More Thoughts on the Federal Budget

I started writing this blog post a couple of weeks ago whilst on leave. I was reading the Australian news while overseas and saw that Minister Pyne, in introducing the Higher Education Reform legislation into Parliament, described it as “some of the greatest higher education and research reforms of our time”. I would agree that the proposals are the most significant, whether they are the greatest or not remains to be seen.

The proposals are now in Senate Committee and I thought it was worth setting out a few thoughts as the process of putting these proposals through the Parliament begins, as well as giving my view on what should happen.

If you read the history of Higher Education, one almost constant theme is that of a sense of crisis so I don’t want to overuse that word. However, we really do have a fork in the road in front of us with the proposal to deregulate fees. I would like to highlight a number of themes from the proposals and work through each of them:

  • Cost sharing between government and students
  • Fee deregulation and price competition
  • HELP Interest Rates
  • The Commonwealth Scholarships fund proposals
  • Market imperfections and how to address them

Cost sharing between government and students

I commented in a previous post on whether the proposed level of cost sharing was fair and I won’t rehash that again. A major point of debate has been whether increasing student fees is likely to deter people from Higher Education. The Minister has referred to the UK experience to suggest that it will not. The European Commission recently released a report on cost sharing:

http://ec.europa.eu/education/news/2014/20140623-cost-sharing_en.htm

I would recommend everyone to read this because it is a very thoughtful analysis of long-run responses to cost shifting to students. It does suggest that in the long run, it’s difficult to put students off higher education and that a well targeted loan scheme takes a lot of the sting out of it. However, the UK experience is still very fresh – graduates, with their larger debts, are only just emerging. I understand from UK sources that the impact on graduates’ ability to borrow is already being felt and that will feed back into student decision making. Also, there has been a large drop-off in part-time and mature age students (around 50%). There may be more than one explanation for this but we know in Australia that these students are more cost conscious than school leavers. This has not been talked about very much, but for graduates the effect of these changes will be tantamount to a significant tax slug until they pay off the additional costs of their study. For students already working they may well feel it immediately. We might expect that this will affect CSU more than others as we have a high proportion of mature age students. Given the importance of these students to maintaining viability for regional institutions, this could be a very big problem indeed.

Having said all that, it is very plain from talking to people in Canberra that if we do not have students accepting a greater share of the cost burden, the only politically realistic alternative is ongoing cuts and/or putting caps back on the sector. I don’t think either of those is a good solution. That is why I grudgingly accept that some modified form of this package is probably the most sensible way forward.

Fee deregulation and price competition

You only need to read the media, and see which Vice-Chancellors are pushing hardest for this, to understand who are going to be the big winners. It will undoubtedly be the Group of Eight universities because they on average have the wealthiest students and the most elite brand value based (wrongly in my view) on research intensivity. The Minister has asserted that price competition will keep fees down. For most products, given equal quality, consumers will choose the cheaper option. So far, I have been able to find zero instances in the literature where students choose a higher educational option because it’s cheaper. They may choose less expensive options because that’s all they can afford but this is not the same thing. As far as I can tell, education is a Veblen good where the more expensive it is, the more attractive it is. You only have to look at the behaviour around chasing ATAR scores to see the truth of this – this is the biggest price that school students pay in terms of their time and a very real one at that. We know that students ‘ATAR shop’ for courses based on the most prestigious course they can get into, not necessarily what they really want to do. I think it is unfortunate that in higher education we have created a lot of this ourselves through our obsession with research esteem. I think it is up to universities such as ours to make a different case around educational value-add. I think this is one of the potential benefits of fee deregulation – we can stop talking about why everything is the same and start to celebrate difference.

The opportunity to think about something other than equivalence may be particularly useful in relation to blended and distance learning. Most of the discussion we have had up to now has been about whether distance education is as good as face-to-face teaching. We have also tended to see any increase in staff-student ratio as a bad thing. It seems to me this has unnecessarily restricted our thinking and has made it difficult to talk about innovation. Most other industries have used technology to improve the customer experience whilst reducing the human labour required. We have in fact used technology to increase work for staff whilst delivering a better service for students. Noting the point above that society is not willing to fund ever-increasing costs for higher education, this is not sustainable. Therefore I believe we have to start examining how we can use technology to improve outcomes for students whilst reducing the amount of effort required from university staff. Universities have done this brilliantly in research where we doubled productivity over about 15 years and I believe this was largely due to effective use of technology for literature searching, data analysis and publishing. We have not bemoaned this as a loss of quality and we have to get into the same mindset around teaching.

HELP Interest Rates

The proposal to impose real interest rates on HELP debt seems to be the one that has the psychologically biggest impact because of the idea of debt that just keeps getting bigger. I think there is general acceptance that we need compromise on this, and I don’t think we should accept the reform package unless we get it. As noted above, I am concerned that education markets do not work like other markets, particularly where there are loan schemes to support the costs. I believe a progressive interest rate above a threshold provides the best mechanism to retain pressure on costs whilst also being equitable for lower income graduates.

Commonwealth Scholarships

Again, I covered my objections to this scheme in an earlier post. I can see the political necessity for this fund because the selective research-intensive institutions are often accused of social as well as educational elitism and there need to be mechanisms to address this. However, I do believe that if the scheme is implemented as proposed it will impose an immediate market distortion by forcing the most selective urban institutions to chase students they would not otherwise try to recruit. On modelling we have done, and using low SES as a proxy, on quite modest fee increases the Group of Eight could end up with at least 10 times as much money per equity students as regional institutions. I believe it would be more appropriate to make the proportion of money that institutions have to set aside proportional to the number of equity students they currently recruit with perhaps a cap and a floor. This would avoid any immediate market distortions but still provide a mechanism by which institutions can support equity students as they grow their numbers, if that is what they choose to do.

