Category: Higher education

Words Julia Gillard may regret

~ Andrew Norton ~ 6 Comments

After more than a decade of the Howard Government [universities] felt neglected, and they had been neglected because there hadn’t been the proper investments into our universities. But they also felt under siege. They were rolled up in red tape, they could hardly scratch themselves without having to send a piece of paper to Canberra and wait for it to come back out. They weren’t able to see what the Government’s vision for universities was for the next five or 10 or 15 years, other than more neglect and more micromanagement. (italics added)

– Julia Gillard speaking yesterday to Alan Jones.

Let’s be clear on Labor’s record so far. Though as part of its stimulus measures it has given universities some capital hand-outs, its 2008-09 budget imposed real cuts on recurrent university income for teaching Commonwealth-supported students, and its phasing out of domestic full-fee students further reduced recurrent university teaching income. By contrast, Coalition budgets delivered real increases in 2005, 2006, and 2007 for all disciplines, and in 2008 for some disciplines.

The Coalition’s higher education policy was a shambles. But at least over the last few years there was some recognition that it was irrational to cut annually in real terms government teaching subsidies and to regulate student contributions so that these were also cut in real terms. The lead story in today’s Australian about the razor gang getting to Gillard’s higher education spending looks like part of an on-going downgrading of expectations for the higher education sector. It is possible that on the key issue of recurrent funding this year’s budget may confirm Labor’s record as worse than the Coalition’s. Unfortunately, universities cannot spend education revolution rhetoric.
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A Mammon-solution to an Allah-problem

~ Andrew Norton ~ 11 Comments

Letter writers to The Age are not impressed with demands from Muslim students for dedicated prayer rooms at RMIT. Plausibly enough, some argue that a secular institution like RMIT should not favour one religious group over another.

It seems to me than an obvious solution is being overlooked. The University should provide a Muslims-only prayer room, but do so on a commercial basis. RMIT could either rent a room to a Muslim group, or operate the prayer room itself by issuing students with swipe cards in exchange for a fee. Maybe the very religious could get bulk discounts for using the room 5 times a day, or maybe it could be like a gym membership, in which the sunk cost encourages attendance from those whose desire to get fit or show faith is not always matched with action.

If RMIT charged too much, this would provide an incentive for other groups to offer cheaper prayer space. Indeed, particularly for RMIT’s city campus I imagine there is a good business opportunity in seeking custom from the many Muslims who now use Melbourne’s CBD.

Another win-win market solution.

Will uni students have to learn about Indigenous culture?

~ Andrew Norton ~ 16 Comments

One of the less remarked-on sections of the Bradley report claimed that

it is critical that Indigenous knowledge is recognised as an important, unique element of higher education, contributing economic productivity by equipping graduates with the capacity to work across Australian society and in particular with Indigenous communities.

Arguments for incorporation of Indigenous knowledge go beyond the provision of Indigenous-specific courses to embedding Indigenous cultural competency into the curriculum to ensure that all graduates have a good understanding of Indigenous culture.

As this was a ‘finding’ rather than a ‘recommendation’, most readers were probably content to take it as a necessary, but empty, gesture to the hurt felt by the Indigenous Australians. After all, only a tiny proportion of graduates will ever work in contexts where knowledge of Indigenous people – let alone ‘Indigenous knowledge’ – will be useful, and it would be far more efficient to pick it up as needed than to build it into unrelated courses.

But now the Indigenous Higher Education Advisory Council is, according to the SMH, taking it a step further and proposing that

ALL university students and staff will be required to learn about Aboriginal and Torres Strait Islander culture under proposals to be considered by the Federal Government.

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Do Group of Eight graduates earn more?

~ Andrew Norton ~ 17 Comments

In full-fee markets, Group of Eight universities charge a large fee premium over their less prestigious competitors. But is this a good investment by students?

According to an article in the latest Australian Economic Review, reported on in the SMH this morning, the answer is no – at least for new graduates.

Using data from the 2003 starting salaries survey carried out by Graduate Careers Australia, UWA academics Elisa Rose Birch, Ian Li and Paul W. Miller found that while choice of industry (mining especially), occupation and having an honours degree all matter, once other factors are controlled for ‘university effects have only minimal impacts on graduates’ starting salaries’.

If this pattern persists as graduates’ careers continue, it would be remarkable: that the brand value of prestige institutions and the presumably higher average innate ability of Group of Eight graduates count for near-nothing in the labour market.
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More voucher confusion

~ Andrew Norton ~ 2 Comments

The word ‘voucher’ sure has journalists confused. Last week the SMH took Gillard’s spin at face value. And in today’s Australian we are told this:

The system isn’t a voucher system. Students aren’t being issued with a portable amount of money they can just cash in where they like. For all the talk of empowering students with greater choice, it is the universities, and ultimately their vice-chancellors, that will frame that choice, since it is they that will decide what is on offer.

And while universities can be expected to tailor offerings to attract students, not all universities will seek to expand. Offerings will be influenced not just by what students want, but also by the relative cost of delivery.

There are two confusions here. One is the point I made last week about the technology of delivering the subsidy. This is irrelevant to the concept of a voucher, which is that a consumer’s decision, rather than a bureaucrat’s decision, triggers the payment (under the current system, no payment is made unless a student occupies a place first authorised by the bureaucracy).

