Grattan Institute advocates cutting university research funding

Andrew Norton of the Grattan Institute has received quite a bit of attention for a piece arguing that universities don’t need additional funding because money intended to fund teaching is going to support research instead. Norton suggests that the funding going to research is around $2 billion a year

University research matters to Australia, but the evidence that it improves teaching is less clear. Direct spending on teaching, by contrast, is far more likely to ensure that universities offer the high-quality courses students want.

The obvious question is, if university research is important to Australia, won’t cutting $2 billion (or some substantial component of it) from research funding harm our national interest. As the quote above shows, Norton merely asserts that redirecting funding from research to teaching will benefit teaching.

The core of Norton’s piece is a misuse of accounting categories. The implicit claim that, since university funding is allocated on a per-student basis, it must be intended entirely for teaching. The further implicit assumption is that the only research that should be undertaken is that explicitly funded through bodies like the Australian Research Council.

But this has historically never been the case. In Australia, and (as far as I know) in every other country, university academics are expected to undertake research as part of their duties, whether or not they have grant funding. The standard proportion, which hasn’t changed in my 30+ year involvement in the system is 80 per cent teaching (and associated service), 20 per cent research, which appears to be exactly the proportion cited by Norton.

It’s true that more transparency in the allocation of resources between teaching and research would be a good thing, if it were feasible. But as the travails of exercises like the Excellence for Research in Australia process have found, this is easier said than done.

Finally, lets come back to Norton’s rejection of the centuries-old scholar-teacher model in favor of a teaching-only approach. His defence of this position “the evidence that it improves teaching is less clear” is not exactly robust.

Against this we can observe that worldwide, there are in fact plenty of examples of both teaching-only and research-intensive institutions. Nearly all are nominally funded on a per-student basis, whether through fees, government subsidies or both. So, what does the market test, which Norton ought to favor tell us. The answer is that students are beating down the doors of the research-intensive unis. Teaching-only schools are the second choice for nearly everyone[1]

fn1. The one exception, unique to the US, is a set of tiny, incredibly expensive, liberal arts colleges, typically attended by children of the upper classes who don’t need to worry too much about making their way in the world. As might be expected, Uni of Adelaide VC Warren Bebbington, who is under the impression that these are representative of non-research US unis, is quoted supporting Norton.

44 thoughts on “Grattan Institute advocates cutting university research funding

  1. Correction: the report does not say $2 billion should be cut from research, and the history of funding and work allocations is all in the report.

    The argument is much more modest, that if we want to improve teaching or other aspects of the student experience the current policy mechanisms provide no guarantee that the money will reach its intended target, due to the powerful internal university pressures to spend money on research instead.

    I probably did not need the empirical work to argue that, but I was on more solid ground by including it.

  2. And much of the money spent on funding catering colleges goes on preparing food rather than on training.

  3. @bjb
    Well, having read the “Myth … ” article I must say I am impressed. Matt Ridley does not seem to have the slightest conception of the difference between technology or innovation and science.

    Hint: Thomas Edison, AFAIK, was not a scientist. He was a very good technologist/engineer. On the other hand, his rival Tesla was an Real Scientist™. Nor was Alexander Graham Bell a scientist ( in terms of the telephone, he may well have been considered one in his research on teaching the deaf)

    It follows that there is less need for government to fund science: Industry will do this itself.

    Well with some notable exceptions, Bell Labs, and perhaps IBM, this assertion seems a bit dubious.

    Ridley seems to have missed the point that Newton was either an academic or a civil servant for most or all of his working life, as was Einstein. For all intents and purposes Liebniz was a civil servant and so on.