Market Imperfections

Overall, as the Minister has pointed out, this scheme shifts costs to students and the Minister has linked this to the ability of universities to compete in the global research rankings. Clearly then, universities’ ability to compete is going to have far more to do with the ability of their students to pay than the relevance of their mission to their communities or even their competence in research. Given the spread of wealth across the regions, this is likely to undermine the ability of regionally based institutions to support their communities. This is a perverse outcome and I think it is essential that there is a source of funds which redresses this imbalance.

We will continue to work with the Government, Universities Australia, the opposition parties and the independents to get appropriate modifications to the Government’s proposals. I think it is essential that we develop policy settings which are reasonable and which can last into the longer term. In our strategic risk assessment last year we identified government policy change as our most significant risk which we could not mitigate effectively and so it has proved. We have a clear plan for how we would like to develop the university and we know what we want to achieve for our communities and our students. I would love to have a period of policy stability when we could actually get on and do the work we want to do. This in fact is the ‘masterly inactivity’ that Tony Abbott suggested would be the best approach when he spoke to the Universities Australia conference in 2013. Clearly, we have not had that but even so we must push on with trying to do the best job for our communities and our students irrespective of government policy.

August Update

I have made the comment to a few meetings that the period following the Federal Budget has felt a bit like starting a new job – weeks seem to have lasted for months and there has been a lot crammed into a short space of time. What has not been crammed in has been an update through this blog, although there have been a couple of all-staff e-mails about how we are handling the expected fallout from the reforms. If you have been following the press, you will have seen that the Government appears ready to compromise on the reforms, particularly on the interest rate on the debt. However, we also hope for compromise on the level of cuts to government support which will force fees up significantly if they go ahead as planned. Stay tuned on this as we have a Universities Australia plenary meeting this week at which the Minister is speaking so I hope to get an update there.

For this blog I wanted to concentrate on some positives in the last month or two. Firstly, and very importantly, we have announced that the next Chancellor of Charles Sturt University will be Dr Michele Allan. Dr Allan has a long background in rural and regional industries and in education, and has significant experience with boards. She will take up her appointment in December following the retirement of our current Chancellor, Lawrie Willett AO. I am really looking forward to working with Michele but will be equally sorry to lose Lawrie who has guided and supported me during my first two and a half years as Vice-Chancellor. We will have the opportunity to say farewell to Lawrie and to welcome Michele later in the year.

To continue that theme, we also inducted new Council members over the last month. This includes Associate Professor Lyn Angel as the newly elected academic staff representative, replacing Dr Sue Wood, and Rowan Alden as the newly elected student representative, replacing Saba Nabi. This blog post is a good opportunity to acknowledge the work of both former and current Council members. The University Council has overall responsibility for the direction and governance of the University. This means that it approves the University’s strategy and major decisions and policies about our activities and locations. The Council also monitors how well we are doing academically, financially, culturally and in our service to our communities. As well as elected representatives, the Council includes members appointed by the NSW Government, and members appointed by the Council including graduates of the University or its forerunner institutions. We have a great range of experience on the Council from business and education, and Council plays an extremely important role in supporting University management in navigating challenging times.

I also wanted to note the Staff Excellence Awards which started two weeks ago in Bathurst, continued in Dubbo last week and will finish in Wagga Wagga in early September. These are an opportunity to recognise the efforts of staff across the institution and it is a very rewarding process to understand the great work that people are doing. Chika Anyanwu, Head of School of Communication and Creative Industries, did an outstanding job of MC-ing the Bathurst awards and, as I noted at the time, I reckon a gig MC-ing the Oscars beckons for him.

We have been discussing, along with the rest of the University, what we can do at the SEC level to improve communication in response to the Voice Survey. My intention is to write more frequent blog pieces as part of this. I have also been learning to use Adobe Connect with the help of Milena Dunn and I am looking to run a session for as much of the whole university as wants to take part in the next month to explain what’s happening with the Strategy refresh. We are trialling this with Vice-Chancellor’s Forum participants first.  As per my comments at the start, I’m hoping we will get a clearer sense of where the Government’s reform proposals are likely to land in the closing part of this year so I will write updates as that information becomes available.

Federal Budget Update

The big news for the last week has of course been the Federal Government’s budget proposals for Higher Education. I will come to these a bit further down but wanted to deal with some good news stories first.

The first thing I wanted to note was the changeover in Presiding Officer for Academic Senate. Professor Ben Bradley has now been replaced by Professor Jo-Anne Reid. Senate is a very important feature of a university because it is the mechanism through which the voice of the academy – separate to the corporate considerations of running the University as an organisation – can be distilled and articulated. This in fact is legislated as part of the Charles Sturt University Act. Senate achieved a lot in the period in which Ben was the Presiding Officer and Jo-Anne served as the Deputy and I want to thank them both for their contribution to the University through that. Naturally, I would also like to thank Jo and indeed all the members of Senate for continuing to perform this important work for the University.

Second, congratulations to Residence Life for winning the 2014 College/University Housing Operation of the Year. This is a terrific achievement and a testament to the hard work done by the staff in Residence Life. We count the students who are employed as Resident Advisers as part of that staff and having attended their training sessions for the last three years I have been really impressed with their enthusiasm and commitment. All the staff should be (and are) very proud of this and at a time when more than ever we need to focus on providing excellent services to students this is a great affirmation of what we do.

