Hosted by the Office of Knowledge Capital and City of Melbourne
MELBOURNE and the Committee for Melbourne
21 MAY 2009
Overcoming a decade of neglect
Two and a half decades ago, Australia began a revolution that aimed to make higher education something to which every Australian could aspire, no matter what their background or their means.
Between 1984 and 1992 alone:
- year-12 retention increased by 110 per cent;
- university enrolments increased by 57 per cent; and
- TAFE enrolments increased by more than 25 per cent.
We moved from a minority to a mass higher education and training system in less time than it takes for a child to progress from prep to university.
And along the way Australia produced innovations like the Higher Education Contribution Scheme which have influenced the world.
Education changes lives. It changed mine. As I have said before education made me and the life I live today.
When you change education for the better, you change millions of lives.
I pay tribute to those who reshaped and emboldened Australian education over those years, especially Labor Education Minister John Dawkins. There is a reason why, despite the passage of time, we still talk of the Dawkins reforms.
The economic change that made that major suite of education reforms a necessity kept gaining speed.
Information technology and globalisation changed our world, our lives and our future.
As the world became more connected and interdependent, the value of skills, knowledge, innovation and adaptability increased. Education became even more important to our future success as a nation.
But in 1996 when transformation in Australian education was needed the most in this changing world, progress stalled.
For almost a dozen years, Australia’s government turned against the idea of education for all.
For largely ideological reasons it recognized the price of education but not its value.
Investment halted.
Advances in understanding about early education were ignored.
Public schools were made into poor cousins.
Innovation slowed.
Equity was dismissed.
Universities were identified as a problem. While other governments tried to boost education to construct a bridge to the 21st Century, ours attacked it in order to re-fight the battles of the 1960s.
And slowly but surely, Australia began to slide down the international education rankings.
The result?
- Australia now lies in the bottom half of OECD countries in terms of year-12 or equivalent qualifications.
- And we’ve fallen from 7th to 9th in the OECD rankings of tertiary educated young adults.
Australia simply can’t afford this any longer. The supply of graduates is soon expected to fall far short of demand. There is urgent need for big changes.
To succeed in today’s world economy, we have to become one of the most highly educated and skilled nations on earth or watch our relative prosperity decline. It’s as simple as that.
National wealth is said to grow by almost a percentage point with each percentage point increase in the proportion of the working age population with post school qualifications.
For individuals, research estimates that for every additional year of education, earnings increase by between 5.5 per cent and 11 per cent, all other things being equal.
Education and economic prosperity are one and the same thing.
That’s why at the November 2007 election, Labor made a 21st century Education Revolution our number one economic reform priority.
After our election the Rudd Government made a number of significant reforms and investments.
Beginning from the ground up by giving priority to the early years.
Bringing new thinking to the way we run our schools. Not hiding away failure but subjecting it to the cleansing sunshine of public scrutiny.
Creating new places in vocational education and training.
And undertaking thorough reviews of the higher education and innovation sectors, led by the excellent work of Professor Denise Bradley and Terry Cutler.
The Global Recession
Our Education Revolution did not start its life during the days of the global recession.
And for some governments, the advent of the biggest synchronized economic down turn since the Great Depression, would have caused a shying away from reform.
But the Rudd Government has deliberately taken a different course.
Strong and decisive leadership is needed in responding to the global recession and the Rudd Government is determined to build the national physical, industry and social infrastructure essential for recovery.
While engaging in economic stimulus and supporting jobs today, we are determined to set Australia up to maximise the benefits of the economic recovery by investing in the two drivers of national productivity, infrastructure and skills.
The downturn in Australia’s terms of trade and national wealth reinforces the importance of high value goods and services created by smart knowledge, skills, people and investment capital.
Indeed, many of our infrastructure investments are investments in our education institutions.
In the 2009-10 Budget, the Government announced an additional $3 billion in capital funding for tertiary education and research. This includes:
- $934 for successful Education Investment Fund projects in universities and TAFEs
- $901 million our Super Science Initiative.
