CQUniversity submission to the Senate Economics References Committee inquiry into the indicators of, and impact of, regional inequality in ...
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Regional Inequality in Australia
Submission 75
CQUniversity submission to the
Senate Economics References Committee inquiry into the
indicators of, and impact of, regional inequality in Australia
April 2018
CRICOS Code: 00219C | RTO Code: 40939 P_TEM_0010_COV_ReportCoversheet
Regional Inequality in Australia
Submission 75
CONTACT INFORMATION
Andrew Dickson
CQUniversity Australia, North Rockhampton, QLD 4701
Regional Inequality in Australia
Submission 75
ABOUT CQUNIVERSITY
CQUniversity provides the following submission to the Senate Economics
References Committee inquiry into the indicators of, and impact of, regional
inequality in Australia. CQUniversity would welcome an opportunity to address any
queries and, or provide additional supporting information to the Committee.
Originally founded in Rockhampton in 1967, as the Queensland Institute of
Technology (QIT) Capricornia, it was granted full university status in 1992 and was
named Central Queensland University (CQUniversity). It now has more than 30 000
students across 27 sites and has firmly established itself as one of the largest
universities based in regional Australia, with campuses in Adelaide, Brisbane,
Bundaberg, Cairns, Emerald, Gladstone, Mackay, Melbourne, Noosa, Perth,
Rockhampton, Sydney and Townsville. Along with these campuses, the University
also operates study centres in Biloela, Broome, Busselton, Karratha and Yeppoon,
and delivers programs in Cooma and Geraldton, thanks to partnerships with the
respective university centres in those communities.
Approximately 17 000 students study on campus and 13 000 study via online
distance education. In 2017 approximately 73 per cent of the cohort of domestic
Australian students, or almost 17 300 students, came from rural or remote areas
across Australia.
In 2014, the University merged with CQ TAFE bringing together more than 175 years
of combined experience in the delivery of education and training. This merger
established Queensland’s first (and still the only) comprehensive, dual sector
university. In 2017 the university student cohort was split approximately 70:30
between higher education and vocational education and training.
As such, CQUniversity is uniquely well placed to comment on the existence of
disadvantage and inequality in regional Australia, especially in the areas of education
and training, and employment and to offer thoughts on policy solutions.
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Submission 75
ECONOMIC DISADVANTAGE IN REGIONAL AREAS
Economic disadvantage in regional and remote areas across Australia is an
undeniable fact. As you move beyond the metropolitan areas of the state and
territory capitals and regional cities such as Geelong, Toowoomba, Newcastle or
Townsville, levels of disadvantage increase rapidly. In the case of remote areas of
Australia, such as in the Northern Territory or far north and western Queensland,
acute levels of disadvantage are pervasive. Mapping the ABS indexes of relative
socio-economic advantage and disadvantage (based on the 2016 census) clearly
illustrates this point (ABS Cat No. 2033.0.55.001).
There are fewer jobs; high and systemic levels of unemployment; higher costs of
living (groceries, fuel, etc); poorer levels of community and social services
(availability and quality); less infrastructure, both in terms of availability and reliability;
fewer personal and professional development opportunities, particularly for things
like leadership or elite level sport; lower levels of community resilience (economic
and social); greater community health risks through higher levels of isolation and
dislocation, and reduced access to specialist medical support; and greater overall
hardship.
Of course, there are compelling economic reasons why regional and remote areas
lag behind cities and it is not clear that this is necessarily evidence of market failure.
Rather markets appear to be working efficiently, but simply to the disadvantage of
regional communities. That is, what might be economically efficient for business does
not guarantee equitable outcomes for regional and remote Australians.
There are clear economic benefits of agglomeration and economies-of-scale, which
draw businesses and industries to co-locate, but also to locate themselves close to
supplies of skilled labour and essential infrastructure, such as transport and
communications. More often than not these requirements are found in the greater
metropolitan areas of major cities and towns, clustered around Australia’s major
road, rail, sea and air ports.