  4. The government could increase funding designated for research and reduce that designated for teaching and university budgets and activities stay the same. I don’t really see the point of the Grattan report… BTW, at research universities 40% research, 40% teaching, and 20% service is the usual allocation both in the US and Australia as stated in the Grattan report…

  5. John states that ‘the obvious question is, if university research is important to Australia, won’t cutting $2 billion (or some substantial component of it) from research funding harm our national interest.’ The obvious answer is that it depends inter alia on where our research levels are relative to the optimum, but the fact that some things (think recycling, energy, leisure or research) are important for Australia does not of course mean that more is always better.

  6. Andrew @1 The current mechanisms have worked to maintain the ratios between teaching and research at broadly stable levels for many decades. So, it seems reasonable to assume that additional funds will be allocated in the same way. Some will go to hire additional academics who will divide their time between teaching and research much as they always have.

    The big question is: what is the alternative? There has been a gradual shift towards creating some research-only and some teaching-only (or teaching-focused) positions, but this is far from a panacea. In any feasible system, teaching and research rise and fall together.

  7. I notice J.Q, has put up no new Weekend Reflections Monday Comments or Sandpits recently. Is he telling us, the regular commenters, that we have written nothing interesting in these columns for some time? He might be right. We need to lift our game.

  8. Norton merely asserts that redirecting funding from teaching to research will benefit teaching

    Presumably should be: redirecting funding from research to teaching will benefit teaching.Fixed now, thanks – JQ

  9. liberal arts colleges

    It’s a myth that no research goes on in these places. If you want to get tenure there, you’ve got to have a top-notch research record. Perhaps not as good as at the best research universities, because the teaching load is bigger, but you’ve still gotta publish.

  10. @John Quiggin
    I am open to contrary argument, but I am not sure why increased academic specialisation in teaching or research is a bad thing, even if it has often been driven by funding changes more than a considered view about optimal employment arrangements. Specialisation generally increases performance and productivity, as economists have observed for centuries.

  11. Hi John

    I’ve been part of this debate both within my Go8 university as a student representative and at a national level. The position I put forward is this. Teaching quality is crap and this is especially highlighted relative to the quality of teaching that most undergraduates experience prior to their entry to university (i.e at high performing state schools and wealthy private schools).

    Most of the reason why its crap is lack of resourcing, through a combination of over reliance on casual and other non-ongoing academic staff, poor educational facilities and massive underinvestment in high quality IT infrastructure that students have come to rely on as a given in the rest of their lives, the slow, unintuitive and broadly non-user friendly Learning Management Systems and most importantly, ballooning staff:student ratios as exemplified in ever increasing tutorial sizes.

    We also know, to an extent, what works in pedagogy, measured both by student outcomes and self-reported satisfaction. Smaller tutorial sizes, more flexible classrooms and learning environment (e.g. flip classrooms), more personal time in academic staff and a focus on doing than just learning (particular important in the laboratory and field sciences). All of this costs money.

    However, whenever a discussion about teaching resources comes around at the university I am at, this line from the university executive is endlessly trotted out “Yes, we understand that these are all things that are proven to be good, and yes, we’d like to do them all, but we’re spending 15-20% of the money ostensibly allocated for teaching on research on-costs”.

    Your argument that per student funding isn’t necessarily for teaching falls a bit flat when students debt in the HECS program is specifically in exchange for the services of education and that the commonwealth contribution for different courses is paid based on the cost of teaching said course. I don’t think it could be clearer that the combined HECS + CSP per student contribution is meant to be for teaching! It would be a truly bizarre state of affairs to use that formula to fund research (and anyway the various research base funding programs JRE, SRE, RBG and RTS are based on research funding formulas).

    The time split for academic staff is now a pretty well defined concept in all EBA’s. 40-40-20 (teaching-research-admin) is the broad model and different staff are allowed to push it in one direction or another. Workflow accounting is something that everyone is already doing to some extent. Universities already collect the data and have a pretty good idea on how much time people are spending on teaching undergraduates vs research. covers the material cited in this comment.