- $500 million for a third EIF funding round and
- a special $650 million Sustainability Round of the EIF.
During the days of the global recession, when public revenues have been slashed by over $200 billion, we have invested $5.7 billion in higher education and innovation.
The Education Revolution and the economic recovery have become parallel strategies to kick start and continue a new era of Australian prosperity.
Our goal – transforming lives, not institutions
The goal of the Education Revolution is to ensure that every Australian child can realistically aspire to achieve their full educational potential.
Better universities are a necessary part of this but they are not sufficient. What’s needed is an integrated policy approach.
Today too many children are entering school without the early learning skills they need to succeed.
Once at school, too many are failing to read, write and count to the standard required.
In many cases their teachers are failing to enthuse them and their subjects are failing to engage them.
Sometimes their sights are not set high enough.
Far too often, their schools are unable to correct the disadvantage they bring to school from their homes.
If they don’t succeed at school, too many fail to gain vocational qualifications and are excluded from the world of work to their long-term disadvantage.
And if they do make it to university, against all the odds, their energies can be all too consumed by the need to make ends meet. They drift away, drop out or under-achieve. Their enthusiasm and talents lost.
These children can’t afford this. And neither can Australia.
Ladies and gentlemen, we are not just setting out to transform an education system; we’re setting out to transform the opportunities and potential of millions of Australians over the coming years.
If we’re going to succeed, we must draw more Australians from more diverse backgrounds into the world of education and skills.
Their disadvantage must not determine their destiny.
So let me tell you how the changes we are now implementing will improve the prospects of an Australian child born today in a family yet to be touched by the power of higher education.
Let me tell you the story of a boy who without educational change would be at risk of leaving school at 15 and then of living a life without real inspiration or direction, without skills or opportunities.
The story of a person at risk of becoming a man more often out of full time work than in it, a man whose life becomes one of small and large missed opportunities, a man who may be a disappointment to himself later in life and a person more excluded from life’s possibilities than included.
The early years
For our all children, including the most disadvantaged, education must start in the home and in local communities.
The early years are perhaps the most crucial of all. And the Rudd Government has begun the process of transformation of our early childhood education system.
From the age of three the boy of our story will have the benefit of our Home Interaction Program, that helps his parents understand what they need to do to develop a love of books and develop learning skills through play.
His learning skills will be developed further through guaranteed access to early childhood education, where he will have the benefit of value-added child care and extra pre-school hours – all under the care of a new generation of qualified early childhood educators, guided by a new national early years learning framework.
It’s a $1.17 billion four-year investment in early education and preschools guided by a comprehensive national reforming agenda.
The school years
When our child enters school, it must be a place that expects and supports him to succeed.
His progress with the basics of literacy and numeracy will be monitored and his problems addressed with one-on-one teacher attention as part of our national action program on literacy and numeracy.
We want him to be engaged by his teachers, including those hired from the ranks of high-achieving graduates and guided in their task by school leaders empowered to get things done. Bureaucratic ways of thinking should not be allowed to hold this child back.
No matter how poor his background, his teachers and community will want him stretched by high academic standards, through curriculum that engages his interest and teaching that identifies and feeds his passion without dumbing down expectations or aspirations.
Australia’s new goal is that 90 per cent of all boys and girls in his school and across the country will achieve year-12 or its equivalent as a base for further training or study by 2015.
This will take a massive national effort. To begin to make it happen, investment in schools in the current quadrennium is being almost doubled – from $33.5 billion to $62.1 billion, including the biggest school building modernisation program in Australian history as part of the response to the global economic downturn.
This is a quantum, transformative leap.
But it’s not just about dollars. It will be built on the twin pillars of quality and equity, informed by a new emphasis on transparency and accountability for every child and every school. The boy of our story will not be left marooned in an under-performing school while no-one knew or everyone averted their eyes.
Higher education
Just a couple of decades ago, our child could have been satisfied with having come this far with 12 years of school and a job with reasonable security and prospects of promotion.
Not any more.