Where industries do need to be located in regional and remote areas (such as with
the extractive resource industries), the high costs and hardship involved in living and
working in regional and remote areas leads many workers and companies to fly-in-
fly-out (FIFO) and drive-in-drive-out (DIDO) arrangements. While these
arrangements arguably minimise costs to businesses (and in that sense are
economically efficient), the benefits of development are not spread throughout the
community and are largely appropriated back to the cities and metropolitan areas. In
this way FIFO and DIDO arrangements reinforce and perpetuate the economic
problems experienced by regional and remote areas and are not equitable.
In some cases, regional communities are left ravaged by economic boom/bust cycles
with little enduring capacity or infrastructure to show for it. This has left some to
conclude that we live on a ‘tilted’ continent, with resources and wealth flowing to the
southeast corner of Australia and little remaining in the north.
Agriculture is one exception where small businesses and the families that run them
are typically embedded in regional and remote communities, and as such, are
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Submission 75
critically important to local economies and communities alike. However, even in this
case the capacity of agriculture to ‘prop up’ regional and remote communities is
diminishing.
The history of Australian agriculture is a tale of adaptation, as well as productivity
gains: adaptation in that generations of farmers in Australia have adapted European
and north American farming practices to suit Australia’s typically harsh and
unforgiving environment and what are, quite often, poor quality soils; and productivity
gains in the sense that Australian farmers, faced with persistent declining terms of
trade, have embraced new practices and technologies to reduce costs and improve
productivity — and in so doing, the farm population in Australia has halved over the
past four decades (http://www.agriculture.gov.au/abares/research-
topics/productivity). When once agriculture might have been relied upon to sustain
regional communities with a certain amount of economic largesse (riding on the
sheep’s back so to speak), modern agriculture is increasingly a lean and globally
efficient corporate business with little room for non-paying passengers.
A significant challenge for all regional communities is the drain of young adults to the
metropolitan areas (see for example McKenzie 2009 Regional youth migration and
the influence of tertiary institutions. Victorian Government, Department of Planning
and Community Development). Key reasons include a lack (or perceived lack) of
access to HE and VET opportunities; a lack of career options or a relatively narrow or
limited employment base; and a lack of social amenities and entertainment options.
The White Paper on Developing Northern Australia (http://northernaustralia.gov.au/)
noted that the north is hampered by localised worker shortages and high wage costs
which deter investment. Retaining workers and better matching their skills is one way
to support and drive future growth, assisting in addressing inequalities in regional,
rural and remote communities compared to the capital cities.
It is a generally accepted wisdom that workers who are trained or educated in
regional areas, are more likely to be employed and remain in regional areas. Indeed
there is evidence that those who study at regional universities are more likely to stay
in regional areas after they graduate (see Regional Universities Network Economic
Impact of the Universities in the Regional Universities Network www.run.edu.au). In
this way regional universities can address localised or regional skills shortages in a
sustainable manner.
The Department of Industry’s 2016 report How Regional Universities Drive Regional
Innovation (https://industry.gov.au/Office-of-the-Chief-Economist/), also notes that we
have a well-developed understanding of the economic fundamentals of Australia’s
regions and there are many existing case studies that describe the positive impacts
that regional universities have on regional economies.
As reported in the 2011 Review of Regional Loading completed by the Department of
Education, Employment and Workplace Relations, regional universities make
significant contributions to regional economies, directly and through meeting regional
skills needs. (https://docs.education.gov.au/documents/regional-loading-review). The
report also notes the spillover benefits of regional universities for their communities
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Submission 75
are likely to be greater than for metropolitan universities, as regional universities
provide research, specialised skills and facilities that are otherwise unlikely to be
available.
