Opinion & Commentary
Parties in a state of voluntary confusion
`The Liberals are spending political capital to abolish a near redundant fee'
A quick quiz: Which major political party supports totally deregulated and up-front fees for all university students? Most people would think it is the Liberals.
In fact, it is the Labor Party, currently campaigning strongly against the Federal Government's voluntary student unionism (VSU) legislation, which would eliminate the last remaining compulsory, pay-now fee for Australian students; the union or amenities fee.
It does not sit easily with Labor's claim that the university-set tuition fees introduced last January threaten the affordability of higher education.
The Liberals also are in a state of policy confusion. They are spending a large amount of their political capital to abolish a near-redundant fee.
The overwhelming majority of students in Australian universities now pay for tuition, and more than a third pay full fees.
In principle, universities no longer need the separate union or amenities fee the VSU bill targets. It is a relic of the days when the government paid for tuition, and the students for extra-curricular activities.
Now that students pay for both, it makes sense to charge only one fee for what is, in effect, one bundle of services.
The main practical reason for two fees is that the Senate, then with a minority of government Senators, set a low maximum student contribution amount when it passed Education Minister Brendan Nelson's reform package back in December 2003.
Universities want all the money they can collect from the student contribution amount for their academic purposes. They are reluctant to give up the deregulated union or amenities fee.
Ironically, having supported fee deregulation in 2003, the Government now wants to further regulate fees.
And Labor, having opposed fee deregulation in 2003, should now support it as a way of financing the student services they say are essential.
As this policy cross-dressing suggests, both parties have let their decades-old stances on VSU lead them into a deep intellectual and tactical muddle. Neither party has thought through the implications of near-universal tuition fee charging.
Both policy stances, for and against VSU, wrongly assume that universities are completely government financed and non-market institutions.
There is a far better alternative for both parties, one that ought to produce consensus rather than division. This alternative is to further deregulate the student contribution amount, which currently ranges from just under $4000 a year to just more than $8000 a year, depending on course. Universities would then fund all their current non-academic services out of the total revenue from students, rather than two separate income streams.
From Labor's point of view, it saves them from the tortured logic required to argue for repealing a tuition fee that does not need to be repaid until the student earns more than $36,000 a year, and against putting an end to a union or amenities fee that has to be paid at the start of each year regardless of income.
From the Liberals' point of view, further price deregulation takes them closer to what they wanted in their original 2003 Nelson reform package, and to the absence of price regulation in their full-fee university student and subsidised private-school fee policies.
It's true that further deregulating fees will not end funding of non-academic services at universities.
But the current VSU Bill won't do that either, since universities will pull more revenue out of teaching to preserve core services previously funded by the union or amenities fee.
Combining the two fees would, by contrast, improve the way universities spend their money. Because of federal government regulation and funding policies, teaching services already have been subject to extensive cost-cutting over the past decade. With a deregulated funding stream, non-academic services have been quarantined from this process. Put the two fees together to produce the one income stream, and watch the funding priorities change.
Fee deregulation won't deliver the knockout blow many current and former Liberal student politicians hope to inflict on their old campus enemies. It won't guarantee, as Nelson suggested the VSU Bill would, that no single mother studying nursing will ever cross-subsidise canoeing or mountaineering.
But it will have two worth-having advertised benefits of the VSU Bill, ending up-front fees and creating more accountability for university spending, without the costs - to campus life, to Coalition unity, to policy coherence and to electoral support in regional seats.
Andrew Norton is a research fellow with The Centre for Independent Studies.
