Economic Analysis of Tertiary Education Reform in Australia: A Report

This report provides an economic analysis of the tertiary education reform in Australia, focusing on the changes in student fees, HECS repayment limits, and the impact on both domestic and international students. The analysis draws upon newspaper articles and economic concepts to assess the potential consequences of these reforms, including income inequality, political implications, and the country's international competitiveness in education. The report highlights the concerns of students and universities regarding the changes and provides recommendations for the Australian government to mitigate the negative effects, such as providing financial assistance, improving the quality of higher education, and offering scholarships. The conclusion emphasizes the need for the government to consider the well-being of students and the overall economic health of the country when making decisions about education funding and policy.

Running head: ECONOMIC OF BUSINESS
Economic of business
Name of the university
Name of the student
Author Note

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Executive Summary:
The chief purpose of this report is to explain the newspaper analysis on tertiary educational
reform in Australia. This paper will focus on the various renowned newspaper articles, which
are mainly based on this educational reform and the situation of students and universities.
After that, an economic analysis will be done to understand the situation deeply. Some
recommendations related to this topic will also be discussed. At the end, this report will
conclude that why education is necessary.

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Table of Contents
Introduction:...............................................................................................................................3
Newspaper Analysis:..................................................................................................................3
Economic Analysis:...................................................................................................................4
Recommendations:.....................................................................................................................5
Conclusion:................................................................................................................................6
Reference:..................................................................................................................................7

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Introduction:
Education is the basic tool of a country to create efficient human capital. This further
helps a country’s economic system by producing large amount of national income. Hence,
education is an investment for making human capital, which is an important factor of
production. Within a country, educational reforms may affect adversely or positively to all
students in both developed and developing countries (Hulten 2017). This report will focus on
the various newspaper analyses of educational reforms in Australia. This reform is adversely
affecting Australian students as well as foreign students. This new educational reform is
going to be implied since next year. Moreover, this report will analyse this topic based on
appropriate economic concepts and some recommendations will be analysed. At the end, a
conclusion will be drawn, based on the overall discussion.
Newspaper Analysis:
The Educational Minister of Australia, Simon Birmingham, has declared a pre-budget
announcement regarding the change in educational funding system on 1st May 2017.
According to a daily newspaper of this country, The Minister has announced that the rate of
student fees would be increased each month by 1.8% from January. Moreover, an aggregate
student fees will be increased by 7.5% up to 2021. Therefore, it will increase the amount of
fees for undergraduate students from $2000 to $3600 during their course of study (Karp,
2018). At the same time, repayment limit for Higher Education Contribution scheme (HECS)
will be decreased from about $52000 to $42000 (Education.gov.au, 2018). Australian
students, who are trying to enrol their name in universities, are still unaware about the exact
tuition fees. The government has already passed the measure under the House of
Representative. But, Ministers of Australia have decided not to put the bill in the Senate for

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collecting votes to gather support from crossbenchers. Students and universities are opposing
this formation on educational fees.
However, the Education Minister has recently launched a new funding system for
school going children (Theaustralian.com.au, 2018). This system will help them a lot.
However, he again has failed to reform higher education. Students, especially who are from
regional universities, are suffered more as maximum of them are from poor families. They do
not even know that what will be the amount how much they have to pay.
Major Cities Inner Regional Outer Regional Remote and
Very Remote
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
2012
2014
2016
Fig1: Proportion of students, aged 25-35
Source: (ABC News, 2018)
Economic Analysis:
As the present educational reforms are going against the common people, Australians
are losing their belief on the present Government. They are starting to believe that good
public policy is somehow going to decline in Australia (Lingard 2018). This can generate a
conflict between the common people and the present government. This will further adversely
affect political conditions of Australia. This disturbing political condition is not good for a
country’s economic conditions. As people are losing their faith on the current governmental

