Opinion & Commentary
Putting a case for fee deregulation
IF education ministers can be judged by the average number of policy initiatives per year, Julia Gillard will be remembered as a high achiever.
But on one key issue, funding per student, her legacy is uncertain. Unlike her two Liberal predecessors, Julie Bishop and Brendan Nelson, she left the portfolio with real funding per domestic student lower than it had been when she arrived.
Gillard was not inactive on student funding. The indexation system responsible for imposing real spending cuts will be replaced in 2012 with one more accurately reflecting changes in costs. But this is an end to backward steps more than an important forward step.
The bigger issue of future teaching funding levels was deferred to a review to report in 2011. This was announced in May last year, but as of early last month nobody had been appointed to the review and no terms of reference had been announced. A review likely to find that universities need more money is being delayed by a government that has little money to spare.
Labor's first-term record contains an important lesson. Even a government that came to office with extravagant rhetoric in relation to education, ultimately behaved the same way as all governments since the mid-1970s. When money is tight, the core financial needs of universities are a very low priority.
Reliance on public funding makes universities hostage to the budget cycle. The only practical way to escape the budget cycle's constraints is to let universities charge students more. Yet there is great reluctance in the sector to make this argument. It is the policy position of the Group of Eight and some individual vice chancellors, but silence on, and opposition to, further fee deregulation are more common.
There is nothing wrong with universities wanting to offer reasonably priced higher education to Australian undergraduates. But there is something wrong in risking the quality of that education with a public funding-based political strategy that has failed repeatedly in the past. We can no longer assume that international student fees will fill the financial gap.
There is also something wrong with constraining the choices available to undergraduates by locking public universities into a low-cost educational model, limited by the available public funding and the present cap on student contributions.
Some private institutions offer, among other things, smaller classes for those willing to pay full fees. But while the private higher education sector is growing rapidly, it is still a long way from being able to offer widely accessible alternatives to public universities. If we are to offer Australian students diverse higher education options any time soon, we need public universities to make them available.
Letting universities increase fees is always politically difficult. But the higher education sector should insist that the status quo is untenable. If the federal government cannot provide funding itself, it should step out of the way and let universities take financial control of their own futures.
Andrew Norton is a research fellow at The Centre for Independent Studies.
