Estimates: Department of Education, Employment and Workplace Relations

Education, Employment and Workplace Relations Legislation Committee

Estimates hearings, 20 October 2011

Department of Education, Employment and Workplace Relations

• Senator Chris Evans, Minister for Tertiary Education, Skills, Jobs and Workplace Relations
• Ms Lisa Paul, Secretary
• Mr Robert Griew, Associate Secretary, Tertiary, Skills and International
• Mr David de Carvalho, Group Manager, Higher Education Group
• Mr Mark Warburton, Branch Manager, Higher Education Group
• Mr Phil Aungles, Director, Performance and Analys is Unit, Higher Education Group

Full transcript available here

Senator RHIANNON: Thank you very much. How will the government ensure that universities offer low-demand courses in areas such as classics and the arts in the new demand-driven funding environment?

Mr de Carvalho: I am not sure that there is anything that we can do to ensure that universities offer all these courses. Universities will make choices as to how they want to market themselves in the new environment and to tailor their courses to what they think will attract students to them. The government also has the capacity, if it wishes to, to constrain demand for certain courses as well as designate certain courses as vulnerable to promote enrolment in those courses.

Senator RHIANNON: Can you explain how that capacity would work? The first part of your answer seemed to suggest it would not happen—that you were just leaving it up to the new regime—but that there is a capacity for government to do that. Can you explain how that would work for vulnerable courses?

Mr Warburton: We have funding agreements with each institution and they outline conditions of grants—the conditions of grant for their Commonwealth Grant Scheme grant. In that, we have clauses that require universities to seek our approval before certain types of courses are closed. We try and do that in a reasonable way. If a university is opening a new course and trying something new and it is not successful, they do not have to get our approval to close something down. But long established courses in significant areas—there are some languages identified and some skill needs identified—are required to seek our approval before they close them, and we try and work through the issue.

Senator RHIANNON: There are some that have to be approved and the majority do not. Is that how it works?

Mr Warburton: That is a reasonable comment.

Senator RHIANNON: Can you give us a list of where approval has to be sought?

Mr Warburton: I could give you copies of the condition in the funding agreement.

Senator RHIANNON: Thank you. Will the Commonwealth direct any additional capital expenditure to help universities cope with the drastic expansion in student places expected under a deregulated higher education scheme?

Ms Paul: There has been a significant injection of capital funding into universities in recent years, particularly through the Education Investment Fund.

Senator RHIANNON: I meant conditional from after these current changes, considering the dramatic impact they will have.

Ms Paul: We have discussed this before. There is no limitation on what universities can use the funding for. Of course, the demand-driven funding is increasing funding to universities significantly. That trend has already been seen. That is potentially a matter for the future but, at the minute, demand-driven funding is basically attracting really significantly increased funding to universities, which they can use for capital purposes. In addition to that, the Education Investment Fund has offered significant injection as well.

Mr Griew: The other point to make here concerns the questions that Senator Mason was asking about universities choosing to use their infrastructure over the summer, for longer hours and using information technology based teaching. If you talk to the universities, they are all active also in thinking about how they use their existing buildings. There is a huge potential in the use of their existing facilities.

Senator Chris Evans: We are asking the wrong question, Senator Rhiannon. There is a number of interesting examples where universities are actually thinking this through. Firstly, many of them currently have unused space. It is not a straight sort of question of, 'We have 2,000 more students, therefore we need 32 more tutorial rooms et cetera cetera.' Secondly, the key issue for universities is that people are learning quite differently and a lot of their infrastructure is actually no longer suitable for the way people learn.

Senator RHIANNON: Minister, I am sure you have also heard of so many lecture theatres and tutorials that are just totally overloaded with people. There is the example at Macquarie University now where they have erected a big tent, which I understand is there supposedly on a temporary basis while they do repairs. But the rumour is certainly rife at that university that that is going to become permanent. These rumours and concerns are out there and just relying on the changing education environment probably is not the best answer.

Senator Chris Evans: I do not respond to rumours about tents, Senator Rhiannon.

Senator RHIANNON: It is worth noting.

