The public-private balance: A failed rationale for setting student contributions

A previous post on the reasons given by government for setting student contributions, like this post based on a new paper of mine, listed five rationales used for implemented policies: course costs, private benefits, public benefits, increasing resources per student place, and incentivising course choices.

A sixth rationale has repeatedly been considered but never become policy, the idea that the distribution of benefits between public and private should drive the distribution of costs between public and private, as represented by the government and students. This post explains where this idea came from and why it has always been rejected.

Origins in the justification for HECS

As my earlier post noted, the public-private benefits idea first appeared in the Wran report that led to HECS. Its logic was not explained, but I think it was a corollary of the private benefits argument – that if students should pay for their higher education because they received private benefits then it seemed to follow that the government, on behalf of the public, should pay for the benefits they received. This is a normative argument about who should pay rather than an empirical claim that public subsidies produce public benefits.

The Wran report did not recommend this approach because calculating private and public benefits was too hard.

The balance metaphor

As part of the 1996 Budget the Howard government, with Amanda Vanstone as minister, introduced private benefits as a rationale for specific course contributions. Conceptually, however, this was quite different to the private-public benefits idea. The Vanstone version was the private benefits of a course relative to the private benefits of other courses, rather than the Wran private benefits of a course as a proportion of all benefits private and public or, at a system level, overall higher education private benefits as a proportion of all benefits.

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The five student contribution rationales since 1989

In a new paper published by the U of M’s Centre for the Study of Higher Education I chronicle the history of student contribution rationales – the reasons the government gave for HECS rates and then student contributions.

I argue that five rationales have been used: private benefits, course costs, increasing resources per student place, incentivising course choices and public benefits.

A key turning point is the 1996 Budget, when the government abandoned a flat HECS charge across all disciplines and introduced differential HECS. This required a more complex set of justifications than previously. The government’s arguments had to explain not just why students should pay compared to the previous free higher education system, but also why they should pay more for some courses than others.

The Wran report

The HECS system was recommended in a 1988 review chaired by former NSW Premier Neville Wran. It introduced four concepts that were subsequently influential in thinking about how to charge for higher education: private benefits, public benefits, a balance between private and public benefits, and course costs.

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Academic freedom as a principle and a practice (a review of Open Minds: Academic Freedom and Freedom of Speech in Australia)

Open Minds: Academic Freedom and Freedom of Speech in Australia is an accessible overview of the subjects in its sub-title. It covers rationales for academic freedom and freedom of speech, the current law, historical controversies, and emerging threats.

Its authors are two law academics, Carolyn Evans and Adrienne Stone, with Evans now a vice-chancellor. Jade Roberts, a legal researcher, assisted them.

As a general concept few people are against academic freedom. Nobody is calling for powerful figures – ministers, bureaucrats, or vice-chancellors for example – to direct the detail of what Australian academics research, teach or say. Yet the historical chapters of Open Minds report many cases through the decades raising issues of ‘academic freedom’. People regularly see exceptions to this otherwise widely-supported idea.

In judging disputed situations first principles can help. Yet these are also the subject of disagreement and grey areas. Academic freedom is not a clear and unchanging principle but instead a practice that has evolved over centuries, originally as institutional autonomy from church and state, with the current idea of academics personally having freedom developing from the late 19th century.

Only this year, after Open Minds was published, have the precise words ‘academic freedom’ with a definition been inserted into university funding legislation. Until then, as the Open Minds chapter on law explains, the language was of ‘free intellectual inquiry’, with universities and regulators left to decide what that meant. Even this terminology is recent, dating from 2011 in funding legislation and accreditation regulation, with ‘free inquiry’ used from 2000 in national legal definitions of a university. Australia has had universities since the 1850s.

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Recurrent critiques, concerns and crises in Australian higher education

In a previous post on Gwil Croucher and James Waghorne’s Australian Universities: A History of Common Cause, I noted a range of significant changes in Australian higher education over the last century. This post looks at recurrent themes.

Debate about the purpose(s) of the university

From the start Australia’s universities served multiple purposes, with on-going tensions between knowledge for its own sake, typically most strongly supported by academics, and meeting practical needs, typically most strongly supported by governments.

At the 1920 meeting that Croucher and Waghorne mark as the start of a national organisation of universities, University of Sydney Chancellor Sir William Cullen warned against ‘adopting too enthusiastically the current preoccupation with ideas of “national efficiency”‘.

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Key differences between Australian and British higher education: regional versus national markets and institutions

In two previous posts on higher education parallels between Britain and Australia, prompted by reading Peter Mandler’s book on Britain, I also noted that there were some important differences, which this post explores.

National versus regional systems

Mandler argues that in Britain a national higher education system emerged out of a ‘patchwork of institutions dating back to the middle ages’. Although local funding has been part of higher education finance in Britain, national funding was more significant early in the 20th century, and dominated the post-WW2 expansion of higher education. Universities were linked in a common funding system.

As a recent book by Gwil Croucher and James Waghorne explains, in Australia state governments were significant funders of higher education until the national government took over in 1974. Laws regulating the foundation of universities were state-based until 2011, although agreements between the states created a high degree of uniformity from 2000.

In Britain, free higher education from 1962 and a means-tested maintenance (income support) grant helped universities recruit nationally. Britain had a national applications and admissions system from 1961. However, devolution in the UK means that there are now differences in higher education finance between jurisdictions.

Free or consistently-priced undergraduate education across Australia since 1974, along with means-tested student income support, has not fundamentally changed the largely regional nature of Australian higher education. Most students attend universities in their state, and usually in their home city. Australia’s admission systems remain state-based.

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What’s changed in a century of Australian higher education?

Gwil Croucher and James Waghorne’s Australian Universities: A History of Common Cause is an easy-to-read history of Australian higher education, told with attention to the history of university peak bodies. Universities Australia commissioned the book to mark the centenary of the regular meetings of university leaders that began in 1920.

The Australian university system in 2020 is in many ways very different from what it was in 1920. But despite the transformations some issues recur repeatedly over the decades, which I will discuss further in a later blog post. I will start with what has changed the most, prompted by the Croucher and Waghorne book, but adding other material and my own take on events.

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The social and political causes of increasing educational participation from the 1980s

In my previous blog post, a discussion of Australian educational trends inspired by Peter Mandler’s post-WW2 history of education in Britain, I finished in the 1970s, a rare period of decline in school completion and university participation rates.

School completion increases again

Whatever the reasons for 1970s educational trends, in the 1980s rates of school completion rapidly increased, as the chart below shows. According to Simon Marginson’s book Educating Australia, increasing the proportion of students completing Year 12 was a deliberate policy goal, supported by state governments and the Commonwealth.

With these older teenagers, in the 1980s compulsion was not a politically acceptable policy tool for increasing school retention. As recently as 2007 in Victoria and 2009 in NSW the school leaving age was still only fifteen. Incentives were needed. According to Marginson, the Commonwealth significantly extended income support for secondary school students, with recipient numbers increasing six-fold between 1982 and 1990.

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The rise and then slight fall of school completion and university participation rates in Australia and Britain, 1870s to 1970s

A recent reading highlight for me is Peter Mandler’s The Crisis of the Meritocracy: Britain’s Transition to Mass Higher Education since the Second World War. I reviewed it on the GoodReads site.

Despite its title, Mandler’s book does not neatly belong to either educational merit genre; it neither bemoans the excessive influence of academic ability in allocating social and economic goods, nor laments the decline of academic standards in schools and universities. Instead, its core theme is how changing attitudes, aspirations and expectations drove up British educational participation and attainment after WW2. There are many interesting parallels with Australia.

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