Third, congratulations to Charles Sturt Campus Services at Orange who achieved 1000 days without a lost time injury. This again is a terrific achievement – I have been very keen to encourage everyone to be vigilant about workplace health and safety and it is really good to see areas celebrating their achievements.

Fourth, I wanted to give a plug to the CSU Academic Women’s Association which is providing mentoring and support for academic women across the University. In common with most universities, women are under-represented at senior academic levels and one of the targets in our strategy is to improve this. I hope this will complement other initiatives to assist women to build their careers.

I would also like to note that this week is National Reconciliation Week. I think this has been rather overshadowed by the discussion of the Federal Budget. Having just written an acquittal of the University’s performance, one area where we have clearly been successful is in increasing Indigenous enrolments and Indigenous staff numbers. That I hope is making a continuing contribution to reconciliation.

So now to turn to the Federal Budget.

Here are my thoughts on the government’s proposals on fee deregulation, which are quite lengthy, but this is a critical set of reforms for the sector and for us.

Let me start by saying I do not argue that we need to balance the Federal budget over the longer term. I would also agree that we have probably been too generous in terms of personal tax cuts and tax relief. However, personally I would have preferred us to have had a decent conversation about the balance of taxation and welfare before the last election which would have allowed the electorate to make a more informed decision. This is not a particular criticism of the Government as neither Labor nor the Coalition really facilitated this conversation. In any case despite that we now have proposals which are acknowledged by the Minister to be the biggest reform in 30 years and I do not think he is exaggerating. What do they mean, what are the advantages and what are the potential problems?

The major aspects for me are:

1)   A deregulated fee market – universities are free to charge any amount for domestic tuition as long as it does not exceed international fees. My presumption is that this means that domestic fees at a university cannot exceed the international fees at that university.

2)   An average across-the-board reduction by 20% of government support for student tuition. This will shift the balance of average student contribution from 41% to about 52%. Note that because students were paying less, this means that the proportional increase for students is more like 27% – assuming the overall cost of education doesn’t change.

3)   HECS debt to carry a real rate of interest equivalent to the 10-year government bond rate capped at a maximum of 6%. This is an increase of something like 1.5% and means that, unlike now, if students are not paying off their debt it will be growing in real terms (assuming that inflation stays below 6%).

4)   If universities raise their fees beyond the amount required to replace lost government support, they will be required to put 20% of the money raised into a scholarship fund which will be available for use at that university.

5)   Sub-degree places will now be uncapped and covered by commonwealth support.

6)   Private providers and TAFE will also have access to commonwealth support. The government sees this as contributing to competition (the Minister talked about an ‘adrenaline jolt of competition’) in the sector.

7)   PhD students will also be required to pay a part of their tuition costs, which will also be supported via a HECS loan.

8)   Any student who enrolled after the date of the budget (13 May) will move onto the new fee arrangements from 2016. Anyone who enrolled before that date will stick with the existing fee arrangements until the end of their course, until they change course, or until 2020 whichever is the earlier of the three.

9)   The government has committed to an additional year of NCRIS (National Collaborative Research Infrastructure Scheme) funding and to fund Future Fellows for the foreseeable future.

A point of detail to note, there was early concern that there was a threat to our Dental school because of the budget changes. We did lose $15m that had been pledged by the previous government to build additional dentistry clinics in Taree, Kempsey and Port Macquarie. This would have allowed us to expand clinical placements and hence student numbers as well as working to reduce the public dental waiting lists in that area. The loss of this funding does not affect our existing operations but as noted will prevent any expansion of Dentistry or Oral Health on the Mid-North Coast.

The government’s view is that the suite of proposals provides a fair balance of costs between the private benefits that students receive and the benefit that the nation receives from higher education. Whilst many people have drawn comparisons to decades past where higher education was free, or substantially cheaper, that was a very different world. A very small proportion of the population attended university, there was very much less gender equity and very much less social equity. I do not think it is realistic to expect that we could make higher education free with the participation rates that we have now. That is unless we are prepared to pay a lot more income tax, which it seems we aren’t. So I don’t think we should be debating whether students and graduates should bear some of the cost, what we need to debate is whether policy settings will drive the kinds of social and economic outcomes we are looking for.

Good things in these proposals are that the demand driven system is retained, that sub-degree places are included and that the Government has committed support for NCRIS and the Future Fellows scheme. I think it is reasonable also that private providers be brought into the system, provided we retain some means of funding the social good part of public universities’ missions. I will talk more about the possible problems with fee deregulation below, but it has to be said that an unregulated market in the international space released a lot of creativity and entrepreneurialism from universities and grew international education substantially. Of course, that was bringing new money into the country, not redistributing existing money within the country.

So what’s likely to happen? The Minister has suggested some fees might go down. According to our calculations Mathematics and Humanities will be receiving more government support than they currently do and, if substituting commonwealth money with student fees is all we do, that would allow a reduction. Fees in all other areas would have to rise, simply to replace the money removed by the government. For CSU we calculate this to be an average of 23.5% across the board. Some areas would need to rise substantially. Science fees would need to be increased by 62%, Agriculture by 48% and Environmental Studies by 114%. Is it going to be as simple as this? I don’t think so because we will need to consider the totality of the fees we set so that we can do the best job for our communities and we will have to see how the market behaves, and what happens to student demand, when it starts operating in 2016. I will have a bit more to say about how fees might play out below.

