A voucher scheme without private providers?

Today Julia Gillard put out a media release drawing attention to the release of the first semester 2008 enrolment numbers (it’s a disgrace that it has taken a year to get these statistics ready, but that’s another issue).

They show that there is strong growth in the private higher education sector, despite fees that are significantly higher for domestic students than in the public universities. Commencing Australian students were up 17% on 2008 in the private providers, but only 0.2% in public universities (in absolute terms, the public institutions still have 95% of the market). These numbers suggest that the FEE-HELP scheme, which enables students to borrow tuition fees, is having a large effect.

Yet though these market signals show increasing student interest in private higher education, Gillard’s voucher scheme is specifically restricted to public higher education providers. This significantly undermines the positive potential of student choice, since it restricts choice to institutions that by the history of the funding system tend to be alike: large, multi-faculty, bachelor-to-PhD level institutions, aiming (with widely varying degrees of success) to be research institutions. It’s Henry Ford’s Model T kind of diversity: you can have any colour as long as it is black.

No rationale has been given for excluding the private providers.

There is no evidence that the quality of private providers is lower on average; indeed unlike the public universities with their self-accrediting system the private providers mostly have conflict-of-interest free external accreditation. Indeed, a few public universities now sub-contract some of their teaching to private providers.

There is no evidence that public universities have a special mission to help students from poor families; quite a few private providers have a higher percentage of low SES students than do the Group of Eight universities. Under Gillard’s system, kids from elite private schools will get heavily subsidised places in the law and medical faculties of Group of Eight universities, while kids whose schools let them down will end up paying full-fee feeder colleges to fill the gaps in their school education.

It’s not as if there is a clear commercial/not-for-profit divide here. The biggest players in the for-profit education market are the public universities, using billions of dollars in international student fee revenue to fill the funding gaps left by decades of poor-quality policy coming from Canberra.

As I argued some years ago, none of an institution’s origins, purposes, activities, regulation or funding mix reliably lead to a definition as either ‘public’ or ‘private’. The distinctions are a matter of history and convention, not principle.

I think Gillard will fail to fix the price flaws in her voucher scheme, so my criticisms on this point are somewhat academic: few private providers would sign up to such flawed arrangements. But building an artificial and arbitrary distinction between public and private institutions into the design of the new system suggests that there is more than one ideological blindspot driving the government’s higher education policymaking.

6 thoughts on “A voucher scheme without private providers?

  1. Three possibilities:
    1. Gillard wants to use economic means to reverse the trend towards private schools because of the ideological bias amongst sections of the left against private education?

    2. Authoritarian/paternalistic reasoning: children are better educated as the left would prefer them to be in public systems that are controlled under left-wing funding models/overseen by a left-leaning government?

    3. Gillard thinks that private schools already get enough public funds?

    I can’t think of any particularly good reason for this sort of proposal.


  2. From a report I read in Campus Review, the hundreds of thousands of vocational education places Gillard has funded have largely gone to private providers. Maybe higher education is seen as different, but the reasons why are not clear.

    The government does not control curriculum in public universities, so ‘control’ over what students are taught is not the obvious explanation.


  3. A fourth possible reason: that she believes it’s impossible to have a level playing field between public & private providers, b/c the public are constrained by a whole lot of public sector requirements that the private sector is free from. That certainly seems to be the case for secondary schools; I don’t know if it’s true in the tertiary sector as well, but it doesn’t seem crazy to think that the government might believe it is.


  4. “There is no evidence that the quality of private providers is lower on average”
    Of course, there isn’t much evidence at all in Australia, which is one of the problems (not that I know much about it, but I believe the evidence from NZ’s experiment with private providers, which must be as close as we can get for likely outcomes in Austraila, was so mixed the government had to re-regulate things somewhat).
    My anecdotal evidence is that the students we get from some of the university feeder colleges for Australian students is that they always get top marks (making it impossible to distinguish between them) and are uniformly awful — so bad that we don’t accept them anymore (or in fact, the course is given a zero weighting), and our standards are only medium. Of course, this is no doubt in part due to non-random selection, as the kids paying for these courses are often ones that couldn’t get in to normal universities to start (hence their numbers will be self limiting, which is why you need to look closely at where the private provider growth is rather than just noting that there is growth).
    One of the interesting things about kids doing these feeder courses is that it is clear they don’t have good information, or what they are told is certainly incorrect (I believe they are told this course will allow them to get a university position). The problem is that like most universities, we have no clear guidelines for who gets in via alternative methods excluding a few automatic entry methods (you can do 2 years of TAFE where I work, for example). Thus we still get these guys applying even though the chance of them getting in with just that course is zero. However, since it is in no providers interest to say this (in fact, we don’t even know who is the telling the students this — there are no doubt multiple sources of this misinformation, some quite legitimate, like misinformed school careers information people), there is no correction method for this misinformation.



  5. Conrad – Most of the feeders have direct relationships with a particular university with courses designed to integrate – I am not aware of any having one with your institution, though the one I thought might has a malfunctioning website so I can’t see right now. Given the reason why these kids went to a feeder, I doubt many are going to be top students, but there is of course a big distinction between good teaching and good results.

    True, apart from AUQA reports there is little publicly available quality material of any kind. But the private providers have greater external checking than the trust-us approach of public universities. Quality is in my view poorly regulated, but the solution is to create good quality systems (which will mostly be private), rather than rely on ideological prejudice or whatever motivates the current government.


  6. Charles – There are some regulatory constraints on public universities coming from the state government that don’t apply to private providers, but I would not say they have the playing field tipped against them – just the small matters of billions of dollars in assets given to them for free and the prestige coming from being first movers and having research.


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