VSU impact

For all the fuss in the voluntary student unionism debate during 2005, there has been very little follow-up on its consequences. The first sector-wide study of VSU’s impact (which will be available from the Australian University Sport website on 7 November) is reported this morning.

It finds the amenities and service fee/membership fee income for sporting, recreational, social and culture activities dropped from $179 million before VSU to $12 million after VSU. From the perspective of the report’s funders that is clearly bad news, but from the government’s perspective it confirms that few students wanted these services badly enough to pay for them via membership fees. The summary findings do not say how much of that funding loss was made up for from increased direct charges.

My position (pdf) on this issue is unchanged. The separate and compulsory amenities fee is an anachronism; there is no point in itemising the cost of attending university if the student cannot opt-out of purchasing services he or she does not want. Universities ought to be free to sell whatever bundle of services they choose at whatever price they determine; if it is the wrong bundle or the wrong price they will pay a market penalty.

If my reform was adopted, I predict we would not go back to the pre-VSU status quo. University activities tend to the accumulated result of many years of ad hoc decisions. The VSU shock has seen many low priority activities de-funded, and rightly so. Student union over-staffing has been reduced. Some years ago, I told an incoming student union president that significant efficiencies could be made. At the end of his term, he told me that after that first conversation he thought I was a ‘neoliberal bastard’, but a year in the student union had convinced him that I was right. There are better ways to spend student money than on union time-servers.

However, there is room in the higher education market for ‘full-service’ universities offering a wide range of extra-curricular activities. The kind of price control in the VSU legislation should not stand in the way of that happening.

14 thoughts on “VSU impact

  1. Perhaps I should simply read the pdf of your views, but since I imagine the question is likely to be asked anyway: what about the funding of political activities? That seemed to be a major Liberal gripe with the unions.


  2. Leon – There is nothing about funding of political activities in what I have seen so far of this latest report, though NUS did put out a survey of how much unis are doing to support it (not enough from their perspective, but probably too much from my perspective).


  3. I think there will be long term effects, especially to those universities that want to get benefactor money but have closed down most student services. Basically, my bet is that those people that had a good time, made lots of friends and got taught well are more likely to donate money. If I look at the rich US universities, where you can do almost anything you can imagine (both funwise and academically in case you need to learn something), it doesn’t surprise me that they have a high rate of donation from former students (I’d probably donate too if I got that sort of education). Student unions played an integral part of the poor Australian equivalent of that, even if the way the money they got was inefficient. As much as you might not like it and as much of it was ad-hoc, many people enjoyed and remember those wierd activities the students did but the official boot-licker of Stalinland employed in their place can’t think of. Its a culture pretty much gone now, replaced by a get-your poor quality degree from our great business, and enjoy being the consumer. Of course people are not going to donate anymore. It would be like giving donations to Coles.


  4. Conrad,

    Isn’t it ironic that you site a US example in this context, given that over there you have to pay for just about anything?


  5. Boris — I’m not sure its ironic. It shows that if you pay for a good service, you will appreciate it more than if you don’t pay for a bad service. I think the neo-liberal university agenda has also been very different in Australia (at least compared to the good universities in the US). I guess as an analogy, the good US univerities are a bit more like great artwork that you pay to see, rather than as businesses offering a service (often poor quality). You can see the difference — Do students at, say, Princeton ever call themselves consumers? and, on the flipside, do people at the University of Phoenix ever donate money to them?


  6. The big difference is that the US universities Conrad is talking about give students a whole-of-life experience, usually moving away from home and living on campus and if not sharing a house nearby. The campus experience is very partial here by comparison.

    Also, many students at the top private US universities attend on scholarships provided by the university, rather than state subsidy as here. People feel a greater obligation to repay private money than public money.

    Phoenix would not expect donations. But as I noted in a post last month, the for-profit sector survives by being very focused on the immediate needs of its clients, which they will pay for now, rather than hoping for a donation in 20 or 30 years time.