    I think that to find our way out of the situation we’re in, the research block grant program needs to be expanded to fully cover the costs of publically funded research (currently the gap is about 600 million per annum nationally) through a small hypothecation of the company tax (as it flows logically that the primary beneficiaries of publically funded research both basic and applied is Australian businesses through technological development that occurs) and that the per student funding be directed specifically by convenant to be used to teach undergraduates.


  12. A comment about two things. Transparency and students’ choice of institutions


    There is a real lack of transparency within universities about where the resources go, but excuses like saying it is too hard to work out the level of any implicit cross-subsidy are a bit of a cop out.

    I cannot imagine that it would actually be that hard to calculate the efficient cost of delivering a quality undergraduate degree that meets a specific standard (including an efficient allocation of overheads based on reasonable benchmarks). This is a very common approach to establishing the price of many regulated goods and services. Why an undergraduate degree is any different is beyond me.

    If the efficient cost is less than the funding there is clearly money wasted on inefficient administration (I’d bet my hat on it) and/or money going to research.

    Choice of institutions

    John, you say “The answer is that students are beating down the doors of the research-intensive unis.” I think that is more likely to be due to consumer choice based on historical brand reputation than any actual knowledge of the quality of the current undergraduate teaching.

  13. I am open to contrary argument, but I am not sure why increased academic specialisation in teaching or research is a bad thing

    Because they aren’t really different things: what happens in high-level education is essentially teaching people how to do research. For post-grad and many undergrad courses, research is produced as an inescapable by-product of teaching; the research is essentially “free”, little or no opportunity cost. Or flip it and foreground the research, and the teaching comes at close-to-free. Certainly it’s cheaper than doing them separately, if that’s even possible.

    Think of a university like a combined-heat-and-power plant: it’s usually cheaper to produce research and teaching in a combined facility than in separate ones.

  14. @Collin Street

    Yes but much teaching in first year vocational subjects is done by practitioners who might or not be good teachers but who have no interest in research.

  15. @John Quiggin

    That’s one way to frame the situation. The other is that the academic/student ratio is now more than twice that of 20 years ago, so if academic staff are doing roughly the same amount of research, the average student is getting about half the amount of contact time compared to what they once were. So things have changed considerably, although I doubt taking away research time would solve the problem as universities tend to do a poor job helping those that need help from full-time teachers (targeting the high school system would be better).

  16. I have a solution. Stop our bombing campaign in the Middle East and put the $500 million saved per annum into education. Split it as per current teaching/research splits. Too easy. Next issue please.

  17. Sorry- the moron’s eye view. I beleive the notion that research is funded from teaching cuts or vice versa is a false binary. Both need to be funded adequately, otherwise we have just descended to more neoliberal “reform” self defeating nonsenses for dumbing down and economic dependency.

    After Ikon, fund the thing properly and don’t schmooze cuts as “reform”. Get rid of the F35s instead.

  18. “I am open to contrary argument, but I am not sure why increased academic specialisation in teaching or research is a bad thing, even if it has often been driven by funding changes more than a considered view about optimal employment arrangements. Specialisation generally increases performance and productivity, as economists have observed for centuries.” (Andrew Norton)

    There has been so much specialisation in academia (academic disciplines) that interdisciplinary research is required to tackle an increasing number of research questions. The need for pooling knowledge from various academic disciplines, particularly for applied policy questions, is reflected in John Quiggin’s explicit invitation for comments from readers other than textbook economists.

    You seem to be totally unaware of the specialisation according to fundamental research questions.

    The idea of splitting research from teaching at university level on the grounds of expected ‘productivity gains and improved performance’ beggs the question of how is ‘productivity gain’ and ‘performance’ measured. Initially I thought your argument might hold for Financial Accounting because nothing has changed on the fundamental research level since the very late 15th century. But I had to reject this limited agreement on the grounds that there is no research question and therefore no need to spend any public resources on research.