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body, common citizens will not belief on any other economical reforms of this government.
This will restrict a country’s economic growth.
On the other side, proper education is the basic need for any people in any country.
Otherwise, inefficient human capital may cause harmful for the country’s growth. This will
affect negatively on the production process and decrease the national income of Australia.
From economic viewpoint, education is taken as an investment. Education helps students to
gather knowledge and to become a skilled worker (Passaro et al. 2018). However, due to
increasing amount of higher educational fees, the amount of human capital will be adversely
affected. Moreover, this educational reform will create income inequality. Students from
inner and outer region and from remote areas will get less opportunity to pursue their higher
education in Australian universities. This will further create discrimination among students to
get proper job opportunity. This will be the chief reason behind income inequality of
Australian citizens.
On the other hand, international education is one of the largest exporting services of
this country. Moreover, this sector is expanding rapidly. Australia may lose its international
students after increasing educational cost structure (Gribble, Rahimi and Blackmore 2017).
Due to globalisation, students generally go to developed countries for pursuing higher level
of education. The country can increase its global competition by providing a good
educational facility. However, higher amount of tuition fees may reduce the number of
foreign students in this country. This adverse affect will further decrease the national income
of Australia.
Recommendations:
Due to higher amount of tuition fees, higher educational system is facing various
problems. Universities and students are suffering a lot. Moreover this higher educational

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sector re helping to develop the country’s economic, social, cultural and intellectual
development. Hence, the government of Australia should take some responsibilities to help
all national and international students
Firstly, the Australian government should help all students by providing various
financial assistances. For doing this, different types of loans for students are needed.
Secondly, the quality of higher education and training should be increased. This will
further attract students to peruse higher education, irrespective of higher tuition fees.
Thirdly, the government of Australia can provide scholarships for rural and regional
students. Those students are generally coming from middle class families or poor families.
By providing them educational scholarships, they can easily pursue their higher education.
Conclusion:
Australian students, who are trying to study at a higher level, are facing a serious
problem. They do not know that what will be the fees of higher education from 2018.
Students, who are from regional areas, are facing more problems to pay than students who are
from major cities. This is because; those students are mainly coming from poor families. On
the other hand, the early repayment to HECS-HELP is another major problem to those
financially needed students. Therefore, it will be better for all if the Australian Government
can cut some amount of educational fees in future for every students. The government of
Australia should think about the wellbeing of the country and their citizen and should assist
the students for proper education. For doing this, the government can take some steps which
have already recommended.

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Reference:
ABC News., 2018. Fears for regional universities as Government looks to reform higher
education. [online] Available at: http://www.abc.net.au/news/2017-09-18/regional-
universities-oppose-higher-education-changes/8949416.
Education.gov.au., 2018. Higher Education Reform Package - Student Overview |
Department of Education and Training. [online] Available at:
https://www.education.gov.au/higher-education-reform-package-student-overview.
Gribble, C., Rahimi, M. and Blackmore, J., 2017. International Students and Post-study
Employment: The Impact of University and Host Community Engagement on the
Employment Outcomes of International Students in Australia. In International Student
Connectedness and Identity (pp. 15-39). Springer Singapore.
Hulten, C., 2017. The Importance of Education and Skill Development for Economic Growth
in the Information Era. In Education, Skills, and Technical Change: Implications for Future
US GDP Growth. University of Chicago Press.
Karp, P. (2018). Coalition 'appalled' at NXT decision to block $2.8bn in higher education
cuts. [online] the Guardian. Available at:
https://www.theguardian.com/australia-news/2017/oct/19/coalition-appalled-at-nxt-decision-
to-block-28bn-in-higher-education-cuts.
Lingard, B., 2018. Reforming education: The spaces and places of education policy and
learning. In Critical Analyses of Educational Reforms in an Era of Transnational
Governance(pp. 41-60). Springer, Cham.

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Passaro, R., Passaro, R., Quinto, I., Quinto, I., Thomas, A. and Thomas, A., 2018. The impact
of higher education on entrepreneurial intention and human capital. Journal of Intellectual
Capital, 19(1), pp.135-156.
Theaustralian.com.au., 2018. Minister needs to step up. [online] Available at:
http://www.theaustralian.com.au/higher-education/opinion/higher-education-reform-simon-
birmingham-needs-to-step-up/news-story/63fdf506aa4fd73dd60a2fff0a1e8b9c.