A few points of interest on topics of particular interest to me:

* The proportion of their sample who were overseas had doubled from 3.2% to 6.8%, which means that they will not be repaying their HELP debt. People with qualifications in ‘architecture and building’ are most likely to be overseas (12%).

* The graduates in non-graduate jobs generally don’t want to be there, though this is is more true of ‘sales workers’ than ‘clerical and administrative workers’. The second most frequent reason (‘to earn a living’ had a majority response for all occupations) for taking a clerical job was ‘to develop general skills’, but only 7% of sales worker respondents gave that reason. By contrast, 47% of sales workers say they took their job because it was the only one they were offered, compared to 23% of clerical workers.

* Graduates with jobs rated their generic skills development and overall satisfaction with their courses more highly in 2009 than in 2006. However unemployed graduates rated both more negatively. Do graduates see more benefits from their course in hindsight as they get to use more of the skills they learnt, or is this just part of the general tendency to forget bad things that happened in the past?

* A regression analysis that controlled for field of study, occupation, hours worked and age found that being the first graduate in the family (no sibling, parent or grandparent with a degree) was associated with a 2.9% lower income. I’d take this as a pretty good result. In theory, I would expect that lower average school results translating into lower university grades, lower levels of cultural capital and less useful connections would significantly undermine earnings for those without university-educated parents. In practice, the disadvantage is small. Meritocracy wins.

He included with the letter what I think is the first ever survey of think-tank name recognition. Though as John points out in the letter the rather generic name of the IPA may cause its numbers to be overstated a little (there are so many institutes around that I have trouble keeping track of them myself) I’m still impressed by the result.

Even the 21% for the Grattan Institute is pretty good, given that it is relatively new.

There was no question about my employer the Centre for Independent Studies, though in my experience people frequently get think-tanks confused. I regularly get people who are under the impression that I work for the IPA or even occasionally Gerard Henderson’s Sydney Institute.

ABS anlayst Hui Wei uses data from the 1981, 1986, 1991, 1996, 2001 and 2006 censuses to provide estimates of rates of return for investment in higher education. In the figure below, the rates are based on post-tax earnings of graduates compared to someone who finished their education at year 12 (say a Year 12 completer earned $800 a week and a graduate $1,200 a week – the graduate premium would be $400). The graduates are aged through the census of the stated year (eg it assumes that a 1996 graduate would at age 40 earn what a 40 year old graduate earned in 1996).

The costs are assumed to be the opportunity cost of four years out of the workforce with no earnings in that time, plus direct costs such as HECS.

As student labour force participation has increased over this time, the opportunity costs are increasingly over-stated. However the graduate premium is also over-stated, as those who go on to university are not a random group of Year 12 finishers – they are on average of higher ability. A further difficulty is that the highest census income category ($2,000 a week in 2006 ) understates the earnings of many graduates.

With these caveats, the following observations:

* As Wei notes, the rates of return are much higher for male persons than male employees. This is because a significant part of the benefit of being a graduate is protection against unemployment or not being in the labour force.
* For employees, the rate of return is quite stable over time at around 9-11%. The one exception is 2006. What seems to be happening there is that the booming labour market was employing a lot of lower-skill people, who earned significantly less than graduate employees (and so pushed up the latter’s premium) but also reduced the graduate persons premium because the Year 12 only group were increasing their average earnings.
* The massive increase in the number of graduates has not reduced their rate of return.
* HECS has not reduced the rate of return (though for most of this period it was so low that as a cost it was minor compared to foregone wages)

These results are generally positive for the next wave of higher education expansion – past expansions and their assumed consequential decline in graduate quality have not had an obvious impact on rates of return (though it would be interesting to see if there has been an increase in earnings dispersion over time).

