering a diversity ofeducational experiences, including through support and frameworks for shorter
forms of learning and by facilitating greater mobility between school, TAFE anduniversity. UTS supports the need for recognising and enabling greater
diversification and recommends this be achieved by allowing diversity to flourish
through the design of the system and funding drivers. Institutional autonomy,
supported by sound governance frameworks that allow the deployment of
resources towards each university’s mission and purpose, should be protected.”– The University of Technology Sydney

IssuesHigher education is likely to need stronger planning and analytical capability, and more collaborative
mechanisms to build complementary and differentiated institutions that, when combined, better
meet the needs of Australian communities and the nation overall.
Currently, Australia’s policy, funding, regulation and use of evidence to guide the evolution of
tertiary education is beset by fragmentation, under-investment and competing interests between
different institutions and agencies. The system has grown in recent years without regard to how or
where institutions operate. In addition, the current system does not have the settings to facilitatealignment between VET and higher education.
This section discusses options to deliver stronger, more adaptable and more responsive governanceand structures to build a coherent national tertiary system. It explores the concept of new public
institutions, and ways to drive a greater level of alignment across the tertiary education system. It
considers how the regulatory frameworks and role of the regulators could potentially operate with a
new governing body. One of the major concepts the Review is considering for a future system is a
new system of national governance, through a proposed Tertiary Education Commission.

3.1.1 Dynamic and responsive institutions
As explored in previous chapters, more learners will need to participate in the tertiary education
system over the course of their lives to obtain the blend of skills, capabilities and knowledge that will
help them prosper and contribute to work and life. At the same time, institutions need to support anincreasingly diverse cohort of learners and take a leading role solving our nation’s biggest challenges.
No single institution or single part of our tertiary system can meet all these objectives on its own.
Only the collective action and contributions of the higher education and VET sectors can ensure wemeet these.

3.1.1.1 The current structure of the higher education sector
Australia’s higher education system has grown over the last 30 years to reflect a range ofinstitutional types and delivery arrangements. However, the sector’s basic structure and direction
has not significantly changed since the 1980’s Dawkins reforms. The system has been left to growwithout a clear plan from governments on what the system should look like, or whether this growth
is a good thing. The Review is considering how to establish a stronger process of planning for
growth, including to avoid ‘university deserts’, particularly where there may be high population
growth but poor access to institutions.
117

Our universities are large and comprehensive, with some approaching student numbers that will seethem among the biggest in the world. While specific missions and contexts differ, many universities
pursue teaching and research activity in relatively similar fields. This ensures students can access arange of courses regardless of the university they choose and is a strength of the sector, but also
entrenches a degree of homogeneity that may drive undesired outcomes.
“[T]here is less diversity in Australia than other OECD countries in terms ofspecialisation e.g. undergraduate-focussed universities, graduate universities,
research-intensive universities, or functionally specialised, as well as no systemic
frameworks that exist.”– University of Western Australia
Diversity in non-university institutions is higher, with clear examples of specialised focus and uniquedelivery, such as music, performing arts and theology. But these institutions operate on a different
basis from public universities, with limited or no access to Commonwealth funding and incompliance with additional regulation and financial requirements. While non-university providers
may benefit from specialised funding opportunities or pursue very distinct missions related to
specific community needs, they may also lack the scale to compete genuinely against larger
universities or to access some of the opportunities arising from demographic and economic change,
despite many delivering high-quality outcomes for students and industry.

3.1.1.2 How strong are our current providers?
The health and performance of the higher education sector is mixed. The COVID-19 pandemic forced
institutions to adapt models of curriculum, pedagogies and education management, and toreconsider the use of online learning platforms to provide engaging learning experience during
lockdown. Digital disruption continues, along with increasing expectations of students and industryof the quality and cost of the education learners are receiving.
While overall performance is strong and many universities show excellent quality and leadership,
this is highly variable at an individual institutional level. Business and organisational models for someproviders may not be sustainable over the next decade, requiring careful consideration about how toadapt and renew them.
The current funding system is also inhibiting universities from specialising, notably in higher-costfields of education and research. While universities are inclined to pursue their mission, theuniformity of their core business models and funding pulls them back to the norm. This isexacerbated by the JRG changes, which reduced overall and per student place resourcing, and by theeffects of funding caps and lower student contributions in some fields. The issues created by crosssubsidisation can drive complexity, opaqueness and perverse outcomes, which further inhibit theoverall diversity of the system and its responsiveness to changing need. These funding issues are
discussed further in Section 3.3.

3.1.1.3 Planning for a new system, and the possibility of new institutions
All institutions will need to evolve over the coming decades; some through rapid innovation andgrowth, while others may do so at a more measured pace, and some may even reduce in scale tosome extent.

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This might require more specialist institutions, or it might see the emergence of clusters ofuniversities working as systems, as organisations respond to changing needs.
Over time this could lead to a more differentiated system, with changes to funding, regulation,
governance and planning that can support a more dynamic and relevant mix of institutional
provision.
“The Accord must embrace the importance of a differentiated system that allows
each university to meet the learning and teaching and research needs of theirlocal community.”– University of Notre Dame
The move to a future system should be carefully managed, with considered planning on where andhow institutions are growing, changing and emerging. Governments should have a considered viewon how the overall system is operating and whether the location, design and operation are meeting
community needs. As a first step this could involve more targeted discussions of the missions ofinstitutions, and considering whether the funding and regulatory frameworks are enabling themissions. It may also involve working closely with the states and territories to identify areas where
new public institutions should be created or looking to new models (such as the RUCs and outer
metropolitan hubs proposed in Section 2.3).
The current exploration of mergers of universities in both South Australia and Western Australia areinteresting opportunities, partly driven by objectives of state governments to capitalise on scale todeliver better outcomes for their jurisdictions. While the outcomes of these processes are still to be
finalised at the time of writing, it has reignited important debate that could lead to stronger stateand national system outcomes.

3.1.1.4 New provider categories
The 2019 changes to the Provider Category Standards (PCS) established clearer categorisation of
institutions, creating a new University College category to reflect the specialist and high-quality
contributions of these institutions, as well as new research requirements for universities. Researchrules require that a university, within ten years of entering the ‘Australian University’ category, must
undertake research at or above benchmark standards in at least three (or 50%) of the fields ofeducation in which it delivers courses.144
The Review considers that the requirements of the PCS may be preventing institutions fromdeveloping stronger identities and diversity. The current research requirements of the University
category will be challenging for some to continue to maintain. Additionally, categories may notreflect the aspiration of some universities which may want to build an identity and advantage asteaching-intensive, research-intensive, or education for the professions-focused. As Australia
contemplates an evolving tertiary education system, serving a growing number of people, there isopportunity to consider these definitions and current activity requirements to reflect a wider mix of
institutions.

144 Higher Education Standards Framework (Threshold Standards) 2021, Part B1.3.16.

1193.1.1.5 Collaborative delivery arrangements
Innovation can also come through collaboration and partnering between institutions, across sectors
and with industry to provide locally relevant pathways that equip students to succeed in their own
communities and in specific industry ecosystems. Various examples of new delivery models exist
across the tertiary education system, with the opportunity for experimentation and collaboration tocreate success at scale.
These include universities jointly offering subjects which would not be viable based on student
numbers at individual institutions, for example in languages other than English or allied health fields.
They also include dual sector universities, other universities and TAFE institutes working together
with industry, unions and other service providers to offer more integrated qualifications andpathways to meet fast-growing areas of skills demand. Section 2.4 discusses how innovative models
of delivery could be supported and shared across the sector assisted by a new office for quality
teaching.
Universities are already effective research collaborators especially when brought together throughgovernment programs such as the ARC Centres of Excellence which foster collaboration for highresearch impact. Building on this collaborative success should be considered.

3.1.1.6 A new National Regional University
The Review is considering new approaches to ensure the sustainable, effective delivery of higher
education in regional, rural and remote Australia. Many challenges regarding the ongoingsustainability of regional universities have been raised with the Review by those universities,
including operating in thin markets, ensuring a range of comprehensive offerings and the importantrole they play in their communities.
The concept of a single national regional university was explored in the Bradley Review, including
recommendations for Government to undertake a feasibility study to assess the merits of such an
institution. If implemented, the regional university considered by the Bradley review would havebeen tasked with delivering accessible, high-quality education to the regions and be a hub for bestpractice provision of higher education for other institutions teaching in the regions.145 To date, nostudy has been conducted to investigate the appropriateness of a single university model forregional areas. The Review considers there is merit taking this work forward, with the potential toestablish a new National Regional University (NRU) which could have regional universities opt in to
become part of the NRU.
The Review is considering the merits of a establishing a National Regional University as a second
national university for Australia.
The Review is considering the views of stakeholders who believe that establishing a NRU as a second
national university, with a distinctive institutional and educational model shaped by Australiangeography, would be an important opportunity to create a planned approach to our nationalregional education footprint. It could support high-quality regional education, offer a growing range
of opportunities to students from regional communities, and deliver excellence in regional research.

145 Bradley et al., Review of Higher Education: Final Report.

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It would have a strong regional voice and through its campuses would retain its important local
community identity.
The NRU would provide substantial and lasting support for underrepresented cohorts and deliver forskills needs in the regions. In addition, an NRU may also represent an opportunity to find academic
synergies and operational efficiencies across existing institutions and to better attract international
students, combining education and research excellence associated with Australian higher education
with a uniquely Australian regional experience.
The concept and design of a new national university would need to be worked through in close
consultation with the Commonwealth, states and territories, regional universities, local communities
and many other stakeholders. International models for such a system exist. One is the University ofCalifornia system which operates as a state-wide institution with central governance accountable tothe state government, but includes ten campuses each with their own local identity and leadershipwith a degree of autonomy (e.g., UC Berkeley, UC Los Angeles, UC Davis).
The Review has also heard from some stakeholders that creating an NRU may not be the best option
to advance the provision of higher education in regional areas. Stakeholders have noted the deep
connections forged between the existing regional universities and their local communities, and thatstudents may prefer a choice of different universities within the regional footprint.

3.1.2 An aligned tertiary system
There is an opportunity to explore bringing together the tertiary education system as a coherent
whole, rather than thinking of higher education and VET as two separate and siloed areas, and for
new and evolving institutions to be shaped by the strongest features of both the higher education
and VET sectors. These systems both provide essential skills and knowledge in their own right andthe Review is exploring whether these systems should be equally valued in funding, regulatory andpolicy settings. In doing so, there are good examples of the benefits that are realised when
institutions collaborate and can operate in both systems.
While efforts over the last decade have sought to drive new partnerships between sectors andimprove the overall status and perceptions of VET, various cross-sectoral barriers remain, and there
is still a lack of shared purpose and direction. Sections 2.2 and 2.3 discuss pathways between higher
education and VET and the role they could play in meeting Australia’s diverse skills needs, improving
access and delivering greater opportunity.

