Opinion & Commentary
In search of that last small step
Tens of thousands of Victorians will soon submit applications for university places in 2011. They are probably the last to do so under a system of distributing university places that has served Victorians badly.
For decades the federal government has kept the number of university places it supports financially below demand. In most years it also banned full-fee places at public universities, so anyone not receiving a subsidised university place missed out or went to a full-fee charging private higher education provider.
While cases of people missing out completely occurred in every state, they were more common in Victoria than elsewhere. Victorians were victims of their own academic achievement. With higher school completion rates than in other states, a larger share of young Victorians wanted to continue on to university. But successive federal governments took little notice of this. They allocated places to states according to their population, regardless of how many people wanted to attend university.
Now both major political parties are committed to abolishing this method. Instead, they propose a plan that gives more weight to the wishes of potential university students. Labor has said that it will lift all controls on the number of students public universities can enrol from 2012. The Coalition hasn't committed to this date but is unlikely to delay the change for long if it takes office.
The reform means that public universities will face no regulatory obstacles to taking more students. Despite complaining about the funding rates on offer, most Victorian public universities seem willing to offer more places. A partial lifting of funded enrolment caps for 2010 and 2011 saw a substantial increase in offers this year compared with 2009.
While this move to a 'demand-driven' funding system is welcome, the policy has a significant omission. Only students in the existing public universities will share in its benefits. Students at private higher education providers, and at the TAFEs now offering degrees, will still pay full fees.
The Labor government never explained why it limited funding in this way, though it promised to consult with the higher education providers that missed out. The restriction created a major inconsistency in the government's policy framework. While it mandated full fees in private higher education providers and TAFEs, it stopped full-fee undergraduate places at public universities.
Where public subsidy is available it should be allocated on a rational and principled basis.
Public subsidy aims to help make higher education affordable, particularly for disadvantaged students. However, public universities have no monopoly on this group. In private higher education provider and TAFE degree courses 12.5% of students have a low socio-economic background. At public universities there is little difference at 15%.
In practice, some private higher education providers and TAFEs are better placed than the public universities to meet the needs of students with educational disadvantage. The private providers typically offer smaller classes and more personal attention. Both private providers and TAFEs allow students take diploma courses to prepare them for university-level study.
Under the proposed demand-driven system, students taking pathway programs will pay full fees, while those with no educational disadvantage can move straight into public universities where they receive public subsidies of up to $19,500 a year. It does not seem consistent with Labor's fairness agenda.
From a Coalition perspective, a dual track funding system also conflicts with the party's general principles. Educational choice through universal entitlements has been a powerful Liberal theme in school debates, and it is odd that this has not carried through to higher education. The Liberal commitment to fiscal responsibility would also be better served in the long-run by including teaching-only TAFEs and private providers into the system. They can deliver courses at a lower cost to students and taxpayers than research-active public universities.
In abolishing controls on higher education student numbers, the two parties are coming very close to a reform that combines choice and fairness. A small extension to current policies would be a great start for whoever emerges as the education minister.
Andrew Norton is a research fellow at The Centre for Independent Studies.
