Ross Pilling, managing director of BASF Australia & New Zealand and deputy national president of the Australian Industry Group, has posted an article in The AFR today arguing that Australian business becoming increasingly concerned by declining participation rates in the so-called STEM disciplines of science, technology, engineering and mathematics:
…only one in 10 Australian students studied advanced maths in year 12 last year. Fewer year 12 students, especially girls, have any interest in studying maths and science.
For business, this is a source of profound frustration. The potential lack of a talent pool of STEM-trained graduates has a real impact on Australia’s ability to remain competitive in science-led industries.
It’s not only graduates. A survey by the Australian Industry Group has found employers also have particular difficulty in recruiting technicians and trades workers for occupations needing STEM skills.
…there is a clear need for closer ties between industry and the education sector to address Australia’s looming STEM crisis.
Unfortunately for Mr Pilling, and the Australian business community more generally, the Abbott Government’s reforms to university fees and funding, announced in the May Budget, are likely to make science shortages worse.
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Recently released estimates from the National Centre for Social and Economic Modelling (NATSEM) showed that science students would be worst affected by the fee changes, with science students expected to experience a doubling of fee repayments to around $90,000 or more, which would obviously discourage student enrollments in the STEM disciplines (see below charts).
We analysed a range of typical courses for the University of Canberra and considered the impact on repayments for students. We assumed that students will face a repayment interest rate of 5% which is around twice that of the CPI (the existing indexation) but lower than the typical 10 year Treasury bond rate (the proposed loan interest rate) of 6% over the past decade…
There is the possibility that universities in a deregulated market could increase fees beyond the current funding envelope. We estimated the impact of a price increase of 20% beyond current costs.
No doubt, the Abbott Government’s response to any science shortages would be to ramp-up immigration including via the 457 via program, rather than attempting to develop the skills locally.
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Such is the disappointing state of policy making in Australia.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
