Reforms in Australian Education Industry for Australian Government

Question: Discuss about theReforms in Australian Education Industry for Australian Government. Answer: In order to increase economic status of a country, reforms in the education sector can be termed as mandatory. In context to the Australian education industry, reforms are inevitable as it is one of the growing industries in the country (Coombe, 2015). In the Federal Budget, the Australian government has to review the reforms that can make a significant impact on the sector. In the newspaper article, the author, Bexley (2017) reviewed the pre-budget announcement directed towards the higher education system in Australia. In the meanwhile, Simon Birmingham, the Australian Education Minister stated that higher education would be costlier in the next few years as the government had decided to increase the education fees of the higher education by 1.8 percent per year from 2018 to 2021 (Bexley, 2017). By the review of the selected newspaper article, it is apparent that the latest education reforms in the higher education system will create an adverse impact on the students seeking higher education in Australia as the rise in university fees for degree course will add monetary pressure on the students (Gamage Shangwu, 2016). Under the reforms, the Australian government decided to reduce the burden of education funding as the contribution of the students had been increased in the Federal Budget (Bexley, 2017). In this particular study, the issue of the reform and economic impact of the decision have been discussed. Due to recent modification in the Australian higher education system, Australian undergraduate students will now need to pay $2,000 to $ 3,600 more for a degree course in compared to the previous amount. The alteration in the higher education funding has forced the students to pay increased fees (Bexley, 2017). On the other hand, the payback period for education loan taken under the Higher Education Contribution Scheme (HECS) will also be reduced. Clearly, increased fees of the higher education mean that the students have to borrow more money and repay the loan in shorter time. Moreover, the efficiency dividend has been included that denotes 2.8 percent cuts for funding in education in 2018 and 2019 (Bexley, 2017). Precisely, the education reform policy will benefit the government of Australia as the government can save a substantial amount of funds spent on the higher education system. According to the reports, the education funding will be reduced by AU$ 380 million by 2019 (Bexley, 2017). Meanwhile, the cuts of funding will also impact the ongoing research projects in the higher education. Due to rise in fees and funding cuts, a number of job cuts can be seen in the universities (El-Khawas, 2014). In the next section, the impact of the increased fees of the higher education on the Australian economy has been demonstrated. The Australian Education industry is one of the highest contributors of GDP in the economy. However, the maximum proportion of the revenue comes from international education as Australia is one of the most attractive destinations for higher studies across the globe (Halsall, 2013). According to the last ten years statistics, the economic contribution of international education in Australia has gradually increased in the higher education sector of the economy. A graph has been presented herein below for further understanding: Figure: Economic Contribution of International Education in Australia (Figures in Billions) Source: (Gornitzka, Kogan Amaral, 2017) It can be seen from the above figure that the economy has earned around $21.97 billion in 2016 from international education. Furthermore, higher education accounts to contribute around $15.13 billion of the total amount in 2016. Hence, it can be seen that Australian Government is highly dependent on International Education Service for maintain an economic balance in the nation (Teichler, Enders Fulton, 2016). However, it is expected that the rise in the price of education in Australia due to the policy reforms will gradually impact the quantity demanded for the international education. By applying the theory of demand, it can be clearly seen that the rise in the price will negatively impact the quantity demanded for higher education in the nation. On the other hand, it is important to keep in mind that education is a necessary service that cannot be substituted. Hence, the demand for education is inelastic in nature. In other words, a higher increment in the price for education will impact the quantity demanded in the sector by a smaller amount. Therefore, the revenue gained due to the increase in price will be higher than the revenue loss due to the fall in the demand (Turpin, 2016). But, the fall in the demand for international education will highly impact the other industries due to the decrease in the number of international student. Additionally, the pressure over the student to repay the education loan will increase that will influence them to complete their higher education in some other nation. On the basis of the above analysis, it can be clearly seen that the policy reforms made by the Australian Government in the education sector will move towards a negative direction in the upcoming years. It is suggested to the government to make necessary changes in the education industry by introducing latest technology and provide other benefits to the students (Mauch Sabloff, 2015). Competitive placements can be offered to the students and better loan schemes can offered in order to mitigate the current issues of the economic reforms in the Australian education sector. The above discussion and review of the article have presented how the higher education reforms of Australian government will impact the students and teaching system in the country. Precisely, higher education fees have forced the students to contribute higher. As a result of scenario, students need to borrow more money to meet their university fees. Also, the lower payback period of loan suggests that students have to repay the loan amount in a lesser time frame. On the other side, as the contribution of the students have been increased in the higher education and funding cuts are proposed in the education system, the government will save substantial money to be invested in other sectors. References Bexley, E. (2017).Higher education reform: small changes for now but big ones to come.The Conversation. Retrieved August 2017, from https://theconversation.com/higher-education-reform-small-changes-for-now-but-big-ones-to-come-76978 Coombe, L. (2015). Australian higher education reforms unification or diversification?.Journal Of Higher Education Policy And Management,37(2), 125-143. El-Khawas, E. (2014).Reform initiatives in higher education(4th ed.). Washington, DC: ERIC Clearinghouse on Higher Education. Gamage, D., Shangwu, Z. (2016). A Study on Recent Reforms, Current Issues and Policies Within the Australian and Chinese Systems of Higher Education.Education And Society,21(2), 19-35. Gornitzka, A., Kogan, M., Amaral, A. (2017).Reform and change in higher education(5th ed.). Dordrecht: Springer. Halsall, J. (2013). Delivering Higher Education Policies within a Challenging Community.Higher Education Studies,3(2). Mauch, J. Sabloff, P. (2015).Reform and change in higher education. (7th ed.) New York: Garland Pub. Teichler, U., Enders, J., Fulton, O. (2016).Higher education in a globalising world(6th ed.). Dordrecht: Kluwer Academic Publishers. Turpin, T. (2016). Academic research evaluation in Australia: some implications of proposed higher education reforms.Research Evaluation,9(1), 37-46.