Super Size Me

Get rid of the caps for a bigger and better Australia

Those working in Australian higher education have been living through remarkable times. The magic pudding of perpetual growth that we lived through for decades was abruptly brought to a halt by the combination of:

• a pesky virus

• downstream global social, political and economic consequences of this virus

• the intersection of policies developed pre-pandemic that sought to limit enrolment growth of Australian higher education

• rising prominence of the negative sentiment associated with international students in policy discourse

Chart of growth in student load (2001 - 2019) and contraction (2020 - 2022)

Total student load may have grown year after year after year pre-pandemic, but its component parts did not¹. The sector caught lucky break after lucky break that saw international load rise when domestic load declined (2004, and 2018), and domestic load increase when international load declined (2011). Some institutions have been luckier than others, with some enjoying an unrelenting pattern of growth, whilst others have experienced periods of contraction and all that comes with it. All these factoids are relevant to my ruminating about demand and supply for higher education, the role that regulatory caps play in shaping this supply and demand, and why we should be bold in our imaginings for our future.

A Detour to Quambatook

Quambatook is part of the lands of the Wamba Wamba / Wemba Wemba people in Northern West Victoria. A genAI search suggests its name originates from being a camp or resting place near water. The Wamba Wemba recently achieved a reserved seat on the First Peoples’s Assembly of Victoria.

In a post-colonial context Quambatook is a small rural community 300 km NNW of Melbourne. Somewhere between Wycheproof, Kerang, Swan Hill, and Boort. For those who love to see high powered machines and big heavy objects the 47th Australian Tractor Pull Championships will be held there in April.

The most recent census counted 229 persons living in Quambatook. Three identified as Aboriginal or Torres Strait Islander. Four were attending university, of those over 15 years of age, 14 had a bachelor degree or higher. Close to 30% of Victorians in this age group have a degree, whilst only 6.5% of Quambatook-onians do. It’s fair to say that it would be hard to sustain a university here. The nearest Regional Study Hub is in Swan Hill some 60km away, and the nearest campus in Bendigo 145 Km away. Pretty close by regional Queensland or Western Australian standards - but not exactly easy to get to.

In Quambatook there is low demand for higher education, low supply of higher education, and not surprisingly, lower levels of educational attainment. My powers of extra sensory perception allow me to read you mind dear reader, and I can tell you are keen to know how this picture has changed over the last 100 years.

The 1921 census (p72) reveals that Quambatook had a resident population of 519, with nearby rivals in Quambatook East having a population of 57. Like much of rural Australia there has been a contraction in population with drift to regional centres and major capital cities. We may be a sunburnt country with sweeping plains, but the plains around the Loddon River have borne witness to the displacement of Indigenous persons, population then gradual depopulation of non-Indigenous persons, and soon to be influx of massive tractors.

I’m not sure what might constitute peak-Quambatook, in terms of population or popularity, but in 1925, it was significant enough to be a specified location for the delivery of extension lectures by the University of Melbourne (Annual Report 1925-26, p952). To be honest this was the reference point that took me down a Quambatook wombat burrow.

My method here did not start in Wamba Wemba. I wanted to go back in time to consider scale, demand, supply, regulation, and caps in Australian higher education past. There are few better reference points for this approach than University of Melbourne Calendars. Coincidentally, 1925 turns out to be quite the turning point for Australian higher education with the introduction of technology enabled learning in the form of wireless lecturettes², and got be on the Quambatook band wagon.

Source: University of Melbourne Annual Report 1925-1926

University Finances How Embarrassment

I’m no historian, so don’t ‘at’ me for any inaccuracies associated with the following observations. The observations turn on the proposition that there are some strong similarities between 1925 and 2025, despite a century of higher education growth and development:

1. Universities are keen to take what they do to the people, both as a public service, and to catalyse demand and access for their offerings. A century ago this included new-fangled technology of wireless lecturettes, correspondence, and extension lectures to far flung places like… Frankston. Today it’s online learning, study hubs and lectures on You Tube. Then it came out of the ‘endowment’ operating grant, now we have HEPPP.

