Her idea of shifting control over the size of annual federal-funded undergraduate admissions from budget-conscious bureaucrats in Canberra to individual universities ignored the decades of funding repression to which the unis had previously been subjected.
Governments of both persuasions had gone for years trying to get the universities off the budget books by a process of de facto privatisation. Unis were given the power to charge (government-set) tuition fees to local students – HECS – and unrestricted power to charge overseas students – but with commensurate cuts in government grants.
The result has been to make vice chancellors as money-obsessed as any company chief executive, but without the private sector’s simple profit-maximising objective. Universities have lost their way, no longer sure what they’re doing or why they’re doing it.
Meanwhile, when Gillard opened the unis’ access to the federal coffers the predictable happened: vice chancellors went crazy, slashing entry requirements and cramming in as many more under-qualified undergrads as they could.
This seems to have been particularly true of second-string and regional unis. Australian Catholic University, Swinburne and Sunshine Coast more than doubled their domestic undergrad enrolments between 2008 and 2017. Another six increased their enrolments by more than half.
Gillard’s move to demand-driven funding was linked to her policy of raising the proportion of school-leavers going on to higher education to 40 per cent. A worthy goal – except that everyone took “higher education” to mean going to uni.
So, at a time when federal and state governments were engaged in their disastrous experiment with using “contestability” to get TAFE off their budgets, it suited both status-conscious parents and money-strapped lesser universities for the unis to cut their entry standards and poach kids who would have been better served getting a technical education.
Returning to the feds’ budget preoccupation, after the unis’ inevitable demand-driven raid on the federal purse came the Finance Department’s inevitable cry of pain: we can’t possibly afford this hugely increased cost.
The accountants’ solution – one that couldn’t have made sense to anyone who understood how un-market-like universities are – came in the Abbott government’s first budget: match the deregulation of uni places with the deregulation of uni fees (and cut uni grants by 20 per cent while you’re at it).
Fortunately, the Senate firmly rejected this bizonomics stupidity. But this left Abbott’s successors bereft of ideas to limit the unis’ cost to the budget. They ended up doing what they could do without parliamentary approval: canning the demand-driven system.
Which brings us to the election campaign. Labor is promising to restore demand-driven funding – but also to instigate an inquiry to find a more sensible division of roles between the two parts of higher education. Hopefully, the latter would undo the damage done by the former.
The Coalition is persisting with its spending cuts. But, because regional universities are claiming to be hard hit by those cuts, it promises special spending to help them (think National Party rent seeking).
But none of this would fix the real problem with the way universities have allowed their funding problems to undermine their commitment to high-quality undergraduate teaching and even high-quality research.
They’ve gone too close to turning undergrad teaching into a money-making sausage machine, where you have to be really dumb not to pass, where you don’t need to attend lectures because it’s all online, where lecturers – who will perish if they don’t get their publications up – limit their students’ access time, and where the lecturer is a casual because the person who should be doing it has brought in a big research grant and been rewarded by being allowed to “buy out” their teaching load.
Universities treat their junior academic staff badly (we get flexibility, you get insecurity) and have become bamboozled by KPIs and other faddish “metrics”. Their worryingly high dependence on fees from overseas students means the sandstone “Group of Eight” unis have become obsessed by lifting their place on the various international rankings of universities.
Why? So they can attract more overseas students and charge them higher fees. While their academics find ways to game their KPIs, their many “pro-vice chancellor (something in brackets)” search for ways to use their academic appointments and research direction to game the international ratings.
I think a much more comprehensive inquiry is needed.
Ross Gittins is the Herald’s economics editor.