So what are the potential concerns? My first concern is with the pretexts on which this is being pursued. The first pretext is that we don’t have enough diversity in the sector and that diversity is a good thing. I agree with the second proposition but not the first. Early last year I attended a workshop on the U-Multirank tool run by the LH Martin Institute. The conclusion of this workshop was that in fact the sector is already very diverse. Charles Sturt University is nothing like University of Sydney, nor does it wish to be anything like it. We have very different missions, cater for very different student demographics, have different levels of research intensivity and we employ different kinds of staff. We teach more than half of our students by distance education and USyd teaches almost all of theirs by face to face. I think what people from Group of Eight universities mean when they say ‘we don’t have enough diversity’ is ‘we don’t have teaching-only universities, and therefore we have to share our research money with universities that shouldn’t have it.’ This to me is not a good reason for seeking more diversity. I did my first degree at what was then Trent Polytechnic. The staff were mostly professional engineers with a couple of researchers thrown in. They took their teaching very seriously and they did a very good job. However, there was a bit of intellectual spice missing from the education and at the end I did feel a little bit like I’d had the creativity beaten out of me. That was probably OK in 1989 but given the way the world is changing I think we need more flexibility of thinking, not less and I think the inclusion of some research in the culture is important to that end. In both Australia and the UK the binary divide was abolished for a reason and we are better for it.

The second pretext is that fee deregulation will allow Australian universities to climb up the global university rankings. Noting that these are almost exclusively research rankings, I remain to be convinced that requiring students to provide increased funds is going to do the job. On the Times Higher Education rankings, our highest performer in 2014 is the University of Melbourne at 43. To make it into the Top 20 it would need to more than double its score to 14.9, and this at a time when particularly Chinese universities (from a country of one billion people, let’s note) are having mind-boggling quantities of funds injected by their government. On the ARWU rankings, Melbourne again is our highest performer at 54 with a score of 30.2. To lift itself into the top 20 on the ARWU, it needs to improve this score by about 50% and go past University College London and Imperial College as well as the Universities of Illinois, Toronto and New York. If the Go8 are serious about shrinking their student numbers to get more focussed, their undergraduates are going to be paying a very high price indeed for this kind of ambition. I have previously suggested we might be able to pull this off by merging Melbourne and Monash or Sydney and UNSW, selling one of each of their campuses and investing the proceeds in research. I hate to be a grouch, but personally I’m not even sure what, apart from national bragging rights, would be the advantage of having two universities in the Top 20 as opposed to six in the Top 100? What would be the benefit to the economy or community?

The second concern I have is with the impacts on workforce supply. In the existing system we have been able to boost the supply of skilled professionals in regional areas. I worry that this may be undermined by these changes as regional students are put off studying. It would appear that the current higher education market has saturated – that is that the demand for higher education at its current price has plateaued. Assuming that the higher education market operates like any other, we are now looking at a substantial increase in price and we would therefore have to assume that some students will decide not to come. Universities have many fixed and semi-fixed costs which, even if staff were shed to match the fall in students, would not scale down at the same rate. On top of this, note that the Minister’s intention is for universities to be better resourced as a result of these changes “education institutions themselves will be able to grow, to employ more people and invest more back into their local communities.http://budget.gov.au/2014-15/content/glossy/education/html/index.htm Both of these would suggest that fees will need to rise more than the simple replacement value. On top of this, it should be noted that in previous fee deregulations around the world, fees have risen. The most recent example of this is in the UK where fees tripled – almost all of them up to the cap. I find it very difficult to believe therefore that fees will not rise beyond the simple replacement value which is likely to deter even more people. The minister may be counting on private providers and TAFEs to provide enough competition to restrain price rises and to expand supply. However, if this does happen note that even if it’s good for students it will go against the idea that universities will be able to grow and invest more into their communities as suggested in the budget material above.

The third concern I have is with the scholarship fund. As currently planned, this requires 20% of the additional dollars raised above the replacement level to be put into a fund in each university for scholarships. Quite clearly, the most elite universities will be able to charge the highest prices and will therefore have the largest scholarship funds. Currently, these universities have the lowest level of low SES students. This therefore runs the risk that they will be incentivised to recruit students from regional Australia and if, as the Minister intends, competition restrains fees elsewhere in the market, the universities who currently support the most low SES students will be least able to do so. This is a fundamentally regressive proposal which in my view needs to be changed.

Other concerns follow for me, including knock-on macroeconomic effects like graduate wage inflation and the possibility that if the sector raises fees too enthusiastically there might be some rapid re-regulation. I mentioned regional work force above, there is also the possibility that the prices we set (because of the costs of programs like agriculture, veterinary science or engineering) are out of whack with student demand and we end up with even worse labour market shortages in regional areas than we already have.

What does it mean for Charles Sturt University and other regionally-based universities? It’s really hard to say. It seems almost certain to me that we will lose some students who have the least financial resources. We already know that some students struggle to attend university and this may be enough to deter them. It is possible that some students currently moving to capital cities to study may decide to stay in their regions instead. Perhaps it will increase the trend of some students studying for a year or two before moving to the city to finish their degree off and vary their experience. It is possible that more students may decide to move from metropolitan areas to regional areas to study. It is really difficult to do more than guess what the combined impacts may be. We have a great reputation for being entrepreneurial but I think we would be foolish to think that Charles Sturt University will be unscathed or significantly better off. I suspect we would at the very least be significantly different. It will take quite some time to fully work this through. I am hoping that compromise can be reached on the proposals as the budget makes its way through the Senate. Certainly at the moment Labor, The Greens and the Palmer United Party have said they are against it. We will begin to do contingency planning and work out how we will walk the path through the next few years as things unfold. I think this will amplify the existing trends of competition and privilege, much of which is based on history, in the sector.

