This is a moment for universities to shine. Instead they’re in crisis

Well before the coronavirus outbreak it was apparent Australia’s under-25s were in danger of becoming the first generation in many decades to have lower living standards than their parents’ generation.

Years of wage stagnation, high rates of under-employment and high housing costs mean living standards have improved far less for younger people than for older age groups. Now the pandemic has exacerbated the problem.

With unemployment high many young Australians are opting for higher education.
With unemployment high many young Australians are opting for higher education.Credit:Louise Kennerley

Grattan Institute chief executive Danielle Wood, who co-authored a recent study on generational inequality, says: “We were on the cusp of saying we’ve got a generation that’s going to fall behind the one that came before it, but I think we’re certainly going to be in that world now.”

Confronted with the weakest jobs market in memory, more young people than usual are opting for vocational or higher education. Applications for university next year have surged as school leavers respond to the recession by signing up for more study. The University Admissions Centre, which processes applications for admission to tertiary courses mostly in NSW and ACT, has received 21 per cent more applications from year 12 students wanting to attend university in 2021 than at the same time a year ago.


Many older workers will likely choose to upskill or retrain during the downturn. Education is a smart choice with the labour market so tight and travel restricted.

The spike in demand for post-school education is a national opportunity. Australia can use the pandemic to invest in our collective know-how. A more educated young workforce will help drive the recovery from the coronavirus recession.

So this should be a moment for Australia’s world-class universities to shine. Instead, the sector is in crisis.

The National Tertiary Education Union says more than 11,000 university jobs have been lost this year and more staff reductions are anticipated. Some institutions have slashed the number of courses available to students in a bid to save money.

The job losses and reduced course offerings mean a lower quality of tertiary education for young Australians. Many university students already complain about overcrowded tutorials and limited contact with academic staff.

University leaders say they’ve had no choice but to make cuts. They seem preoccupied with the decline in international student numbers due to COVID-19 border restrictions and the effect that has had on balance sheets.

The federal government, which funds universities, has added to the upheaval with a controversial overhaul of university fees now before Parliament. The “job-ready graduates” package proposed by Education Minister Dan Tehan will reduce student contributions for some courses, including engineering, health and science, while significantly increasing fees for many popular subjects, such as humanities (apart from languages), law and business. Tehan says his reforms will “grow the number of university places for domestic students by 39,000 in 2023”, although tertiary sector experts have queried that claim.

Professor Andrew Norton, a higher education analyst at the Australian National University, warns the government’s changes are “not going to deal” with the challenges now facing universities. In a submission to a Senate inquiry into the job-ready graduates legislation, he says problems with it “are too fundamental to be fixed by amendment. The bill should be rejected.”

Danielle Wood is even more scathing. She says the government’s proposed changes lack coherence and threaten to exacerbate the financial challenges faced by the higher education sector because of the pandemic.

“I honestly think it’s one of the worst-designed policies that I have ever seen,” Wood says. “Even if you accept its stated rationale, it doesn’t go anywhere near achieving it.”

To make matters worse for school leavers, Norton warns 2021 is shaping as a “competitive year” for university hopefuls. Under current policy settings, universities may turn away thousands of potential students as applications spike but the number of available places remains fixed. Many who miss out will likely end up on JobSeeker.

Over the past decade universities have been increasingly portrayed as export businesses rather than places of learning and scholarship.

Prime Minister Scott Morrison likes to speak about universities with the language of big corporations and commerce. Asked in July why universities were being denied access to the JobKeeper wage subsidy scheme, Morrison said they were like other “large businesses” negotiating the coronavirus crisis.

“We should remember, these are very large organisations with billion-dollar reserves and they’ve got multi-million-dollar CEOs and they’re making decisions about how they’re running their own organisations, just like many large businesses are going through this,” he told ABC television.

But opinion polls suggest voters value the public good that universities provide, not just the export earnings. A recent Ipsos survey found 78 per cent of Australians viewed universities as crucial in solving the world’s biggest challenges. And 76 per cent agreed that access to universities should be expanded while only 7 per cent disagreed.

Young people typically bear the brunt of any economic downturn. Research shows age groups entering the workforce during past recessions have suffered long-term “economic scarring” including higher rates of underemployment and lower incomes.

Access to top-notch tertiary and vocational training is one way to offset the damage. We know higher levels of post-school education boost workforce participation, productivity, and national wellbeing. It will pay long-term dividends as an increasing share of employment becomes knowledge-based.

The deep economic downturn caused by the pandemic demands a renewed focus on the needs of young Australians.

Most Viewed in Business

Source: Thanks