University of Sydney welcomes Coalition Government review of the demand driven system

13 November 2013

University of Sydney Vice-Chancellor Dr Michael Spence today welcomed the announcement by Minister for Education, the Hon Christopher Pyne MP, that he had commissioned a review of the demand driven funding system for higher education, to be completed by mid-February 2014.

"This is a critical review which can help determine if we as a nation are putting enough emphasis on quality over quantity for this vital sector, charged with producing the skilled workforce and research innovation that is so integral to Australia's future," Dr Spence said.

"As well the review must consider whether the demand driven system has been the most effective way to deliver increased equity of participation, as on average 80 per cent of students admitted to universities under this system continue to be from middle to high SES backgrounds."

Dr Spence said that with projections of as many as 500,000 extra domestic students in higher education by 2025 the cost to the taxpayer of maintaining a high-quality higher education system can only grow significantly.

"We need to start thinking now about how we can sustain quality and fairness into the future while faced with ever increasing demands from students, as well as escalating staff, infrastructure and other costs," Dr Spence said.

Dr Spence said the higher than expected costs of the demand driven system have had a profound impact on government funding of both the education and research activities of universities, which are integrally linked, but too often treated as separate. The high costs have also compounded the deficiency in funding for degrees for various disciplines, which an independent review uncovered, and for which universities have had to make up the shortfall.

"Under current arrangements we can only sustain courses in high-cost disciplines such as medicine, veterinary science, dentistry, agriculture and various health disciplines, through a complex web of cross subsidies from other disciplines and increasingly fees from international students. The situation is not sustainable," Dr Spence said.

"We need to turn the focus to proper funding of degrees and research activities and a quality offering for both domestic students and for the international student market, which is a major contributor to the Australian economy and society."

"We look forward to engaging with the review team, the government, business and the sector on this important process."

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