Opinion & Commentary
Opening Go8s to the market benefits all
Call it the Telstra theory of higher education competition. According to Greg Craven from Curtin University, we shouldn't have a market in higher education because some universities, like Telstra in telecommunications, established powerful businesses through many years of state-funded monopoly. How can newer universities, he asks, win a race "rigged clear beyond the standards of a sideshow shooting gallery"?
Craven's Telstra theory, advanced in The Australian last week ("Elitism Will Get us Nowhere", June 14) is colourful but not new.
Last month HECS architect Bruce Chapman opposed lifting the cap on full-fee undergraduate places because it would deliver disproportionate benefits to universities with reputations built up with 100 years of public subsidy.
Paul Thomas, vice-chancellor of Australia's newest public university, the University of the Sunshine Coast, told the HES younger universities needed to be given the same opportunity as their competitors to develop over decades. Otherwise the "strong will benefit most because they are already strong".
Craven and Thomas were responding to a recent proposal from the Group of Eight, which represents the eight leading research universities, to end quotas in higher education. Instead of the commonwealth allocating student places to universities, as now, under the Go8's plan the commonwealth would allocate scholarships to students, who would put the money towards a place at any higher education institution that accepted them. Instead of being effectively guaranteed students, universities would compete for them in a market.
Clearly this worries some non- Go8 universities. It seems unlikely, however, that the Go8 wants a higher education market to take students from other universities. Go8 universities are more concerned with prestige than market share.
They want the best students, not the most students. Since they already enrol the vast majority of the most academically able school-leavers, expanding student numbers would dilute rather than enhance their prestige.
The Craven and Thomas analysis misses that a market would let universities shrink as well as expand. Go8 growth in recent years has reflected the need to bring in extra revenue, not a belief that bigger is better. The relaxed (but not abolished) price control the Go8 advocates would let them meet revenue targets with fewer students, while also increasing the average Equivalent National Tertiary Entrance Rank of accepted students.
Higher price caps would give non-Go8 universities a competitive strategy they presently lack. A commonwealth-supported student pays the same amount to attend Curtin University or the University of the Sunshine Coast as they pay to attend the University of Western Australia or the University of Queensland. By choosing one of the last two, both Go8 members, students get prestige at no extra charge. It's an unfair advantage made worse by anti-competitive price regulation.
Contrary to Craven's fears, when markets are deregulated, as they were long ago for overseas students and for postgraduates, non-Go8 universities defy the pessimistic theories and do well. Only two of the Go8 make it to the top eight for overseas student enrolments, with Curtin ranking second in 2005. Its Perth rival, UWA, came 27th. Curtin had more than twice as many coursework postgraduates in 2005 than UWA. Overall, four of the top eight for coursework postgraduate enrolments are non-Go8 universities.
Entrepreneurial flair counts for more than inherited prestige.
In practice, the main competitors of non-Go8 universities would be each other and private higher education providers, who could also take scholarship students. Yet they are strangely absent from Craven's analysis, seemingly because he is preoccupied with the handful of very bright students he fears may leave Curtin for UWA.
Craven is dismissive of those left behind after bright flight.
He refers to the "hordes of second-rate students" at non-Go8 universities, and "service universities" filling up with "teachers, nurses, health professionals and other worker ants to whom serious inquiry is of little relevance".
Few university students are academically first-rate and fewer still want to pursue serious inquiry. Academics tend to prefer these students to the intellectually above-average, but not brilliant, people aspiring to professional careers who make up most university enrolments. But policy ought to balance the biases of academics with incentives favouring the interests of all students. Instead, by virtually guaranteeing student numbers, it has done the opposite.
Craven's analogy between the Go8 and Telstra highlights the problem with his analysis. Fifteen years after telecommunications competition began, Telstra is still the biggest telco. Yet several rivals went from no presence in the Australian market -- a much weaker position than non- Go8 universities -- to become successful telecommunications companies. Facing competition, Telstra's performance has improved significantly. It's just the kind of thing we need in Australian higher education.
Andrew Norton is a research fellow at the Centre for Independent Studies who also works part time for the University of Melbourne.