In standard usage – still supported by the Macquarie Dictionary and several random Australian politics books I checked – a donkey vote is defined as the practice of numbering all candidates in the order they appear in the ballot paper, rather than according to the voter’s political preference. This is a formal vote, which will eventually go to whichever serious candidate appears first in the list of candidates. However Wikipedia is wobbling, suggesting that informal votes can also be classified as ‘donkey votes’.

In Bryan Garner’s five stages of language change, ‘donkey vote’ is at stage two or three. Several of the people I have heard use ‘donkey vote’ when they mean informal vote have university degrees.

Stage 2: The form spreads to a significant fraction of the language community but remains unacceptable in standard usage.

Stage 3: The form becomes commonplace even among many well-educated people but is still avoided in careful usage.

While I tend towards language conservatism, I am less opposed to this change than others (eg reticent/reluctant, uninterested/disinterested) where I think important distinctions are being lost through clumsy usage. I take it that the key idea being conveyed in the expression ‘donkey vote’ is that the voter is a ‘donkey’ who lacks the intelligence or interest to cast an informed vote. Arguably someone who cannot fill in the ballot paper correctly is a bigger ‘donkey’ than a person who knows how to do it but does not care who wins.

Way back in 1986, the Monash University Liberal Club, of which I was a member, rather provocatively invited Wilson Tuckey to speak on campus. The campus left were not big on freedom of speech, and decided not to let Tuckey speak. Having spent the earlier part of his career as the publican in a rough pub (the ‘Ironbar’ nickname came from some rather excessive means of ejecting unwanted customers), Tuckey was not easily intimidated. Though he could not give his talk, he refused to back down and spent his allotted time trading insults with the assorted lefties who had turned up to silence him.

When it came near to the scheduled end of the meeting, I was sent out to make sure that Tuckey’s Commonwealth car had arrived to get him off campus. Unfortunately it had not. I dashed to the car park to get my car as a back-up, knowing that the protest could be following him as he made his way to the designated pick-up point. I arrived at the pick-up point just before Tuckey did, surrounded as I feared by menacing Trots.

Tuckey got into my car, which was then surrounded by the protestors. They began rocking the car. Luckily I did not panic and just kept driving very slowly until we escaped them. Nobody was hurt. But I was furious.

That was the day I turned from being an ordinary Liberal Club activist to someone super-committed to opposing the radical left on campus.

My target was the Community Research Action Centre (CRAC), a left-over (no pun intended) from Monash’s ultra-radical days of the 1960s. It received about $100,000 in union funding plus an office, and was pretty much entirely unaccountable for its activities. I believed that they had organised the protest, and should pay with their existence.

Led by my friend Stephen Kenmar, I was part of a campaign to have CRAC abolished. In the Right’s first election win at Monash, we took control of the student union in a Liberal-Jewish students-Christian students coalition. We worked hard to get the university administration onside (this was the first time I met a vice-chancellor) and the staff representatives on the Union Board. I learnt a huge amount about politics in between my car being rocked and moving the 1987 Union Board motion to have CRAC wound up. We won by one vote.

I particularly enjoyed one aspect of CRAC’s downfall. A key issue was whether CRAC had actually organised the Tuckey protest. They initially denied it. But we had kept some of the posters advertising the demonstration, and being the greenie recyclers that they were they had printed them on the reverse side of other CRAC material. They saved paper but lost their funding.

If Wilson Tuckey had not come to campus that day my university political life would have been very different.

* Only individuals should be allowed to donate to political parties.
* Increase transparency requirements.
* Cap individual donations at a reasonable limit [they suggest $1,000 a year]

But when it comes to donations to GetUp! things seem to be rather different, as the SMH reported yesterday:

The union movement has emerged as a key financial backer of the advocacy group GetUp!, with six unions pouring more than a million dollars into its election purse in the past three weeks alone.

GetUp! has splashed nearly $1.5 million on TV advertising since the campaign began, meaning the unions have effectively supplied two-thirds of its advertising budget.