Senator Chris Evans: There are lots of rumours that circulate in this building and at universities that turn out to be complete rubbish. I will not comment on that one. If you go Adelaide University soon, you will find this new centre they call the hub and it is fascinating to see. It is full as a state school because they have actually adapted the way students learn. They made lots of open spaces and comfortable chairs, and a whole different design. It is teeming with students. It is working. It just reflects the fact that the way people study with technology etcetera is changing and the facilities you want on universities is changing. I think the biggest challenge, from what I have seen of the capital needs, is actually about adapting to new ways of learning. Your point about overcrowding in lecture theatres comes more down to class sizes and some of those developments. I share some of the concerns you are expressing, but we have put more into capital in the last few years than have gone to the universities for decades. There is more being rolled out at the moment, so I do not accept the suggestion that they have not done really well in capital funding in recent years. I think the challenge is as much about adapting to a quite different way people learn and what they are looking for out of their university.

Senator RHIANNON: I just want to move on to the issue of university academic appointments. There is increasing casualisation in this area. Could you tell the committee what the government is doing to arrest the alarming decrease in young academics planning to work long term in Australian universities?

Senator Chris Evans: In a study the other day, that was wrong.

Ms Paul: We monitor the staffing arrangements in universities, but we do not control them. We do not seek to constrain universities' decisions about their staffing complement and so on.

Senator Chris Evans: I am sure there was a recent report. It was reported in the paper in a totally misleading way that there was a crisis about young academics. I actually looked at the report and you would draw a different conclusion from that. Do we have a copy of that reference to the report?

Mr de Carvalho: We do have some research that does show that Australia is a net importer of academics in terms of migration. So the allegation or suggestion that there is an international brain drain which is sucking people out of Australia—

Senator RHIANNON: My question was actually about the casualisation. Surely, you do not deny—

Mr de Carvalho: I understand that, but part of that story is about the actual number of academics who are available to draw on. Certainly the issue of casualisation is one of concern.

Mr Aungles: The figures from the staff collection, Senator, show that in 2001 the proportion of casual staff was 15 per cent, and in the latest figures that are publicly available, 2010, show that the proportion of casual staff was marginally higher at 16 per cent. We should be releasing the 2011 staff data very shortly.

Ms Paul: That was a 10-year comparison and it has only shifted by one per cent.

Senator RHIANNON: You are saying that you do not actually see that there is a problem with regard to the casualisation of the academic staff and the implications for career paths for academics? I am trying to assess whether you see there is a problem here.

Ms Paul: That data would suggest that there is not too much to be concerned about if, in over 10 years, it has shifted one per cent from a fairly low base to a similarly low base.

Senator RHIANNON: Just to stay with the theme now, I understand that there is an ageing profile of established academic staff in our universities. I am interested in what the government is doing to offset what could be inevitable staff shortages because of this.

Mr Griew: We will take notice to find the report that the minister has referred to—

Senator Chris Evans: Unless he is going completely mad—

Mr Griew: If that academic pattern were happening, which Mr Aungles' figures suggest may not be, the most concerning impact might be to deter young academics from seeking a career. If there is research on young academics' perception of their careers ahead, then that would be a measure of the most important perception.

Mr de Carvalho: The report may be the Australian academic profession in transition report released on 21 September by the Centre for the Study of Higher Education.

Senator Chris Evans: That sounds about right—and I am not going mad!

Ms Paul: Something that may offer you some comfort, Senator, is that when we do our intensive compact discussions with universities, we are interested in issues in terms of their forward planning in areas like capital but also workforce. We do tend to those things in our one-on-one discussions. Those planning matters of course are ultimately a matter for the universities themselves, but we do take an interest particularly through those discussions.

Senator RHIANNON: So you are referring to those mission based compacts. I was interested in understanding where the process is up to and how it is going?

Mr Griew: The compact discussions are basically done and agreements based on those compacts are due to go to the university shortly.

Mr de Carvalho: Very shortly.

Senator RHIANNON: What does 'shortly' mean?

Mr de Carvalho: 'Shortly' would mean—

Senator RHIANNON: This year?

Mr de Carvalho: yes—before the end of the month.

Senator RHIANNON: Before the end of the month? That is pretty good—October. Thank you. How will strategies to enhance academic teaching skills in Australian universities be monitored and—you would have to say—more importantly, supported?

Mr de Carvalho: There are a few things going on in this space. This might be an issue that was touched on earlier this morning, but we do have the ongoing programs from the former Australian Learning and Teaching Council. We have a number of grant programs and award programs which are encouraging improved teaching and learning. There is $50 million over the next three years devoted to programs to encourage improved teaching on the part of the academic workforce.

Senator RHIANNON: Thank you. I wanted to ask about the Tertiary Education Quality and Standards Agency. What steps will the agency take to ensure that students have a high-quality learning experience in all Australian universities, rather than simply in those institutions considered at risk?

