Opinion & Commentary
Fee hikes fit in with Libs' ideal
Last Friday's surprise passing of the voluntary student unionism legislation means that for at least 18 months - from the law's introduction on July 1 next year to the election due at the end of 2007 - universities won't be able to charge a separate and compulsory amenities fee. Despite the present polls, only the most reckless business plans would assume an ALP victory.
While the Liberals remain in power, demands for repeal of the VSU law are futile. They have heard and rejected every anti-VSU argument. They have accepted the political price of keeping VSU, enduring near-universal opposition since the Higher Education Support Amendment (Abolition of Compulsory Up-front Student Union Fees) Bill 2005 was introduced. In this political environment the VSU law is here to stay, but the right strategies will minimise its possible negative effects.
The principle of voluntary membership should be accepted, as even the ALP's compromise amendments did. The political focus should be entirely on avoiding the financial consequences of VSU. We need policies that can generate revenue, justified by principles that fit within the Liberal world view, rather than rejecting it, as anti-VSU arguments have to date. We should hear no more analogies between the amenities fees and local government rates or income tax.
Saying that amenities fees are similar to other things they dislike is not going to persuade your average Liberal activist or MP.
More important, support for a separate and compulsory amenities fee should be dropped. The radical-Left student activism it funded makes it a red rag (in more ways than one) to the Liberal bull.
Fortunately, the separate amenities fee is an anachronism, a relic of the old funding system.
Historically, it was needed to sidestep two bans: on universities charging for tuition or spending commonwealth money on non-academic amenities. Neither ban remains in place.
Tuition fees are now paid by nearly all students, whether through full fees or the student contribution amount. In principle, amenities could be entirely funded from these fees. Why charge two fees for one bundle of services, some academic and some non-academic?
Universities retained the second fee for a practical reason. Facing serious financial difficulties, they needed all the permitted student contribution amount to finance their academic activities. The VSU law's effect comes not from abolishing the compulsory amenities fee alone but in combination with capping student contributions at just 25per cent above the old HECS rates.
The amenities fee has acted as a de facto deregulation of this maximum. Universities have been able to charge whatever they like on top of the capped student contribution amount and the combined sums have funded commonwealth-supported students. What the VSU law does, in practice, is impose a lower price cap.
Once the legislation is understood this way, we can see ways of persuading Liberals who would never consider repealing it.
Price caps are not consistent with Liberal market ideology or with Liberal practice in other areas of education.
Liberals already support fully deregulated fees for overseas students, for most postgraduate students and for full-fee domestic undergraduates.
They recently extended the income-contingent loans scheme to support the fully price-deregulated private higher education industry. They have helped expand private school enrolments, with no suggestion of price control.
The student contribution amount cap has no basis in principle or logic. It is an arbitrary 25 per cent extra on an earlier arbitrary price, the differential HECS charges. It is less than the Liberals wanted in the original 2003 package, which was a 30 per cent increase. The 25per cent is a politically expedient number, what they could get away with in a Senate they did not control.
Lifting the cap, or preferably abolishing it altogether, would raise revenue sufficient to fund student amenities. But wouldn't this breach the VSU law, which prohibits the charging of a fee for amenities? I don't believe so.
The student contribution amount is, as its name suggests, a contribution to a larger expense. Increasing it would mean that students paid for more of their education than before. It would still be a fee for academic services.
While universities cannot charge separate compulsory amenities fees, nothing in the Higher Education Support Act stops them spending government money on amenities, a point reinforced by Brendan Nelson's decision to create an $80 million transitional fund. So universities could truthfully say that not a cent of fee revenue went to amenities. With higher student contribution amounts, universities would no longer need all their government money to fund tuition.
Trying to restore the compulsory amenities fee would mean working against the way the system is evolving and passionate Liberal belief. Trying to increase the student contribution amount would work with the way the system is evolving and in accordance with Liberal ideology.
For the next two years, only the second strategy makes sense.
Andrew Norton is a research fellow at The Centre for Independent Studies. He also works at the University of Melbourne and was an adviser to former federal education minister David Kemp.