    The point of teaching at a university level is that the teaching of the research methodology is part of the teaching of the ‘material’. The aim is to not only ‘present’ (to use the silly term coined by some ‘new public sector management accountants’) ‘the material’ but to encourage students to become aware of unresolved questions – surely this is a prerequisite for educating people for daring to innovate if not invent. Delegating the teaching to non-researchers results in the one-eyed teaching the blind, proverbially speaking.

    Without wishing to be disrespectful, the statement “Specialisation generally increases performance and productivity, as economists have observed for centuries.” is a good example of the outcome of non-research based university education in Economics.

  19. @paul walter

    “Sorry- the moron’s eye view. I beleive the notion that research is funded from teaching cuts or vice versa is a false binary. Both need to be funded adequately, otherwise we have just descended to more neoliberal “reform” self defeating nonsenses for dumbing down and economic dependency.”

    Well yes. Surely it is obvious by now that ‘neoliberal reform’ roughly corresponds to the undergraduate economic textbook knowledge that is about 100 years old. Observing that ‘the material’ is contained in texts published by ‘new’ authors in 2014 or 2015 would not be apparent to a specialist teacher, would it?

    I am talking against the background of direct observations.

  20. @Ernestine Gross

    Andrew is presumably thinking about Adam Smith’s pin factory. I think it was Joan Robinson, 40 plus years ago, who first showed the flaw in Smith’s argument.

  21. (abbreviating my name to make this comment less Googleable)

    @Vik is, in my view teaching in a technical area at a Go8 uni, spot on.

    There are a bunch of things we could do to improve teaching were we to spend the money:

    * more professional small-group (lab/tute) teaching.
    * more time spent on course development, with domain experts collaborating with teaching experts (not to mention systematic input from the industry).
    * more extensive, better quality feedback on submitted work.
    * better IT support for teaching (for insance, a colleague and I are so annoyed at the weaknesses of Moodle’s feedback mechanisms that we have embarked on a guerilla campaign to implement our own alternative marking tool).

    There isn’t a whole lot of interest at the higher end of the faculty for this kind of thing, and I can only draw the conclusion that they aren’t getting any pressure to improve teaching quality from the ever-increasing blob of DVCs and PVCs.

  22. For the record (and without commenting on the other issues raised), at the time Hillary attended Wellesley College she could scarcely have been described as a “… [child] of the upper classes who [doesn’t] need to worry too much about making their way in the world.”

    I would think that the same could be said of Nora Ephron (Wellesley), David Baltimore (Swarthmore), or Joseph Stiglitz (Amherst) … just to pick a random few.

  23. It might be more accurate to say that large 1st year uni classes subsidise other areas, both teaching and research. You have economies of scale, so a unit with 500 students can run more efficiently than one with 50.

    But I’m not sure I understand their argument over funding. Sure, you could waste money trying to accurately work out exactly how much funding is needed to teach each unit. But in reality, you have an imperfect formula and rely on the university to distribute the money as best it can.

    Right now, the funding per student is too low. My uni is probably typical, where we can maintain things, but not improve them.

  24. @Andrew Norton
    The reason why the teacher/research combination exists is because 1) without a research incentive, ‘good teachers’ end up in industry on more money and universities are finding it very expensive to buy-in these ‘good teaching-only’ staff. Not unusual for universities to use big 4 contractors to cover (continuing) gaps in tax & accounting at great cost. The move to teaching-only is not about improving quality with new positions but really about not being able to make the hard decisions with poorly performing staff. 2) Great researchers also tend to be great teachers – some of the best performing humanities courses with great student numbers and retention rates into 2nd & 3rd year had level D & E academics delivering 1st year subjects. Not surprisingly when costs were cut and teaching was done by level A & B academics student numbers and retention rates fell.

  25. Interesting intervention today from Ian Jacobs, the new VC of UNSW.

    In a dramatic break with the longstanding position of his fellow Group of Eight vice-chancellors, University of NSW vice-chancellor Ian Jacobs said higher fees are not necessary for Australia to have a high quality university system.