3.1.2.1 A collaborative approach to tertiary education
An aligned tertiary system can only be achieved through collaborative reform across governments,
regulators, employer groups, unions, student groups and education institutions. Reform could focus
on how to meet future need, and must address the separate and inconsistent policy, regulatory andfinancial arrangements that drive cultural differences between sectors and restrict institutional
collaboration and innovation.
“The concept of lifelong learning means that pathways are not always linear.
There are significant numbers of higher education graduates who take up apractical skills-based qualification post attaining their degree. To enhance thismodel, innovation is needed so that students can select from both sectors
simultaneously. Currently, funding, policy and regulation do not make this easy.
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The discussion on connecting the VET and higher education sectors needs to go
beyond pathways and look at the creation of both new qualifications. Incentives
for universities to partner with TAFEs on dual credentials should be encouraged."- TAFE Directors Australia
Achieving this ambition will likely require greater systemic investment and new whole-of-systemgovernance. There are good steps in the right direction already, including work across theCommonwealth and states and territories to establish a new National Skills Agreement.
In facilitating a high performing tertiary education sector, the two sectors need to operate on equal
footing as part of a whole of tertiary system. The Review recognises there are significant structural
settings that would need to be adjusted to achieve this. Current frameworks that govern skills andthe arrangements for funding and pricing can create the impression that vocational education is the‘lesser sibling’ to higher education, despite the fact that it contributes to skills that are equallyimportant for society.
Initially, a more aligned system could involve focussing policy efforts on occupations that span both
higher education and VET qualifications. Similarly, barriers to recognition between the sectors and alack of information to help students make good decisions could be addressed through expanding
current digital platforms to include both higher education and VET, including building a centralised
tertiary digital solution, such as a national skills passport, to support learners to build, maintain andshare their credentials.
There is an opportunity to deepen and leverage the capability of JSA and the Jobs and Skills Councils
to support a more systematic approach to industry engagement across the tertiary education sector,
and to identify areas of critical skills need to support innovative delivery through dual or cross sector
models.
“It is a truism that lifelong learning is essential for the people of an innovative
country. Lifelong learning does not necessarily comprise a multi-year plan ofcontinuous and linked courses. Programs of short courses and microcredentialling, whether through universities or TAFE, can be extremely valuable.”– Graduate Women NSW

3.1.2.2 The Australian Qualifications Framework
As highlighted in Section 2.2, AQF reform could be a critical element of a new tertiary education
system. The 2019 AQF Review, chaired by the late Professor Peter Noonan, aimed to give greater
recognition to skills alongside knowledge, establish clear and rigorous standards for qualificationlevels and enable the higher education and VET sectors to design fit-for-purpose qualifications.
These reforms, particularly those to improve the recognition of skills in the AQF architecture andtaxonomy, would ensure that both higher education and VET are equally recognised and valued, andthat providers are supported in creating innovative and integrated qualifications.
Work is ongoing to support the consideration of recommendations, including engaging withstakeholders to establish agreement on more complex recommendations, that could impact
international or industrial settings.

1223.1.2.3 Aligning funding settings across the tertiary system
Funding settings across higher education and VET do not currently enable fair and consistent pricing.
There are funding inconsistencies across sectors and jurisdictions that create unequal opportunities
and continue to reduce the status of VET. In many cases, VET students have to meet the full costs of
their education and training upfront, unless governments subsidise delivery, for instance throughthe Fee-Free TAFE and vocational education places. The Productivity Commission has suggested thatfunding disparities push students to choose a sector less suited to them and reinforce perceptions of
VET as a lesser educational pathway.146

3.1.3 A modern approach to regulation
Improving the autonomy, flexibility and innovation of institutions can only be achieved by a modern
regulatory architecture focused on excellence, quality and outcomes. This architecture needs toalign across sectors better to reduce unnecessary duplication and burden and to ensure that
performance issues do not slip through the various boundaries of responsibility. Currently, providers
across different parts of the tertiary education sector face multiple and differing regulatory
requirements and obligations. Dual-sector providers in particular are subject to both TEQSA and theAustralian Skills Quality Authority (ASQA) regulations (or state-based regulations if based in Western
Australia and Victoria).
“The fragmentation, complexity and sluggishness of the wider systems ofaccreditation, funding and regulation currently stand in the way of developing
more innovative, relevant and cost-effective tertiary education activities”– Australia’s Dual Sector Universities

3.1.3.1 The Tertiary Education Quality and Standards Agency
The establishment of TEQSA has been a significant achievement in Australian higher education. It,
along with ASQA, plays a critical quality assurance role to maintain the quality and international
standing of Australia’s tertiary education system.
The Review has heard concerns that TEQSA’s current compliance-based approach could betterreflect its legislative principles of regulation of necessity, risk and proportionality. Current
requirements around registration and accreditation processes risk slowing responsiveness ofinstitutions, particularly non-self-accrediting institutions which are subjected to increased
regulation.
The Review is aware TEQSA is currently moving towards a prudential regulatory approach, to tier its
assurance and reporting requirements according to provider risk. This will better differentiate theregulatory intensity required for different providers and in some cases reduce the regulatoryburden. It may also lead to a shift from a focus on meeting threshold standards to exceeding
standards for excellence.

3.1.3.2 Towards a new regulatory environment
Institutions face multiple and differing regulatory requirements, including from TEQSA, ASQA,
professional accreditation bodies and government agencies. The intersection between TEQSA and
AQSA is critical, and many submissions called for greater convergence between agencies.

146 Productivity Commission, 5-Year Productivity Inquiry: Advancing Prosperity. Recommendations and Reform Directives.

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“While the delivery and assessment of qualifications differ between higher
education and skills training, there remain common governance andadministrative obligations that both agencies seek to regulate. The result is a
duplication of regulatory processes and a red tape burden for dual sector
providers.”– Independent Tertiary Education Council of Australia
There are multiple areas of duplication in regulatory and reporting requirements, including financial
management, student information and grievance complaints.147 This administrative burden may
have contributed to the decline in dual sector providers across the last 10 years.
Under a new vision of the tertiary education system, the roles of TEQSA and ASQA as parallel
regulators could be reassessed. Shorter term actions to alleviate this burden may include aligning
reporting in areas such as corporate governance and accountability, facilities and infrastructure,
student complaints, staffing and student information. More fundamental changes to regulatory
structures could be considered in the longer term.
There are a range of considerations to this, however. The Review notes opportunities to trial
streamlined arrangements for dual sector higher education providers and selected TAFEs whichmeet minimum thresholds, in their VET operations. This could mean dual sector providers need only
be registered with only one regulatory agency, or for a system of automatic reciprocal registration. It
could also mean moving towards self-accreditation for VET curriculum, possibly beginning with atrial of dual-sector universities which already self-accredit their course content for higher education.
Substantive reforms are likely to require changes to the threshold standards and legislation.
“Having to deal with two separate regulators with separate compliancerequirements, rules, processes and auditing approaches means the goal of amore integrated system is unnecessarily complicated and impeded.”– Central Queensland University

3.1.4 National leadership for a new system
Australia needs new leadership for the national tertiary education system as an interconnected
whole.
The Review is considering the benefits of the establishment of a Tertiary Education Commission,
charged with overseeing the development of a fit-for-purpose tertiary system and operatingwith a degree of independence from Government.
A national body purposefully convened for sector oversight would possess the expertise andauthority to drive the strategic direction of tertiary education, guiding institutions as they navigate
the complex and evolving education landscape.

147 Independent Tertiary Education Commission Australia (ITECA) Submission to the Australian Universities Accord

Discussion Paper, 2023; TAFE Directors Australia (TDA), Submission to the Australian Universities Accord Discussion Paper,
2023.

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Similar models have successfully shaped periods of change in the sector in the past, including
the Universities Commission which was central to delivering the post war reconstruction agenda in
the 1940s and 1950s, and its successor body, the Commonwealth Tertiary Education Commission of
the 1970s and 1980s.148

Case study: The former Commonwealth Tertiary Education Commission(CTEC)
Following a period of strong sector growth in the late 1960s and early 1970s, in 1977 theAustralian Universities Commission and the Australian Commission on Advanced Education
were replaced with the Tertiary Education Commission, later becoming the CTEC. CTEC wasinternal to government, yet partly independent of the minister of the day. It both provided
advice to the minister and undertook some administrative functions directly.
The objects of CTEC were to promote:• the balanced and coordinated development of tertiary education in Australia• the diversifying of opportunities for tertiary education• closer cooperation and association between the various kinds of tertiary institution.
TAFEs were included in the merged body allowing one organisation to coordinate funding for all
post school education, prevent duplication and improve consultation with the states. CTEC
aimed to promote the balanced development of the whole sector and better consider theinteractions between the sub-sectors.149

3.1.4.1 What would a new body achieve?
The core function of the Tertiary Education Commission would be to promote long-term strategic
thinking across the tertiary education sector. This would include advising Government on policy
reform and implementation, coordinating and negotiating activities with institutions in line withnational priorities, and tracking domestic and international trends.
“The role of the Commission, in general terms, would be to provide long term,
coordinated, and expert advice to government on higher education policy
matters. This would ensure that the tertiary education sector is established andmaintained as a seamless sector, responsive to the changing needs of theAustralian community and economy and with a continuity of approach acrosselectoral cycles.”– The Group of Eight
Another key role for the Tertiary Education Commission could be to support the Accord. The ongoing
and multidecadal nature of the Accord is likely to require a body with a mandate of stability andlongevity, and the capacity to undertake expert analysis on the changing needs of the sector andsociety. This includes independently monitoring progress against mutually agreed upon deliverables
such as attainment targets and progress towards a more equitable system.

148 K Jackson, Higher Education Funding Policy [PDF], Parliament of Australia website, 2003, accessed 8 June 2023.
149 HR Hudson, Review of the Structure of the Commonwealth Tertiary Education Commission and Arrangements for

Coordination and Consultation with States and Institutions, Australian Government Publishing Service, 1985, accessed 8
June 2023.

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By drawing together higher education policy experts and sectoral representatives, the Tertiary
Education Commission could establish buy-in to the Accord’s reforms among the many different
types of institutions and diverse stakeholders, leveraging the collective resources of the sector todrive better outcomes. The Tertiary Education Commission would also need to work closely with,among others, state education and training departments, JSA, TEQSA, ASQA, professional
accreditation and industry bodies, and various funding bodies and government departments.
Additional responsibilities of the Tertiary Education Commission could include determining funding
allocations, including through the negotiation of mission-based compacts with universities. In doing
so, the Tertiary Education Commission would be uniquely placed to consider the role which each
institution can play within the national system.
“[The Tertiary Education Commission] should facilitate better coordination andconsistency across the system at the same time as ensuring universities andother higher education providers maintain autonomy over their operations, as
this underpins their capacity to deliver quality teaching and research.”– Associate Professor Gwilym Croucher and Professor Vin Massaro, Melbourne
Centre for the Study of Higher Education
There are regulatory, financial, structural and historic reasons for the shape of Australia’s higher
education sector. Greater diversity and innovation in institutions is unlikely to emerge without
proactive government intervention. The Tertiary Education Commission could provide the strategic
leadership and coordination needed to develop a more dynamic and responsive system.
A new governing body could fulfil a number of critical functions, many of which are not part of thecurrent system, in particular focusing on the operation of the system, assessing its ability to meet
new targets and priorities and planning for how the structure of the sector should be evolving andchanging (including where new institutions may be needed).
Under the aegis of the Tertiary Education Commission a new First Nations Higher Education Council
could give voice to the needs, aspirations and know-how of community and lead a self-determined
approach to funding and policy settings in relation to First Nations students, employment, teaching,research and engagement. This approach, mirrored within individual universities, would allow
funding and policy settings relating to First Nations students and research to be led by First Nations
staff and communities, as is the case in some institutions today, and see that each institution
engages with First Nations communities in their local area.
This Council would oversee a First Nations-led review of access, participation and outcomes for First
Nations students and Frist Nations staff, research, teaching, use of First Nations knowledges, andFirst Nations governance and leadership within universities.
Leadership structures could include specific roles such as an equity commissioner and a regional
commissioner to share best practice and focus institutional efforts. Consideration of the relationshipwith the ARC would also be needed. The Review notes a Tertiary Education Commission would
require sufficient resources to deliver on its responsibilities and operate effectively in conjunction
with government and responsible ministers.