CQUniversity is a major regional employer in and of itself, with over 2000
administrative, professional and academic staff located across the mainland States
of Australia. In 2017, employee related expenses were approximately $240 million. In
Rockhampton alone, the University employs approximately 955 permanent and part-
time staff (1340 including casuals) and is the largest single employer in the region.
Across the universities national footprint, more than 80 per cent of all staff are
located in regional areas.
CQUniversity is also a source of significant capital investment in regional areas
($27.6 million in Cairns and Townsville alone between 2015 and 2017), supporting
local businesses and trades and developing common-use, community resources in
regional areas, such as libraries, theatres, sporting facilities, trades training and
research facilities.
In the name of decentralisation the Government is incurring significant costs to
re-locate a number of small Canberra-based agencies to regional areas, including
the Australian Pesticides and Veterinary Medicines Authority (APVMA) to Armadale
and the Rural Industries Research and Development Corporation (RIRDC) to Wagga
Wagga, but it is not clear that this is money well spent. In the case of RIRDC it has
been reported that only 3 out of 18 Canberra-based staff agreed to move to Wagga
Wagga, despite having been offered 20 per cent bonuses to relocate, meaning the
organisation will lose an enormous amount of corporate knowledge in addition to the
estimated $1.4 million in direct relocation costs.
Supporting established regional businesses, such as CQUniversity, or at the very
least ensuring government policies do not actively work to the disadvantage of
regional businesses, would be a more sustainable and less costly approach to drive
sustainable regional development. The capacity of regional universities to stimulate
regional economies and drive economic growth while at the same time improving
educational outcomes and reducing regional skills shortages, should be supported by
Government(s) and indeed leveraged, to maximize outcomes for the regions.
RECOMMENDATION: Regional universities should be encouraged to continue
to invest in regional and remote areas to support communities and improve
educational outcomes. This can be achieved through the establishment of a
capital grants fund for regional and remote education and training
infrastructure, to be made available on a dollar-for-dollar basis, or by
modifying the eligibility criteria of existing funds (such as the Regional Growth
fund http://regional.gov.au/regional/programs/) which typically exclude
universities.
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Submission 75
EDUCATION ACCESS AND PARTICIPATION
It is well known that school leavers in regional areas are under-represented in
university enrolments compared with those from urban areas, reflecting fewer
opportunities for higher education (HE) and vocation training (VET).
“People from regional and remote Australia remain under-represented at universities.
While a quarter of the general community lives in regional and remote areas, they
represent only one in five students at university.” (Senator McKenzie, June 2016
http://nationals.org.au/coalition-to-improve-access-to-education-for-regional-
students/)
The disparity in post-school education, training and employment participation rates
between regional and metropolitan areas can be illustrated using data for
Queensland drawn from the Next Step survey which is conducted annually by the
Department of Education (DoE) through the Queensland Government Statistician’s
Office (QGSO) — see http//education.qld.gov.au/nextstep/.
The data in Table 1, which has been sourced from the Next Step website, compares
the main destination of Year 12 completers in 2017 from all Queensland regional
areas with the Brisbane metropolitan and Queensland south-east area (Metro/SE).
In 2017, only 30 per cent of Year 12 completers in regional Queensland progressed
to higher education (that is, commenced a Bachelors Degree), compared with 47 per
cent of Year 12 completers in the Metro/SE area. Marginally more regional
completers moved into vocational education and training, including apprenticeships
(21 per cent compared to 18 per cent), but overall, only 51 per cent of regional
Queensland completers were engaged in some form of higher education or
vocational education and training, compared with 65 per cent in the Metro/SE area.
Mirroring this, the workforce (that is, full-time or part-time employment or seeking
work) was the main destination for almost 46 per cent of regional Year 12
completers, compared to only 32 per cent in the Metro/SE.
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Submission 75
The data in Table 2 indicates changes in the main destination of Year 12 completers
over the past decade, again comparing the survey results for Queensland regional
areas with Brisbane Metro/SE.
