The Prime Minister says that today’s High Court decision won’t be used as a “mandate to massively extend the powers of the Commonwealth”. But perhaps merely a “large” rather than a “massive” extension?
After all, Education Minister Julie Bishop has in recent months been showing some constitutional impatience. The main head of power in the Constitution the Commonwealth uses for universities is the “benefits to students” provision in section 51. This lets the Commonwealth provide conditional grants to universities, but doesn’t let them control universities’ governing legislation. This does not please Ms Bishop. In October she was complaining about various alleged deficiencies in university governance arrangements. University governance is a responsibility of the states. This displeasure seemed, however, to go beyond just governance. In another October speech she said:
Universities are creatures of our states, set up under state legislation, they are accredited, registered, audited, governed by the states. The states even nominate their representative for Councils and Senates. So where is their financial contribution? Just 2%? And that figure is debatable.
In a speech in early November at the Melbourne Institute conference, which doesn’t seem to be online, she went to so far as to say that the Whitlam government had made a mistake in 1973 in not getting a referral of powers from the states when the Commonwealth took over principal financial responsibility for higher education.
Today’s judgment did confirm that the Commonwealth won’t be able to get its hands on one of the state education powers it wants most, the power to establish rules for the creation of a corporation (universities are corporations). So it won’t be able to legally define the various types of higher education institution or manage the accreditation process. But the judgment does make it more likely that the Commonwealth could make all sorts of other rules for existing universities without the current practice of enforcing compliance via tied funding grants. Possibly it would allow them to set governance rules as well.
In practice, the main implications of the High Court’s decision may be for the private higher education industry. This is because though universities could have (and in my view should have) stood up to the Commonwealth and negotiated a better funding deal and regulatory arrangements, in reality there is a deeply entrenched culture of capitulation in the higher education sector. I can’t think of any other interest group that rolls over so readily. The universities have never used the power they have, and so they won’t be any worse off without it.
However, the private higher education industry – or at least those parts of it that are not receiving Commonwealth cash – has to date been largely free of Commonwealth control, something Brendan Nelson noted with some frustration. If the government is allowed to set minimum wages, could it also set fees for private higher education institutions? I can’t see any legal reason why not. And politically, both parties still subscribe to the view that the Commonwealth should set maximum fees for some students at least. In Labor’s case, I fear that they actually believe in this, and it is not just a cynical political pose. It’s been another bad day for supporters of small government.
Andrew Norton 
I personally can’t blame the federal government for complaining about the state governments (excluding Queensland) — they do provide the majority of the funding, although two sets of rules sounds like a nightmare, so if they must take over things, they should take over completely (for good or bad).
Given that you work at Melbourne, I think you’re a bit negative about universities rolling over. I think if Melbourne actually makes the changes it is currently suggesting, it will be considered quite radical considering the uniformity of all the other universities. The only other slightly radical thing I can think of happening that goes against government opinion is U. Syd. chopping nursing.
I might also be worried about any new legislation if I was at Melbourne — its easy for me to imagine the federal governement blocking the changes for political versus sensible reaosns (“courses X, Y, & Z shouldn’t be cut back”, “course X, Y, & Z, must not have fees…”, “you must provide services X, Y, & Z that we don’t pay for”, etc.) as the changes are sure to be controversial once they start getting brought it (“Melbourne Uni only for the rich..”)
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Conrad – There aren’t any real problems in the current arrangement. Universities have to report some data to two governments, but this is a very minor inconvenience. The Commonwealth should never have imagined itself to be a regulator. It is simply a large customer, and should be treated that way.
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‘It is simply a large customer, and should be treated that way.’
I’d even go beyond that and argue they are the single largest financier of our customers, and should be treated that way.
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I’d be amazed if Whitlam in 1973 could have got a referral of powers on anything out of some of the states – especially Jo’s Queensland. Not so much a mistake as an impossibility.
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DD – I agree. But more to the point, there was and is no need.
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Yes, higher education is next. The Federal Government is the major financier, and they will want credit not only for what they spend but any regime which channels significant private-sector funding to universities (a tax reform I’d expected long before now). It is the states should be regarded as customers rather than significant stakeholders or regulators.
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“It
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