126Considerations for change
To create an adaptable and responsive higher education system that is increasingly aligned andconnected in a broader tertiary system, and which meets the evolving needs of students, industry
and the nation, the Review will continue to give consideration to the following policy areas:a. the benefits of establishing a new national body, a Tertiary Education Commission, working with
the Minister and Department, which could:i.
be based on the principles of independence and expert decision-making to provide
oversight, coordination and expert advice to the higher education sectorii.
lead relevant analysis, including with other agencies, to provide advice to government
on policy and funding settings to enhance student, teaching and research outcomesiii.
function as a pricing authority for Commonwealth higher education funding for the
purposes of a potential student-centred, needs-based funding modeliv.
negotiate new mission-based compacts with institutions to deliver against local, regionaland national priorities and needsv.
over time, and in partnership with the states and territories, be expanded from higher
education to encompass the whole tertiary education system to pursue greater
opportunities for alignment and collaboration between the higher education and VET
sectors.
b. how to facilitate and encourage change and evolution in the type, diversity, size and number of
tertiary education institutions, including:i.
the merits of a new National Regional University as Australia’s second national universityii.
encouraging and incentivising new models of delivery and collaboration to increase
tertiary education and research provision, particularly in regional and under-serviced
areas
iii.
facilitating the emergence of institutions specialising to a greater or lesser extent inteaching or research.
c. ensuring tertiary education regulation, including the role of TEQSA, enables innovation in thetertiary education systemd. continually working towards an aligned tertiary education system, including encouraging parityof esteem between the VET and higher education sectors.

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Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:
A Tertiary Education Commission:a. would be responsible for planning and tracking progress towards increased participationand meeting skills needs
b. would provide ongoing advice on changes and trends affecting the future of the higher
education systemc. could consider opportunities and the desirability of future structural adjustment, including
the size, location and need for new institutions
d. could protect and promote student voices, in light of the new, student-focussed vision forthe sector, including the role for a new Equity Commissioner
e. create an arms-length research centre of excellence in higher education and research, tostudy and research the sector itself in the international context. The research centre should
be awarded in response to a competitive callf. deliver on the promise of the Accord, monitor progress against the mutually agreed
deliverables and work with the Minister and Department of Education to broker the
evolving agreement as part of an ongoing Accord process.
Structural change across the tertiary sector:
a. supporting recommendations following feasibility investigations of provider mergers inSouth Australia and Western Australiab. exploring revisions to the Provider Category Standards, to remove the requirement that all
universities will carry out research. This should offer the system more flexibility andencourage institutions to diversify, innovate and specialisec. encouraging significant administrative efficiencies through collaborative frameworks
d. incentivising collaboration between institutions to reinforce research collaboration andestablish new and innovative service offerings and education models for students to study
across multiple institutions.
Higher education and VET moving towards an aligned tertiary education system:a. articulating an agreed national vision for the future of Australia’s tertiary education systemand committing to collaborative reform with institutions, unions and industry groups, toachieve parity of esteem for VET, and consistency in funding and regulatory architectureb. exploring new Commonwealth higher education financing arrangements including throughconsistent pricing, loan arrangements, credentialing and shared VET/HE provisionc. piloting self-accrediting for dual sector higher education providers, and selected TAFEs whomeet minimum thresholds, in their VET operations.
Ensuring regulatory frameworks can meet future objectives and challenges:
a. reviewing the TEQSA Act to ensure the agency is fit for purpose in light of other changes inthis Review
b. improving coordination of regulatory functions between TEQSA and ASQA including
potential sharing or referral of powers between regulators.

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3.2: Institutional and collaborative governance“The make-up of university boards and councils inform organisational cultures
and there needs to be improvements in terms of member compositions andexperiences."– National Tertiary Education Union

IssuesHigher education institutions have grown into increasingly complex organisations, managing
significant assets and large numbers of staff and students. Effective governance is essential for
promoting positive institutional cultures and ensuring that each institution has the ongoingcapability to deliver on its strategic vision, but the Review has heard that institutions may not beadequately engaging with some very serious issues within their remit.
Despite the best efforts of many institutions to address them, systemic issues persist across thehigher education sector, including widespread underpayment of staff, suggesting governancearrangements could be improved. Sexual assault and harassment on campus is affecting thewellbeing of students and staff, and their ability to succeed.
This section outlines considerations to help strengthen institutional governance structures and foruniversities to be exemplary employers. It explores the benefits of a potential student charter, codesigned with students, to ensure a national commitment to student safety, wellbeing andempowerment.

3.2.1 Strengthening institutional governance structures
Each Australian university has a governing body, generally called a Council, Board or Senate, which
varies in size (approximately 10 to 25 members). The role of this body is to ensure effective
governance and oversight of management. The composition and functioning of these bodies are set
out in universities’ enabling legislation.
State and territory governments and the Commonwealth have a joint obligation to ensure good
governance at universities. As part of their obligations under the Higher Education Standards
Framework (Threshold Standards) 2021, institutions are required to have a governing body that is“accountable for all of the higher education providers’ operations.” University Councils also haverelevant governance obligations under other legislative arrangements.150 Issues of wage theft,casualisation and student safety illustrate that these accountability requirements do not always
translate into effective oversight and support for staff and students, and that this is a systemic
challenge.
While the Australian Government has legislative responsibility for the regulation and quality of thesector, universities are constituted by individual enabling Acts in the relevant jurisdiction. Thismeans that most University Councils are appointed under state or territory legislation, except for theAustralian National University. States and territories have a significant role to play in ensuring
University Councils are appointed with the right mix of skills.

150 University Chancellors Council (UCC), University Governance in Australia, UCC website, n.d., accessed 13 June 2023.

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Over the last two decades there has been a particular emphasis on appointing people with businessexpertise to councils. Business expertise must be balanced by council members who deeply
understand the functions of universities, including learning and teaching, research and management.
Council members should also reflect the communities that universities serve, including
representation from First Nations people. The voice of First Nations people should be present at
every level of institutions, in the student body, staff, senior leadership and on governing bodies.
“We believe it is time to move from these inclusion approaches to selfdetermination, and educational sovereignty through Indigenous leadership andgovernance. … Now is the time to develop mechanisms whereby Indigenous
peoples have a direct role in decision making and governance. The Voice provides
a potential foundation to move beyond consultation frameworks to embrace
Indigenous Governance across universities, industry, and government.”– Western Sydney University Indigenous Professoriate
Over the last 30 years, university Acts have been amended by the relevant governments as they seek
to decrease size of councils and strengthen the skills mix of members.151 Many of these changes
resulted in smaller councils with more business expertise on them. A further development was the
Universities Australia Voluntary Code of Best Practice for the Governance of Australian Public
Universities that came into effect in 2010. It could be time for this Code to be revised andstrengthened.
While these changes have been welcomed, there are concerning issues of staff and student
wellbeing, including student safety on campus and staff underpayment, that need urgent attention
from university governing bodies and from governments. The Review will continue to consider whatchanges may be needed to ensure student and staff safety. However, there is a clear need for
immediate action from governments and from the sector.

Immediate action:
Through National Cabinet, immediately engage with state and territory governments anduniversities to improve university governance, particularly focusing on:• universities being good employers• student and staff safety• membership of governing bodies, including ensuring additional involvement of people withexpertise in the business of universities.

3.2.2 Universities as good employers
The higher education sector requires a highly-skilled workforce and to attract the best local andglobal talent. Staff deserve a strong institutional culture and governance structures which engage
them in decision-making processes, and which prioritise their wellbeing.
Some submissions to the Review raised concerns around psychosocial stress in higher education
workplaces. It is critical that workplace conditions, including employment security, workload,

151 E Chan, Legislative Changes Affecting the Governance of Australian Universities [PDF], UCC, 2018, accessed 20 June

2023.

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remuneration, appropriate funding for core activities, and engagement with staff, support
psychosocial and physical safety.
Widely reported occurrences of staff underpayment by universities are damaging public confidence
in the sector. The Fair Work Ombudsman (FWO) named 11 universities under investigation in August2022152 and has identified the sector as a priority area for compliance and enforcement in 202223.153
The FWO highlighted “trends of poor governance and management oversight, and a lack ofcentralised human resources functions and investment in payroll and time-recording systems.”154
Large-scale wage underpayment is a clear failure of institutional governance and management, forwhich councils are ultimately accountable. Complex industrial agreements and government policy
and funding arrangements have contributed to the issue,155 however, institutions have an obligation
to ensure appropriate governance settings and frameworks to avoid these circumstances emerging.
This includes implementing updates and changes to workforce system architecture – such as payroll
and time recording systems. Staff underpayment must be addressed urgently. The Accord will
provide an opportunity for staff, governments and institutions to work together to address thisissue.

3.2.2.1 Workplace arrangements need to value staff
The Review has heard that current workforce arrangements are affecting the ability of staff todeliver high quality teaching and research. These arrangements should be examined to consider
whether staff workloads and the use of fixed term and casual arrangements are appropriate. Thereneeds to be appropriate investment in the teaching and research workforce pipeline to attract andretain talented staff into higher education.
Rigid workload arrangements that mandate a set ratio between teaching, research, scholarship andmanagement workloads can impede the ability of those who excel in one field to gain promotion
and affect the ability of institutions to attract and retain these people. In addition, casual staffing
arrangements are arguably being overly relied upon to deliver teaching. As many more students
come into the system, many more teachers will be needed to help them learn.
The Review is considering what more can be done to provide professional development
opportunities to ensure academics are adequately prepared and supported in all their roles —teaching, research, community service, and management.
“...rolling short term or continued casual contracts do not provide the required
stability and investment in careers that are needed to ensure a highly capableand engaged higher education workforce.”– Association for Tertiary Education Management
A significant part of this challenge is that the teaching workforce is highly casualised. In 2020, 21% of
all academic roles were engaged on a casual basis (full time equivalent [FTE] basis). Casualisation isconcentrated among teaching-only staff, with 69% of these roles engaged on a casual basis. Casual
152 T Dodd, ‘Fair Work Ombudsman investigating over a dozen universities’, The Australian, 11 August 2022, accessed 9

June 2023.
153 FWO, FWO announces 2022-23 priorities [media release], FWO, 22 June 2022, accessed 9 June 2023.
154 FWO, FWO announces 2022-23 priorities.
155 M Gardner, ‘Workplace relations and insecure employment in Australian universities’, Lens, 7 June 2023, accessed 26
June 2023.

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academic staff are also more likely to be at the beginning of their career: in 2020, over 69% of
academic casual FTE staff were engaged at below lecturer Level A classification (compared to around
16% of full time and fractional full time FTE).156
The use of casual employment arrangements is not in itself a bad thing. There are times when shortterm casual arrangements suit all parties well, for example notable professionals giving tutorials intheir disciplines. However, the significant use of casual staff in junior teaching roles is of concern,
especially as some staff report being repeatedly employed on casual contracts. This can have longterm effects on career progression because casual staff engaged to teach generally are not paid toundertake and publish research early in their careers.

