Budget Cuts on Higher Education Funding- myassignmenthelp.com

Question: Discuss about theBudget Cuts on Higher Education Funding. Answer: Introduction On 2nd May 2017, the Daily Telegraph published Claire Bickers article titled; University funding reportedly to be cut substantially in Federal Budget 2017. This article analyzes the 2017 budgets proposal to slash university education funding by up to $2.8b, the fact that the sector has undergone prior cuts amounting to $3.9b since 2011 notwithstanding. Among the proposed reforms include proposals to have students pursuing four year Bachelors degree programs to pay between $2000 and $3600 more for their education, early repayment of education loans upon commencement of earning, imposition of efficiency dividend on teaching funding, among others. These reforms have strongly been opposed by various stakeholders for various reasons (Shaw, 2015). The Labor party was on the record stating that it was keen on blocking the proposed reforms and that they would study the Deloitte report that made the recommendations to establish the positive aspects of the reforms. Shadow Minister for Education, Tanya Plibersek was quoted acknowledging that Australian students are the highest contributors to their university education and further increases to this burden would be unfair. Graduate students, in addition to repaying their HECS debts, finance other numerous expenses as they strive to establish themselves early on in life. According to Bickers (2017), further opposition to the reforms comes from Australias top ranking universities whose view is that the reforms do not have a long-term vision for the education sector because they fail to ensure Australias education system produces highly skilled graduates to keep Australia afloat in the co mpetitive global economy. Analysis of the Article The proposed higher education reforms, as analyzed by various parties, possess some notable positive attributes but it is their negative impacts that worry a majority. On the positive side, the reforms have been applauded for their support for the Higher Education Participation and Partnership Program (HEPPP) to ensure access to university education and equity. Further, by being required to make 7.5% contribution to the Commonwealth Grant Scheme funding, the universities will be more accountable and, over time, this fund is proposed to be anchored on performance measures such as student outcomes, transparency and effective financial management which will collectively promote accountability and keep costs under control (Bickers, 2017). Notably, the education export industry is the third largest export industry in Australia. It is argued that by introducing cuts to university education funding, Australias standing as a study destination of choice will be hurt and result in decreased influx of international students. In support of this argument, Professor Saini argues that the cuts have an impact on both local and foreign students who are already burdened with steep fees (Trounson and Hare, 2017). Professor Saini further acknowledges the fact that Australias international education market is a leader in the global perspective due to its brand which makes it highly competitive. The instant characteristics of the education industry have increased the demand for Australian education which has in turn generated export income of up to $22b. Professor Saini argues that if the increased fees burdens become unbearable especially for international students, the flourishing international education industry will suffer great loses (Massaro, 2017). The professor further adds that he believes universities faced with cost burdens may be forced to reduce staff and take other measures likely to compromise the education standards in a bid to make ends meet. These will compromise the standard of education for which Australia is renowned and ultimately, it is the international education industry that will suffer the aftermath (Singh, 2017). Fig: Enrollment of higher education in Australia Source: Internationaleducation.gov.au (2016) The enrolment rate for higher education in Australia has been rising as observed above. However, the approval of the budget cut may lower the enrollment rate. Just like any other venture which requires investment to flourish, the funding cuts will adversely affect the quality of education on offer over time. This will in turn diminish the demand for Australias higher education especially by international students. In such an event, the education industry will no longer be a top earner for the economy. Recommendations Having been noted that the education export industry is of immense value to Australias economy, it then goes without saying that the Federal Government must take measures to preserve the industry by ensuring the demand for the education is not reduced but rather increased in folds. Part of the justification for the funding cuts as per the Minister for Education and Training, Simon Birmingham, is that the funding arrangements are not sustainable and therefore measures need to be introduced to ensure proper allocation of taxpayers monies. Notably, in the 2016-2017 budget, the government proposed the intended progressive corporate tax rate reductions which were assented to on May 2017. The argument is that if the governments objective is to find money in the budget, paramount consideration should not be to overburden students with more fees while reducing corporate tax rates. Another troubling aspect of the 2017 budget proposal is the requirement to have students pay interest on the HECS loans. This move and the fact that there will be increased fees is tantamount to transferring costs to students and it will undoubtedly be a disadvantage to the students, more so those from poor backgrounds. Instead of adopting this policy, the best approach would be for the government to allow students to begin making payments only after graduating and when they begin to earn income that is above the repayment threshold. Conclusion In sum, the Federal Government needs to keep in mind the fact that universities compete globally. Therefore, reform policies must be streamlined to ensure Australias competitive edge is maintained. There appears to be a clear disconnect between the proposed education funding cuts and the need to produce highly skilled graduates, job creation through research and increasing of productivity within the education industry. It is arguable that the government has its priorities misplaced by advocating for business tax cuts while at the same time cutting university funding. While it is agreeable that business tax cuts allow Australia to market itself as a globally competitive economy for investors to set up shop, the same argument can be applied to the universities which are Australias third largest export. It is therefore necessary that the government should reconsider the proposed funding cuts. Bibliography Ato.gov.au. (2017).Reducing the corporate tax rate. [Online] Available at: https://www.ato.gov.au/General/New-legislation/In-detail/Direct-taxes/Income-tax-for-businesses/Reducing-the-corporate-tax-rate/ [Accessed 20 Aug. 2017]. Bickers, C. (2017).University funding to be slashed. [Online] NewsComAu. Available at: https://www.news.com.au/national/politics/university-funding-reportedly-to-be-cut-substantially-in-federal-budget-2017/news-story/8297d34f639cd70eae3aa2503e35290e [Accessed 20 Aug. 2017]. Internationaleducation.gov.au. (2016). International Student Data 2016. [Online] Available at: https://internationaleducation.gov.au/research/International-Student-Data/Pages/InternationalStudentData2016.aspx [Accessed 19 Aug. 2017]. Massaro, V. (2017).Revisit reform, with vision. [Online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/higher-education/higher-education-reform-needs-to-have-vision-and-be-affordable/news-story/de4ecf1f9cee428d1591aa421fa897de [Accessed 20 Aug. 2017]. Shaw, A. (2015).Australian Government Faces Criticism for the Budget Cuts in the University Funding System. [Online] Aussie Network News. Available at: https://www.australianetworknews.com/australian-government-faces-criticism-budget-cuts-university-funding-system/ [Accessed 20 Aug. 2017]. Singh, M. (2017).'The Australian brand of education could be damaged by federal budget cuts'. [Online] SBS Your Language. Available at: https://www.sbs.com.au/yourlanguage/punjabi/en/article/2017/05/12/australian-brand-education-could-be-damaged-federal-budget-cuts [Accessed 20 Aug. 2017]. The Higher Education Reform Package. (2017). [pdf] Available at: https://docs.education.gov.au/system/files/doc/other/ed17-0138_-_he_-_glossy_budget_report_acc.pdf [Accessed 20 Aug. 2017]. The voice of Australia's Universities. (2017).Majority of Voters against University Cuts and Student Fee Rises. [Online] Available at: https://www.universitiesaustralia.edu.au/Media-and-Events/media-releases/Majority-of-voters-against-university-cuts-and-student-fee-rises#.WZlxX1QjFpg [Accessed 20 Aug. 2017]. Trounson, A. and Hare, J. (2017).Poorer students will be hardest hit. [Online] Theaustralian.com.au. Available at: https://www.theaustralian.com.au/archive/national-affairs/hecs-architect-bruce-chapman-warns-that-poorer-students-will-be-hardest-hit/news-story/b19e1af9be90d753f8ff8f6efb27fc6d [Accessed 20 Aug. 2017].