Insights
Universities must be allowed to set fees
Author: Andrew Norton is a Research Fellow at The Centre for Independent Studies. He has advised a federal minister and a vice-chancellor on higher education issues.*
If education ministers can be judged by the average number of policy initiatives per year in office, Julia Gillard will be remembered as a high achiever. But on one key issue—funding per student—her legacy is uncertain. Unlike her two Liberal predecessors, she left the portfolio with real funding per domestic student lower than it had been when she arrived.
Gillard was not inactive on student funding. The indexation system responsible for imposing real spending cuts will be replaced in 2012 with one more accurately reflecting changes in costs. But this is an end to backward steps more than an important forward step.
The bigger issue of future teaching funding levels was deferred to a review to report in 2011. This was announced in May 2009, but as of early July 2010 nobody has been appointed to the review and no terms of reference have been announced. A review likely to find that universities need more money is being delayed by a government that has little money to spare.
Labor’s first term record contains an important lesson. Even a government that came to office with extravagant education rhetoric—an ‘education revolution,’ no less—in office behaved the same way as all governments since the mid-1970s. When money is tight, the core financial needs of universities are a very low priority.
Reliance on public funding makes universities hostage to the budget cycle. The only practical way to escape the budget cycle’s constraints is to let universities charge students more. Yet there is great reluctance in the sector to make this argument. It is the policy position of the Group of Eight and some individual vice-chancellors, but silence on and opposition to further fee deregulation are more common.
There is nothing wrong with universities wanting to offer reasonably-priced higher education to Australian undergraduates. But there is something wrong in risking the quality of that education with a public funding-based political strategy that has failed repeatedly in the past, and we have every reason to expect will continue to fail in the future. We can no longer assume that international student fees will fill the financial gap.
There is also something wrong with constraining the choices available to undergraduates by locking public universities into a low-cost educational model, limited by the available public funding and the current cap on student contributions. Many educational possibilities are ruled out because providing them would be too expensive.
Some private institutions offer, among other things, smaller classes for those willing to pay full fees. But while the private higher education sector is growing rapidly, it is still a long way from being able to offer widely-accessible alternatives to public universities. If we are to offer Australian students diverse higher education options anytime soon, we need public universities to make them available.
Letting universities increase fees is always politically difficult. But the higher education sector should insist that the status quo is untenable. If the federal government cannot provide funding itself, it should step out of the way and let universities take financial control of their own futures.
- Appeared in the LH Martin Institute July Newsletter.
Insights is a new monthly feature of the LH Martin Institute Newsletter, which includes contributed opinion pieces written by leaders and experts across the tertiary education sector. Read other Insight articles.