3.2.3 Institutions have duty of care to students
As all higher education institutions acknowledge, students are at the centre of the mission of higher
education. Institutions have an obligation to students to foster belonging, social inclusion andcohesion within the institution and broader community. However, the Review has heard significant
issues of student safety on campus, mental health and a lack of culturally safe spaces continue tocorrode relationships between students and their institutions.
The Review is exploring ways to evolve institutional cultures so they can reflect and welcome anincreasingly diverse student body, including First Nations students. This would mean that all
institutions must not only be inclusive, but also culturally safe.
“Indigenous students have much better outcomes when they feel well supported
in their learning journey while being in an environment that understands theobligations of culture, family and community.”– University of Melbourne Submission on Indigenous Higher Education
Student bodies make a significant contribution to the culture of institutions. Student unions, student
clubs, student-led events and other programs help to foster a vibrant campus life, with benefits forsocial inclusion and students’ sense of belonging. Student unions also provide services to students
including advocacy, legal, financial and wellbeing support.
A major source of funding for student unions is the Student Services and Amenities Fee (SSAF).
Generally, the distribution of the SSAF to student unions and organisation is at the discretion ofuniversities, which consult with students in allocating funds. Under the Student Services, Amenities,
Representation and Advocacy Guidelines, universities are required to have a formal process of
consultation with democratically elected student representatives and representatives from major
student organisations at the university regarding the specific uses of the SSAF.
Student groups have written to the Review that “these negotiations create an unequal power
dynamic that limits student organisations’ autonomy in holding universities accountable” as it “limits
the advocacy of these organisations in fear of financial retaliation”.157

156 Department of Education, ‘Staff Pivot Table’ Selected Higher Education Statistics – 2021 Staff Data [data set],education.gov.au, 2022, accessed 13 June 2023.
157 The National Union of Students (NUS), Submission to the Australian Universities Accord Discussion Paper, 2023; Councilof Australian Postgraduate Associations (CAPA), Submission to the Australian Universities Accord Terms of Reference, 2022.

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The Review is examining what more could be done to support how the SSAF is directed, including tostudents.

3.2.3.1 Supporting mental health and wellbeing
The COVID-19 pandemic had a significant impact on the social and cultural life of institutions. Social
distancing restrictions led to a shift towards online learning, resulting in students having fewer
opportunities to build connections with their peers and staff.158 The 2020 QILT Student Experience
Survey found that students “reported their sense of belonging was lower with a decline of 11
percentage points compared with 2019”.159 First-year students were particularly affected,
experiencing “lower university belonging and higher loneliness during the pandemic [that] wasdetrimental to their mental health.”160
The Review has heard significant concerns regarding declining student mental health, and theadverse impact this can have on their higher education experience. This not only directly reduces
wellbeing but can increase the likelihood of a student exiting their course early.
“One of the biggest challenges to sustainable participation is to address the very
high burden of mental ill health especially amongst young people in universities.
Indeed, university students are considered a very high-risk population for
psychological distress and mental disorders, with both prevalence and severity ofpoor mental health rising with student populations worldwide.”– University of Tasmania

3.2.3.2 Addressing harmStudents must feel safe on campus. The 2021 National Student Safety Survey found that since
starting university, 16.1% of participating students had been sexually harassed, and 4.5% had beensexually assaulted.161 The Review heard that existing approaches to reduce the incidence of sexual
harassment and sexual assault on university campuses are inadequate, with some stakeholders
advocating for increased transparency, monitoring and accountability mechanisms.
The impacts of sexual violence on a student’s educational experience and outcomes can bedevastating. Students who have been sexually assaulted experience elevated rates of post-traumaticstress disorder and clinically significant depression and anxiety, resulting in higher rates of
nonattendance, delayed academic progression and higher academic failure rates.162

158 GA Dingle, R Han and M Carlyle, ‘Loneliness, Belonging, and Mental Health in Australian University Students Pre- andPost-COVID-19’, Behaviour Change, 2022, 39(3):146-156, doi:10.1017/bec.2022.6.
159 Quality Indicators for Teaching and Learning (QILT), 2020 Student Experience Survey National Report, QILT, 2021,
accessed 9 June 2023.
160 Dingle et al., ‘Loneliness, Belonging, and Mental Health in Australian University Students Pre- and Post-COVID-19’.
161 W Heywood, P Myers, A Powell, G Meikle and D Nguyen, National Student Safety Survey: Report on the prevalence ofsexual harassment and sexual assault among university students in 2021, The Social Research Centre, 2022, accessed 13
June 2023.
162 TD Molstad, JM Weinhardt and R Jones, 'Sexual assault as a contributor to academic outcomes in university: A
systematic review' Trauma, Violence, & Abuse, 2023, (24)1:218-230, doi:10.1177/15248380211030247.

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“Stakeholders interviewed for my doctoral research acknowledged that theThreshold Standards were a high-level regulatory framework which did not
mention sexual assault or sexual harassment but had been employed to addressa very specific and specialised area of concern; that TEQSA does not possess
expertise in sexual violence; and that the agency has been inadequately
resourced to lead this work. Nonetheless they were frustrated and disappointed
by what they perceived as ineffective enforcement of the available Standards
through these regulatory mechanisms.”– Allison Henry, PhD candidate, Australian Human Rights Institute, Faculty of Law& Justice, UNSW Sydney

3.2.3.3 The international student experience
International students can face a range of significant pressures as they adjust to living and studyingin Australia. This can include social isolation and financial hardship, noting international students
incur additional costs compared to domestic students, and are more vulnerable to workplace
exploitation by unscrupulous employers.
The Review is examining the role of universities in providing information to international students,
so they are informed of their rights and protections under Australian law, and whether this requires
significant enhancement. For example, the Assurance Protocol is an agreement between the
Department of Home Affairs and the FWO which provides support to student visa holders who
approach the FWO for help. This provides a safety mechanism for students or employees to raiseissues of workplace exploitation without the risk of it leading to their visa being cancelled, even if
the issues have caused a breach of their visa conditions.163“International students are exposed to the threat of their visa being cancelled,because, in part, they have had limits on the hours they are allowed to work.
Some employers take advantage of this, by locking those students into working
for below minimum pay or working additional hours without pay.”– Sydney University Postgraduate Representative Association
International students are also sometimes subject to discrimination and unwelcoming attitudes in
the Australian community. Together, governments and institutions must actively combat instancesof discrimination and promote the positive contributions international education makes to Australia.

163 FWO, Visa protections – the Assurance Protocol, FWO website, n.d., accessed 13 June 2023.

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Figure 3.2-1: Quality of entire educational experience by domestic and international students, 2012 to 2022.

Source: QILT, Student Experience Survey [data set], 2012-2022, accessed 26 June 2023.

Stakeholders also raised concerns that international students face cost and cultural barriers toaccessing mental health support.
“International students often have to pay upwards of $200 for a single session
with a psychologist, psychiatrist or counsellor. Many international students who
contact SUPRA are struggling with mental health difficulties or are in crisis. And
many of them are unable to afford appropriate treatment or care due to the
exorbitant costs of mental health support. While there are some low cost or
sliding scale mental health services, there are even fewer that are multilingual, or
who provide ongoing medium or long term support; resulting in students arehaving to choose between paying for mental health support and food, rent orother essentials.”– Sydney University Postgraduate Representative Association

Case study: International Student Legal Service NSW
There are examples of services that are helping to support positive international student
experience. The Redfern Legal Centre provides free and confidential legal advice tointernational students studying in NSW through the International Student Legal Service NSW.
Through this service, international students are able to speak to a solicitor for advice on avariety of issues including housing problems, employment, sexual assault and sexual
harassment, fines, debts, car accidents, discrimination, and complaints about colleges oruniversities.
The service is funded by Study NSW, which was established by the NSW Government to support
international students in NSW.164

164 Redfern Legal Centre, International Student Legal Service NSW, Redfern Legal Centre website, n.d., accessed 13 June

2023.

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3.2.4 Enhancing and empowering the student voice
In meeting with the Review, student groups highlighted a power imbalance between students andinfluential stakeholders such as universities, peak bodies, government, and industry.
“Students are the primary stakeholders in education and students are the experts
at being students. There is significant distrust towards universities and a real
power imbalance exists between our two groups.”– National Union of Students
Although the Higher Education Standards Framework (Threshold Standards) 2021 requires
institutions to have mechanisms to address student complaints, the Review heard that options foraddressing student complaints, particularly appeals procedures, are complex, slow, and can be
unclear to students, especially those under stress.
The Productivity Commission has noted “there are few powerful avenues for complaints byuniversity students,” especially regarding teaching quality.165 These challenges are amplified forsome groups of students who face additional barriers to resolving complaints, such as students withdisability,166 and students enrolled in joint degree programs who “can be bounced back and forth
between institutions with each claiming the other institution is responsible for resolving thesituation”. 167
Students require a stronger voice in governance and decision-making and need to be able to holdinstitutions to account if they are dissatisfied. Stakeholder suggestions to achieve this include
establishing a Higher Education Student Ombudsman to streamline student complaints andgrievances.168
Institutions have a clear social obligation to ensure campuses are safe, welcoming and inclusive
spaces for all domestic and international students. There could be stronger partnerships between
institutions and their student bodies to address their concerns and to provide tailored support toensure students have everything they need to succeed.
In New Zealand, this has been the focus of a student charter, implemented in 2021. This is a model
which Australia could look to adopt in future.

165 Productivity Commission, 5-year Productivity Inquiry: From learning to growth.
166 NUS, Australian Law Students’ Association (ALSA) and Australian Medical Students’ Association (AMSA), Disability &Higher Education in Australia [PDF], NUS, ALSA and AMSA, 2022, accessed 9 June 2023.
167 Monash Graduate Association Inc, Submission to the Australian Universities Accord Discussion Paper, 2023.
168 National Tertiary Education Union (NTEU), Submission to the Australian Universities Accord Discussion Paper, 2023.

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Case study: New Zealand Code of PracticeIn 2021 the New Zealand Government introduced the Education (Pastoral Care of Tertiary andInternational Learners) Code of Practice 2021 (the Code), which formally recognises students as
stakeholders by outlining universities’ obligations to them.169 The Code supports the wellbeing
and safety of students by outlining requirements providers must meet, including considerations
for physical and mental health support, safe and inclusive physical and digital environments,
responding to complaints, and additional wellbeing and safety practices for tertiary student
accommodation and for international learners. The code was developed with input fromstudents, with the then-National President of the New Zealand Union of Students’ Associations
saying that “it is heartening that the Ministry of Education listened to the submissions ofstudents and has strengthened their voice throughout the Code.”170

Considerations for change
To make universities better places to study and work, to ensure more effective governance and tosupport institutions working with students, staff and governments, the Review will continue to giveconsideration to the following policy areas:a. improving student wellbeing and safety, including empowering students on matters that affectthemb. improving operational practices and supporting governing bodies to improve their effectivenessc. enhancing wellbeing for staff, and appropriate workforce arrangements
d. ensuring higher education institutions develop appropriate governance frameworks to avoid
underpayment of staff
e. through an ongoing Accord process, bringing together staff, unions, institutions andgovernments to consider policy settings, awards and institutional workforce structures
f. providing explicit support for tutors, research trainees and others on the boundary between
student and staff status, and enhancing career stability for early career academic staff
g. considering improvements to the Voluntary Code of Best Practice for the Governance ofAustralian Public Universities and council composition to recognise the importance of expertiseand leadership in teaching and researchh. examining whether current reporting arrangements demonstrate effective and efficient use ofgovernment funds by higher education institutions
i. considering development of a national student charter to ensure a consistent national approachto the welfare, safety and wellbeing of all students.

169 Ministry of Education, New Zealand Education (Pastoral Care of Tertiary and International Learners) Code of Practice2021, accessed 7 June 2023.
170 New Zealand Union of Students’ Associations (NZUSA), ‘NZUSA Welcomes New Learner Wellbeing And Safety Code’[media release], Scoop Independent News, 16 July 2021, accessed 9 June 2023.