Progress has been achieved in growing the number of Year 12 completers from
regional areas who progress to undertake higher education, with almost 6000, or
30 per cent of completers engaged in a Bachelors Degree in 2017, compared with
4330 or 28 per cent in 2007.
However, the gap between regional and metropolitan opportunities remains both
wide and persistent.
Even more worrying is the decline in completers going on to some form of vocational
training (VET, Apprenticeship or Traineeship), having declined from 29.5 per cent in
2007 to just 21 per cent in 2017 — it genuinely points to a crisis in the making across
vocational education.
While concerns have been raised regarding graduate employment rates and the
possibility of a surplus of graduates in certain discipline areas, the Graduate
Destination Survey dataset (www.qilt.edu.au/about-this-site/graduate-employment)
has consistently shown that a significant shortage of graduates exists in regional
Queensland.
Page |6Regional Inequality in Australia
Submission 75
The data demonstrates:
• University graduates in regional Queensland are more likely to be employed
full-time immediately following graduation than graduates in metropolitan
areas;
• there remains an under-supply of graduates located in regional communities
to meet local needs; and
• regional employers are required to pay higher salaries to attract graduates
from metropolitan areas.
Through the establishment of new regional campuses and through the development
and introduction of new courses, CQUniversity continues to address the inequities
faced by regional and remote communities, with positive effect. As illustrated in the
accompanying figure, CQUniversity has delivered on the Government’s policy
commitment to improve access to higher education and training in regional and
remote communities, albeit there remains a lot more to do. Since 2007 the number of
Australian domestic students undertaking higher education studies or research at the
University (that is, not including VET students) has consistently increased, rising from
11 501 in 2007 to 17 429 in 2017.
It is also worth noting that CQUniversity has achieved this growth while operating in a
high-cost environment. As with other regional universities that have multiple
campuses, CQUniversity does not enjoy the same economies-of-scale, or indeed,
benefits of agglomeration as do single-campus, metropolitan universities. It is also
the case that regional universities provide more intensive student support to what is
generally a more disadvantaged student cohort (see the discussion below on social
disadvantage in regional areas). So, not only do regional universities have a big gap
Page |7Regional Inequality in Australia
Submission 75
to fill in terms of improving access to opportunities, but it’s a more costly gap to fill on
a per-student basis.
It is also important to consider the way in which funding for regional and distance
education is delivered. For the 2017-18 budget (announced in May 2017), eligible
universities with regional campuses were awarded $70.9 million in regional loading to
help meet the costs associated with higher education delivery in regional areas.
However, how the loadings are applied in practice to different regional cities and
towns appears to be largely arbitrary.
It is also assumed that the cost of students studying by distance are less than those
studying on campus — and indeed the loadings assume the costs will be half —
although this is not necessarily the case. For example, CQUniversity supports
students who study by distance by maintaining a network of regional campuses and
study centres so students working remotely have an opportunity to receive some
face-to-face support, from time to time or as needed.
Unfortunately the current Federal Government funding model favours universities
that choose to deliver distance education services efficiently and exclusively through
a centralised (and hands-off) approach. The CQUniversity approach better services
the needs of regional and remote students, but comes at a cost premium.
In a move that will no doubt see further educational inequity in the regions, in
December 2017 the Government announced it would cap Commonwealth Grant
Scheme funding to Australian universities (in 2018 and 2019) at the 2017 level, with
no additional funding being made available to service increases in Australian
government contributions or enrolment increases that may occur in 2018 or 2019.
This locks in the inequities that persist between regional and metropolitan/urban
enrolments (outlined above) and is inconsistent with the Government’s 2016 election
commitment to improve access to education for regional students. This decision to
cap funding for regional university enrolments will impact on the opportunities
available to young people living in regional Australia, but will also impact negatively
on the economic development of regional Australia.
