Indeed, it is worse than not deregulating fees, bad as that is. The Bradley committee haven’t even given any serious attention to how public funding could help make a voucher system work. Universities aren’t going to rush to enrol additional students under a voucher scheme if the price isn’t right. Indeed, if the price is wrong their response might be the opposite one: to use the lifting of regulation to shed uneconomic students.
The one study we have on university expenses relative to income for Commonwealth-supported places suggests that in half the disciplines they looked at universities lost money. This study has (acknowledged) data problems, but that finding is consistent with the observed behaviour of universities in trying to cut costs and recruit profitable fee-paying students. And a few of the disciplines in question did get some extra funding in the 2007-08 Budget. However, it suggests that an economically rational university would not be rushing to take extra students across a wide range of fields of study.
This costing study is not even referred to in the Bradley report. Instead, they suggest a 10% increase in Commonwealth subsidy for teaching and learning. This number appears to have been picked out of the air. Because disciplines differ in what proportion of their total price comes from the Commonwealth, this 10% has very variable consequences. In law and commerce, it will translate into only a 1.65% increase. In most other disciplines, it is closer to 7%, which may not get them to break-even, let alone pay for the lower student:staff ratios, better facilities, and higher staff salaries that the report’s authors fancifully think possible.
Their proposal to bring the private providers into the voucher system will probably also fail, because many of them have high-cost low student:staff ratios. Perhaps the TAFEs will be able to get into this market, but most others will have to stay as full fee.
They reject increased student contributions except for nursing and teaching, which will get the 25% increase all other disciplines received in 2005 (if the students work as nurses and teachers, they won’t have to repay their debt). But they hardly even argue the point. They note that Australian students pay a lot by OECD standards, as if that was conclusive.
Let’s get this clear: despite pages on how important investment in higher education is, the committee’s view is that we should continue to prohibit students making additional annual investment in their own human capital. They are lifting the seven-year limit on Commonwealth subsidy, so students can spend more over time collecting qualifications. But if student would rather spend more on one qualification – say buying smaller classes or better staff – they can forget it.
The committee can’t be bothered working out what the appropriate level of investment per student place should be, and won’t let students and universities do it for them.
While there are some sensible suggestions in the report, the committee’s intellectual and policy failure in the finance sections means that in the end it will just be another Nelsonesque patch-up, that will let the higher education sector stagger on for another few years, but leave its fundamental structural problems in place.
Given the chronic weakness of Australian higher education policymaking it is hardly surprising that the Bradley report is a dud. But it is still very disappointing.