Dr Brendan Nelson's university policy prescription: panacea, placebo or poison? Day 4

Havachats are week-long email dialogues between two prominent advocates on an issue of the day. To vote on the issue and make your view count, click here.

Day 1 . 2 . 3 . 4 .

Andrew goes first. Carolyn responds.

From: Andrew Norton
Sent: Saturday, September 27, 2003 5:26 PM
To: Carolyn Allport
Subject: Winding up

Dear Carolyn

Perhaps we can end our exchange with a few areas of partial agreement.

Though I don't think we need more graduates, like you I don't think limiting subsidised places is necessarily the right policy either. I prefer my decentralised solution, the use of brokers to limit bad choices by prospective students and to curtail universities irresponsibly enrolling students because they want the money, to the centralised alternative of picking a target number.

Prices play a part in my policy. The fact that some prospective students are deterred by the cost of going to university isn't in itself a bad thing. A function of prices in a market system is to help measure trade-offs. If someone makes a well-informed assessment that $21,000 for a commerce degree, plus the time out of work to complete it, isn't likely to lead to benefits that exceed that, then not doing the degree is the right decision, not some failure of policy.

This scenario is very unlikely for school leaver university applicants with the intellectual ability to do the course and who are able and willing to work. But for someone who is likely to fail, or who for some reason won't be able to secure sufficient years of good employment, it is a scenario they should be aware of and act on. It is the role of the brokers to guide people in these decisions. This, rather than slashing prices for everyone, is the solution to irrational debt aversion.

I don't especially like the full-fee places, not so much because they are full fee or because of the debt, but because they mean that some students pay two or three times as much as HECS-liable students for an essentially arbitrary reason, that their Year 12 score puts them on the wrong side of a government-set quota.

Yet within the inherent constraints of the quota system they are an improvement. Nearly 10,000 people this year are doing their first rather than lower preference course because they could pay full fees. Since almost all of them could have taken a HECS place, they have freed up those HECS places for others. The full-fee places leave many people better off and nobody worse off, even if improved policies could leave even more people better off.

I agree with you that the government should withdraw its workplace relations requirements. This is not a reflection on the content of all the requirements. There could well be a case for some of them, such as making it easier to retrench staff and cutting off de facto subsidies to the NTEU. I have no ideological objection to AWAs, though I suspect they would create more administrative hassles than they are worth.

I oppose the workplace relations requirements for the same reason I support universities setting their own fees. These are decisions best made not in Canberra, but by the immediate parties to the transaction. These are the people with the most information and the strongest incentives to make the right decisions.

The workplace relations requirements are, unfortunately, symptomatic of the Canberra-knows-best philosophy that pervades the new legislation. But Canberra can't know best because at most it can second guess those who do. It is more likely to add error than insight. The Department of Education, Science and Training is a big enough obstacle to the good management of Australian higher education as it is. We should be reducing, not expanding, its role.

Regards,
Andrew

Sent: Monday, September 29, 2003 2:55 PM
To: Andrew Norton
Subject: Re: Winding up

Dear Andrew

My apologies for not being as timely in my reply to your letters. A combination of IT issues in our office, and my own work demands this week have meant a short delay.

I have enjoyed exchanging our views. One of the interesting outcomes of that exchange in the context of the "other" debate in the press on workplace relations is that we both remain committed to the notion of institutional autonomy for universities. I welcome your concerns about the efficacy of the proposed workplace requirements, and I note that Tony Abbott has been moved from Industrial Relations to the Health portfolio.

I suppose that you would read institutional autonomy to also mean that universities must be in charge of their own fate, and not be dependant upon government for funding. I would disagree on this version of institutional autonomy because even the ivy league institutions in the United States receive public funding, and most universities in the developed world are to a greater or lesser extent also in receipt of government funding. Where there are totally private universities - in Australia at Bond and Notre Dame - each has ultimately come to the government for funding and both are now in the relevant funding schedules of the current Act.

Elsewhere in the world, the problem for private universities has been their inability to raise through tuition fees and commercial income enough money to pay staff comparable salaries to the public sector, and to provide the degree of job security so necessary to ensure that staff, whether employed in a public or private university, are able to exercise academic freedom and maintain quality.

I do agree that we need to build into our funding regimes, however constructed, more resources devoted to student learning. You would argue that the consumer sovereignty that attaches to the market would empower students to demand such resources, and that a voucher system would ensure that they would exercise that power. From my point of view, I believe we should start with the wider debate around learning, the needs of learners, and the critical importance of learning support services. The quid pro for expanding participation is to lift student performance. There is little in the way of statistical analysis that proves that performance in the final year of school studies is a predictor of success at university - except perhaps at the extremes. I remain confident that we can, and should, make sure that students are able to study in the areas of their choice. To assume that the only policy mechanism that is available to universities is the option of full fees, is to limit our capacity to redesign the way we work to meet student demand. Like you, I agree that Canberra bureaucrats can excessively over-regulate, and this often is not conducive to good practice on the part of universities.

Marks at secondary school themselves should never be the sole entry criterion. In some degree programs, such as medicine, entry is based also on interviews with prospective students. The University of Newcastle medical studies program has been a leader in this new area, and has been one of the few consistently graduating Indigenous health professionals. Perhaps, we need to send a wider message, not just the market message of marks equals money in the long term.

Regards,
Carolyn

Day 1 . 2 . 3 . 4 .