As a final point, the Organisation for Economic Cooperation and Development (OECD) produces a regular report called ‘Education at a Glance’. One of the sets of tables in this gives a calculation of the private and public benefits of tertiary education. For Australia, the private rate of return is approximately 9% whereas the public rate of return is approximately 13%. I don’t know what difference these proposals might make to this (perhaps any economists reading can) but I think it does indicate that simply making the tuition costs 50-50 between students and the state does not necessarily give the full picture on the full benefits. My concern is that we do not unintentionally shrink the system and therefore undermine the benefits both to individuals and to our communities.

Finally, the changes in higher education policy are a very important step for our nation. I think our local Members of Parliament need to hear your opinions on this as they decide what to do about steering the budget through the Senate. The government has indicated it is willing to make compromises and it is important that they are informed about community opinion. You may be in favour of these changes, ambivalent, or dead against them and I would be very relieved to discover that none of our students is worried by these proposals. However, I think democracy would be served by sending an e-mail to your local Federal Member of Parliament to let them know your thoughts. They do take community feedback very seriously and it will help them to understand your perspectives and therefore hopefully make wise decisions.

For my part, I look forward to hearing your thoughts through the comments, or to vc@csu.edu.au if you don’t want to express them publicly.

 

 

Start of 2014

It’s now the start of the third month of 2014 and the start of a new academic year and here are some thoughts to kick it off.

Arizona

In January I visited Arizona State University (ASU) and the University of Arizona.  Both institutions are ‘Land Grant’ universities which means they were established primarily to benefit their communities.  ASU is widely recognised as a leader in strategy, information management and improving retention outcomes for its students.  ASU has a very similar student demographic to CSU and has a very sophisticated system for identifying students who may be at risk based on their academic performance.  It transpired that one of their key initiatives to improve retention has been to build residences and work on community formation – both themes which have been important to us at CSU.  ASU also has a commitment to achieve carbon neutrality and it was interesting to see solar panels everywhere – including covering the car parks and as shade structures around the campus in Tempe.

University of Arizona has a Native Nations Institute and, through its College of Law, an Indigenous Peoples Law and Policy Program (IPLP). Professor Miriam Jorgensen from the Native Nations Institute has been involved with CSU and other Australian universities on a collaborative research project to explore nation building for Indigenous Australian communities.  Several of our staff and members of the Wiradjuri nation had visited Arizona in 2013 to attend the IPLP.  The visit was a very interesting experience; there are significant differences between the context for American Indian communities in the US and Indigenous communities here but there are also strong parallels. In particular, they have focussed on establishing good governance structures and practices in communities to assist community and economic development.

What was really refreshing about both institutions was that they were genuine in thinking first about what their communities need and as a distant second about how this might play out in terms of esteem through global rankings.  As far as I could tell, this applied at all levels and was a significant change to the level of perpetual angst over rankings we seem to have in Australia.  I hope we will be able to continue the relationship with both universities.

Australian Federal Government Priorities

In the next few weeks we expect to get some information about the outcomes of the Federal Government’s Commission of Audit and Review of the Demand Driven System.  Needless to say, the whole sector is hanging on this because the impacts could be anything from negligible through to significant.  The Federal Minister for Education, Christopher Pyne, addressed Vice-Chancellors at a dinner last week but it has to be said we ended up much better informed about the Minister’s views on the values of higher education (and the contribution of Sir Robert Menzies to it) than on any future policy directions.  Sadly, the Minister did confirm the Government’s commitment to imposing the efficiency dividend on the sector which was announced by the previous Labor government.  When Labor announced it, the Coalition condemned it and bizarrely now that the Coalition is enforcing it in government, Labor is opposing it.  Go figure.

O Week and Start of Academic Year

Last week, we also held O Week events and commencement celebrations on our campuses.  I was able to take part in the ceremony in Bathurst and in a welcome to students living in Residences.  In addition to new and replacement capacity in Wagga Wagga and Orange, there has been very significant refurbishment of residences on the Bathurst campus.  A very strong theme for us has been the value of residences in helping students to grow socially and succeed at their studies (this is similar to the experience at Arizona State University).  We know that it is more difficult to create a good community in a poor environment and we are hoping that the investment in facilities is going to pay off in better outcomes for students.  However, there is also the need for strong support mechanisms and with Paul Dowler and Ken Dillon I took part in the training sessions for the Resident Assistants (RAs) in the second week of February.  I have done this each year since I took on the VC’s role and I have thoroughly enjoyed it on every occasion.  They are a great bunch of very motivated people and it is always great to get a student’s eye view of the organisation.

Universities Australia Conference and MOOCs

As mentioned earlier, last week we had the Universities Australia Conference – at which I once again tried my hand at live tweeting and also ran a panel session on MOOCs.  The MOOCs discussion was an interesting exercise; as participants I had Professor Jane den Hollander, Vice-Chancellor at Deakin University, Professor Gregor Kennedy from the Centre for the Study of Higher Education at Melbourne University, Sally-Ann Williams from Google and Professor George Siemens, now at University of Texas but who started the whole MOOC thing at Athabasca University along with Stephen Downes.  I was very pleased to meet George personally for the first time.  I encouraged pre-discussion via our new Blackboard Course Site and also via Twitter.

