This morning’s Higher Education Supplement in The Australian gave the lead story to various interest groups complaining about the Budget decision to reduce Commonwealth subsidies to commerce students by about $1,000, with universities being allowed to increase student contribution amounts by about $1,200.

“It is hard for us to see how this is going to attract more people into doing those courses. In fact, it might turn them away.”

… said Geoff Rankin, chief executive of CPA Australia, which represents 112,000 finance, accounting and business professionals. …

It is a great worry to us,” University of Western Sydney vice-chancellor Janice Reid said.

“It will be a significant disincentive for students who might have seen a bachelor of business or bachelor of commerce as a viable alternative to a bachelor of arts or a general degree in the humanities.

As usual, these arguments assume that prices have a big impact on which courses students choose. Yet a study (pdf) released a couple of years ago put the average income premium from a business undergraduate degree, compared to a Year 12 qualification, at $542,000. The maximum extra cost that could be imposed on a student would be 0.66% of that. Prospective business students who can’t work out that the course is still a good deal have no aptitude for financial reasoning and – as Janice Reid suggests – should perhaps do Arts instead.
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