The second confusion is about the role of suppliers and prices. In this respect, ‘voucher’ system is preferable to Bradley’s language of a ‘demand-driven’ system, since what is delivered in a market or quasi-market system is not whatever consumers want, but the intersection of supply and demand, mediated by prices. So the actions of suppliers and the role of prices are integral to voucher systems, not features that make a voucher system not a voucher system.

From one Soviet-style policy to another

~ Andrew Norton ~ 6 Comments

In a particularly bad day for long-suffering university administrators, Julia Gillard yesterday joined Kim Carr in piling on the bureaucracy. Though she did not say so directly in her speech to the AFR higher education conference, she clearly intends to follow the Bradley report recommendation to impose institutional enrolment targets for low SES students, which will cumulatively meet a national target.

By 2020, 20% of university undergraduate enrolments are to be of low SES students. She says the current figure is ‘around 16%’. Though it sounds about right, I can’t verify this because this number is not currently reported (it is for all students, but not for undergraduates only).

This is, however, the least of the statistical problems with this target. As I argued in December, even if targets are adopted the denominator should not be total university enrolments. This is a shifting target, in which the most important factor is not low SES enrolments but enrolments of other SES groups. In order for low SES to increase their share of total enrolments their enrolments need to grow more quickly than that of other groups. Substantial improvements in low SES enrolments are not in themselves enough.

Short of engaging in class discrimination against applicants from middle and high SES groups, substantially increasing low SES as a share of total enrolments is going to be very difficult to achieve. Gillard herself notes that the school completion rate for high SES students has room to increase, but to the extent that it does reaching the low SES target would become more difficult.
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Two voucher schemes, ten years apart

~ Andrew Norton ~ 4 Comments

Julia Gillard’s part response this week to the Bradley report had me casting my mind back to an unscheduled, and rather more dramatic, higher education policy launch on 13 October 1999. On that day Labor ambushed my then boss, David Kemp, with a leaked copy of his Cabinet submission to reform the higher education system. I was his higher education adviser, and reform like this was why I was in politics.

In two respects, there are close parallels between the two launches. Both proposed a voucher scheme, but neither wanted to call it that. In the Kemp plan, it was a ‘universal tuition subsidy’. In the press clippings I have kept of the time, the voucher scheme in itself did not attract much controversy. There were a couple of the usual claims about regional campuses, but most of the voucher criticism focused on an alleged broken promise not to introduce such a scheme.

But there the differences end. While Gillard immediately ruled out any increase in fees, most of the 1999 controversy surrounded the plan to uncap fees (though there was some confusion in the media, with full fees being muddled with deregulated fees).
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Gillard adopts Bradley report, with its main flaw

~ Andrew Norton ~ 8 Comments

When yesterday I admired Julia Gillard’s chutzpah in stating that her voucher scheme isn’t a voucher scheme I did not expect anyone would believe it. But she has shown that if you spin brazenly enough people will believe you. Not only does the SMH buy Gillard’s non-existent distinction without negative comment, it adds an embellishment in its favour that is not in the published version of Gillard’s speech:

Ms Gillard said the change in funding model was not the student voucher system advocated by Professor Bradley.

Alas, it is exactly the voucher scheme advocated by Denise Bradley, with a slightly later starting date. Gillard has ruled out deregulating HECS price caps, leaving the system entirely reliant on the government subsidy creating the prices per student place that will be the incentives to drive a demand-driven system. For reasons explained in my recent CIS paper, I have no confidence that this will occur. Like Bradley, Gillard shows no sign that she understands this issue, much less that she has a solution to it.

At least Monash VC Richard Larkins was alert to one consequence:

Richard Larkins said abolishing caps on student numbers, while retaining them on the HECS amounts universities charged, could create “perverse incentives” to enrol more international or postgraduate students, who are not subject to price caps.

Exactly.

When a voucher isn’t a voucher

~ Andrew Norton ~ 5 Comments

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.
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Low SES students and the Group of Eight

~ Andrew Norton ~ 19 Comments

According to a report in today’s Australian, the

Group of Eight research universities are tough institutions for disadvantaged students to get into, but they are not, according to a surprising new study, the toughest of the lot: that dubious honour goes to the University of Canberra.

Of course, the University of Canberra is not especially tough for anyone to get into. You can do a Bachelor of Business at the University of Canberra on an ENTER/UAI of 65. It charges the same prices as any other university for a Commonwealth-supported place. The reason it has few low SES students is that low SES is defined as being in the bottom 25% of Australian postcodes according to an index of education and occupation, and Canberra being full of university-educated professionals working in the public service it has no such postcodes. No matter how poor you are, if you live in the ACT you are not ‘low SES’ by this measure.

For the Group of Eight (the ANU aside), locational issues are less important than academic issues. Relatively few people from low SES backgrounds get the scores needed to go to these universities. From research I have seen on Victorian and NSW universities, the Group of Eight get the vast majority of the small number of people from low SES postcodes with strong results. But because they are few in number, they are not a large percentage of all Group of Eight enrolments.
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