$2 billion research support: how teaching funds research in Australian universities

by Andrew Norton

More than $2 billion in surpluses from teaching are being used to fund research in Australian universities, according to a new Grattan Institute report.

The cash nexus: how teaching funds research in Australian universities shows that on a conservative estimate, one dollar in five spent on research comes from surpluses on teaching.

International students, who usually generate more revenue per student than domestic students, contribute a substantial proportion of this surplus.

The finding is concerning because while university research matters to Australia, the evidence that it improves teaching is less clear, Mr Norton said. “Direct spending on teaching, by contrast, is far more likely to ensure that universities offer the high-quality courses students want.”

The report finds that universities earn up to $3.2 billion more from students than they spend on teaching, and have powerful incentives to spend the extra money on research.

Although research spending has tripled in the past two decades, academics still want to do much more research than is currently funded. And universities worry about their position in research-driven global university rankings.

The report calls for policies to ensure that universities spend money intended for students on teaching and student services.

“Under the current system there is no guarantee that any new investment in universities – whether from public or private sources – will benefit students,” Mr Norton said.

It also calls for better costing data so that Australians can see how universities spend $11 billion in student subsidies and loans and $6 billion in fee revenue.

“With better information taxpayers and students will know they’re getting what they pay for when they invest in university education,” Mr Norton said.

Further enquiries: Andrew Norton, Higher Education Program Director
T. +61 (0) 3 8344 3637  E. media@grattan.edu.au


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