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Potential proposals the Review may also consider for the Final Report, and that reflect
the broad themes outlined above, include:
Improving the operations of governing bodies:a.

adopting a national code of practice and governance for university councils, coupled withenhanced public reporting.

Improving student wellbeing and accountability:
a.

b.
c.
d.
e.

developing a national student charter, in collaboration with domestic and international
students, ensuring a national commitment and consistent approach to the welfare,safety and wellbeing of all students
creating new structures and empower existing ones for students to advocate for theirinterests in institutional and national-level decision making
embedding First Nations culture, knowledge and success in all aspects of university
operations
strengthening the role for the Commonwealth Ombudsman in student complaints, forboth international and domestic students
providing a greater percentage of the Student Services and Amenities Fee to student
unions to ensure the support and representation of students.

Improving workforce arrangements to enhance staff safety and wellbeing:f.

ensuring institutions and providers are meeting their obligations to staff and operate as
exemplary employers
g. institutions improving professional development opportunities for staff to help staff gain
and develop skills in teaching, research and management, with a focus on increasing thenumber of First Nations researchers and leaders in universities
h. boosting the capability of Australia’s research workforce capacity by:iii

supporting post-doctoral staff for their future careers whether in the sector or
beyondproviding significant professional development for the academic workforce inresearch skills.

1383.3: Sustainable funding and financing“To maximise the value universities can provide as part of a strong postsecondary system, we need policy and funding settings that recognisethat university education and research make our nation stronger.”– Universities Australia

Issues
The success of the Australian higher education system relies on a secure, enduring and sustainablefunding system. The funding system must ensure that Australia produces the graduates it needs inthe fields and geographical locations they are most needed, while also ensuring equity ofopportunity to benefit from an education that transforms lives and communities. The system must
provide for universities to receive sufficient funding to enable their ongoing financial health andcontinued high-quality delivery, and also that students are treated fairly and not left withunreasonable debts.
The Review has heard significant concerns regarding the current funding system, in particular the
implementation of the JRG package, cross-subsidisation, a reliance on volatile revenue sources, andsystem transparency. As such, the Review is examining whether this system is fit-for-purpose and if
it requires redesign.
This section explores issues with the current funding system, focusing on funding to support learningand teaching and funding for infrastructure, with aspects of the funding for research covered in
Section 2.7.

3.3.1 Guiding principles for a new funding model
The funding and financing arrangements of the higher education sector are essential for achieving
the ambitions elicited in the preceding chapters. The current funding system has evolved rapidly toreflect a patchwork of narrow and competing objectives that, taken together, undermine thesystem. The Review has consistently emphasised that a framework of strong values and principles
must underpin a future higher education funding system.
Based on the Review’s discussions and feedback to date, these could include:• the funding system supports participation and meeting the knowledge creation, education andskills needs of the country• the higher education funding system must be simple, fair, transparent, secure and enduring• the cost of university activities (teaching, research and community engagement) should be
accurately measured and made transparent• the higher education system can be considered as a system with some priorities fundedcollectively• the government provides funds for education and research separately, with funding aligned withthe measured cost of that activity as well as with targeted outcomes over time
• universities receive sufficient funding to produce world-class education and research and to beeffective contributors to their communities• institutions have the resources required to commission and maintain infrastructure to support
the delivery of high-quality education and research• both collaboration and competition mechanisms are features of the funding system139• institutions are free to use their own funds as they see fit, given legislative requirements are met
and spending is guided by the strategic plan of the institution• reflecting the benefits that arise from higher education, funding comes from both public andprivate sources• students’ contributions to higher education are underpinned by the continued operation of a fairand sustainable ICL scheme, which does not unnecessarily burden people• if a student is admitted into a course and willing to take on the student contribution, they will
receive government support, which reflects the individual circumstances of the institution and its
student cohorts, acknowledging that some students, particularly those from underrepresented
backgrounds, require more support than others• direct public research funding is predominantly provided through both the NationallyCompetitive Grants and research block grant mechanisms• Nationally Competitive Grants cover the cost of undertaking these projects• research training funding mechanisms encourage and incentivise a larger domestic HDR cohort tobuild the advanced skills base particularly in areas of skills need• students, including HDR students and postgraduate coursework students, should have access to
sufficient financial support to support their study and participation, including when placements
and WIL is a component of their study.

3.3.2 University sector revenue
Overall revenue to the university sector has grown significantly over the past decade, from almost$24 billion in 2011 to almost $39 billion in 2021 (a real increase of 35% over that period).171 Various
funding policy changes have been made in this time, and the impact of COVID-19 can be seen in
2020. This growth in revenue has been the result of increasing funding from a range of public andprivate sources (see Figure 3.3-1).

171 Department of Education, 2021 Higher Education Providers Finance Tables [data set], education.gov.au, 2023, accessed

13 June 2023.

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Figure 3.3-1: Categories of university revenue, 2004 to 2021

Source: Department of Education internal analysis based on Department of Education, Finance Publications [data set],
2004-2021, accessed 8 June 2023.

Through the Education portfolio, around $20 billion is provided each year to support learning andteaching and research. This includes over $7 billion in HELP loans on behalf of students.
It is estimated that in 2022-23, the Australian Government is investing $3.9 billion into R&D directly
to the higher education sector and a further $2.6 billion which is considered ‘multi-sector’, which
would include significant funding to universities.172
Fees from international students represent the second largest amount of overall university revenue(around $8.7 billion in 2021).173 Universities also receive revenue from sources such as investments
and consultancies, while a few institutions receive substantial donations and bequests each year.
The increases to overall university sector revenue mask difficulties at some institutions. Recent
reports indicate that many, and potentially most, universities will be reporting losses for 2022. Whileat many institutions this may reflect the lingering effects of COVID-19, and more recently the
downturn in student demand arising from strong economic conditions, at others these factors may
have exacerbated underlying structural issues. Funding was provided as part of the JRG package tolessen its impact during a transition period to the end of 2023. This included a guarantee ofgovernment funding irrespective of enrolments. Given relatively soft demand from students at the
moment, the end of this funding could contribute to further financial difficulties in the next few
years.
This wide range of funding sources reflects the fact universities have multiple activities. Most
significantly, and as noted in Section 3.1, they are expected to undertake both teaching andresearch. However, universities have different comparative advantages and priorities, leading tocross-subsidisation whereby they direct funding nominally for one activity to another. This crosssubsidisation has allowed them to invest both more heavily in areas that they see fit and in activities
for which they may not have received any funding at all.

172 DISR, SRI budget tables 2022–23.
173 Department of Education, Finance 2021: Financial Reports of Higher Education Providers Summary Information,

Department of Education, Australian Government, 2023, accessed 20 June 2023.

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The issue of cross-subsidisation has been raised in various submissions. The lack of transparency
around how institutions use the funding and fees is a cause for concern. Cross-subsidisation does notpromote transparency and can reduce trust from students and the wider community about how
resources are being allocated, and the Review considers the funding system should reduce its
prevalence as much as possible.
An issue raised with the Review is whether government funding should be used strictly for the
purpose for which it is provided (as happens in some other countries). Given the lack of transparency
for students relating to how their fees are expended there needs to be greater transparency about
how institutions are using this funding and how revenue derived is used for other activities, such as
research and investment in infrastructure.
While there have been attempts to make higher education expenditure on teaching and researchmore transparent, the Review considers that doing so to the level that is needed will require betterdata collection and costing processes. Over time, this could lead to a better understanding of thecost of university activities to better inform government policy making and provide greater clarity tostudents about the use of their fees.

3.3.2.1 Infrastructure funding
While many universities have been able to use other sources of revenue to finance updating andbuilding new infrastructure, the Review is aware that the ability of some institutions to do this islimited by their relatively small income from other sources. High-quality infrastructure is necessary
for teaching and research.
The issue of infrastructure funding is not new. The 2015 Higher Education Infrastructure Working
Group found that transformative infrastructure is vital for internationally competitive universities
and while universities manage their infrastructure and financial resources well, there is a risk that
financial shocks could erode their capacity to do so.174 It was also noted that some regional andmulti-campus outer suburban universities face particular infrastructure difficulties.
As outlined in Section 2.7, there is broad support for the ongoing funding of NCRIS. The Review has
also heard from a number of stakeholders who are concerned about the lack of Government funding
for infrastructure since the end of the EIF. The EIF was established on 1 January 2009 to provide
dedicated ongoing capital funding for tertiary education and research infrastructure. It provided $4.2
billion for infrastructure projects though competitive funding rounds held between 2008 and 2011,
including projects such as the transformation of Central Queensland University into a dual sector
institution, a joint health education facility at Port Macquarie, the Australian Centre for Indigenous
Knowledge and Education at Charles Darwin University jointly with BIITE and Australia’s involvementin the Giant Magellan Telescope project.175

174 Higher Education Infrastructure Working Group, Higher Education Infrastructure Working Group: Final Report,

Department of Education, Skills and Employment, Australian Government, 2015, accessed 13 June 2023.
175 H Ferguson, Will the new Future Drought Fund leave the Education Investment Fund high and dry?, Parliament ofAustralia website, 2018, accessed 16 June 2023.

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The Review notes various submissions support establishing a specific fund that could be used for
future infrastructure needs, as well other national priorities. This could include consideration of alevy on international student fee income. The use of this revenue for sectoral-wide priorities could
reflect the collaborative nature of the sector in building a strong and enduring system. The Review
notes further examination is required, including consideration of some level of co-investment fromgovernments.
There is also value in exploring how universities could be better supported to leverage their balance
sheets to fund infrastructure projects. Some universities are doing this very effectively already. As
the Higher Education Working Group found, there is interest from financial institutions to better
leverage university assets and this could be a source of significantly more funding to support
infrastructure projects if a funding source for interest or similar payments can be secured.

Case study: Western GrowthWestern Sydney University’s ‘Western Growth’ program leverages the university’s balance
sheet to deliver world-class infrastructure, with over $1 billion in new facilities over five years.
The program:• revitalises the university’s campus network• creates new technology-enabled learning, teaching and research facilities• repurposes existing assets to generate a corpus to reinvest into learning, teaching andresearch• incorporates its learning, teaching and research projects into real-world environment withliving laboratory opportunities.

3.3.3 The Job-ready Graduates (JRG) package
The JRG package was the source of significant concern in many submissions to the Review.
The JRG package introduced fundamental changes to the funding of learning and teaching. At its
core was a redesign of the CGS funding clusters and student contribution bands across different
fields of education. The main stated aim of the JRG package was to incentivise students towards
fields of expected employment growth, while aligning base funding to the average cost of delivery
across different fields of education.
The package aimed to be ‘budget neutral’ – that is, savings were reinvested in other parts of thefunding system – but in fact the JRG package decreased total base funding (the combination ofCommonwealth and student contributions) per equivalent full-time student by 5%. This reduction
included a decrease in CGS funding per place of 14% and an aggregate increase in student
contribution amounts of 7%. Within these changes, some fields, such as humanities andcommunications, saw increases in student contribution amounts of up to 113%.