    “There is no crisis in Australian higher education,” Professor Jacobs told Fairfax Media.

    “Our system is the envy of the world.

    “Fundamentally, the teaching side of university education works well.”

    This could be interpreted many ways, not mutually exclusive.

    1. An attempt by UNSW to change the G8 line
    2. An attempt by Jacobs, the new kid on the block, to wrest leadership from the old guard in the G8
    3. UNSW is splitting from the G8 on this issue
    4. The breakdown of the G8 as a coherent lobbying group
    5. The continuing purging of Abbottism, at least on some issues.

  26. @Vik
    Most of the research I’ve seen says that class sizes actually have very little impact on learning outcomes. Changing staff:student ratios is also one of the most expensive ways to try to improve things. agree with everything else.

  27. @Nevil Kingston-Brown

    I think the comment Conrad made is relevant here.

    It depends what you mean by ‘classes’. From my own experience at a regional university, lectures do not need to be small but the tutorials and pracs that followed up the lecture do need to have a staff:student ratio such that students are able to actively participate face to face and receive individual feedback.

    Online discussion groups are not an adequate substitute for actual contact with a lecturer or tutor.

    My experience was back in the 90’s when there was money for regional institutes to become universities and do ‘research’.

    According to my son who is currently enrolled at the same University, there is nothing like the experience and access to staff that was available 20 years ago. I can’t believe how little he gets for his money.

  28. Here’s a list of just some of the things that universities spend money on:
    salaries of academic staff;
    salaries of non-academic staff, including staff who answer student enquiries, staff who prepare reports required by law, lab technicians, IT support people, facilities maintenance people, library staff, accounts staff, journalists, lawyers, archivists;
    laboratory equipment and supplies;
    library resources;
    building construction and repairs;
    electricity bills;
    copyright licence fees.

    I don’t see how to divide this list of expenditure items into ‘teaching’ and ‘research’; it’s not obvious how a university could shift expenditure from teaching to research or from research to teaching by shifting expenditure from some of these items to others.

    If a university spends more money on hiring more academic staff, we have to suppose that they will do both more teaching and more research, but I doubt the best way of achieving this would be to shift expenditure from all other areas into hiring more academic staff; academic staff need money to be spent in most of those other areas both to assist them to teach and to assist them to research.

    Increases in the total funding for universities should enable them both to teach more and to research more. Changes to the ways in which universities are funded, even without any increase in total funding, could affect the way the time of academic staff is divided between teaching and research. The way academic staff divide their time between teaching and research is important. There are probably some individual cases where the specific features of how universities move their expenditure around internally affect the division of academic staff time between teaching and research, but in general it’s the wrong place to look; saying ‘there is a problem with the way universities are moving expenditure from teaching to research [or, from research to teaching]’ is almost certainly a mistake.

  29. Good point, J-D. While the information you supplied is known to academics, it is apparently not known to Andrew Norton. The term ‘independent think tank’ acquires the meaning of ‘independent of knowledge of the production technology’ or, put more simply, independent of reality.

  30. @J-D

    What proportion of a university’s budget is spent on these things? (I’m not having a dig at you; I’d like to know.)

  31. “Specialisation generally increases performance and productivity, as economists have observed for centuries.”
    Perhaps this has been known for centuries. However, in general, the world has generally been a less complex system. When systems are simple or complicated there is more predictability and agents are more likely to be independent. With complexity there is less independence among agents (of which there may be many) and less predictability. Systems may display self-organisation and emergence. Outcomes non-linearity and thresholds. Among other things, collaboration and diversity are needed. Perhaps we need to know more about complexity and increasing specialisation. I think I can remember in Physiology 101 in 1954 being told about the discovery of how the kidney concentrates. Engineers pointed out that the nephron is a countercurrent multiplier. Engineers knew a lot about countercurrent multipliers. Such enrichment through diversity is not uncommon. Is it enhanced by super-specialisation?
    Much “research” is just doing your job, keeping good records, analysing the data, using it to help find ways to improve, and teaching others the process. Safety in hospitals is a good example. Sadly when safety is very good and funds short, there can be heard mumblings in the corridor that expenditure on safety (“research”) is too high and should be curtailed when in fact the safety is due in no small part to the safety system. In some disciplines, service, teaching and “research” can be so interrelated that it may make little sense to be arguing “either/or”.