Today every school leaver needs a traineeship, a trade or a profession to achieve the prosperity they deserve.
Currently the odds are stacked against him. And heavily so if he’s from our most disadvantaged suburbs or indigenous communities.
More places
New investments and reforms to vocational education and training being made by the Rudd Government are enabling improved access to training places and apprenticeships in a national training system.
And to give the boy of our story an opportunity to choose a university education, the first and most obvious hurdle is the lack of places in our universities.
Bachelor level or above qualification of 25 to 34 year olds, 2006
Today just 32 per cent of Australian 25 to 34 year olds have a bachelor’s qualification.
In the time between our boy starting kindergarten and entering university, our intention is to get that up to 40 per cent.
To start this process, the Rudd Government is investing $491 million over the next four years to uncap the number of public university places from 2012, allowing universities to offer enrollment to all eligible students. This will create an additional 80 000 student places over the four years from 2010 to 2013, allowing about 50 000 additional students to participate in higher education.
Here are the opportunities we predict these changes will produce.
Uncapping places will increase commencements
Greater equity
His second hurdle is social privilege. To clear the way for him, we must ensure that university places are truly open to talent, not just family or school background.
This Budget begins the task through a range of measures totalling $437 million over four years designed to lift low socio economic status enrolments in our universities by 55 000 in 2020.
The reforms include funding to build robust partnerships between universities and disadvantaged schools as well as substantial rewards for universities for attracting and retaining low SES students. This step will lift the student place loading for each low SES student from about $100 currently to about $1100 in 2012.
Universities will have to broaden their gaze. They will now have systemic reasons to understand and assist the performance of disadvantaged schools.
Increased student support
Once enrolled, we have to ensure our child is provided with the support he needs to complete his course.
Current support mechanisms are failing too many students like him.
As the Bradley Review found, current income support arrangements are falling in real terms and are poorly targeted.
In fact disproportionate support is going to students from comparatively wealthy backgrounds.
As you can see from the chart, which presents work drawn on by the Bradley Review, student income support has been received by families right up the income scale including examples of families with incomes over $300,000.
This slide measures the distribution of annual household incomes for the HILDA (Household, Income and Labour Dynamics of Australia) survey.
This provides strong evidence that this aspect of student income support is quite poorly targeted and inequitable.
So the Government has decided to take the tough decision to tighten the eligibility rules and direct the savings to support for students that need it most by increasing the parental income test.
This means more support for more students.
The maximum rate threshold will be aligned with the Family Tax Benefit A income test (currently $42,559) with support tapered down after this. So if our student now 20 and at home, has an 18 year old sibling also at university and at home his parents will now receive support until they reach the parental income cut-off point at an income of $106,000, which is up from $62,000.
Let’s say the family income is $80,000 per year. Under the old system the parental income test was too low for this family to receive any support. Now however, as a result of changes to the Parental Income Test, the family will receive the equivalent of $374.49 per fortnight as a result of receiving the part-rate of youth allowance and the student Start-Up Scholarships of $2,254 per annum for both students.
Rural students in receipt of Youth Allowance will have access to the higher ‘away-from-home’ rate of payment as well as rent assistance, remote area allowance, fares allowance for up to two trips home per year, other benefits such as the low-income Health Care Card and Pharmaceutical Allowance.
To assist students relocating to study, the Government has also introduced the Relocation Scholarship of $4000 in the first year and $1000 in later years. This will be available to dependent students living away from home as well as independent students who are disadvantaged by personal circumstances. This is on top of the Student Start-Up Scholarship which will be available to all university students receiving income support.
This change will mean that tens of thousands of students will get income support for the first time and many more will get higher payments than they do now.
A quality degree
Ultimately, we want our child not just to graduate but to obtain a qualification recognised as amongst the best in the world. When he applies for a job he will likely be facing overseas competitors and we want him, if he chooses, to be able to have the excellence of his own qualifications recognised overseas.
In higher education, reputation is everything. That means a sustained attempt to improve university quality.
Australia’s students could be getting more from university life.
