A chance to get student amenities financing right

The government’s student amenities fee legislation has been rejected by the Senate.

While I did not support the original VSU bill, and am unpersuaded by the reasons given for rejecting the government’s legislation, I am pleased that it has been defeated.

Even by the low standards of Australian higher education policymaking, Kate Ellis’s student amenities financing plan was a shocker.

As I noted when it was introduced, it sought to impose new unfunded service obligations on universities – and this despite Labor cutting recurrent university funding in real terms in every year of its first term. While they have thrown money at capital projects, their policies on recurrent funding have been worse than the Coalition’s.

The bill would have required universities to make complex distinctions between similar services funded from their Commonwealth subsidies and from the new amenities fee.

The bill would have required universities to create an entirely new and completely unnecessary new student loan scheme, SA-HELP. Anyone who needs to borrow $250 for amenities will also need to borrow for tuition under HECS-HELP or FEE-HELP, and so these should be used for all loans. The SA-HELP alternative would have imposed bureaucratic costs on universities and created confusion for students.

In short, it is a relief that this bureaucratic monster has been strangled at birth.

While the government will probaby reintroduce the bill and hope that an Opposition terrified of an early election will pass it, the more sensible thing from them to do would be to refer it to the review they have promised on base funding levels for universities. Amenities fees are just one component of a much larger funding and pricing issue, and it would be sensible to deal with it all in a coherent fashion.

Update: In her media release attacking the Opposition Kate Ellis says:

“It [the amenities fee legislation] would have provided universities with the opportunity to fund critical services rather than redirect funding away from research and teaching budgets to make up the shortfall of funding for campus services.”

While this would have been true in practice for universities already providing services in excess of those minimally required, the legislation actually requires the diversion of funding from teaching. Unfortunately the way this debate is locked into ancient ideological battles means that the particular absurdities of this bill received very little attention.

Labor is as guilty of this as the Coalition. If they had simply proposed relaxing the price caps on Commonwealth-supported places which “would have provided universities with the opportunity to fund critical services rather than redirect funding away from research and teaching budgets” the Coalition would have been in a much more difficult position. This would have taken us closer to the greater price deregulation Brendan Nelson proposed in 2003, but which was reduced to get the bill through the Senate. Because Labor has ideological hang-ups on prices and needed to pay off its student union supporters it instead introduced a bill that was waving a red rag at the Coalitions’s VSU bulls, guaranteeing strong opposition.

12 thoughts on “A chance to get student amenities financing right

  1. The irony is that it was defeated for reasons totalled unrelated to your concerns. Reading the speeches made by the Opposition they are still obsessed with this ideological pursuit of student politics. The Nationals had another agenda totally. Having been through both VSU campaigns now I am convinced the only way student services will be funded properly in the future is that they will be funded by taxpayers.

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  2. Mark, my experience on campus since VSU is that student services are well funded by advertising around Union House.

    Since VSU the price of joining the Student Union at Melbourne Uni has dropped to $89/ year from something like $387 in 2005. All the services I use are still present, campus life still seems vibrant. There’s more commercial advertising in Union House and I’m sure the lefty student politicians don’t like that. But it pays for services that poorer students can’t afford to pay for.

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  3. Shem
    I would suggest they are well funded by the $2-$3m funding that the University provides, and enhanced by whatever the Union can generate through commercial activities and partial user pays. Take the University funding away and the services would collapse or go to full user pays and then collapse because students could not afford to pay. That funding from the University plus the $1m+ provided for sport is funding that would normally go to teaching, research or other university functions. I agree with Andrew – funding to sustain all of the University’s activities should be considered, together with an element of user pays.

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  4. An opposition should never be scared of an election.

    Why didn’t you support the initial introduction Andrew?

    I assume it was because of the nature of the bill and the way it was done, rather than the concept?

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  5. Peter McC – Because I believe that universities should be able to offer whatever bundle of services they choose at whatever price they choose, and let the market decide. The long version is here.

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  6. assuming they’re private, then sure, that makes sense, but it’s not really a market when most of a university’s fees come from taxes and you need the government’s permission to set up a new university.

    couldn’t you use the same logic to say that all public employees should be forced to join a union?

    i wouldn’t have a problem with a private company saying we only hire people who belong to a union (as unusual as that may be), but this seems ridiculous for a government employer.

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  7. There are choices, so precise legal status (which is actually very hard to tell in the case of universities anyway – on your test many would already be ‘private’ in that more teaching revenue comes from student payments than taxes) does not matter much to me. The previous system, in which amenities fees and service levels varied widely looks like what we would expect in a market.

    (And of course my position is in the context of supporting a broader market system of higher education.)

    The issue with this legislation isn’t about compulsory membership (it would not restore that), just whether universities should be able to levy fees for amenities on all students.

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  8. I hadn’t heard about the SA-HELP plan, but it sounds a step in the right direction. Why though couldn’t the HECS/HELP costs have just gone up $250 and the Govt pays Unis to that amount per student ? Why make a new system for it ?

    It would take all the pressure off students, and probably bring enough nationals over to pass the bill.

    For that matter having been both a student and Lecturer I’d love to see textbooks added to HECS/HELP. It’s prohibitive to students who do pay it, and damaging to the education of those who don’t (and increasing amount).

    Sure both additions mean more Govt costs now, but its only a small amount of money and would significantly benefit the quality of both universities and the education they provide.

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  9. Andrew – There has never been a ministerial statement as to why we need a new loans scheme (unfortunately the debate has been a rehash of 1970s conflicts about student unions, with almost no attention to the specific content of this bill), but I understand the reason is that student unions want a clearly separate sum of money that they can claim as their own.

    As for textbooks, again there is no need for a complex add-on scheme. Under fee deregulation, unis could simply include textbooks as part of the overall fee, which would be deferred under HELP.

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