  32. @Ikonoclast

    That gives figures for UQ in 2014 according to which salaries and related expenses for academic staff were about three tenths of total expenditure and salaries and related expenses for non-academic staff were about one quarter of total expenditure. So that’s already over half the total. Next on the list is depreciation and amortisation, the biggest single chunk of which is for depreciation of buildings, but all of that together is only about one fourteenth of reported expenditure.

    (There’s no breakdown of expenditure for non-academic staff into different categories of functions those staff are employed to perform; nor for academic staff, if it comes to that.)

  33. @SamB

    “just to pick a random few” I think you mean “just to pick a non-representative sample”. All these colleges have admissions policies under which some bright students from middle class and even working class backgrounds are subsidised by the upper-class majority.

    Even so, I was a little surprised to see you list Hillary Clinton (father was a successful small businessman) and Nora Ephron (both parents successful screenwriters) as counterexamples. Both of these would have been well inside the top 10 per cent of the income distribution, I would say.

    Admittedly. Stiglitz (father an insurance salesman and mother a teacher) came from a solidly middle class family. But if your policy proposal is “be as smart as Joe Stiglitz, then you can get a scholarship to a top school”, I think its applicability will be a bit limited.

  34. @John Quiggin

    “be as smart as Joe Stiglitz” is worse than asking everyone to “be above average”. I mention this only because people imply this so often, that it is stupefying. Joe Hockey’s “get a good job to get into the housing market” belongs in this category, along with any number of statements made by coalition front benchers recently.

  35. @totaram

    Some people don’t even know what smart is.

    I thought I was stupid until I went to Uni – because of the encouragement from my Social Security case worker – and found out that the things I liked to do meant I was actually above average in some things that are valued at Uni.

    I was very lucky and I’m quite sure that I am not the only person who could have gone through life without ever discovering that they are smarter than the average rather than too stupid to get a real job.

  36. At the risk of showing my age, I always thought the CAE model had a lot going for it. Institutions focused on teaching / training at the tertiary level separated from universities which had research focus though both need to be funded well. If they were re-instituted today, I could see the G8’s hoovering up the funds and CAEs going the way of TAFEs.

  37. There are benefits associated with specialisation, but there are also dangers associated with over-specialisation. It can be a mistake for people to spread themselves too thinly, but it can also be a mistake for people to focus too narrowly. Advocates of more specialisation of academics into teaching-only and research-only need to explain not that there are benefits from specialisation, but why they think there will be benefits (outweighing the costs) from this particular kind of specialisation.

    Also, specialisation of academic staff, some into teaching and some into research, is not directly connected with the balance, in the aggregate, between teaching and research. You could move from a scenario with academic staff who each divide their time and effort between teaching and research in the proportion T to R to a scenario where academic staff are divided in the proportion T to R between those who do teaching only and those who do research only; this might be a good idea or a bad one, but it wouldn’t change the proportioning of teaching to research in total university effort, or output.

  38. If the creation of a category of teaching-only academic positions does not have a high probability of shifting the balance of total university effort away from research towards teaching, or of improving the quality of university teaching in general (and it doesn’t), is there an effect it has a higher probability of producing? Yes: the creation of a category of teaching-only academic positions has a high probability of reinforcing the hierarchy of status. Some people like that idea; some of the people who like the idea are reluctant to say so explicitly (and possibly even reluctant to admit it explicitly to themselves); for them, other pretexts are welcome no matter how spurious.

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