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In trying to align funding more closely to costs, the JRG package reduced the ratio between funding
and estimated costs from around 111% to 106%.176 The costs used to develop the JRG package arebased on the Transparency in Higher Education Expenditure process that has occurred annually since2017, with a reference group including a number of sector representatives providing guidance andadvice on its implementation. Through this process universities provided estimates of the cost ofteaching and scholarship across a range of fields of education at their institution. However, there arestrong concerns that the estimates provided through this process do not reflect the true cost ofteaching and scholarship. Additionally, the decision to determine base funding levels using the
average costs has meant some universities and disciplines are now underfunded, further
compounding viability issues.
"[U]nder JRG the gap between the cost of delivery and the funding provided has
widened. This creates significant problems for universities with vet schools andvet hospitals, and puts at risk the future delivery of underfunded programs.
Funding gaps for teaching and research now need to be covered by otherrevenue sources."– University of Queensland
This reduction in funding, which was primarily achieved through a reduction to the CGS was thenused to fund growth in the number of CSPs funded in the system, with higher growth provided tocampuses in regional areas, and creation of a new National Priorities and Industry Linkage Fund
(NPILF) to support enhanced engagement between universities and industry to produce job-readygraduates. While the JRG package did not exactly match funding with estimated costs across all
disciplines, with funding still being 6% higher than costs on average, it did mean there is less funding
to support other activities such as research, infrastructure and community engagement although no
explicit statement is made about how these things are funded under the package and to what
extent.177
Through consultation and submissions, the Review has noted substantial and overwhelming
criticisms of the JRG package and the current funding system.
Various stakeholders have pointed out that base funding reductions to several priority fields (such as
education, mathematics, science, engineering, nursing, psychology and allied health) have madeteaching them financially unsustainable. This is due to the high costs associated with teaching thesefields not being covered by the base funding rates. This is of critical concern given the importance of
these disciplines to meeting current skills needs.
The principle of setting base funding rates in line with the average cost of teaching at the bachelor
level has also led to the base funding rates not being appropriately set for a number of universities,
as they do not recognise the significant variations in per student teaching costs amongst universities.
Importantly, these funding rates do not recognise different delivery methods and this affects

176 Based on an analysis of Department of Education, Higher Education Statistics –Student Data [unpublished data],

Department of Education, Canberra, 2023 and Deloitte Access Economics, Transparency in Higher Education Expenditure,report to the Australian Government Department of Education, Deloitte Access Economics, November 2019, accessed 14
June 2023. This figure is based on analysis done at the time of the package's formulation, and was based on student load
profiles from 2019 (then the most up-to-date available data). University estimates of student load for 2022 suggest thatsince that time student profiles have changed to a non-trivial extent, and university cost estimates have also been updated
since the reforms were implemented. It is not safe to assume that the 106% figure remains true in 2023.
177 Based on analysis of Department of Education, Higher Education Statistics –Student Data [unpublished data].

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students’ learning experience and outcomes, particularly for the underrepresented students who
benefit the most from tailored delivery methods as discussed in Section 2.3.
The Review has also noted that the attempt to incentivise students to move to fields of national
priority and away from fields such as humanities has had little effect on student choice. This has
recently been noted by the Productivity Commission, which found “the overall demand for university
enrolment in Australia is unresponsive even to significant price increases given ICLs and existing
subsidies.”178 This finding is supported by further research which found “university applicants are nothighly price sensitive in the context of income-contingent loans… price is not a key consideration for
applicants.”179 This is supported by analysis from the Department of Education. For example, whilestudent contributions for society and culture more than doubled, applications to Tertiary Admissions
Centres increased by 3.1% in 2021, while applications direct to universities increased by 63.2%.180
While applications for society and culture decreased in 2022, this was in line with overall reductions
across the sector.
Rather, the student contributions have mainly led to some students incurring significantly higher
debts that they are unlikely to repay in reasonable timeframes (if at all). On top of this, increased
student contributions are now at historical highs and are unfairly affecting female students andIndigenous students, as shown in Figure 3.3-2. The Review considers this is untenable.
Figure 3.3-2: Impact of the JRG package on student contributions paid by female and Indigenous students.

Source: Department of Education internal analysis based on Department of Education, Higher Education Statistics - 2021
student data [data set], 2021, accessed 8 June 2023.

The JRG package intended to return growth to the funding system, with universities’ funding being
indexed each year in line with CPI and further funding provided on the basis of the location of
campuses. However, the level of funding was not adjusted, to reflect actual student enrolment
numbers. Analysis indicates that while there has been falling enrolments across the sector, these
reductions are largest at regional campuses, which receive the largest funding increases under the
JRG package. As the distribution of funding across the sector does not respond to student demand, it
has led to some universities being ‘under-enrolled’ and others ‘over-enrolled’. This inefficiency in

178 Productivity Commission, 5-year Productivity Inquiry: From learning to growth.
179 M Yong, Demand and supply effects of university funding changes: an Australian policy analysis [unpublished Honours

thesis], University of Melbourne, 2022.
180 Department of Education, Analysis of Tertiary Admissions Centre data [unpublished analysis], Department of Education,
Canberra 2023.

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funding distribution has led to some universities having inadequate funding for their student load, as
they are teaching many more students than their funding is calculated to support.
Issues around the adequacy and certainty of universities’ funding is further compounded by thecurrent environment of soft student demand, pricing incentives created by the JRG changes andinstitutions’ capacity to grow, as well as the slower recovery of some from the COVID-19 pandemic.
The above illustrates the various and significant issues and impacts that have been created by the
JRG changes. It is evident that base funding per place and students’ contributions should beredesigned. Funding arrangements must also ensure sufficient growth, stability and certainty, andbetter allow institutions to pursue their mission and meet their student, industry and community
needs.
The Review notes changes to JRG and the implementation of a new funding model are necessary. As
explored in submissions and consultations, the continuation of these current arrangements risk
causing long-term and entrenched damage to Australian higher education.
The Review is considering new funding models, including to address the negative impacts of the
JRG package.

3.3.3.1 Providing funding certainty
The Review notes the need to ensure funding certainty for universities until a new funding approachis considered. In particular, the end of the HECG may cause unnecessary disruption to staff, students
and the sector. New funding arrangements will be proposed in the Final Report and then followed bya period of Government consideration. Interim funding arrangements are needed in advance of a
possible new funding system.
The HECG has provided certainty to universities during the significant upheaval from the COVID-19
pandemic and during the implementation of the JRG package. The Review is concerned that theremoval of these arrangements would represent a significant change in the sector’s financing
arrangements, especially in anticipation of further future change that could arise from therecommendations of the Final Report. Many institutions, particularly those with smaller domestic
and international student numbers, regional universities, and those with higher costs due to needing
to provide students with additional support will find it financially challenging. The end of the HECG
could see these institutions make difficult and premature financial choices, such as reducing staffing
numbers, decreasing support services or cancelling capital works, that are not in line with the needsof students or staff or the long-term direction of the Accord.
The Review strongly supports stability for the sector, and that institutions should have certainty of
their funding into 2024. However, given the imperatives identified by the Review with regard to
growth for skills through greater equity, universities and other providers should be required to direct
this towards supporting and enhancing equity outcomes.
As stated in Section 2.3, many equity students need additional support including increased academic
advice and learning support, and the delivery of enhanced wraparound services. The Review
considers institutions must determine the use of this funding according to their student and local
community needs. This should include a range of assistance and support mechanisms for students,
such as increased support for students in enabling courses (including additional places within a more146

flexible funding envelop), improved academic advice and learning support, wraparound services(such as mental health), scholarships or other services.

Immediate action:
Provide funding certainty, through the extension of the Higher Education Continuity Guarantee
into 2024 and 2025, to minimise the risk of unnecessary structural adjustment to the sector.
Interim funding arrangements must prioritise the delivery of support for equity students toaccelerate reform towards a high equity, high participation system.

3.3.4 A student-centred, needs-based funding model
3.3.4.1 Supporting attainment and participation
As discussed in earlier chapters, Australia’s higher education funding system must operate toincrease long-term participation and attainment, including for those students from historicallydisadvantaged backgrounds.
If implemented, meeting targets and objectives of higher education participation and attainment
would require additional long-term funding and a substantial restructuring of learning and teachingfunding to ensure sufficiency, sustainability and stability. The funding trajectory for higher educationneeds to be dynamic to meet the attainment needs of the nation and parity of participation.
The Review’s ambition is that a new funding system for learning and teaching can achieve multiple
objectives – that institutions can deliver courses that align well with their mission and purpose, canmeet Australia’s future skills needs, and that students can pursue courses which align with theirabilities and interests. This should occur within a system that takes account of the national interestin the overall supply of a highly talented, highly skilled, well-located workforce, which meets thechanging requirements of the economy.
As outlined in Section 2.1, a universal learning entitlement to high-quality tertiary education (higher
education and VET) may be needed. As part of this overall ambition, a universal learning entitlement
should sit at the centre of the higher education funding system and any capable student would
receive a CSP in a higher education course of their choosing. As a first step, a priority element of theuniversal learning entitlement should ensure all students from equity cohorts are eligible for afunded place at university.
While there are similarities between a universal learning entitlement and demand driven funding,the Review sees the concept of ‘demand driven funding’ as no longer reflective of current
requirements, as it focuses only on the willingness of a student to learn, and the willingness of aprovider to enrol. National skills needs and balanced tertiary provision across regional andmetropolitan areas, are both important objectives that also need to be met through better planning
than demand driven funding. The role of the Tertiary Education Commission and its relationship with
JSA could be an important part of this, ensuring the higher education system responds to economywide skills requirements, and delivers against new participation and attainment targets including forequity cohorts.

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The Review notes that it is important to learn from previous experience and suggests that auniversal learning entitlement could be designed and delivered in an optimal way. There have beenvarious examples of policies in the tertiary education system that have implemented demand driven
funding in higher education and a similar entitlement for those enrolling in Certificate 3 and above inthe VET system. As the Productivity Commission has recently noted, these policies led to budget
blowouts and affected the balance of enrolments between VET and higher education.181
Although the 2014 Review of the Demand Driven Funding System found the system had responded
well to skills shortages,182 it also found that “the rapid increase in science enrolments is leading toemployment problems for graduates.”183 Comparing domestic bachelor-level enrolments in 2009
and 2017 shows that growth was higher than average in health, IT, science and society andculture.184 While labour market outcomes for health and IT graduates have been above average, thisis not true for graduates from science, and society and culture degrees. While student choice isessential, in exploring different funding policies, the Review is conscious of ensuring this is balancedwith the system needing to supply graduates who meet the societal and economic needs of theirregion and the nation.
A new funding model must be able to support multiple policy objectives. It should create anenvironment where all students, regardless of their background, have equal opportunities to accesshigher education. It must also provide institutions with certainty and stability. Institutions shouldhave a clear understanding of their learning and teaching funding over the medium-term and be
confident that they would be supported to adjust should there be significant changes in enrolments
across the sector. The role of a potential Tertiary Education Commission and JSA is likely to be
central to this system and the Review will continue to deliberate on how such a system might be
implemented between now and the Final Report.

3.3.4.2 Funding a high-quality education
To ensure all higher education students receive a high-quality education, it is important that perplace funding rates are appropriate. Any new pricing model must be dynamic, able to adjust toreflect changes and innovation in delivery costs, teaching practice and curriculum, while also
recognising that the cost of teaching differs by student cohort (low SES, regional and remote,Indigenous and under-prepared) and location. These funding rates need to be informed by accurate
and ongoing analysis of costs and resourcing requirements and be sufficient to support continued
improvement in quality.
As highlighted above, the Review notes further examination of activity costings for teaching, learningand research is required. This should include examination of why costs differ across institutions,
including the impact of different student cohorts and locations.

181 Productivity Commission, 5-year Productivity Inquiry: From learning to growth.
182 D Kemp and A Norton, Review of the Demand Driven Funding System Report, Department of Education, AustralianGovernment, 2014, accessed 12 June 2023.
183 Kemp and Norton, Review of the Demand Driven Funding System Report.
184 Department of Education, Higher Education Statistics –Student Data [unpublished data].

