Edition 732, 20 November 2017
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- 2017 Education and Consulting Mission to Asian Development Bank
- ASEAN-Australia Business Summit SME Conference Friday 16 March 2018
Lies, damn lies and Statistics
Monday, November 20 2017
This week I again will focus on Higher Education and provide a longer-term overview of the outcomes of the sector.
There has undoubtedly been strong growth in Higher Education enrolments funded through the Commonwealth Grants Scheme and the Higher Education Loans Program (HELP).
The question of course is in the context of Government seeking budget efficiencies, how has the sector performed and just what are the outcomes of the sector in light of this growth?
Let’s start with completions, which provide a rosy view of growth.
Higher education providers are graduating over 200,000 domestic students each year. In 2015 over 133,000 (61% of all graduates) were at Bachelor level and some 76,000 (35% of all graduates) were comprised of those students engaged within post-graduate research or course work.
About 8,000 graduates were at other undergraduate levels.
Overall numbers of domestic graduates have grown steadily (some 34%) since 2005, with the bachelor level growing by over 24% from the 107,566 recorded in 2005 and post graduates growing some 47% from 51,967 over the same period.
A picture tells a thousand words:
**Click to enlarge image
The graph clearly shows that overall, post-graduate numbers have grown strongly both in percentage and in absolute terms reflecting, among other things, a trend to upgrade qualifications or facilitate a career change through postgraduate courses.
Another topic often closely monitored is the question of public or private good. For students, what is the benefit of investment in education?
As reported by a range of commentators, there is some evidence of a declining return from some elements of Tertiary Education.
The graph below demonstrates why. There has been a gradual decline in overall graduate employment from 2007-2008. Interestingly a similar decline is also evident for vocational education and training. The trend is similar for both full and part-time graduate employment.
The trend for Bachelor degree graduates indicates full-time employment has fallen over the last ten years (about 10 percentage points). However, the percentage in any form of employment has not fallen as dramatically, as there is a trend of rising part-time employment.
It is fair to say that the period around the GFC appears to be a ‘break point’ for employment patterns for graduates of both sectors.
**Click to enlarge image
OK so what about salaries?
Put simply, the rate of salary increases over the same period used above has been negligible in real terms.
However, there a couple of more specific trends worth noting:
- Medicine and dentistry are highly attractive, having a high rate of full-time employment and a relatively high salary.
- Professions such as pharmacy and veterinary science have high placement but relatively low initial salary. This reflects, in the most cases the graduates securing ‘internships’, gaining experience and moving into higher salary bands as they progress.
- Other ‘professions’ such as social work and education have moderate to good placement and a relatively good salary.
While on the subject of Higher Education, TEQSA has released its report on the Key financial metrics on Australia’s higher education sector.
The report provides some insights into the financial performance of the sector
I recommend a closer scrutiny of the report. However, I will provide you with a couple of my quick takeaways:
There has been strong growth in international revenue (up by 12% or $660million). This is not a surprise and the reflects strong growth we have seen in recent years.
Private providers had the highest proportion of providers recording a surplus and had the most diverse revenue sources (as a group). Diversity of revenues should not be ignored and is very relevant in considering the viability of a provider.
This report highlights that non- public University providers can’t get access to Commonwealth Supported Places for their students. ACPET will continue to advocated for this inequity to be addressed.
While the Report highlights that 24 providers have been added since 2012, there isn’t actually any more providers overall. Some have left the Sector or merged. As I touched on last week, the apparent concern about being swamped with new providers is difficult to understand, as are the very poor timelines for determining applications.
The Report identifies that most new providers did not achieve their student or revenue projections. This is also not surprising. Given it takes TEQSA 12 months to approve applications, on average, it’s almost expected that some providers will get off to a slow start or perhaps miss an opportunity in niche markets.
What this report does highlight to me is that existing quality providers seeking to add Higher Education services should not be demonised. This is a natural approach and can provide seamless education opportunities. It can also result in providers who have the ability to more quickly return a profit and establish ongoing sustainability.
Seems the right move.
Chief Executive Officer