NTEU National Name Teaching of Presentation Conference 2013

NTEU National Name. Teaching of Presentation Conference 2013 Demand Driven System Market Design and Market Failure in the Allocation of Australian University Places. Paul Kniest NTEU Policy and Research Unit Paul Kniest - NTEU Presenters Policy. Name and Research Unit 1

NTEU National Name. Teaching of Presentation Conference 2013 Origins of Demand Driven Model This government believes in ‘market design’ for all areas of social policy. (Gillard 2008) May 2009 Student Centred Funding Government is investing additional funding of $491 million over 2009 -10 to 201213 to fund a Commonwealth supported place for all undergraduate domestic students accepted into an eligible, accredited higher education course at a recognised public higher education provider. Paul Kniest - NTEU Presenters Policy. Name and Research Unit 2

NTEU National Name. Teaching of Presentation Conference 2013 What is a market based allocation system intended to achieve? According to the Bradley Report a demand driven entitlement system would help to achieve: 1. higher participation rates, 2. the government’s social inclusion objectives, 3. the elimination of unmet demand, 4. greater competition and diversity between universities , 5. better student experience. Paul Kniest - NTEU Presenters Policy. Name and Research Unit 3

University Applications and Offers High School Students by ATAR 2012 Australian Tertiary Admission Rank (ATAR) 100 Price NTEU National Name. Teaching of Presentation Conference 2013 Can you apply market design principles to the allocation of Australian university places? Supply Uni Offers 90 80 70 60 50 Demand Applications 40 0 20 000 40 000 60 000 80 000 100 000 120 000 140 000 160 000 Number of Applications and Offers Quantity Paul Kniest - NTEU Presenters Policy. Name and Research Unit 4

Allocation of Places Before the Demand Driven Model SUPPLY GOVT QUOTA OF CSP D=S Entry Score NTEU National Name. Teaching of Presentation Conference 2013 Market for University Places S* Applications from Eligible Students Offers Min Entry Score for Eligible Applicants S: MIN Student Demand UNMET DEMAND OFFERS APPS Student Enrolments Paul Kniest - NTEU Presenters Policy. Name and Research Unit 5

Increased Participation under Demand Driven Model SUPPLY GOVT QUOTA OF CSP University Supply Entry Score NTEU National Name. Teaching of Presentation Conference 2013 Market for University Places D=S S* S: 1 Min Entry Score for Eligible Applicants S: MIN Student Demand OFFERS: 1 Student Enrolments Paul Kniest - NTEU Presenters Policy. Name and Research Unit 6

NTEU National Name. Teaching of Presentation Conference 2013 Social Inclusion under Demand Driven Model Paul Kniest - NTEU Presenters Policy. Name and Research Unit 7

Unmet and the Demand Driven Model SUPPLY GOVT QUOTA OF CSP University Supply Entry Score NTEU National Name. Teaching of Presentation Conference 2013 Market for University Places D=S S* Applications from Eligible Students Min Entry Score for Eligible Applicants S: MIN Student Demand UNMET DEMAND OFFERS: 1 APPS Student Enrolments Paul Kniest - NTEU Presenters Policy. Name and Research Unit 8

Unmet and the Demand Driven Model Australian University Eligible Applications, Offers and Unmet Demand 2002 - 2012 Transforming 40 000 260 000 NTEU National Name. Teaching of Presentation Conference 2013 HE Policy 250 000 35 000 12. 9% Eligible Applicants (RHS) 240 000 230 000 220 000 25 000 210 000 Offers to Eligible Applicants (RHS) 20. 1% 200 000 20 000 190 000 180 000 15 000 170 000 160 000 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Paul Kniest - NTEU Presenters Policy. Name and Research Unit 2012 9

Unmet and the Demand Driven Model Australian University Eligible Applications, Offers and Unmet Demand 2002 - 2012 NTEU National Name. Teaching of Presentation Conference 2013 40 000 35700 Transforming HE Policy 36100 35 000 UNMET DEMAND (LHS) 30 000 25 000 23600 18500 20 000 20000 19400 19600 -16. 6% 15 000 15435 14200 13200 12600 10 000 2002 2003 2004 2005 2006 2007 2008 2009 2010 Paul Kniest - NTEU Presenters Policy. Name and Research Unit 2011 2012 10

Competition and Diversity The ascendency of marketing at Australian universities Rate of Change in Australian University Expenses 2004 to 2011 220 EMPLOYEE 208 TOTAL 200 Cost Index 2004 = 100 NTEU National Name. Teaching of Presentation Conference 2013 240 AD & PROMO 180 170 160 140 Expenses 2011 $m Total: Employee: Advert & Promo: 120 100 $21, 719 m $12, 636 m (58%) $217 m (1%) 100 2004 2005 2006 2007 2008 2009 2010 2011 Note: The spike in total costs in 2008 is because of Impairment of Assets due to the GFC. Paul Kniest - NTEU Presenters Policy. Name and Research Unit 11

NTEU National Name. Teaching of Presentation Conference 2013 When too much diversity is not enough! “n am e r d o e” g r a l lim its ” “ If y ou ’re as tar –t t of “bes rlds” o w both his wh ere to sh ine . “world of discovery” “go b oldly ” Would you like a tutorial with that“infinite course? possibilities” Paul Kniest - NTEU Presenters Policy. Name and Research Unit 12

NTEU National Name. Teaching of Presentation Conference 2013 Diversity vs Branding “when too much branding will never be enough” Paul Kniest - NTEU Presenters Policy. Name and Research Unit 13

Concerns with Demand Driven Model NTEU National Name. Teaching of Presentation Conference 2013 The Bradley Review identified the following major concerns: 1. the capacity of the government to fund rapid increase in student enrolments; 2. the potential for sudden changes to institutional enrolments depending on how aggressively other institutions compete; 3. the quality of entrants admitted in some institutions that suffer substantial reductions in demand; and 4. the risk of mismatch between student choice of fields of study and the requirements of the workforce. Paul Kniest - NTEU Presenters Policy. Name and Research Unit 14

Sustainability of Increased Enrolments under Demand Driven Model Commencing Undergraduate Domestic Enrolments 2001 - 2011 NTEU National Name. Teaching of Presentation Conference 2013 290 000 270 000 250 000 Is this rate of growth sustainable? 230 000 210 000 190 000 170 000 150 000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Paul Kniest - NTEU Presenters Policy. Name and Research Unit 2010 2011 15

NTEU National Name. Teaching of Presentation Conference 2013 Changes to Institutional Enrolments Paul Kniest - NTEU Presenters Policy. Name and Research Unit 16

University of Abbottsford Monee Ponds University Entry Score Disparity between entry scores NTEU National Name. Teaching of Presentation Conference 2013 Declining Entry Standards for Institutions Suffering Declining Demand Enrolments Paul Kniest - NTEU Presenters Policy. Name and Research Unit 17

In summary NTEU National Name. Teaching of Presentation Conference 2013 The Demand Driven Model will in all likelihood : • increase the number and participation rates of domestic students and as a consequence improve participation rates of traditionally underrepresented students. • lower entry scores on average. • substantially reduce, if not eliminate, unmet demand. • see greater competition (and expenditure on promotion and marketing) between universities aimed at attracting more students. • threaten the financial viability of some institutions (or parts thereof) that find it difficult to maintain a sufficient number of eligible students. • create greater uncertainty about student enrolments and ultimately lead to even greater reliance of casual staff to teach undergraduate programs. Paul Kniest - NTEU Presenters Policy. Name and Research Unit 18