Mr de Carvalho: The TEQSA, who were here this morning, have a brief to monitor quality in all universities, and there are a number of standards that are in the process of being developed or will be developed by them over the next year. I think one of those standards is a teaching standard. When the standards panel members are appointed, which will be in the relatively near future, they will be working on those standards and they will be applying those standards in their function in relation to all universities.

Mr Griew: There is probably a wider context here. You have referred to TEQSA and also to the teaching encouragement. There is also, in the new funding system, performance funding, and there is a very important piece of work being led by Professor Ian O'Connor, who is Vice-Chancellor of Griffith University, which is the development of a set of measures, including a teaching quality indicator, that will drive, over time, performance funding for universities. So there is in fact a very serious engagement with the issue of teaching quality and the validation of teaching skills.

Senator RHIANNON: So is that in place already? Because at the start of the answer the emphasis was on the agency doing monitoring. Is it just a monitoring role at the moment, but it is evolving; or have we got these teaching quality indicators already?

Mr Griew: No, sorry. What I was indicating was that there is the role of the regulator and then there is the role of the funding system and the incentives that will be provided through the funding system for a high-quality teaching and student experience. So, in addition to the role of the regulator, there are also a set of processes between the department and the universities, through the funding system, that are about excellence as well as about regulating minimum standards, which was the gist of your question.

Senator RHIANNON: Maybe I will just ask the minister: can you provide an assurance that TEQSA's existing regulatory capacity is sufficient to achieve its legislative objectives?

Senator Chris Evans: That was certainly the view of the parliament, Senator. That is why we passed the legislation recently.

Senator RHIANNON: I just want to get it on the record that you are confident that that regulatory framework does it all.

Senator Chris Evans: We are confident that TEQSA will do the role the parliament envisages for it, and we have been lucky in that we have a very good field for the roles of chief commissioner and commissioners. I think the appointments of the five people we have appointed have been widely welcomed in the sector as being quality appointments, but they have only just started their roles, as you know, so they are just starting out on the task.

Senator Chris Evans: I think that generally standards in Australian universities are of good order and that our reputation is a strong one, but we are concerned to make sure that we maintain and improve those standards. They will be taking a risk based approach to their role as a regulator. As Mr Griew outlined, in addition to their regulatory function we are building into the system a whole range of incentives to encourage high quality teaching, high quality student experiences and, quite frankly, the pursuit of excellence—because that is important to the system too.

Senator RHIANNON: Perhaps this question goes to the Minister. Given the Commonwealth's recent move to increase the number of student enrolments from low SES, Indigenous and regional areas and backgrounds, can you guarantee an increase in income support that will ensure that these students can meet the living expenses associated with attending of university and so actually take advantage of the expansion in CSP from next year?

Senator Chris Evans: I do not think it is in this program, but if you want me to respond to a general question like that, yes—we have greatly increased the amount of support through youth allowance for people studying at tertiary level and the number of people accessing youth allowance has grown greatly as well, and the reforms we are bringing in during the parliament currently to extend eligibility further for youth allowance for people in regional areas will again increase the numbers accessing youth allowance. So we have a very good story to tell about that, and it has not been without quite serious cost to the Commonwealth budget. The numbers on youth allowance and the income earned on youth allowance have increased. While we are not at that section, I am sure officers can help with the figures if you are interested.

Mr Griew: The bottom line is that it is increasing at a faster rate. The—

Ms Paul: The last time I looked, every category in youth allowance is increasing and the expenditure on it has increased significantly, which means that the whole pool of people benefiting from youth allowance and also by the attendant scholarships which go with it is also increasing. It is all a success story, basically.

Senator RHIANNON: Do you say that confidently? I come from Sydney, and the overcrowding and housing issues are just so extreme. I would not have thought you would have used that word.

Senator Chris Evans: That is right, but, as you know, housing issues are a problem across the community at the moment in the cities and in some of regional areas. Students are facing difficulties with affordable housing because we have affordable housing issues which impact on them as they do on others. But if you are asking about the rate of youth allowance and the uptake of youth allowance, the changes this government made have seen greatly increased uptake and higher payments to students. I am happy to set all that out for you. It is probably on my website, but we will get you all the figures.

Senator RHIANNON: That is why I was just questioning the word success. It would seem that there are still real challenges and difficulties out there.

Ms Paul: It is absolutely clear from the statistics that more low socio-economic students are accessing financial support than ever before because of the changes to youth allowance. There are more students, there is more money, and the scholarships for low SES which go with the youth allowance are also clearly benefiting more students. There are many, many more students who are in receipt of a scholarship than there were before these reforms were introduced. We can get you those numbers if you would like.

