Swinburne News | 19 August 2013
In an opinion piece published in the Australian Financial Review, Swinburne University’s head of Corporate and Government Affairs, Andrew Dempster, says that uncapped funding for higher education is fairer and more efficient. He also says it’s consistent with Coalition policy – and Labor , of course, introduced it.
This is not new. Hand-wringing about the sustainability of the so-called demand-driven system has been fashionable for some time.
There is heightened scepticism of the demand-driven system among Australia’s sandstone universities, which have an unfortunate tendency to look down their nose at those institutions that take students with ATAR [Australian Tertiary Admission Rank] scores of 70 and below, as if those that do are “lowering the standards” for everyone else.
This is despite the fact that many establishment universities would not know what a student with an ATAR of 70 looks like, let alone how university teaching might be configured to assist these students to succeed.
It is also conventional wisdom that, because the demand-driven system is a Labor creation, it will inevitably be for the chop under any Coalition government that follows.
While budget pressures are real, it does the Coalition no credit to assume the demand-driven system will be dispatched to history if it forms government this year.
Indeed, there are many reasons why it may survive and even prosper.
Consistent with free market
For a start, it is much more consistent with the free market ideals that are central to conservative thinking. Granted, the market is not free in every respect.
For now, maximum student contributions continue to be set by the government and the only participants are public universities.
What we have now, however, is streets ahead of the old practice in which each year the number of places that can be offered by each university is determined by a minister in Canberra – an inflexible and opaque system under which every university got their existing share of the pie, irrespective of, well, pretty much anything.
The system that we have now strongly encourages innovation and promotes diversity in the way that universities deliver for their students.
Rather than holding providers to repeat old patterns of behaviour and entrenched teaching practices, universities have been empowered to try new things.
As technology has changed, this has been vital as higher education globally is undergoing a quiet revolution and Australian institutions need to change with the times.
The Coalition rightly detests bureaucracy and upholds the principle that universities are self-governing – both of which are well served by the uncapped system.
Logical starting point
And if our higher education system is ever going to evolve to allow private higher education providers to enter the market and compete on equal terms against established players, the logical starting point is the system that we now have, not one in which caps are reintroduced.
Finally, the demand-driven system speaks to aspirational elements of Australian society, families and young people who correctly see university education as a path to wealth and prosperity and who are coming through the gates in record numbers, now that artificial caps are gone.
We sometimes make the mistake of thinking our system of funding universities according to demand is in some way unique or aberrant in the Australian policy landscape.
The reality is many important programs that serve the public good are demand driven.
Some were creations of the Coalition, some were conceived by Labor and others have been around for so long that no one remembers or cares.
The uncapped systems we tolerate include the private health insurance rebate, childcare rebates, unemployment benefits, paid parental leave and the biggest one of all, Medicare.
This year, investment in Medicare rebates is forecast to reach a record $19 billion, but how much the government spends from year to year varies according to demand.
The government could, of course, be more certain about its annual expenditures by slapping a cap on the system. It could strike an agreement with each medical practitioner – let’s call it a “compact” – either to limit the number of medical services that each GP could provide or to require that each GP operate within a funding envelope.
Bigger bureaucracy required
This would provide the government with more predictability in its expenditure, however it would require great bureaucracy to administer, reduce the overall efficiency of the system and leave Medicare less able to respond to cyclical changes in patient demand.
Substituting students for patients, these are the very same reasons why higher education should be funded according to demand.
Given the alignment with the Coalition’s governing philosophy, there is no reason why the demand-driven higher education system shouldn’t be embraced by a newly elected government.
Let’s not get rid of a system that is fairer, more efficient and more transparent than the lazy and unresponsive bureaucracy that it replaced.