Student engagement with their institutions could be better. Academic challenge and interaction with teaching staff can be improved.
Australian Survey of Student Engagement 2007
To address this, Australia’s university standards, which are already high, will be raised further.
Of course this means better funding. And the Rudd Government agrees with the sector that proper indexation is the right way to maintain and improve funding over time rather than perpetually ask universities to teach well with diminishing resources.
That’s why the Rudd Government is investing $578 million over three years to increase the rate of indexation for higher education funding, linked to quality improvements.
As you can see, its impact on university budgets will increase over time to significantly raise institutions’ financial sustainability.
Higher indexation will boost funding over time
Our new quality assurance body, the Tertiary Education Quality and Standards Agency (TEQSA) will further improve quality by asking our institutions to achieve greater transparency and rigor. And its work will be supported by $206 million of extra funding to institutions that meet exacting quality standards across a range of indicators.
Opportunities to study in emerging fields
For our boy, now a man, his university will provide him with knowledge and skills in the sorts of disciplines most likely to get him into a job in a growing and important field.
Implementing the recommendations of the National Innovation System Review, university research capacity will be boosted - notably an additional $512 million to bridge the gap regarding the indirect costs of research.
Major capital investments and research funding will open up new study, training and research opportunities in exciting areas like space, marine, health and clean energy.
Three billion dollars in infrastructure spending from this Budget will provide modern laboratories, workshops and learning spaces for our young man to grow and learn amidst modern and state of the art facilities.
A crucial part of that learning will be in the sustainability of our built environment, energy, water and natural systems. Through major investments in university and TAFE infrastructure and research capability, the Rudd Government will enable our young man to make strides in tackling climate change.
A clearer pathway to a career
Our aim is that our young man can choose to move between university, VET and work-based training.
VET and university systems must evolve, they must learn to speak to each other, recognise qualifications and provide easy-to-navigate pathways between themselves and the world of work.
This cannot take the decades of our young man’s educational journey. Greater strategic planning capability is now being put in place that will allow this greater harmonisation, including a single Ministerial Council and relevant changes to the Australian Qualifications Council and Skills Australia.
Opportunities to obtain a trade
But should our child not choose the path of higher education, he will still be touched after school by our Education Revolution.
To help him become a trainee or apprentice, we are now making available $5 billion in supporting apprenticeship and related programs over the next four years and, in a linked reform, a $2 billion investment in Productivity Places.
And should he become unemployed or find himself unemployed, we will provide improved employment assistance, with an emphasis on training, through a reformed employment services network – Job Services Australia.
A comprehensive Training Compact will help young people, retrenched workers and local communities to get back to work and gain the skills required for future jobs. He will have to earn or learn. Staying at home and watching TV will simply not be an option.
Conclusion
Millions of Australians now in their 20s and 30s have obtained their dreams because of the reforms Labor governments introduced in the 1980s and ‘90s.
It’s our task to ensure these opportunities are made available to those entering education today and the ones – like the student we have been discussing – who will be entering it in the near future.
It won’t happen overnight. But we have to start now.
By the time today’s children starting school complete it, education in Australia must be improved from top to bottom by ambitious reform backed by sizeable investments.
As I have said, this requires a huge, transformative leap.
We have the plans and investment is now following.
This graph sums up the education-related investments over the forward estimates and outlines the significance of the scale of the change we are introducing.
Education spending over time* (2008 dollars)
* Education sub function totals, excluding student income support payments.
There is a, transformative leap between where we have been in recent years and where Australia will go in future years.
And the investments announced in the Budget will significantly lift the proportion of Australia’s national wealth devoted to higher education. Public tertiary education expenditure will rise from .78 of GDP in 2007 to .86 per cent in 2012. This is a remarkable improvement.
Estimated public tertiary expenditure on educational institutions as a percentage of GDP (1)
These investments are a strategy for future prosperity, educational excellence and social inclusion for the nation. And they will help position us for the recovery when it comes.
But more than that, they represent the chance of a better life for the millions of Australians entering kinder, school, TAFE and university in the next two decades.