4
May
2016

Budget offers more questions than answers

by Andrew Norton


Published by Campus Review, Wednesday 4 May

There’s one thing we can say for sure about higher education policy for the next 12 months: no matter which party wins the election, there will be more consultations and reviews. Last year, Labor announced a green paper-white paper approach to getting its policy detail right. Last night, in the 2016–17 Budget, the Liberals called for submissions on policy ideas, with a new ‘Expert Advisory Panel’ to help them sort out which policy directions to pursue.

We have had funding reviews before, but none of them brought the issue of funding Commonwealth-supported students to a satisfactory policy or political conclusion. The status quo, a mix of Labor’s original relative funding model from the early 1990s as modified by Coalition-increased student contributions up to 2005, keeps prevailing.

While current policy is not ideal, it has one desirable feature: each major political party can broadly live with it, despite the things that could be improved. This gives the per-student funding system stability, letting universities plan around known per-student funding rates. Despite their anomalies, these funding rates have successfully supported substantial enrolment changes at many universities.

Even if Christopher Pyne had herded the Senate cross-benchers into supporting fee deregulation, it would have lacked that stability. Labor would have tried to repeal it, and even a future Coalition minister was likely to have had second thoughts – as Simon Birmingham now has. Universities will not make long-term changes based on short-term policies.

In looking for a stable settlement around higher education policy that universities can plan around, it’s useful to look for parallels between party policies. Apart from wanting reviews, each realises that it’s important for both students and taxpayers to get value for money. The Liberal discussion paper mentions an “efficient pricing review”, overseen by the Expert Advisory Panel, to help redesign the system of per-student funding rates. Labor would institutionalise this process in a Higher Education Productivity and Performance Commission.

There are tough issues in higher education pricing that inevitably have a political angle, such as whether to include research support in a per-student funding rate. But once these are decided, the rates can be left to people chosen for their expertise in costing, rather than their views on higher education policy directions. A partial depoliticisation of funding rates to higher education providers would help create a stable and rational policy framework that supports delivery of quality higher education.

Given their ideological histories, Labor and Liberal will continue to differ on how much students should pay. But research in Australia and other countries suggests that the level of public funding does not in itself matter much to demand for higher education or how it is delivered. For a well-functioning higher education system, it is more important to get the overall funding rates right. Both major parties are thinking about how we might do that.