Since the MYEFO announcement the Government has announced three exceptions
to the cap, being:
• $69 million in confirmed funding for student places at the University of the
Sunshine Coast’s proposed Petrie Campus;
• $12.9 million over four years for additional student places at Southern Cross
University; and
• $41.1m over four years to the University of Tasmania.
But rather than apply regional funding policy in an ad-hoc manner, growth in student
enrolments in all regional and remote areas should be encouraged. In this way
regional universities would be supported to bridge the gap between metropolitan and
regional opportunities rather than being hamstrung.
Page |8Regional Inequality in Australia
Submission 75
CQUniversity’s preferred option would be for no cap to apply to Commonwealth
Grant Scheme funding for courses delivered in regional and remote areas. However,
in the interests of budget repair, a second option could be for funded student places
to be provided to support specific courses for which there is a demonstrable demand
from regional communities and industry; and in which the University and other
stakeholders have made significant investment in their development and/or made
public commitments regarding their delivery.
Similarly, consideration should be given to review the application of regional
loadings, and particularly the treatment of study centres and distance education.
Where a university, such as CQUniversity, is demonstrably providing bricks-and-
mortar support for distance and remote students (more so than any other university
in Australia), consideration should be given to how regional loadings could better
support such an approach.
RECOMMENDATION: Growth in student enrolments in HE and VET should be
strongly encouraged with no cap on Commonwealth Grant Scheme funding to
apply to courses delivered in regional or remote areas. Alternatively, funding
should be guaranteed for courses for which there is a demonstrable demand
from regional communities and industry.
RECOMMENDATION: Review the application of regional loadings (for grant
funding) with particular consideration to the treatment of students studying by
distance.
SOCIAL DISADVANTAGE IN REGIONAL AREAS
The Next Step dataset allows analysis of the main destinations of Year 12
completers by socio-economic status, from the most disadvantaged (Quintile 1)
through to the least disadvantaged (Quintile 5). Year 12 completers in regional
Queensland were most likely to be in Quintile 2, while those in the Metro/SE were
most likely to be in Quintile 5 – the least disadvantaged.
In the Metro/SE region, the most common main destination for school completers
across all five Quintiles was Bachelor Degree, with over 59 per cent of those
completers in Quintile 5 engaged in higher education, accounting for 21 per cent of
all completers in the Metro/SE area. In contrast, for regional Queensland, Full-time
and Part-time employment or Seeking work (combined) is the most common main
destination across all completers, with the exception of the least disadvantaged
(Quintile 5). In the case of the most disadvantaged regional completers (Quintile 1),
51 per cent are engaged in employment or seeking work and only 22 per cent
engaged in higher education.
So there is a cohort of very disadvantaged young people, most of whom are located
in regional areas, who are becoming increasingly disengaged from full-time
education/training or full-time employment.
Of particular concern is the significant rise in regional completers, either in part-time
work, seeking work (that is, unemployed) or not engaged in the labour force or
Page |9Regional Inequality in Australia
Submission 75
training at all (disengaged), which is up from 23 per cent to 38 per cent over the past
decade, with a commensurate decline in completers participating in full-time
employment (down from 19 cent to 11 per cent). This highlights the changing nature
of employment opportunities, particularly in regional areas, and the greater
uncertainties and challenges being faced by completers.
While this data is focused on Year 12 completers, it would be safe to assume that
non-completers (students who do not complete Year 12) would be similarly affected,
if not more so, although there is no data reported here to support this claim.
CQUniversity is proud of its commitment to engagement and social innovation and
aspires to be Australia’s most engaged university. CQUniversity is committed to
addressing this challenge and developing a full range of HE and VOC offerings to
suit the changing needs to regional communities, businesses and industries.
In 2015 the Jesuit Social Services and Catholic Social Services published the results
of a study into areas of persistent communal disadvantage in Australia. Data from the
report Dropping off the Edge (https://dote.org.au/) shows that in regional
Queensland, six of CQUniversity’s regional campuses and all of the University’s
study hubs are located in areas classed as Disadvantaged or Most Disadvantaged.
