Funding puts the vice in vice-chancellor

Stone the crows! We now value education but mistrust university leaders.

Christopher Pyne will be hoping this week is better than last – because that one was a shocker. On Tuesday, Clive Palmer knocked back the education minister’s university reform package, specifically the plan to deregulate undergraduate fees. Free university education is PUP policy and “free means free”, Mr Palmer said.[i] And with Labor and the Greens opposed, without the three Palmer United Party senators, especially if their ally Ricky Muir (Motoring Enthusiast Party – Victoria) joins them, the legislation is lost.

The Coalition has 33 Senate votes and is said to be able to count on the support of senators Bob Day (Family First – SA) and David Leyonhjem (Liberal Democrats – NSW). Nick Xenophon (Independent –SA) is believed to be leaning towards voting for the bill, if Mr Pyne makes concessions, as expected on the interest rate on student loans. However, no one is sure what Senator Madigan (Independent – Victoria) will do. At best the government has 37 against Labor and the Greens with 35, plus the three PUPs and Senator Muir.[ii]

This is strange stuff given the Pyne plan is the culmination of a Labor reform that just about everybody agreed to – funding every Australian student a university accepts.[iii] The then opposition voted for Labor’s demand driven funding in 2011 and the politics and policy consensus is that individuals and the economy both benefit when everybody with the ability does a degree.[iv] The problem is that expanding student numbers puts pressure on the budget – so the Pyne plan is to cut government funding per place with the students who fill them making up the shortfall.[v]

But to ensure nobody is excluded Christopher Pyne proposes students borrow whatever it costs through the existing HELP (the present name for HECS). Sound sensible? It is – but the problem for Mr Pyne is that he has listened to university complaints of underfunding and says they can charge students their own fees on top of what Canberra collects. He will add it their HELP debt.

It’s a vision of loveliness for a Treasury official and while vice-chancellors would prefer Canberra to write ever-larger cheques they recognise this is as good a deal as they will get from this government – and probably many to come. According to the peak lobby group Universities Australia, “with budgets under pressure, governments faced with a myriad of competing priorities for public funding, and successive governments being disinclined to invest at the level that repeated independent reports have shown to be needed, full deregulation of higher education is needed.”[vi]

So why is Clive Palmer peeved? Yes, he thinks universities should be free. But as that is impossible – if consumers don’t pay other taxpayers do – it is the other reason that matters: “Proposals to deregulate Australian universities were just a grab for cash and an attempt to follow a failed US education model. Australia needs an all-inclusive model, which allows for and considers the needs of the whole of society. Australian students can’t pay more.’’[vii]

So who is doing the grabbing? Given the government would loan students the extra fees, it is illogical to blame the feds. As the National Tertiary Education Union estimates, under the Pyne plan student debt will overtake total Commonwealth debt in a decade and reach $279bn by 2025.[viii]

According to Mr Palmer, university managements are being greedy. As he said last Tuesday: “This extra money will allow them to increase their salaries and employ more academics on tenure that is what this is all about – it’s about being open to the highest bidder.”[ix]

Labor’ higher education spokesman Senator Kim Carr, who is crusading against the Pyne package and all who endorse it, agrees that vice-chancellors want more money. In his second reading speech opposing the Pyne package last week, Senator Carr launched an extraordinary attack against university managers:

Whatever the motivations or reservations of vice-chancellors, the fact remains that – just as it is not the role of the Senate to rubber stamp the desires of the executive; neither is it the role of this chamber to automatically give vice-chancellors whatever they want. Successful university funding policy does not simply allow – carte blanche – this nation’s vice-chancellors unlimited access to funding from the pockets of Australian students and workers. It is not our role to give them a “licence to print HELP debt” It has often been said that getting between a vice-chancellor and a pot of money is a dangerous business. But that is what Labor will do. Because there is more at stake than the performance bonuses of university managers. [x]

And the National Tertiary Education Union, which created the concept for the campaign now used by Labor – that universities will use deregulation to charge whatever the market will bear – argues that in supporting deregulation vice-chancellors have placed their institutions’ finances above community need:

Instead of being conscious of what universities achieve for society, vice-chancellors are now beholden to their institution and its place in the market. This has shifted their focus from the public good to a fiduciary obligation to their employer.[xi]

The grim truth for university lobbies is that the coalition of academics and management, always divided by much but united in a commitment to continual campaigns for more public funding, is breaking, if not broken.

This is not due to the Pyne package; according to Universities Australia a survey shows people accept the policy case for deregulation.[xii]

Rather, it results from the way the debate has swung from what universities need to what students should pay.

This is as ironic as it is appalling for the university lobbies – for years they have unsuccessfully tried to put university funding on the political agenda. They finally have, but not in the way they wanted – instead of what universities can do for Australia the debate has become what they want to take from young Australians.

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[i] Stephen Matchett, Campus Morning Mail, October 28 @ recovered on November 2

[ii] Parliament of Australia, Senate Composition, nd @ recovered on November 2

[iii] Greg Craven and Glyn Davis, “In praise of the demand-driven higher education system,” Australian Financial Review, November 21 2013

[iv] Parliament of Australia, “Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011,” 104/2011 @ recovered on November 2

[v] Coral Dow, “Reform of the higher education demand driven system (revised),” Parliamentary Library, 2014-15 nd @ recovered on November 2

[vi] Universities Australia, “Senate: approve higher education package with amendments,” August 28 @ recovered on November 2

[vii] Clive Palmer, “Abbott’s attack on education and pensions destroying Australia,” Palmer United Party, September 16 @ recovered on November 2

[viii] NTEU, “Fees and debt shifting in higher education,” May 29 @ recovered on November 2

[ix] Stephen Matchett, Campus Morning Mail, October 29 @ recovered on November 2

[x] Senate Hansard, October 29, “Higher Education and Research Reform Amendment Bill 2014, 92 @ recovered on November 3

[xi] Jeannie Rea, “NTEU stands up for universities while VCs whimper,” National Tertiary Education Union, October 31 @ recovered on November 3

[xii] Universities Australia, “Majority support university reforms with key changes to ensure fairness,” October 29 @ recovered on November 2