Funding package needed for regional universities


OPINION: Regional universities play a crucial role in the communities they serve.

Because of their strong links in their region, they invariably enjoy strong support.

So it is not surprising there is now momentum for a funding package for regionally-based universities.

This funding package would serve as an important and strategic addition to Education Minister Christopher Pyne’s higher education reforms.

The logic for a funding package is self-evident. If nothing is done, there is every indication that regional Australia, its communities and their universities will suffer a disproportionate impact from the budget measures relating to higher education.

The shallow rhetoric about having more scholarships for regional students, including assistance to help them to attend metropolitan universities, and the availability of more sub-degree courses, ignores the real differences we have in this nation between metropolitan and regional higher education.

The differences are structural and not simply related to student choice and cannot be easily ameliorated by the application of market forces.

The 2011 Larkins’ review of regional higher education funding made this patently clear when it concluded: “it is unlikely that the regional higher education market will lead to better long-term outcomes for students and regional areas without government intervention” and that “the economic disincentives for regional higher education provision create an incomplete market – a type of market failure”.

In other words, market failure is already a characteristic of regional higher education provision.

When the evidence is examined, it is apparent why regional higher education in Australia needs specific public policy attention when broader reform is being considered.

The facts speak for themselves, as the Larkins’ review, and the Bradley review before it, noted: higher education participation rates are much lower in the regions; regional year 12 completion rates are significantly lower; regional higher education students face greater disincentives to study because of costs and distance to campuses; these students are predominantly first in family to attend university and much more likely to be non-recent school leavers, female, older and care for dependents; and they are less able to move to study and more likely to study part time.

Likewise, regional universities and campuses continue to face economic disincentives which were also enumerated by the Larkins’ and Bradley reviews. These range from thin or quasi-markets for higher education due to lower population density and lower year 12 completion rates, through to diseconomies of scale in maintaining regionally important but low enrolment courses, and the higher costs of operating regionally.

Given the evidence, an important consideration with Christopher Pyne’s higher education reform package is not to exacerbate an already tenuous situation in regional and remote provision where there is evidence of market failure and the necessity of government intervention through modest regional subsidies.

Despite the challenges, all regional universities are continuing to make a difference. The newest of these, Federation University Australia, is a case in point.

Three in four of our undergraduate domestic higher education students at FedUni come from regional and rural backgrounds. Almost a third also come from low SES backgrounds.

Three-quarters of these students are the first in their families to attend a university. And, more than 80 per cent of our domestic students depend on Commonwealth welfare payments (additional to support from HELP tuition assistance) to attend university.

Some 80 per cent of our students find work within three months of graduating. We return three in every four of our graduates to regional jobs. Our nurses, teachers, accountants, scientists, engineers and research graduates directly contribute to regional capacity building, to regional development and to regional leadership.

However, the university is also vulnerable given the composition of its domestic student body and the diseconomies of scale that characterise the operation of its campuses, particularly in the Gippsland and Wimmera regions of Victoria.

We also know from our own internal research that, for most of our students, the choice to attend and then to remain at university is delicately balanced.

What is becoming apparent from the debate and consultation around Christopher Pyne’s higher education reforms is that universities which have the majority of their domestic higher education enrolments emanating from regional and rural areas will have limited options.

They will be constrained in setting higher student contribution fees to offset the proposed 20 percent decline in Commonwealth funding.

As a result, they are unlikely to raise substantial funding for scholarships for disadvantaged students, which make up the majority of their enrolments.


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