Greens demand more dead-end university degrees

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The Greens are demanding the federal government lift university places to soak up unemployed young Australians:

The Group of Eight universities has estimated that it has received 9,340 more applications this year compared with the same time in 2019, despite the package offering its members funding for just 572 more places in 2021.

It’s a similar story at the Regional Universities Network (RUN), where members report an increase in demand ranging from 4.7% to 41% in semester two, well above the 3.5% increase in places from 2021 offered for regional unis…

According to the Greens’ analysis, if universities are to maintain a rate of 83% of applicants receiving an offer, a 25% rise in applications in 2021 would require 58,000 more places than provided by the Coalition package. The figure rises to 128,000 places for a 50% rise in applications…

The Greens education spokeswoman, Mehreen Faruqi, said… “In the Covid recession, applications are soaring and the government has no plan to handle it… The government is denying tens of thousands of students the chance to study and retrain during the recession.”

It would be nice to see the Greens show the same passion towards vocational education and training (VET) and TAFE, whose funding has been decimated in favour of universities:

The figures show that government VET spending has languished far below funding for schools and universities over the last decade, declining by 1% in real terms since 2005–06 to only $6.9 billion in 2017–18… Meanwhile, government expenditure on universities increased the most of all education sectors, with a total $30.2 billion spent in 2017–18 — more than 45% above 2005–06 levels (in real terms).

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As a result, enrolments in apprenticeships and traineeships have collapsed, with the Mitchel Institute predicting a further 30% drop in new apprenticeships (with 130,000 fewer positions) to 2023:

By contrast, university participation has ballooned:

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This overwhelming policy bias towards universities has left the Australian economy way oversupplied with university graduates and with skills in all the wrong places.

As a result, the Australian economy has been hollowed-out, as noted by the Mackenzie Institute:

…the institute condemns the 2008 Bradley review – which spawned Australia’s recently abandoned demand-driven system of higher education funding – for producing a glut of graduates and exacerbating the funding decline in vocational training, particularly among public technical and further education colleges.

The paper blames the Bradley review for cultivating one of the worst skills mismatch profiles in the world. It cites figures showing that Australia ranks sixth among 33 Organisation for Economic Cooperation and Development nations for “high skills” development, but 27th for technical skills…

“Australia has never had more graduates than now, yet we have a sluggish economy, stagnant wage movement and low productivity. Many of the occupations that provide low return to graduates would once have been taught in VET with better outcomes, and at a much lower cost”…

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Clearly, the last thing Australia needs is more people studying dead-end university degrees adding to the glut.

So, rather than pouring more taxpayer funding into universities, governments must instead direct their focus towards publicly run TAFEs.

They are the forgotten victim in the higher education war, are way undersupplied, and offer young Australians far brighter career opportunities.

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About the author
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.