In the discussion at the conference itself, it was plain that much of the hype that has been attached to the ‘MOOC’ label was a symptom of the wider change that is happening in higher education.  In particular, the internet and broadband connectivity has made it easier to consume information for all learners and easier to deliver education for all providers – everyone is a publisher now.  It is not a new theme but this does challenge us to focus on what distinctive value we can offer as universities because no-one now needs us merely to access information.  It is also clear that universities have embraced technology and are making dramatic changes in the way they deliver courses.  However, for many they are not yet skillfully using technology to reduce workload for both students and staff and we will need to solve that if we are to thrive into the future.  One point that should not be overlooked is that MOOCs have attracted those who are learning purely for interest and the love of it.  It is pretty hard to be critical of something that attracted most of us to work in higher education in the first place. However, there was a consensus that perhaps it was time to ditch the term and get back to talking about education more generally.

Finally, it’s worth saying something about themes that emerged in the online pre-discussion but less so at the conference. Some of my twitter correspondents mused on the cultural imperialism aspects of MOOCs.  Is there the risk that our intellectual life will become homogenised – and Americanised – as much as our suburbs have?  In one of his movies, Wim Wenders said “the Yanks have colonised our subconscious”.  There is now a global interest in MOOCs from developing countries but we should also be interested in this in smaller countries in the developed world.  That is, we should if we value our cultural identity. Another very interesting point raised in the online conversation was the relationship between the use of technology to facilitate teaching and casualisation in higher education.  Casualisation was almost unmentioned at the conference and yet it is a topic of intense concern to staff, both for that section of the casual workforce looking for a permanent position and for existing staff who are managing the workload associated with managing teams of casuals.

Student Demand and Challenges for 2014

We are still counting the enrolments for the first session of 2014.  Indications at this stage are that we will meet our budget target for load, which is good.  However, it seems plain from State and National data that the demand driven system is topping out and student demand is plateauing.  It is also plain that all universities are getting very much more competitive for students and that students are recognising they have more power and more choice.  On top of this, the ease with which distance education can be delivered via the internet means that there are many more players entering the market.  So, a lot more choice for students but no university can afford to be complacent.  We need to ensure we have courses that are relevant, engaging, that teach students well and deliver graduates who are highly employable as well as being well-grounded, decent human beings.  We also need to provide a great student experience and ensure that all interactions with the university work smoothly.  So, not much to ask for but this is what our Strategy sets out for us to do over the next two years.  2014, then, is a year of delivering on our strategy.  Some of this is going to be exciting and innovative, but much of it will be unglamorous with a fair bit of graft.  To use the words from our Strategy though, we need to have the gumption and the soul to tackle the task.

Christmas Wishes

This post finds us at the end of a very busy, but also very productive, 2013.  We have made progress on all the areas in the Charles Sturt University 2013-15 Strategy and I think we can face the future with confidence.  It has been pleasing to see that so far the new Federal Government has announced no further major changes to the higher education system, although we wait to see what will flow from the review of the demand driven system and from the Commission of Audit of government finances more generally.

2014 will see the continuation of work against the strategy.  In particular, the Smart Learning project will get into more detailed work with Early Adoption courses.  This will allow us to pilot the approach, learn from that experience and hence refine the later and broader work.

We will also continue to work with the Your Voice Survey results.  Human Resources have been assisting areas to understand what the results mean and how we might move forward. Senior Executive Committee have also been considering our communication mechanisms at the whole of university level and will be working next year to see how we can optimise these.  This is critical work if we are to live up to the vision in our Strategy and our values of being an institution that has soul and that values and respects the contributions of staff and students.

Last week we had graduation ceremonies across our campuses.  Including the Police Attestation Parade in Goulburn, I attended these across six campuses.  As our Deputy Chancellor, Kathryn Pitkin, was unfortunately ill I officiated at ceremonies in Dubbo, Orange and Bathurst.  I enjoyed all of these, and it is enormously satisfying to meet our graduates and to learn a little of what they are going on to do after completing their courses.  More than anything I shared the joy on the faces of the graduates as they marked the completion of their courses and the pride on the faces of family and friends attending the ceremonies.

On a particular note, at the Wagga Wagga graduation ceremony we awarded an Honorary Doctorate to Mr Stan Grant AM for his contribution to our communities and the Wiradjuri language in particular.  I got a pronunciation lesson from him on ‘yindyamarra winhanga-nha’ (the wisdom of respectfully knowing how to live well in a world worth living in) and now feel more confident that I am not doing too much damage to the Wiradjuri language in attempting to say it.

Last and not least, it falls to me to wish you all a happy, safe and peaceful Christmas and New Year.  We are grateful for the contributions of staff and students to the university and for the support of all our communities and stakeholders.  I hope that you all enjoy time with your family and friends, that your mental and physical batteries recharge and that you return refreshed, confident and ready to dance into 2014.

September Update

Enterprise Agreement

I thought I should start this blog with some comment on the recent Enterprise Agreement ballot.  I was very pleased with the level of staff participation in this ballot and of course that a majority voted to endorse this agreement.  As noted in communications to staff, I think that the pay increase of 11.9% across four years and the other changes represent a good compromise deal for the University and its staff in difficult financial circumstances following the cuts announced by the previous government.

‘Your Voice’ Survey

I also wanted to comment on the Your Voice Staff Survey.  Again, we had a really good response rate (about 80%) which I am very pleased about because it means we can be sure the results are a good indication of the mood of the institution.  An overview of the results can be found at the Your Voice Survey website.

Overall, the key indices we have chosen to measure our performance, the Passion and Progress indices, have improved by 3% against the 2010 survey.  This is good, but there are mixed aspects within the survey.  I’ll start with the not-so-positive aspects and then move to the better news.

