Confusing ends and means

The Australian’s Higher Education Supplement asked me to write a short piece on the issue of university efficiency, which appears here.

People who read this blog will already know my views on trends in administration costs. But in the HES version I pick up on this report on ABC radio on Monday:

Ms Bishop says the university sector should be more deregulated, but first the universities must show that they are efficient and productive.

I presume that’s a reference to the Group of Eight’s plans to replace the current system of allocating student places from Canberra with a ‘portable scholarship’ (aka voucher) system. The context of the discussion was ‘the funding model the Group of Eight wants’.

The Minister is confusing means and ends. A more competitive system is not a reward for becoming more ‘efficient and productive’. It is a way of pressuring universities to become more ‘efficient and productive’.

While I don’t disagree that universities can be more efficient than they are, history suggests that they are quite capable of responding to market forces if given the chance. Who would have believed in the late 1980s, when the international student market was deregulated, that the public universities could create one of the nation’s biggest export industries, and in less than 20 years?

The problems in the higher education sector are overwhelmingly due to chronically poor policymaking in Canberra. Alas, neither party is offering us anything better.