Date posted: 18/09/2020 5 min read

Will COVID-19 reshape the tertiary sector?

As closed borders reduce international student numbers, the tertiary sector is at loggerheads with government over funding.

In Brief

  • COVID-19 border closures have constrained international student numbers in Australia and New Zealand.
  • The loss of fees from international students could mean less research work will be done at universities.
  • Although the tertiary sector is calling for urgent assistance, governments have resisted a funding bailout.

By John Burfitt

Vocational colleges emerged as the big winners in New Zealand’s May budget, with an additional NZ$334 million earmarked for tertiary enrolments as the Ardern government banked on a skills-led recovery. A Times Higher Education article says the sector had anticipated NZ$600 million in additional funding, but there’s still NZ$20 billion of COVID-19 recovery money to be allocated.

In Australia, however, the outlook for the higher education sector is even more uncertain.

A Higher Education Relief Package, announced in Australia in April, guaranteed funding for Australian students throughout 2020 but ruled out including most universities in the JobKeeper wage subsidy scheme.

On 3 June 2020, Universities Australia released modelling that revealed Australian universities could lose A$16 billion in revenue by 2023, with 21,000 jobs expected to be shed.

International education is Australia’s fourth-largest export, contributing A$39 billion annually to the economy. With the anticipated decrease in international students, and the revenue those students generate, the sector called for an urgent relief package to help universities cope.

Instead, in June, federal education minister Dan Tehan outlined a new pricing structure for uni courses in Australia. Fees for commerce and law courses are set to increase 28% to about A$14,500 a year, while the cost of humanities and communications courses will more than double – in some cases by 113%.

On the flip side, there will be a significant decrease in course costs for teaching, nursing, agriculture, IT and engineering – in a bid to lure more students into studying in areas in which there are skills shortages.

Tehan estimated 60% of students will see reduced or unchanged fees, and the changes would open up an extra 39,000 university places by 2023. Current students' fees will not increase as the changes will be grandfathered, although fee reductions will apply to current students.

Tertiary sector funding troubles

The government’s reluctance to allocate more money to the higher education sector is nothing new. Back in February at the Universities Australia Conference – long before the COVID-19 outbreak –Tehan had urged universities to attend to their existing business models and “wring every last dollar” out of the funding they already receive.

“If we are going to ask the Australian people for more support, it is first incumbent upon us to maximise the value of what we already receive,” he said.

Universities have responded that fees from international students have been propping up research activities at universities for years, and falling overseas student numbers mean that research is now at risk.

“This is an impending disaster which needs to be sorted out in the next few months,” Australian National University vice-chancellor Brian Schmidt told The Australian on 3 June. “We’re to lose a potential early-career researcher generation.”

The tertiary sector’s role in economic recovery

Universities have a key role to play as important partners in getting the economy back on track, in terms of creating jobs and teaching essential skills, claims Dr Michael Spence, vice-chancellor of the University of Sydney.

“The most pressing need is to support the sector to plan for the safe return and arrival of the thousands of international students – their return is a key factor in helping universities recover and get the economy booming again,” Spence told Acuity. The large-scale return of students is not expected until 2021.

It’s a similar story with Australia’s vocational education provider TAFE, which has experienced a A$3 billion cut in funding in recent years.

“There is an urgent need to invest in a strong TAFE,” the Australian Education Union’s federal president Correna Haythorpe said in May. “TAFE is going to be vital for Australia’s future and for tackling the big challenges to come.”

The research field could prove one of the most critical avenues for Australia’s recovery, Universities Australia CEO Catriona Jackson says.

“Australia will need even more new ideas, skills and jobs to power economic recovery – and universities are the engine rooms of that renewal,” she told Acuity. “If universities are unable to continue funding this activity, Australia’s ability to innovate its way out of the COVID-19 recession will be severely hampered.”

“Australia will need even more new ideas, skills and jobs to power economic recovery – and universities are the engine rooms of that renewal.”
Catriona Jackson, Universities Australia

Dr Amanda White, a CA and former senior consultant with PwC, is currently a senior lecturer in accounting at University of Technology Sydney (UTS). She says improving financial literacy of the new breed of accountants is essential.

“Accounting education is crucial right now – it’s not a time to limit it,” she says. “Small businesses are looking to CAs, demanding much more of our skills to help direct them through uncertain times.”

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