One thing that is troubling is that some particular areas were rated worse than the last survey in 2010.  These included prevention of bullying, encouragement for evaluation of teaching, encouragement for collaborative research and commitment to ongoing training and development. On average, more than 50% of staff rated each of these positively but nonetheless it is cause for concern that the scores have declined.  There are variations in response across the University and we will need to work further to understand what has happened here, and what can be done to address it.

A second set of concerns is the areas that are rated least positively on average. These include good communication, change management, learning from mistakes, career planning, workload and consultation.  However, each of these has improved since the 2010 survey and they are now within a percent or two of the average for all universities.  Workload in particular was rated 9% more positively than 2010.  However, it has to be said that universities do much worse on most of these than the average of all industries so there is no room for complacency.

On the positive side, there were significant improvements in perceptions of the way CSU is run, buildings, grounds and facilities, environmental responsibility, support for teaching, research and community engagement.  We are at, or ahead of, the sector on all these and well ahead on environmental responsibility; 14% better than the average of other universities and 18% better than the average of all other industries.  It is interesting that the rating for satisfaction with income is 9% better than 2010, 7% better than the average of other universities and 10% better than the average of all industries.

The most positively rated aspects were role clarity, belief in the overall purpose of CSU, job satisfaction, mission and values and organisational commitment.  Again, these were improved from 2010 and ahead of the universities average, and significantly ahead of the all industry average.

So, what to make of all this?  People who work in universities love their work and are strongly committed to it from a values perspective.  However, they don’t think we communicate internally or manage change very well and they feel overworked.

I want to assure everyone within the University that I, and the Senior Executive, take the opinion survey very seriously. We will not be able to fix everything all at once and we do need to prioritise.  We have a process in place to work through the results right across the University.  The themes identified above will need to be priorities and there will be particular issues in particular areas.  The Division of HR is working through the results of the survey with all areas in the organisation and I look forward to working with you all to implement the outcomes from this.

The New Government

Obviously, we now have a new Federal Government which was elected with a significant majority. It is very pleasing that three of the representatives who have been particular friends to CSU and to regional higher education – Senator Fiona Nash, Michael McCormack and Sussan Ley have senior roles within the new government.  We congratulate them on this and very much look forward to working with them in their new capacity.

There has been recent media speculation about comments by Christopher Pyne, the Education Minister.  In my view, the Minister’s comments were largely a restatement of his views made clear before the election and I think there was little that was surprising.  Also I think that commentators have read more into the comments than was warranted.  Both Tony Abbott and Christopher Pyne were at pains before the election to point out that they would take a considered and consultative approach to higher education changes.  Christopher Pyne is also on record as saying that they do not propose to reintroduce caps.

The suggestion of scrapping the Student Services and Amenities Fee is disappointing but predictable given the Liberal Party’s objection to its introduction.  The Prime Minister has played down suggestion that this will be a short-term priority for the Government.  However, if it were to happen it does have the potential to have a significant impact on our services to students and we will be lobbying to ensure the government understands this.  Once again, it has been pleasing to see many people, including Michael McCormack, coming to the defence of the SSAF in the media.

University Strategy

I have been making presentations across the campuses on the University Strategy – disrupted somewhat by acquiring the unpleasant cold virus that circulated in NSW this winter.  There are still a couple of sessions to go but, for those unable to attend, a recording of the second session at Wagga Wagga is available here.  I am also looking to organise a session via Adobe Connect for anyone who missed the earlier sessions or was unable to attend.

As you will recall, we finalised the top-level Strategy at the start of the year.  We have been working to finalise the sub-plans which specify in more detail what will happen in each of the 12 areas.  These plans are now close to finalisation and are being shared at the Vice-Chancellor’s Forum (VCF) this week.  Some of these have been out for consultation across the University already but they will all be shared more widely after VCF.

Online Learning

I mention this in the Strategy presentations but interest in the online space continues.  Whilst this is territory that universities such as those in the Group of Eight are now trying to claim as their own, it is an area in which we have deep capability and long experience.  Having worked at two universities which have strong capability in online and distance learning, I do not think it is so simple to rethink pedagogy to work in this way.  Therefore I do not believe that existing distance providers, or regional universities generally, will be swept away by Massive Online Open Courses (MOOCs) offered by universities that have not been in this space before.  I suspect there will be a bubble in this which will burst in due course.  I think we have a sound strategy to continue our growth and dominance in this area, including the appointment of new staff as mentioned below.

Smart Learning

The Smart Learning project, led by Professor Alan Bain, is now well underway.  This is a very significant project for us and will run over the course of five years.  The project provides a thoughtful, systematic, supported, documented approach to curriculum design.  I think that as higher education teaching and learning has become more thoughtful and professional we have missed approaches of this kind.  It will mean a significant change to the way we design curriculum but one that I believe is critical if we are to meet internal and external requirements for demonstrating the quality of what we do.  The project has a long time line and is starting with a set of pilot courses in each faculty.  We will, I am sure, learn a lot along the way.  However,  as far as I can tell, we are leading the sector with this project so I think this is a very important part of achieving our ambition to be seen to be at the forefront of educational innovation.

New Appointments

Finally, I want to welcome two new senior appointments.  Professor Heather Cavanagh has been appointed to the position of Pro-Vice Chancellor International Education and Partnerships after acting in the role earlier in the year.  Heather is a long-standing staff member at CSU having joined us in 1998 and having previously held roles as Acting Executive Dean (Faculty of Science) and Sub-Dean International (Faculty of Science).  This is an important role to achieve the objectives in the internationalisation section of our Strategy.