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3.3.4.3 Discipline funding rates
A shared concern across the sector is the impact of the JRG funding changes on the capability of
institutions to deliver a high-quality education. As noted above, this is particularly noticeable in the
STEM disciplines, which are essential to many of the technical skills graduates will require in the
future. The Review notes that funding for these disciplines could be adjusted to better reflect thecost of delivery.
The use of the average cost of delivery across the sector has led to several universities noting thatthe current base funding levels for some fields of education do not adequately reflect their cost ofdelivery (see Figure 3.3-3 below comparing base funding with the range of costs across the sector).
This can be particularly problematic for those universities which do not have large international
student fee revenue to bridge the gap between the funding and costs of teaching. Changes to basefunding levels have also made it difficult for institutions to pursue teaching excellence, or to
implement the changes needed to support new types of teaching delivery.185
Figure 3.3-3: Comparison of costs and base funding under the JRG package.** Error bars provide a range for the cost of delivery for an equivalent full-time student load (EFTSL), with lower and upperbounds representing the 25th and 75th percentile. Average costs for all levels were reported in 2020, and have been
indexed to 2023.
Source: Department of Education internal analysis based on Deloitte Access Economics, Transparency in Higher Education
Expenditure [unpublished dataset], Department of Education Skills and Employment, 2022, accessed 8 June 2023.

185 UNSW, Submission to the Australian Universities Accord Discussion Paper, 2023; James Cook University (JCU),

Submission to the Australian Universities Accord Discussion Paper, 2023; University of Melbourne, Submission to theAustralian Universities Accord Discussion Paper, 2023; ATN, Submission to the Australian Universities Accord Discussion
Paper, 2023.

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3.3.4.4 Funding to support expansion and success in participation
It is also critical that institutions receive enough funding to support the learning needs of different
students. A significant expansion in the system will increase enrolments of students fromtraditionally underrepresented backgrounds. The funding system must be adequate to support thesestudents to complete their studies successfully and in minimum time.
The Schooling Resource Standard (SRS) that forms the basis of Australia’s schools funding system isuseful to examine is this context. The SRS comprises a base amount for every primary and secondary
student and six equity loadings. The aim of the equity loadings is to provide additional financial
support to schools with higher concentrations of need so that all students can achieve goodoutcomes. The equity loadings are for students with disabilities, students with low English language
proficiency, Indigenous students, students with socio-educational disadvantage, students in regionaland remote areas and small schools.186
The Review notes that while the higher education context is significantly different to schools, where
for the most part all students are taught the same curriculum, using different loadings to reflect
differential costs of adequately supporting different student cohorts could be explored in the higher
education context. This will require a better understanding of the costs of supporting different
student cohorts to ensure the loading amounts are appropriate.
The Review is examining the potential benefits of a student-centred, needs-based funding
model for learning and teaching in universities, similar to that now used for schools, which takes
into account the costs of different courses and the socio-economic mix of students at each
institution.

3.3.4.5 Funding base research capacity
A central aim of a new funding system could also be to remove any existing cross-subsidy fromlearning and teaching to research. That most academics undertake teaching, research andscholarship is reflected notionally in the current base funding for CSPs. This could be removed fromfunding for learning and teaching, and provided explicitly for scholarship, research, and innovation
through a separate funding stream (potentially a new research block grant), but with a distributionthat retains the wide distribution between institutions that is currently in place.

3.3.5 Improving affordability for students
Since the introduction of HECS in 1989, (now replaced by HELP), the Australian higher education
system has been based on the principle that given the public and private benefits that arise fromhigher education, student places should be funded by both the Government and students. This mix
of funding has facilitated the significant expansion the higher education system experienced overthe previous 35 years and should continue.
In considering this issue, the Review is receiving significant advice from Emeritus Professor Bruce
Chapman AO, the architect of HECS.

186 Department of Education, Schooling Resource Standard, Department of Education website, n.d., accessed 7 June 2023.

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3.3.5.1 Fair and affordable student contributions
According to the latest OECD Education at a Glance publication, tuition fees for full-time domestic
students studying a bachelor degree and a master’s degree at a public university in Australia were
the sixth and the fourth highest respectively of the OECD countries.187
The Review has consistently heard, through submissions and direct consultations, that changes tostudent contribution rates as a result of the JRG package are unfair and not based on sound or
consistent principles. The Review’s analysis supports this position.
There are a range of considerations and options in considering what future student contributions
should be set at. Submissions have proposed a number of principles that should inform thedevelopment of new arrangements including that students should not be unfairly subjected toexcessive debts; and that setting fairer contribution rates could increase access to higher education,
help incentivise lifelong learning, and reduce the amount of debt never repaid.
These are complex issues that will be the subject of more detailed analysis in advance of the Finalreport.
• Various submissions, including from Universities Australia and the National Union of Students,
recommend replacing or reversing changes introduced by the JRG package.188 This would include
reducing fees for students undertaking humanities, communications and society and culture
courses. Initial Department of Education estimates suggest this could cost in the order of $1
billion per year.
• Other stakeholders such as the Group of Eight and Australian Technology Network of Universities
have suggested exploring a single student contribution rate.189 Depending on the level of thiscontribution, it is likely to represent significant increases in contributions for some students,
while decreasing for others. While this approach would charge students equally, regardless of
their course, it also risks unfair trade-offs. Student contributions would be likely to increase on
average for women, First Nations people, regional and remote, and low SES students, orGovernment would need to provide additional funding and the overall share paid by students
decrease.
• The NSW Vice-Chancellors’ Committee and University of Technology Sydney also suggested
examining increased fees for Commonwealth supported postgraduate students.190 The latest
transparency of higher education expenditure survey indicates the cost of teaching postgraduate
students in 2020 was around 20% higher than the cost of delivering bachelor degrees.191• The University of Canberra suggested that student contributions should align with graduates’
future earnings potential as well as course costs.192 It is clear from graduate earnings data that
contributions from students in certain disciplines, particularly creative arts, social studies,humanities and communications, are not in line with expected earnings for these students.193
187 OECD, Education at a Glance 2022: OECD Indicators, OECD Publishing, Paris, 2022, accessed 7 June 2023.
188 National Union of Students, Submission to the Australian Universities Accord Discussion Paper, 2023; Universities

Australia, Submission to the Australian Universities Accord Discussion Paper, 2023.
189 The Group of Eight, Submission to the Australian Universities Accord Discussion Paper, 2023; Australian Technology
Network of Universities Submission to the Australian Universities Accord Discussion Paper, 2023.
190 NSW Vice-Chancellors’ Committee, Submission to the Australian Universities Accord Discussion Paper, 2023; Universityof Technology Sydney, Submission to the Australian Universities Accord Discussion Paper, 2023.
191 Deloitte Access Economics, Transparency in Higher Education Expenditure, report to the Department of Education, Skills
and Employment, Deloitte Access Economics, June 2022, accessed 13 June 2023.
192 University of Canberra, Submission to the Australian Universities Accord Discussion Paper, 2023.
193 Based on Department of Education analysis of departmental and Australian Taxation Office (ATO) HELP data
[unpublished].

151• The JRG changes increased the average student share from 42% to 48%, with theCommonwealth’s share adjusting from 58% to 52%. This has meant students now, on average,
pay closer to 50% of base funding costs. However, based on a discipline level, there are somecases where students pay closer to 90%, including in business, law and humanities. It is not fair
for some students to make such a high contribution, even if expected earnings are likely to behigher than average.
Fundamental reform is required to address the perverse outcomes created by the JRG package. This
needs to be considered in the context of the design of any new funding model for teaching andlearning. A key priority for the Review is ensuring student contributions are fair and do not place
undue burden on students. In making recommendations, the Review will also consider anappropriate transition, including options to implement changes over time to minimise impacts tostudents studying now.
The Review is examining potential changes to student contributions to reduce long-term
financial burden for individuals and sustain successful increased participation in higher
education.

3.3.5.2 Building on the world-leading success of the HELP system
The HELP system is a critical pillar of the funding system for higher education and has served
Australia well. The scheme is designed to both expand access to higher education without
substantially burdening the budget, and to eliminate the upfront cost of tuition for students. The
Review believes the HELP system remains a highly effective approach to funding higher education,and the overall approach of this system remains sound in terms of affordability, sustainability andequity. However, recent focus on the size of debts incurred by some graduates (which should be
improved by a redesign of student contributions), repayment burdens and the effects of highinflation on accumulated debts leads the Review to consider it is time for the HELP system to be
examined. The Review is hearing evidence of the impacts these issues could have on peoples’ lives. It
is time to review current policy settings to ensure they remain appropriate for a modern education
system, workforce and economy.
3.3.5.2.1 Ensuring debts are manageable
HELP debts are not subject to interest but are indexed to retain the real value of the debts over time.
This is to ensure that the value of the HELP asset to taxpayers does not decline over time andsafeguards the sustainability of the HELP system.
Since the introduction of HECS, outstanding debts have been indexed by CPI. In most years this has
resulted in a rate of indexation below wages growth and the long-term costs of Government
borrowing. However, in the modern context of much higher average debts for graduates, and thecurrent economic climate of high inflation and modest wage growth, indexation has caused larger
than typical increases in outstanding debt. The Review is aware that graduates are concerned when
they make repayments but see no nominal decrease in their HELP balance. This raises concerns fromHELP debtors around holding larger HELP debts for longer.
"Students are now more indebted than ever before."– Sydney University Postgraduate Representative Association

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CPI indexation has been volatile recently, increasing from a rate of 0.6 in 2021 to a rate of 7.1 in
2023. High CPI growth in conjunction with relatively more modest wage growth has meant debtors’
real wages have decreased.194 Using the Wage Price Index (WPI) as a measure for indexation has
been suggested by stakeholders as it ensures that the cost of HELP is correlated to the private
benefits received by debtors. Alternatively, using the lower of Government Long-Term Bond Rate
(LTBR) and CPI as it ensures that HELP debt is always concessional to the Government’s long-termcosts of borrowing.
The Review is considering the most appropriate way to reduce the volatility of the current
indexation method. However, it must simultaneously consider the appropriate size and sustainabilityof accumulated debts and the earning capacity of graduates.
The Review is also aware of concerns around the timing of indexation on 1 June each year and theperception that income withheld for HELP repayment is not immediately applied to reducing debts.
The Review welcomes the work of Australian Government departments and the Australian Taxation
Office (which administers repayments of HELP debt) in considering this issue and whether changes
are necessary and feasible given the complexities of tax administration.
3.3.5.2.2 Ensuring repayments are not overly burdensome
Repayment of HELP debt occurs when a debtor’s repayment income exceeds the minimum
repayment threshold. In 2022-23 this minimum threshold is $48,361 and increases to $51,550 in
2023-24. Above this threshold the individual’s repayment amount is 1% of their total repayment
income, with this rate increasing progressively with income.195 Basing repayment on total incomemeans that the amount of debt that a person repays can increase significantly over small income
ranges (a repayment ‘cliff’). This is particularly noticeable at the first repayment threshold where
earning $1 more means a person must repay $483.
Previous studies have found evidence of clustering of repayment incomes just below HELP
repayment thresholds.196 Analysis supports these findings, particularly for lower income thresholds,
and those where the relative increase in the repayment rate is higher (the first two thresholds in
2019-20 increased by 1pp, rather than 0.5pp at higher thresholds).
A system based on marginal repayment would reduce these repayment cliffs by basing therepayment calculation on income only above the repayment threshold. This would generally mean aperson could no longer pay more in HELP repayments than they earn in additional work. A marginal
repayment system could also be structured in a way that reduces the burden of HELP repayment of
low-income earners, improving the outcomes of the system, as well as reducing negativeinteractions with other parts of the tax and transfer system.