  7. Andrew — Perhaps a decade and a half ago Australian university campuses, whilst not the equivalent of the US ones I am talking about, certainly had a much more vibrant culture. Many people went to university to do more than simply getting a bit of paper, or at least enjoyed their time more than they might have done otherwise. The bigger and richer universities still try and replicate this to some extent (not least of which is the one you work at). In addition, it isn’t simply scholarships driving the donations (just look at the percentage that donate in USAnews.coms list of best colleges), although I’m willing to admit that it is partially due to a culture difference. That aside, its clear that this culture was destroyed in the last decade or so of neo-liberal reforms, with student unions being part of what was lost (which I agree, wasted a lot of money, and could have been more efficient). In general, the universities that did try and replace this didn’t do a good job. I’m not saying this is all bad — I’m sure getting your degree for the cheapest price possible is good for many people (probably the majority). But in the end, there are trade-offs, not least of which is you may as well give up on public philanthropy. That might be a big deal — I’d like to see the numbers, but historically, I’m sure some universities in the US are getting more in donations than they are in fees (let alone all operations, where again, the idea of being a corporate business vs. a university is important. cf. I’d like to run my medical study at Harvard vs. I’d like to run my medical study at Glaxo).
    The other really big trade-off, which relates to your “immediate needs of clients statement” is that the consumer no-one speaks about (the employer) basically gets no voice, and there are essentially no internal checks for this anymore (except “we got a good teaching mark after all…”), excluding those with professional bodies (although these are often pretty flimsy too as far as I’m aware). In addition, as long as everyone offers a bad enough service to this second consumer, it doesn’t matter, which is basically what happens in Australia, because everyone has basically the same amount of funding and offers essentially the same degrees. As an example, I’ve _never_ seen any advertising pamphlet ever that says we are the best because we have the hardest course where you learn the most, even if some students would prefer it to being caught in want is almost like a prisoners dilemma game with the other students who want to get through with the easiest course possible. Thank god for immigration, but bad luck for those with Australian degrees who get to become the trash of their own country.


  8. Conrad – The decline of student life can be put down to many things, but ‘neo-liberal reforms’ are not among them except in the indirect sense that a huge boom in jobs suitable for university students has helped consume their time and finance student demand for a wide range of commodities and experiences off campus. Even the VSU legislation, as I have repeatedly pointed out, gets its force not from deregulation but a tightening of the price control that has cursed public higher education for decades.

    The link to my earlier post above shows how the US for-profits in the study I was writing up were highly focused on employers – their selling point to both students and employers was that they did a better job of making their students work-ready than their community college competitors.

    The US undergraduate colleges are generally not so focused on employers, because that is not their role – graduate schools do that.

    Donations to Australian universities have always been tiny by US standards, though they are improving. I suspect ‘neoliberal reform’ might help here. Just as people would never donate to Phoenix, few people would donate to the government. For a long time universities were essentially part of the public service. Now that people understand that unis must be more self-reliant they might be more inclined to donate. But it will take a change in the type of education offered to really make a long-term difference, and no university can easily do that within the current restrictions applying to undergraduate education.


  9. In addition, in the US there are amazing tax examptions for donations to universities and other non-profits. I heard a radio program on this last month while navigating Los Angeles freeways – not the best environment to remember fine details. Somehow it has to do with the university acting as your pension fund. Maybe Andrew can explain it better, but it seems there is more insentive in the US to do it than here.


  10. Andrew, I think your point about the indirect effect of ‘neoliberal reforms’ (at 9) is more telling than you realise, particularly regarding the ‘standard’ student experience. Because of increased affluence, the poverty of dingy inner city flats, cheap wine and self-organised (and therefore Union run) entertainment has given way to expensive inner city rents, party drugs and going out for entertainment. It’s a ‘keeping up with the Joneses’ phenomenon, and largely reflective of the changes in the rest of society that have come with economic reform, but it’s far more pronounced for students, because in the past it was accepted that the student lifestyle was one of poverty. This is no longer the case, or at least far less than it used to be.

    As you say, the result of this is that we work more to support this lifestyle, and spend more time away from campus, and the social services needed to support the old way of student life become less relevant.


  11. Boris – I don’t think the tax systems have much to do with the difference – though some claim that elderly Americans give away their money before death rather than have it subject to estate taxes. But even if you want to avoid taxes, there are many other worthy causes to donate to other than universities. Most of the $$$ goes to the universities that offer an exceptional student experience, so that is probably the biggest factor, along with the stronger American philanthropic culture and many more high-wealth individuals to draw on.


  12. I attended University Of WA before VSU, and the unions there offered nothing that made me want to hang around on Campus long. They did offer a few services like Legal advice and a health clinic, but I never needed to use them so I can’t comment on them.

    The only thing the Student Union provided us that was useful was huge subsidies on alcohol. As in “$5 all you can drink” huge.

    We made a good fist of that, but I hardly think it’s fair to non-drinkers to pay for others to get pissed, and it’s probably not the best idea for the drinkers either, given the extremely high dropout rate among first years.


  13. “The only thing the Student Union provided us that was useful was huge subsidies on alcohol. ”

    I thought there were also discounts on non-alcoholic drinks, including coffee, weren’t there? I thought coffee was 30 cents or something.


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