Senator RHIANNON: You raised the issue about the removal of TEQSA's quality assessment function. With the non-threshold standards—the learning and teaching, the research, the information—is your concern that that could be lost? Is that how you think it could play out?
Mr Kniest : Our interpretation of the proposed amendments to the act is that TEQSA would no longer have the capacity to actually assess against those standards; I think it is the appeal of section 60 that actually gets rid of the reference to the non-threshold standard. If TEQSA does not have the authority to assess against those, my understanding is that they become redundant.
One of the other issues that is that the Higher Education Standards Panel, which is chaired by Professor Alan Robson, is reviewing the standards. It may well be that some of those we think will be incorporated into threshold standards, so they may in fact come back in to this threat to the loss of that quality. But the other thing that has happened since 13 May was that the minister has now established a TEQSA Advisory Council chaired by Professor Shergold who, according to the evidence from the department yesterday, will determine which providers are eligible for Commonwealth supported place funding. So it is not clear to us now based on the evidence given at estimates yesterday as to whether the threshold standards as determined but the independent Higher Education Standards Panel will be the same as the standards established by the advisory council for those people who are eligible for Commonwealth funding. Again, it would be useful to get some clarity from the minister and or TEQSA as to their understanding. It would seem to us very odd that you would have two sets of standards that do not match up. I am sure it happens elsewhere, but it seems like a very odd way to proceed.
Mr Kniest : I think that would be useful.
Senator RHIANNON: We were also given evidence yesterday that they have gone through 40 applications in two years. But just looking at the big picture here: is your interpretation that TEQSA is being simplified or stripped down but it will effectively end up with more work, because there will be potentially more providers coming in? Do we have a contradiction that could play out, if the bill went through in its current form?
Mr Kniest : It is certainly our view that in fact the availability of the subsidies for private providers will in fact—we would suggest that anyone who is currently registered as a higher education provider that has someone doing higher education courses would be silly not to apply for the Commonwealth subsidies, because there are no restrictions on what fees they can charge. That would have been the case under the previous system where there were caps on fees.
Dr Macdonald : It was not worth it.
Mr Kniest : A lot of those providers would not have entered the market, because it would not have suited their business model. I think Bond University would fit that example where they would argue that the reason they did not apply for Commonwealth supported places is that they did not want to have a restriction on the fees that they could charge; it was against their business model. But now there are no restrictions on fees—that is the proposal—so that, if you are a private provider and you are eligible, why wouldn't you say to the Commonwealth, 'Send me the cheque'? Business as normal, and there is some money sitting at the bottom of the thing—
CHAIR: As long as they qualify
Dr Macdonald : If they are a provider already, they have qualified.
Mr Kniest : So we assume that is the case.
Senator RHIANNON: So under that system there are a lot of unknowns. Some of us how been looking at the VET system in Victoria. Can we draw from recent developments in other areas that might help inform us where this could go in this form? Because education has just so preciously veered up the marketplace and obviously puts a lot of pressure on; do you think the Victorian experience or any areas—not just in Australia—could inform us what this could do, if it is loosened up in this way?
Mr Kniest : The experience in VET in Victoria, we think, is an example of what is likely to happen. There is going to be a blow-out in the budget. The other thing that happened in Victoria that we did not get to earlier when this came up is that half the TAFEs are losing money. The Victorian Auditor General has said two or three are at risk of not being able to continue. The Northern Melbourne Institute of TAFE has just reported a $30 million loss. A number of the regional TAFEs in Victoria, including some of the ones in Gippsland, are now amalgamating with Federation University Australia. There is a whole lot of public infrastructure out in the regions.
In Victoria the increase in the number of students, mostly in the private providers, did not reduce the skills gap. It did not reduce the gap between rural students and metro students in terms of participation. Basically you spent a lot of money, there was a lot of angst and a lot of the public TAFEs had to sack staff—over 2½ thousand staff—and get rid of student services like library services et cetera. It was all for nothing if the objective was, in fact, to reduce the skills gap. Our view is that there was a lot of heat and pain with virtually no gain. So that would be our concern.
Another example, which may come a bit closer to home, is that there is in fact one arrangement at the moment whereby there is a private for-profit provider in receipt of commonwealth supported places, and it is SEEK Learning. SEEK is in a 50-50 joint venture with Swinburne University, I think, or Swinburne Online. They get access to commonwealth supported places.
The Kemp-Norton review made an example of this as being highly innovative et cetera. We have members who work at Swinburne. They have raised a whole lot of issues and concerns about that. Swinburne Online is only online delivery. I would be interested to know what has happened to Alan Tudge's review of online education, which was done while you guys were in opposition. Where has that gone and why hasn't it been published? Maybe the whole online thing is not that good.
But the feedback we are getting from our members is that they are really concerned about (1) the conditions that the staff are employed under. They are all employed as casuals, these e-learning advisers, so there is virtually no-one employed on a continuing basis. Swinburne Online offers a teacher education course solely online. They do not actually offer that face to face, so our concerns are about the academic backing of those things. Who developed the courses?
If I was TEQSA, I would be looking at Swinburne Online and their enrolments. According Swinburne Online's annual report, enrolments increased from 824 in 2012 to 2,854 in 2013, so that is a 250 per cent jump. If I were a regulator and I was worried about quality, I would be asking questions like: do you have the capacity to provide those students with a high-quality education? Some of these students—quite a large number of them—are in teacher education. Do they have the capacity to find them placements, for example? They are all over the place. There are a whole lot of questions.
Then, if you dig a little bit further into Swinburne Online, you find out that according to SEEK's annual report Swinburne Online made a $2.6 million contribution to SEEK's profit in 2013. Based on 2,854 students, that is a profit of roughly $911 per student enrolled at Swinburne Online. So that $911 is partly coming from the Commonwealth contribution, because they are all Commonwealth supported students. Why isn't that being invested into the quality of the education? Why is this a windfall gain for a private provider? So one of our concerns about the new arrangements—
Mr Kniest : That is a for-profit company. One of things that came up in the evidence from estimates yesterday was that Secretary Paul suggested that the new arrangements will open up the capacity for these private public partnerships between universities and other providers. As far as I am aware, Swinburne Online does not have to register with TEQSA because its qualifications are Swinburne qualifications. Swinburne is a university, so it is self-accrediting. It does not have to go through that process. So is this like a back door entry into the market?
CHAIR: We will have to check on that.
Senator RHIANNON: Can you comment on the variable impact this bill could potentially have on universities, particularly the different impacts it could have on universities in regional areas and Group of Eight universities—all those differences that you would know so well? We are seeing a number of the vice chancellors pushing for deregulation, although there is a variation between them in their response to the government's plans. But it seems as though many are now starting to realise that they could have an additional financial and management burden. My question in the main was: what variable impact will this have on the universities?
Dr MacDonald : One of the issues we have had since TEQSA was raised and the legislation was originally being drafted and all that sort of stuff, is this idea that the regulators dare not mention the word 'university'. So I will compare universities to other providers because I do not know that the amendments to the TEQSA legislation actually impact differently on different types of universities necessarily. Every organisation is a 'higher education provider' even though amongst the TEQSA threshold standards are these provider category standards. It seems to us that it would be a really healthy thing for someone to say there are these organisations out there called universities; they are established by legislation; they are accountable to parliament; some of them have been around for 150 years. Is the system broken? Have Australian universities really let down the Australian public? Our view is they have done pretty well, by and large.