194 ABS, Consumer Price Index, Australia, ABS Website, n.d., accessed 13 June 2023.
195 ATO, Study and training loan repayment thresholds and rates, ATO website, n.d., accessed 13 June 2023.
196 R Highfield and N Warren, ‘Does the Australian Higher Education Loan Program (HELP) undermine personal income tax

integrity?’ eJournal of Tax Research, 2015, 13(1); B Chapman and A Leigh (2008) ‘Do very high tax rates induce bunching?
implications for the design of income-contingent loan schemes’, Economic Record, 85(270):276-289, doi:10.1111/j.14754932.2009.00554.x.

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“The ability to improve the equity of repayment arrangements, to increase the
incentive to work and to remove poverty traps are good reasons to change to amarginal rate approach.”197– Emeritus Professor Bruce Chapman AO
The impact of a marginal system on both individual debtors and on the cost to the system (in termsof debt not expected to be repaid (DNER)) would depend on the specific thresholds and repayment
rates chosen. It would be possible to introduce a marginal repayment schedule that results in thesame amount of HELP repayments, potentially by lowering the minimum threshold or by having
relatively high marginal repayment rates that step up quickly. While a marginal system would likely
reduce repayments for those at lower incomes and therefore increase their disposable income, theincome contingent nature of the HELP scheme means these people are likely to repay for longer as
their annual repayments are lower.
3.3.5.2.3 HELP debt forgiveness
HELP debts are generally only written off when debtors die, but the circumstances where debt isforgiven could be expanded. Larger scale student loan forgiveness is already utilised internationally.
Domestically, different programs have recently been implemented which reduce the debts for somehealth workers.
Broad approaches to writing off HELP debts, like debt forgiveness after a certain period, can be very
expensive. The United Kingdom has such a system but has pushed out the point at which debts are
forgiven multiple times due to the cost, reaching 40 years for new loans from August 2023.
Expanded write offs would also limit options for other policy changes to HELP, as anything which
increases repayment times would come at an even greater cost. This would constrain the capacity
for more precise affordability measures.
Governments could focus on targeted approaches to debt write offs, for debtors who work inindustries and/or regions facing shortages. For example, the Australian Government is already
reducing the HELP debts of doctors and nurse practitioners in rural and remote areas. Suchprograms may be better handled by jurisdictions for occupations like nursing and teaching, as theprimary employers of these debtors. Issues with employment in these occupations are not purely
from a lack of qualified people. The shortages are also driven by poor retention within theoccupation, so the incentive could be tied to continuous employment.
3.3.5.2.4 HELP debts and home lending
The Review is aware of concerns that large HELP debts may impact graduates’ ability to enter theproperty market. Discussions with the Australian Prudential Regulation Authority confirm the issueof housing affordability is complex.
It involves the intersection of a range of factors, such as supply issues, prices and rising interest costs
and individual bank policies and practices. Nevertheless, large HELP debts that take longer to repay
debts can impact debt servicing capacity for longer. This issue will be examined in the next phase.
3.3.5.2.5 Loan fees on FEE-HELP loans
Since 2005 students studying in full fee-paying places have been eligible to receive support througha FEE-HELP loan. These loans currently attract a fee set at 20% of the loan amount. HELP loans for
197 Advice to the Accord Panel from Emeritus Professor Bruce Chapman AO [unpublished], 2023.

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students in CSPs do not attract a similar loan fee. Some submissions to the Accord from independent
providers have argued that the loan fee is inequitable and have advocated for it to be removed fromFEE-HELP loans (as well as from VET student loans).
“It is a great farce of Australia’s tertiary education system that a student
accessing either a FEE-HELP Loan for undergraduate study, or a VET Student Loan
in an unsubsidised place, will be required to pay a student loan tax on top of theamount that they borrow for study. This tax is discriminatory, levied largely on
the basis of the student’s choice of provider and has no relationship to likelihood
they will repay the loan.”– Independent Tertiary Education Council Australia
The loan fee increases the amount of HELP a student must repay, and will therefore extend theamount of time a student takes to repay this debt after finishing their course. This can have an
adverse impact particularly on those who require longer periods to repay their debts, including
women working part time.
The Review will consider the rationale and continuing suitability of loan fees for FEE-HELP loans
ahead of the final report.

Considerations for change
To ensure an enduring and sustainable funding model for higher education, the Review will continue
to give consideration to the following policy areas:a. establishing a framework of strong values and clear principles for public and private investmentthat underpins the higher education funding systemb. how best to design a funding model which provides longer-term stability, that is dynamic inresponding to changes in student mix and demand, and that protects against rapid shifts infunding that are beyond the capacity of institutions to adapt
c. how to establish a new funding model for higher education, that:i.
is student-centred, needs-based, ensuring the funding available is sufficient to provide
access to high-quality higher education for students from equity backgrounds and fromdifferent locationsii.
helps achieve attainment and equity targets, and recognises the different costs ofdelivery in regional Australiaiii.
strengthens Australia’s higher education research capacity
d. developing a stronger understanding of the true costs of the core activities in higher education,
increasing transparency and improving pricing, quality, performance and efficiency
e. ensuring the ongoing affordability of higher education for students, including adjusting student
contributions instituted by the JRG package
f. examining changes to HELP to make it fairer and support growth in participation
g. ways to support and maintain critical teaching and research infrastructure
h. reducing the extent to which core higher education functions rely on funding from insecure
income streams, and decreasing the extent of cross-subsidisation throughout the system
i. examining a funding mechanism such as a levy on international student fee income. Suchmechanisms could provide insurance against future economic, policy or other shocks, or fundsector priorities such as infrastructure and research.

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Potential proposals the Review may also consider for the Final Report, and that reflect thebroad themes outlined above, include:
A new funding model that considers:a. a universal learning entitlement, so that if a student is qualified for admission to a course inhigher education, they will receive Government support
b. additional mission-based loadings reflecting location and student demographics
c. discipline mix that meets Australia’s skills needs both nationally, regionally and locallyd. providing certainty and stability to institutions of funding over a longer period.
Improving the transparency of institutional spending and the cost of teaching and research:a. exploring new and regular approaches to activity-based costing and pricing to provide
transparent and independent advice in relation to funding and expenditureb. regularly revise pricing to reflect changes in teaching and research costs and delivery andpromote efficiency and quality outcomes.
Changes to ensure affordability for students:
a. student contributions at different levels, noting certain courses lead to higher potential
earnings.
b. HELP arrangements, including moving to a marginal repayment rate and changes toindexation.

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Chapter 4 – Building an Accord“The Accord should establish a framework and mechanisms for long-termcooperation and collaboration between the Australian Government, the higher
education sector, industry, and related stakeholders that will positively shapepost-school education in Australia for the next generation – not just a series ofshort-term policy initiatives.”– University of New EnglandIssuesA renewed higher education system will not be achieved by the actions of the AustralianGovernment or the higher education sector alone. It requires collective ambitions and collaboration
among a wide range of participants across the system with sustained commitment over decades.
The Commonwealth and state and territory governments must work together in partnership withthe tertiary education sector, industry, unions and communities to develop and deliver this vision.
The Review is considering how such an Accord could be operationalised as it prepares for its Final
Report.

4.1 Implementing an ambitious, enduring Accord
Consultations have reinforced to the Review the importance of an Accord to drive genuine
engagement and collaboration to prioritise and plan for the future. An Accord must be a dynamic
partnership, providing a framework for shared stewardship of the higher education system,
including all major stakeholders in the sector and Australian society: higher education providers,
their students, staff and alumni; state, territory and Australian Governments; businesses; unions;and community organisations. Such a mechanism would focus on practical action, by establishingappropriate structures of dialogue and discussion among key stakeholders, identifying sharedconclusions and priorities for action, and providing advice or advocacy to key policy processes.
Within the broader ambition for an enduring Accord, there is a need for close partnership on critical
reforms. Skills, qualifications and the implementation of AQF reforms could have a significant impact
on some industries and need to be implemented through arrangements with industry, unions andgovernment.
Similarly, governments will need to work together to implement any future reforms and achieve thelong-term ambition for a higher education sector that continues to grow and develop, as part of abroader tertiary education system and wider innovation and research ecosystem. States andterritories are stewards of the VET system and should be partners in changes to VET or higher
education.

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Considerations for change
Delivering the opportunities and ambition proposed by this Interim Report requires joint effort
across a range of stakeholders and parties in the form of a dynamic partnership to ensure Australia’s
higher education sector as part of a broader tertiary education system can grow and develop tomeet Australia’s economic, cultural and social challenges and advance our national interests.
Delivering this would require establishing an ongoing mechanism to bring together governments(with bipartisan support), universities and higher education providers and their students and staff,
businesses, unions and community leaders in the form of a continuing Accord process.
An Accord process could include:a. convening a series of forums to discuss key challenges facing higher education, which
require new solutions and collaboration between jurisdictions, communities and sectors.
b. representatives of student, academic, industry, community and union groups with a stake intertiary education working together with governments on key issues and challenges, withshared access to evidence and examples.

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Glossary
ABSTUDY

Aboriginal and Torres Strait Islander Study Assistance Scheme

AQF

Australian Qualifications Framework

APEC

Asia-Pacific Economic Cooperation

ARC

Australian Research Council

ASC

Australian Skills Classification

ASEAN

Association of Southeast Asian Nations

ASQA

Australian Skills Quality Authority

AUKUS

The trilateral security partnership between Australia, the United
Kingdom and the United States

BIS OEBIS Oxford Economics

CGS

Commonwealth Grant Scheme

CPI

Consumer Price Index

CRC

Cooperative Research Centres

CSP

Commonwealth supported place

DNER

Debt not expected to be repaid

EAS

East Asia Summit

EIF

Education Investment Fund

ELP

English language proficiency

ERA

Excellence in Research for Australia

FTE

Full-time equivalent

FWO

Fair Work Ombudsman

G20

Group of Twenty

HDR

Higher degree by research

HECG

Higher Education Continuity Guarantee

HECS

Higher Education Contribution Scheme

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HELP

Higher Education Loan Program

HEPPP

Higher Education Participation and Partnerships Program

HERDC

Higher Education Research Data Collection

IAT

Institute of Applied Technology

ICL

Income contingent loan

IRLSAF

Indigenous, Regional and Low SES Attainment Fund

JRG

Job-ready Graduates

JSA

Jobs and Skills Australia

Low SESLow socio-economic status

LTBR

Long-Term Bond Rate

NCP

National Credentials Platform

NCRIS

National Collaborative Research Infrastructure Strategy

NETM

New Education and Training Model

NHMRC

National Health and Medical Research Council

NPILF

National Priorities and Industry Linkage Fund

NRU

National Regional University

NSRA

National School Reform Agreement

NUHEPsNon-university higher education providers

OECD

Organisation for Economic Co-operation and Development

OLT

Office for Learning and Teaching

PCS

Provider Category Standards

PSWR

Post-study work rights

QILT

Quality Indicators for Learning and Teaching

R&D

Research and development

RPL

Recognition of prior learning

RUCs

Regional University Centres

SES

Student Experience Survey

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SME

Small and medium-sized enterprises

SRS

Schooling Resource Standard

SSAF

Student Services and Amenities Fee

STEM

Science, technology, engineering and mathematics

TAFE

Technical and Further Education

TEQSA

Tertiary Education Quality and Standards Agency

UNESCO

United Nations Educational, Scientific and Cultural Organization

VET

Vocational education and training

WIL

Work Integrated Learning

WPI

Wage Price Index

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