Performance targets to drive funding

THE federal Government has placed performance targets at the centre of a $5.3 billion, six-year package intended to move higher education funding towards a more sustainable basis.

Teaching funding is to be linked to agreed performance outcomes on quality, participation and completions rates and a new regulatory agency, the Tertiary Education Quality and Standards Agency, will be formed to oversee standards and performance.

The move is part of a $5.3billion package for tertiary education and research that in addition to $2.6 billion in infrastructure funding, includes longer-dated pathways towards making funding more sustainable through better indexation and increased research block grants to cover indirect costs.

Last night higher education commentators welcomed the budget, against a background of low expectations.

Ian Chubb, vice-chancellor of the Australian National University, said: "Of course, grumblers will say there should have been more, but let's be realistic.

"An investment of more than $5 billion in higher education and research is to be celebrated."

Alan Robson, chairman of the group of eight universities and vice-chancellor of the University of Western Australia, said: "Even though some of this funding will not flow through immediately, the Government's forward-looking approach provides universities with some predictability for their planning.

"This budget includes a serious commitment to move progressively to cover each university's indirect research costs, long advocated by the Go8 as vital to the quality and competitiveness of Australian universities."

The Government is to spend $578 million over three years to increase indexation for teaching and learning to be phased in from 2010-11. At first this money will be conditional on universities agreeing performance targets before becoming unconditional from 2012.

However, the new indexing arrangements, to be based on the professional wage and salary cost index, will be discounted to drive productivity improvements.

Sandra Harding, vice-chancellor of James Cook University and chair of Innovative Research Universities Australia, said the budget was "much more than we expected and responds very well to some of the imperatives identified in the Bradley report.

"The commitment to improve indexation, though it will be stepped in, was almost the holy grail of the higher education sector, and here it is.

"The funding to support low SES participation targets is much needed."

To improve standards, $206 million in teaching and learning funding over two years will be linked to performance targets being met. The funding initiatives will replace the Learning and Teaching Performance Fund, involving $323 million in spending over four years being redirected.

Ross Milbourne, chairman of the Australian Technology Network universities and vice-chancellor of the University of Technology, Sydney, said: "I guess it's better than we were expecting, in the sense that it's given some long-term perspective to where university funding might head."

He welcomed the return of indexation - "we've been asking for that for some time" - and the increase in research infrastructure funding.

Professor Ken Baldwin, president of the Federation of Australian Scientific and Technological Societies, said: "This is an exceptional budget, above expectations.

"The Government has grasped the opportunity to undertake fundamental reform."

Examples of this reform included tax credits for private sector innovation and a move towards funding the full cost of research in the higher education sector.

For Carolyn Allport, president of the National Tertiary Education Union, the budget was "very welcome".

"For university staff, they would welcome and be astounded by the commitment to a new indexation formula," she said.

"It could go a long way to restoring the funding basis of universities over the longer term."

Nigel Palmer, president of the Council of Australian Postgraduate Associations President said: "We are very happy. These are certainly from our perspective landmark reforms, things we have been looking for for many years.

"We certainly welcome the increase in the Australian postgraduate award and the extension of eligibility for youth allowance and Ausstudy for coursework postgraduate students."

TAFE Directors Australia chief Mr Martin Riordan described as "encouraging" the move to expand the structural adjustment fund to degree-granting TAFEs, and the increase to the Education Investment Fund which would "ultimately" flow through to TAFE.

But he was surprised by the lack of funding for the Government's big "earn or learn" push, despite projecting an increase in the number that would need those funds to 135,000.

"The big increase in projected unemployment leaves a big unknown as to the demand for training. We are already seeing a spike in enrolments, but how they will be funded is a key issue especially for accredited courses."