Budget 2016: Simon’s Drive – Are We There Yet?

Helmets off! Remove your live ammunition from the chamber, disassemble the barricades; run the flag of the public universities up the pole – deregulation has surrendered!

Murmurings  that the new education minister Simon Birmingham was considering a modified fee deregulation model did not materialise in the budget papers. Rather than concrete policy, the budget includes an ‘options paper’, Driving Innovation, Fairness and Excellence in Higher Education, an entirely dull collection of words that appears to restore Higher Education policy to tinkering and empty rhetoric. Birmingham’s vision (his word) is of ‘a system in which universities are able to reflect and respond to the demands of students and employers and to leverage their research strengths to position themselves in a global context’. (A human being actually wrote that…)

The ‘Regulation and Impact Statement’ which formalised the Abbott-Pyne deregulation policy was a document of outright war. It identified and set out ruthlessly to eliminate all the conceptual and institutional vestiges of a university system centred on the public good and supported by the state and its citizens. The status of Driving Innovation is unclear. Its main purpose, of course, is to head off one of Labor’s main lines of attack entering into the election campaign. It may not be an entirely heinous document composed specifically with the aim of punishing universities for once having harboured non-economistic ideas, but it is still subtly nasty. It assumes an air of bureaucratic nonchalance as it moves further to erode the social basis of tertiary education and push us once again to the precipice of full deregulation and privatisation. Rather than warfare, this is stealth deregulation. The ‘options’ deserve close scrutiny, if only because all of them will tacitly be mandated should the Turnbull government be elected in July.

Public benefits = private benefits

Some perfunctory phrases aside (the sector ‘enriches our cultural landscape’), Driving Innovation understands the sole purpose of universities to be the creation of market citizens. The use of the public purse is justified only in so much as it provides opportunities ‘to engage in a modern economy’. These market citizens will then ‘give back’ through their taxes so that future generations might likewise ‘engage in a modern economy’. Birmingham cocks his ear to a recent report from the Business Council of Australia which, would you believe it, calls for graduates to be supplied with skill sets immediately geared to their needs. The economistic logic of Driving Innovation is so dogged that even retirees hoping to ‘enrich’ their ‘cultural landscape’ will be blocked from accessing HECS-HELP loans.

‘Unpaid’ HECS-HELP debt

The government frequently tells us there is a ‘mountain’ of unpaid HECS/HELP debt, and that it is their obligation to chase Australian graduates to their grave in order to reclaim it. This is a fundamental misrepresentation. When issuing income contingent loans, the state acts as a risk manager, writing off debt in high-risk areas like human capital investment where returns cannot be guaranteed. You might enter your teaching course having heard rumours of a shortfall in teaching graduates, only to find, upon graduating, that everyone else piled into teaching degrees at the same time. In an aside full of tortured syntax, Birmingham does acknowledge this (‘while debt not expected to be recovered is an intrinsic part of an income-contingent loan scheme…’), but it doesn’t stop him from proposing a number of measures to seize back ‘unpaid’ debt and erode the social logic of the HECS system in the process.

HECS-HELP system is ‘generous’

For, you see, our income contingent loan system is ‘one of the best and most generous in the world’. In New Zealand for example, you start repayments once you are earning just $AUS17,000. (Let’s not mention that the New Zealand Government spends around a 30% more than ours on Higher Education as a proportion on GDP – we generously loan what New Zealand gives…) And who would want to be more generous that New Zealand?

Outrageous proposals in a grey suit

Birmingham is looking to strike at the heart of the HECS design, with proposals that would have brought students and lecturers out on the street were it not for the catharsis of having staved off the sheer horror of the Pyne proposals. The logic of the Dawkins system was that the state would continue to be the major investor in degrees, with students only paying a contribution once they had benefitted with above-average earnings. This paper is trying to eradicate the possibility that the state might not be able to recoup every cent it invests and is keeping every option on the table in order to so. Birmingham wants students to pay more (8% more) and the state will snatch back its money just as soon as they’re off the breadline (the threshold for repayments will be set at about FT minimum wage). Even worse, the introduction of loan fees is mooted so as to ‘defray costs’. Defray! He has a vocabulary after all – an arsenal of demure euphemisms.

Private-provider rorting still a live option

And, all the while, one of the central pillars of the Pyne scheme, the extension of public subsidy and HELP loans to students taking sub-bachelor degrees at private providers, stays on the table. Subsidies should go to ‘all registered higher education providers’, and so we are likely to see the sorts of rip-offs that have characterised the vocational education system in recent years. In the UK this arrangement swelled public expenditure by a billion pounds in its first three years and led to investigations into ‘cash point colleges’. This is deregulation in every respect other than course fees.

Deregulation defeated in spite of ‘sector support’

A relatively inexperienced minister, Birmingham has obviously spent the last few months breathing the same air as the entrenched sector lobbyists and neoliberal policy ‘experts’. One of the great lies repeated daily by Pyne as education Minister was the notion that he had the sector’s support, by which he meant 38 vice chancellors with a funding guillotine suspended above them. The copious vomiting from students and rank-and-file academics which saw, amongst other things, one of the most successful recent campaigns against major neo-liberal reform and the formation of NAPU, is gingerly evaded. This canard is repeated at the opening of Driving Innovation, setting the scene again for policy that suits the incestuous managerial stratum rather than looking to address the structural problems with the demand-driven system that academics and students daily knock their heads against.

Policy by election slogans

The one properly new idea in this fart-squeak of a policy platform, is the deregulation of fees for select flagship courses of ‘defined excellence or innovation’. There is not a single concrete suggestion as to what these might be because it is a policy defined by election rhetoric. As Gavin Moodie has pointed out, the 2011 policy review from which this option has been plucked suggested that government contribution match those made by students. The rank idealism of Turnbull’s new economy, in which ideas must materialise because political will demands it, will no doubt translate into extortionate fees for courses that lead to high-paying professions.

Institutional rather than systemic excellence

‘Excellence’, of course, means excellence at the top, rather than our university system as a whole. The emphasis is on shoving as many institutions into the top 100 ranking as possible rather than thinking of the performance of our system as a whole. Had Birmingham focused on this, he would have seen that, adjusted for levels of economic development, Australia’s system is ranked 13th in the world, with every system above us investing considerably more public funds as a proportion of GDP. On this evidence, the most likely outcome of shifting the financial burden from the state onto students will be the deterioration of the performance of our sector considered as a whole.

Spectre of neo-liberal dogma

Without a doubt, the best thing about this options paper is the disappearance of the language of the student ‘consumer’. Where the Pyne proposals followed the most hard-core neoliberal dogma, the framework here at least admits to the possibility that universities could serve both public and private interests. However, in substance, the default trajectory is unchanged, with a sector drifting towards a consumer-based model. Here and there, the hard-edged neoliberal language creeps in, such as when it mentions ‘non-distortionary funding models’ (meaning market distortions…) and the need for infrastructure development to respond to ‘market conditions’ rather than social needs.

If the options floated in Driving Innovation form the basis for the substance of a new higher education policy for a re-elected coalition government, we can expect to be driven to the exactly the same destination that Pyne promised to take us in 2014. Being the reasonable guy that he is, Birmingham will at least stop once in a while so we can take a piss.

Ben Etherington

National Alliance for Public Universities

The views and opinions expressed above are personal and belong solely to the author.

Related Article: Ben Etherington on Deregulation in The Australian

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