Fee Deregulation Debate

Six months ago Nobel Laureate Brian Schmidt delivered a public lecture at University House where he outlined his vision for ANU. He indicated ANU should be an institution dedicated to offering an education unmatched in Australia and rivalling the best in the world. His vision was of an education which would match the experience he saw at Harvard – small classes of highly gifted students, interacting closely with the best scholars in the world and being tested to their limits.

This education would include a major residential component, enabling education to extend far beyond the classroom. This extraordinary environment would develop a cadre of alumni dedicated to further building this environment. The audience applauded eagerly and there was enormous excitement about such a vision.

I, however, was sadly pragmatic. I indicated to Brian that I shared his vision – a utopia of education. However, this was so far separated from the reality of Australia that surely it was but a pipe-dream.

The reality for Australia is very different. We have a system which in recent years has expanded rapidly, with 130,000 more students over the past five years. That is an expansion of which we should be justifiably proud.

As a result, however, the cost has almost doubled over that same period and is projected to balloon over the next five years.

Even the Labor government, which came to power with the slogan of an “education revolution”, could not sustain this increasing burden and in 2013 was forced to cut deeply into the Higher Education budget.

The challenges of taxpayer support for Higher Education are long standing and not limited to one political party. In the period 1996 to the present, the per-student funding levels have steadily fallen by 14 per cent in 2013 dollars.

The result has been increasing class sizes, more sessional staff, small enrolment classes closing, aging facilities and a system stuck on a treadmill of ever increasing student numbers simply to make the budgets work.

This is far from my vision for ANU or the vision Brian Schmidt painted.

If we do nothing, the results will be clear – a continued decline into mediocrity. Based on decades of indifference by voters and hence the governments they elect, I have little faith that a change will arrive any time soon.

As it has been pointed out more than once, when I went to university it was free, or at least someone else paid. However, less than 10 per cent of Australians attended university at that time and very few of them came from poor backgrounds.

Today almost 40 per cent of young Australians attend university. That is a statistic of which we all should be proud. In a perfect world, government would fund this expansion at an appropriate rate. However, as a sector, we have never been able to convince the electorate that universities are their highest priority for such funding.

Now the government is proposing to shift some of the burden from the taxpayer to the individual. This is an unpopular move, but one I believe is sadly inevitable. If it doesn’t happen now, it will happen at some point in the future.

Government could have done this and fixed the price institutions charge. They did not. They decided to deregulate, and this is something I support.

The government package is large and complex. It is a mix of vision for a changed system and pragmatic budget savings. There are elements that are clearly simply there as a saving to the overall budget. I suspect there are elements also there to trade off in the Senate, although only government knows this.

I and the Group of Eight welcome deregulation. It will not deliver Brian Schmidt’s education utopia. But it should stem the continual decline and provide greater choice for students. In addition, this package will provide welcome equity provisions through enhanced scholarships and the funding of pathway programs.

Of course, the devil is often in the detail and there are elements of this package that need to be rethought.

Specifically, the proposed interest rate on the HECS debt has significant equity problems.

The magnitude of the cut to the Commonwealth contribution and how it is spread across disciplines is deeply problematic.

The proposal, as it now stands, caps the amount which universities can charge at the international fee. An institution that decided to charge such a student fee would receive both the fee and the Commonwealth contribution. Surely, such a position is not morally defensible? Rather, this cap should be that the total revenue received by the institution (student fee plus Commonwealth contribution) should not exceed the international fee. Such a change, originally proposed by Chancellor Gareth Evans and myself before the budget, would go a long way to address concerns about fee gouging.

Finally, the cut to HDR students, where there is little private benefit, seems counter-productive in a society which needs greater investment in research, not less.

There are no easy solutions. To simply say no to the package will entrench a steady decline.

The challenge is to land on an outcome which finds the appropriate balance between public and private contribution, and one that enables Australia to develop a system with real diversity and choice for students. A solution must ensure that entry and success at university is limited only by ability, and not one’s socio-economic background. The outcome must also develop a Higher Education system which can build the social capital and research excellence required for a prosperous and socially just nation.

Achieving this balance is the challenge we all now face.


Filed under: The University

Updated:  19 August 2020/ Responsible Officer:  Director, SCAPA/ Page Contact:  Director, SCAPA