Professor Sandra Wills has been appointed to the role of Pro-Vice Chancellor Student Learning which she will take up in November. Professor Wills is currently Executive Director, Learning and Teaching, at the University of Wollongong and has a very strong background and international reputation in educational technology.  This is also a critical appointment for us in ensuring we retain our position as the leader in distance and online education.

May Update

Higher Education Funding Cuts

I had intended to write another blog post sooner than this but the government’s announcement of cuts to the higher education budget consumed quite a bit of oxygen over the last few weeks.  To reiterate the message I sent to all CSU staff in an e-mail, while these are serious cuts and will cause pain they are not large enough to threaten our viability nor to divert us from our strategy.  As a reminder the impact on our income will be $6.5m per year from 2015 onwards and we will need to find ways to fill this hole.  Also a reminder that it comes on top of previous cuts in last year’s Mid-Year Funding Adjustments.  At this stage we expect some of this to be met through general budget restraint, some through targetted efficiency measures and some through increased revenue.  Needless to say it is also going to put pressure on our ability to provide wage increases.  I think it is very important that politicians from all sides are reminded that voters understand the importance of universities and I would encourage anyone who does to complete the online petition at the Smartest Investment Website.

‘Your Voice’ Staff Survey

For CSU staff the most important message at the moment is about the Your Voice Survey.  This is the fourth time that we have run the survey, the previous occasions being in 2003, 2006 and 2010.  From previous experience, the detailed results will provide a rich picture of how staff are feeling across the university.  At the summary level two combined indices, the Passion/Engagement Index and the Progress Index are used as Key Performance Indicator for Council to assess the performance of the university and myself as Vice-Chancellor.  The first of these is a composite of job satisfaction, organisational commitment and intention to stay and the second is a composite of change and innovation, customer satisfaction and organisational objectives.  Whilst I don’t doubt there will be things we will need to attend to I am very much looking forward to seeing the results of this survey and encourage all CSU staff to fill it in.

NSW Teacher Reforms ‘Great Teaching, Inspired Learning’

Another potentially painful impact is the NSW Government’s ‘Great Teaching Inspired Learning’ (GTIL) Blueprint.  The plan to reform teacher education in NSW has many very positive points, not least professional development support for teachers once they are in practice.  An area of concern for us is in relation to entry standards into teaching degrees.  The key issue is really the proposal to require three Band 5 results for direct entry into teacher education.  Not too many regional students who currently apply for teacher education achieve this.  We know that regional students tend to perform relatively less well in the HSC and we are concerned that it might disadvantage regional and rural students as well as creating workforce supply problems in the future.

We are still working through the implications of this but it does have the potential to affect CSU students and education courses significantly. One possibility is that students might be diverted through a double degree to give them time to develop equivalent achievement levels.  This might in fact require little additional time so may prove to be a good solution for both students and communities.  The GTIL Blueprint does flag that there may need to be additional access routes for regional and Indigenous students so this may be the solution and we will continue to work with the State Government on this.

CSU Financial Results for 2012

CSU’s Annual Accounts for 2012 have been audited and submitted to State Parliament.  These were completed a week early and credit is due to Executive Director Finance Paul Dowler and the team in Finance for achieving this.  One of the key indicators of financial health is the surplus reported through these accounts. The normal target for not-for-profit organisations is to aim for a surplus of between 3 and 5%. Without this you are in fact starting to run the organisation down because you will be unable to maintain funds to invest in replacement of buildings and infrastructure.  Also you will lack a buffer against unexpected expenses or drops in revenue.  Our target is to aim for a surplus of over 3%.  The surplus figure also needs a bit of unpicking because the accounting standards mean that there are some distortions in the ‘headline’ surplus.  First, we are required to include capital money received from the government, which is spent directly on infrastructure, as revenue.  However, the expenditure is recorded as an increase in asset values on the university’s balance sheet and therefore does not appear as expenditure.  This distorts the bottom line and gives an inflated indication of financial health.  Revaluation of our investments is also included and there has been quite a bit of volatility in this following the Global Financial Crisis.  In 2012, the headline surplus was $22.9m but the adjusted surplus was about half this at $11.6m or 2.65%.  This is below our target range and is a function of the fact that our student load has started to level off from a peak of commencements in 2010.  This explanation is important because we are not starting from a position where we can simply absorb the Federal Government cuts.

Practice-Based Education Summit

I wanted to talk a little about the Practice-Based Education Summit organised by EFPI.  This fortunately aligned with other engagements I had in Sydney which meant that I was able to attend the majority of it.  I really enjoyed this summit and found a lot of parallels between the research discussed and the writing that I have been doing about organisational soul and leadership.  I also gave the first poster presentation of my career having managed to somehow avoid this early in my academic life.  The most important lesson I learned from this was to ignore the conference organisers when they tell you to print at A3.  However, it also led to useful discussions with a number of the participants for which I thank them.

CSU Ontario

University Council endorsed a revised business plan for the Ontario campus earlier this year.  We plan to expand on the ground numbers at the campus as well as using it as a base for increasing our distance load in Canada.  I visited our Ontario Campus in Canada at the end of April and had very good discussions with stakeholders and the Provincial Government about our future.  It was interesting to see that as national and provincial budgets tighten, Canadian governments are also cutting back funding to higher education.  Canadian institutions are now looking very much harder at international students and this will increase competition for Australian university student recruitment.

Welcome to Tim Wess, Executive Dean Science

I would like to close by welcoming Professor Tim Wess, our new Executive Dean of Science to the University.  Tim comes to us from University of Cardiff in the UK and we are very much looking forward to working with him.  Tim will be based at the Wagga Wagga campus but will be getting around to other campuses in the usual CSU way.

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