Mr Griew: I can give you the number of regional students. Between March 2010 and June 2011, regional higher education youth allowance recipients increased by 26 percent—that is, 7,400 students compared to a national increase of 18 percent.

[Other Senators continued the questioning]

Senator RHIANNON: Is it correct that in some states such as New South Wales private VET providers now subcontract work back to TAFE and to each other?

Mr Griew: There might be some of that arrangement—it is not something that I am personally aware of. We will take that on notice.

Senator Chris Evans: Bear in mind that TAFE is a state run system.

Senator RHIANNON: I realise that. When we ask it at the state level they bounce us to you and then you bounce us back. New South Wales VET has waived the requirements of some VET providers to provide lists of existing teachers and facilities during the tender process, claiming that it would be unfair to expect those private providers to have those resources and facilities already in place. Is this consistent with your department's implementation of procurement guidelines?

Ms Paul: Which tender are you referring to there? It is not immediately ringing bells.

Senator RHIANNON: Maybe I will have to ask you to take that on notice, because it has been raised with me a couple of times that this is happening in New South Wales..

Ms Paul: Is it the literacy, languages and numeracy program?

Senator RHIANNON: That was one of the examples.

Mr Griew: We need to be clear about which guidelines are being discussed here. If we fund a state government to purchase a training service, that would be govern by the agreement we have with the state government, not by the department's own procurement guidelines. The question would be: what is in the contract which specifies the nature of the training? We would have no capacity to bind a state government department to the chief executive's instructions on how we procure.

Senator RHIANNON: Maybe I have misunderstood—your procurement guidelines are not relevant here?

Ms Paul: It depends whether it is a tender which we are doing or one that they are doing. It would really help to know the program. We will take it on notice as you asked it, but—

Senator RHIANNON: I will give you some details of programs.

Ms Paul: I think that would be useful.

Mr Griew: My prediction is that it would be very hard to get that information without knowing which program we are talking about.

Senator RHIANNON: I was interested in some administration cost issues. I understand that, between 2005 and 2009, the operating cost for DEEWR rose by more than 130 per cent. Is that a fair estimate?

Ms Paul: I am not sure what you are talking about. Perhaps it is the hour. Which years are you talking about?

Senator RHIANNON: I understand that, since the introduction of competition in VET provision, there has been a massive increase in the budget for admin costs while there have only been small budget increases for teaching. I am trying to get a handle on a comparison of teaching costs and admin costs. We are picking up that the blow-out is with admin costs.

Ms Paul: It is a bit hard to follow, to be absolutely honest. Are you talking about the costs of particular vocational education programs? Or are you talking about the costs in my department?

Senator RHIANNON: I am talking about the overall admin costs for DEEWR.

Ms Paul: For my department—the costs of my own staff. During that period—

Senator RHIANNON: Yes, during that period. To phrase it another way: what has been the added cost burden to your department since competitive tendering was introduced in 2008?

Ms Paul: Competitive tendering for many things has been around for an awfully long time. I think the big change to departmental expenditure you referred to arose from the creation of the department itself following the 2007 election and change of government. That doubled the cost of running the department, because the creation of DEEWR represented a merger of two complete departments and a large part of a third. The costs of running a procurement—a tender—are funded each time by government. The largest tenders we run in this department are in the employment area, not in the vocational education area. They are for Job Services Australia, formerly Job Network, or, as is happening now, for Disability Employment Services.

Mr Griew: Some tendering for VET training goes back a lot further than 2008.

Ms Paul: Yes, tendering goes back for decades.

Senator RHIANNON: Yes, but it has certainly increased recently.

Ms Paul: I do not think it has.

Mr Griew: The Productivity Places Program allowed the private sector in—prior to that there was always the user choice component.

Ms Paul: We did not tender the PPP. I would posit that—

Senator RHIANNON: You see where I am trying to go. You are disputing that there has been a blow-out in admin costs—

Ms Paul: due to the costs of tendering procurement—yes. Indeed, since the creation of the department, the department's internal resources have been on a steady decline, which we have discussed here before and in the cross-portfolio estimates. This year, the department has declined, net, by the equivalent of 200 people. Last year, it declined by almost 600.

Mr Griew: The procurement you are talking about is run by state governments, not by DEEWR.

Senator RHIANNON: Yes, but there is a tendering process. If you dispute my suggestion, that is how it is. Thank you very much and thank you for squeezing me in.