When a voucher isn’t a voucher

More later on the first instalment of Julia Gillard’s response to the Bradley report, which includes accepting the recommendation to ceate an uncapped demand-driven scheme, but her speech to the Universities Australia conference contains this gem:

Let me be clear about one important point: this is not a voucher.

Students will not be receiving a set dollar entitlement to be redeemed at an institution of their choice. Rather, there will be a Commonwealth payment to universities – with the amount varying depending on the course – on the basis of student numbers.

The core idea behind ‘vouchers’ is that public subsidies be allocated on a market basis.

The actual choice of technology – distributing bits of paper called ‘vouchers’ or cards (like Medicare) or a report-and-audit system with suppliers (as with private schools) – is a management decision, and not fundamental to the underlying idea. Where the eligible persons are easily identified, such as any Australian citizen or permanent resident in the case of schools and Gillard’s proposed higher education system, report-and-audit is likely to be the cheapest and therefore the best option. Nobody wants pointless distribution of bits of paper from Canberra (except maybe DEEWR, experts in bureaucratic make-work).

Nor is the idea of a flat amount intrinsic to the idea of a voucher, though if it is to be a subsidised though otherwise undistorted market like cases should be treated alike. For example, in Medicare there is a higher rebate for specialists than GPs, but no government steering between specialists or between GPs. The private school system is an impure voucher scheme, because public schools receive much higher per student subsidies than private schools for teaching the same things. It looks like Gillard is proposing a pure voucher scheme for higher education, with subsidy depending on course of study rather than institution.

She isn’t the first to have to deny that a voucher is a voucher. But why the concern about this word? It has become taboo because public-sector education unions are very powerful in left-wing politics, and they have mobilised for decades against student and parental choice, which would undermine their influence on education and threaten the jobs of their incompetent members. This passage in Gillard’s speech is for them. Luckily, much of the rest of it is not.