Reflecting this, CQUniversity ranks very highly among Australian universities in terms
of the ratio of students from disadvantaged, mature age, Aboriginal and Torres Strait
Islander, and first-in-family backgrounds. In 2017, we welcomed 5990 first-in-family
students; 2830 students who enrolled in a pathway or enabling program; and 993
students (3.3 per cent) who identified as Indigenous or Torres Strait Islanders.
CQUniversity has an inclusive approach to access and participation and defines itself
by who it embraces, rather than who it excludes. This means the University itself, like
many regional universities, is a vehicle for social change through the work that it
undertakes in raising the aspirations of, and supporting the attainment of educational
qualifications for students who have few other post-secondary study options.
This commitment to engagement and social advancement has led to CQUniversity
being recognised as Australia’s first and only Changemaker Campus by Ashoka U
(http://ashokau.org/). Ashoka U is an exclusive global social innovation network
made up of nearly 50 universities across the world. The network is working towards
embedding design-thinking and social innovation skills and experiences into
curriculum, while also using the economic, organisational and intellectual resources
of member universities to support the delivery of initiatives that help to overcome
embedded social disadvantage, by working with stakeholders to develop solutions
that they, as end users, can benefit from.
While there are many definitions of social innovation, CQUniversity sees the
discipline as an opportunity to engage with its communities to address entrenched
social issues through a multi-disciplinary, human-centred approach. With a particular
focus on regional Australia, this approach draws on the University’s skills and
expertise across five broad themes:
• Bright Youth Futures
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• Healthy and Connected Communities
• Partnership with First Nations’ Peoples
• Sustainable Regional Development
• Looking After Our Planet.
The University is also actively engaged in outreach to secondary school students
through a number of career-focused aspiration-raising programs delivered to
Year 6-12 students. This includes:
• CQUni Connect
• Start Uni Now (SUN)
• VET in Schools (VETiS).
The CQUni Connect team work to create understanding among the students about
the choices that are right for their future and empower students to navigate and
leverage post-secondary education to their benefit. When students arrive at the point
of making decisions about senior schooling subjects and supplementary study
options, they are in a better position to make informed choices.
In 2017, the University worked with almost 10 000 students across 46 schools
through the CQUni Connect program, including 1260 Year 12 students, and reached
approximately 38 per cent of the student population.
The Start Uni Now (SUN) program is a CQUniversity initiative that allows students in
Year 10, 11 and 12 to study CQUniversity units whilst still in high school. The
increased capability students feel from completing SUN successfully positions them
well to succeed as undergraduate students. Between 2015 and 2017, 119 SUN
students (or 50 per cent of those eligible) transitioned directly to undergraduate
studies at CQUniversity, while a further 91 students transitioned to undergraduate
studies elsewhere via QTAC and other pathways.
RECOMMENDATION: Invest in widespread, low-cost access to internet and
hardware solutions to allow students in regional and remote areas to access
high-speed internet.
RECOMMENDATION: Establish regional and rural (social) innovation hubs and
accelerators in partnership with universities to support the development of
local social enterprise to create local jobs and social solutions.
RECOMMENDATION: Ensure all regional and remote students in Australia are
entitled to a funded student place in a course of their choice.
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CONCLUSION
The people of regional, rural and remote Australia are fully invested in their
communities and their industries and deserve a policy environment where they and
their families have equal access to quality education and training. As has been
illustrated in this submission, these Australians make significant sacrifices to live and
work in areas of Australia that are generally under-represented in tertiary education.
While regional universities have made commendable progress, the gap between
regional and metropolitan opportunities remains both wide and persistent and this
situation should not be allowed to continue.
Rather than being hamstrung, regional universities should be encouraged and
supported to continue to invest in regional and remote areas, to support communities
and to bridge this gap once and for all.
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