The organisation’s director, Simon Sheikh, refused to name the six unions yesterday, saying they wanted their identities kept secret until after donor returns are filed with the Australian Electoral Commission.

So this arrangement breaches all of GetUp!’s three principles: the donations are from organisations, they are not transparent, and they are uncapped. And by relying on just six donors to finance most of its campaign spending GetUp! is far more reliant on a small group of powerful donors than either of the main political parties.

Perhaps the distinction is that GetUp! cannot directly make government decisions, it can only influence them. But the ban on organisations and the caps on them seem aimed at limiting the political influence of big money, and in this context the distinctions between financing an activist group and financing a political party are not necessarily very important. They are both means of achieving political goals.

Right from the start of GetUp!, I have seen them as an entrepreneurial venture profiting from politics. There is a large group of people who want to feel that they are making a political statement and contributing to a political cause. Simon Sheikh and his senior colleagues are presumably well paid for delivering these services.

But it means we should be very cynical about GetUp!’s campaign to strictly regulate and limit its political party competitors for political donations, while hypocritically not applying the same principles to its own operations.

Even with a Liberal government, it is possible that a compulsory student amenities fee might return. A quick Google search this morning indicates that all three rural independents have supported such a fee in the past, though it may need ‘political’ funding to be quarantined (Labor’s policy specifically created a role for their comrades in the student unions). So it is possible that a revised bill that passed the new Labor-Green Senate post-1 July 2011 would also pass the House of Representatives.

If a Liberal government is formed, there are things that could be done by regulation – or lack thereof. Labor is promising a red-tape extravaganza with its so-called ‘compacts’ between the government and universities, its equity and participation funding, and an even more ill-conceived ‘performance’ funding program. All of these are based on departmental/ministerial discretion given force by legislative instruments.

The significance of these legislative instruments is that they are disallowable by either house of parliament. In the event of an equal vote the disallowance motion will be lost. So there is an asymmetry between legislation and guidelines: the government needs a majority to pass legislation, but it only needs a tie to defend its guidelines.

In the case of Labor’s ‘performance’ policy Gillard/Crean never got around to approving the guidelines, so Coalition inertia would dispose of this idea. There is no specific ‘compact’ legislation or guidelines, but existing funding agreement provisions would presumably have been the main basis. While a funding agreement will still be necessary to distribute Commonwealth-supported places to universities, the Coalition could not proceed with the micro-managing elements of the compacts.

Things are more complicated with the equity policy, which does have existing guidelines. The Coalition wants to reduce the funding to this program, which will require the guidelines to be changed, and in my view they should remove some of its more absurd provisions as well (such as micro-level requirements to allocate resources based on an arbitrary definition of low SES). It’s hard to to know how the independents would jump on an issue like this – and the savings involved may not warrant handing out yet more rural pork.

The Coalition could also use guidelines to include more TAFEs and private providers in the publicly funded system. There is a provision in the legislation to allocate so-called ‘national priority’ places to non-public unis. Somehow supporting the private University of Notre Dame’s expansion has become a ‘national priority’, so there is precedent for further such ‘national priorities’. My perception is that Labor is not necessarily opposed to this; Gillard extended ‘national priority’ places to Holmesglen TAFE. However the TAFEs and private providers should be wary of building their business models around guidelines: what one minister gives, another can take away.

The government’s so-called demand-driven system of higher education funding has not been legislated. However with the Coalition also indicating support for this it should go ahead as planned in 2012.

The HECS discounts for ‘voluntary’ work proposed by the Coalition have been supported by Labor in the past, so this policy is also likely to go ahead.

But overall, as in other policy areas, a hung parliament and the possibility of another election well before three years pass means that higher education institutions face considerable uncertainty.

While I don’t think the punters should worry about them too much, I know what he is talking about. When I was a ministerial adviser during the 1998 election I could hardly bear to watch the election night coverage. It felt like I was being slowly sacked on live TV.