2. Regionality is still a major factor in whether one goes on to study at university or not. A century after extension lectures were delivered in Quamabtook - higher education participation and attainment are stubbornly low. Enrolments in higher education are a function of demand, which is a market-based cap on what universities can do. If the demand isn’t there, but the supply is, insolvency beckons.

3. Universities - at least in Australia - have been reliant on governments for their funding. Governments are not in a position to fund the magic pudding of Australian higher education, so it place limits on their exposure by capping places, funding, and other tricks in the regulatory took kit. It’s also over time encouraged universities to diversify their revenue streams, particularly via international education, but this too is subject to regulations and caps. The Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS), for example, ensures that enrolment of international students is limited to some extent.

4. There is never enough money - university finances are an embarrassment - and there is a need for the government to step up and do more. At least that’s what the University documented in their Annual Report in 1925. We might be more polite about our public statements in this day and age. There is an elaborate lobbying architecture via university groupings and university political and policy advisors that are addressing the same underlying issue. We’d like to do more but don’t have the money to do it all.
   
   For what it’s worth in 1925 government financing as a proportion of the University’s revenue was 44% (State grants, plus Commonwealth research grants)³. In 2022 55% of revenue came from the Commonwealth⁴, so the strategy of seeking more funding has been successful over the long term.

Source: University of Melbourne Annual Report 1925 - 1926

5. Channelling my inner Hayek and Friedman, it seems more than a little nuts that the funding mechanisms in 1925 and 2025 are near identical, albeit with an increasing mountain of red tape. So much so that the tractors in Quambatook will be confronted with volumes of higher education regulation, and I’m predicting the tractors may come off second best.
   
   In 1925 the University of Melbourne was subject to the University Act 1923 specifying an annual endowment of 45,000 pounds. This Act, including all of the operational details for the running of the university ran to 27 pages. This fixed annual endowment is analogous to the ‘maximum basic grant amount’. For the University of Melbourne in 2022, the MBGA is much higher, $262 million, but the end product is the same, albeit with 663 pages of Higher Education Support Act detail to wrangle.
   
   To be clear hear one can’t push out $20 billion of funding with a one-page funding instrument and good will of all concerned. You need more than that, but right now we have too much. My doctorate explored patterns of policy making over the long term and predicted that in future we’ll see financing and regulation consolidation, at which point the cycle of incremental addition of red tape and proliferation of funding streams will take off again.

The Biggest Cap of All

Some readers may have been anticipating a deeper dive into Ministerial Directives and international regulation. To be frank I have run out of puff on that topic. However, I think we should be radically rethinking our approach to international student caps because of one very significant cap, the red cap of the Make America Great Again movement.

Despite the Kayfabe nature of what is happening in America right now, we are in the middle of a geopolitical realignment where America’s position and standing in the world is changing rapidly. With change comes opportunity, and I think we should be seizing these opportunities by going big and large. Super-sizing our international education sector - super-sizing the integration of global talent into our communities - and super-sizing places like Quambatook to be thriving focal points for learning. If America is to close its doors, and close its heart to the world, let us open ours.

The biggest cap here is our own imagination.

Yes, it’s hard to justify massive increases in temporary, skilled, or permanent immigration when we are in a housing and affordability crisis. Yes, it's hard to uplift cultural intelligence on matters relating to First Peoples for the population we have, let alone by decreasing average Indigenous literacy through migration. Yes, it is hard to achieve social cohesion with a diverse population who have deep ties to the geopolitical tensions evident across the globe.

Let us not cap our imaginings of how we do better.

Doing better will require us to super-size education so those in small regional communities get access to the knowledge and skills they need to thrive. It will require us to find better ways of equipping everyone in Australia to graciously accept the invitation to walk with Aboriginal and Torres Strait Islanders in a movement of the Australian people for a better future⁵. It will require us to build more homes in more places. It will require us to nurture social structures that allow everyone to have a dignified secure life.

We can do this, and our universities are the institutional structures that are central to making all of this happen. We can be instrumental in ensuring “The Best Chance For All”.

1. Data from uCube, and Student Load Pivot Tables

2. More on the wonders of wireless with a NSW Schools focus can be found here.

3. University of Melbourne Annual Report 1925 - 1926 p968

4. University Finance Reports 1922

5. Uluru Statement from the Heart