In the end the Coalition scraped back with a minority of the votes but a majority of the seats. And so then began the wait to see if my minister would get to keep the portfolio.

As Barnes says, political staffers know the risks. Most political careers end in failure – mine certainly did. While I survived the 1998 election the reform I had hoped to be involved with died in the controversy surrounding the leak of its Cabinet submission.

Most attention seems directed at the Coalition’s decision to cut by about two-thirds the money Labor was planning to give universities according to their enrolments of low socioeconomic status students. The higher education sector is opposed to this, but I will support it. The Coalition’s policy document observes that the main problem is not the unwillingness of the higher education sector to offer places to low SES students, but that too few people from low SES backgrounds have the necessary academic preparation to go to university. The Liberals talk about their school policies as alternatives.

I have also argued that the government’s equity policy is based on an arbitrary definition of SES and assumes, contrary to the available evidence, that low SES students have much higher academic needs than other students. The program needs to be substantially reformed as well as its funding reduced.

The Coalition is also on the right track in effectively abandoning its policy to re-introduce full-fee domestic undergraduate places, accepting the criticisms made of it:

Allowing universities to re-introduce full-fee paying domestic places is an interim measure, as the introduction of the student demand-driven system in 2012 or thereafter will make these places obsolete.

Given that there is no prospect of the necessary legislation being passed in time to allow full-fee places to be offered in 2011, the full-fee place promise is now an irrelevance.

I was less pleased with a policy to resurrect the idea of letting students ‘volunteer’ to reduce their HECS (read HECS-HELP) debt. In a pilot programme involving 1,000 students they would spend up to 200 hours a year getting a $10 credit for each hour worked. This was one of the forgotten 2020 Summit ideas (though Liberal Senator Mitch Fifield has been promoting it for years), but it has never been a good idea for reasons I explained here.

Labor is confirmed as largely running on its higher education record. This is far less impressive than their statement makes out. Most of their spending to date has been financed by raiding the investment funds set up by the Howard government.

On the key issue of funding per student place they have imposed real cuts, both through maintaining the old indexation system and abolishing the full-fee domestic places (an improved indexation system will partially start next year, and be fully implemented in 2012). However it is their changes to migration law that will have the biggest effect, as they slow the flow of the international students than keep the higher education system going. Depending on how large the international downturn is, 2011 may deliver the higher education sector its biggest ever financial blows.

The main new thing announced in today’s policy was that they will legislate to protect academic freedom. I doubt this is a good idea, because the principles at stake (see the U of M policy for example) are not easily codified. The current system of public debate and controversy surrounding claimed breaches of academic freedom is preferable to legislation.

Of course both parties dodged the biggest issue: deregulating student fees. But in an election, I would not expect otherwise.

Labor voters in the seat of Melbourne may need to do something similar this Saturday. In what may be a first for Australian major party politics (or at least very rare), the only way Labor can guarantee itself victory in this seat is to boost the Liberal vote.

Their problem is that if the Liberals are eliminated before the Greens their preferences will run heavily against Labor. The figures on Antony Green’s website suggest that about 85% of Liberal preferences went to the Greens in 2007.

Yet if the Greens are elmininated first, Labor is headed for the kind of crushing victory over the Liberals it achieved before 2007, because Green preferences overwhelmingly flow to Labor.

As noted in an earlier post, the Liberals were about 600 votes ahead of the Green primary in 2007, but fell behind after distribution of minor party preferences. The donkey vote was helping the Greens in 2007, as it is again this time. I’m not sure how (or whether) the minor parties this time are directing their preferences. The most eye-catching is the Australian Sex Party.

But unless there have been some demographic changes in the seat since 2007, it’s likely that the Liberal base will again not be large enough to get Green preferences distributed to Labor. But a couple of thousand Labor voters voting Liberal with a second preference back to Bowtell (just in case it is not enough) should see off the Green menace.

It would be the ultimate in tactical voting – but a tactic that is very difficult to implement.