Saturday, August 23, 2008

Gillard's two universes

Car makers are not the worst bastion of old-style protectionism, universities are, and Labor panders to them.

Francis Scott Fitzgerald said "the test of a first-rate intelligence is the ability to hold two opposed ideas in the mind at the same time, and still retain the ability to function".  If Fitzgerald was right, Education Minister Julia Gillard has a first-rate intelligence.

Gillard has declared she wants to reform the country's vocational education and training system.  She wants to make TAFE colleges more responsive to the needs of industry and introduce competition and market incentives.  She is also demanding that state governments relax their rigid control over the subjects taught at TAFE and the fees charged by colleges.

Most radically, Gillard is publicly contemplating a voucher system in which government funding would be going to students rather than institutions.  Students would be able to spend their voucher at a college of their choice regardless of whether the college was run by the government or the private sector.  The best colleges would attract students and funding.  The worst colleges would change or go out of business.

Although she'd never admit it, Gillard's proposed reforms are basically a continuation of measures initiated by the coalition.  They are reforms that are long overdue and deserve widespread support.

Unfortunately the minister has refused to extend the principles she wants to apply in the training sector to higher education.  Labor has ruled out deregulating tertiary fees.  It has already abolished the ability of students to payfor their own place at university.  Education policy in Australia is now verging on the absurd.  The ALP is willing to give vouchers to students doing diplomas in multimedia studies at TAFE colleges, but it won't countenance vouchers for students doing degrees in creative writing at universities.  It appears that the training and higher education sectors now inhabit parallel policy universes.

The ALP has been accused of gaining the inspiration for its training reforms from free-market economist Milton Friedman.  If so, Labor has more than compensated when it comes to its policy for universities, which would do credit to the best of Gough Whitlam's dirigisme.

The reasons training and universities are treated so differently is not hard to fathom.  Vocational education, because it must be applied in the real world, has traditionally been less afraid of marketbased solutions.  University academics are largely immune from the requirement to do anything useful.  Academics don't concern themselves with mundane matters such as the need to attract a clientele.  Whether their students will be able to be gainfully employed is the last thing on the minds of university lecturers.  In fact most lecturers would be highly offended if asked whether anything they taught helped their students get a job.

Universities also have a special place in ALP mythology.  With nationalisation of the means of production going the same way as the Berlin Wall, free universal and government-controlled higher education is one of the few articles of faith party members can still cling to.

By and large university administrators are happy with the status quo.  There are a few notable exceptions, but most vicechancellors enjoy having the Department of Education run their university for them.  It's easier to make speeches about the need for more public funding than it is to actually go out and raise the funds yourself.  Anything that goes wrong is blamed on the government.

Australia's car makers have been labelled the worst bastion of old-style protectionism.  That's unfair.  They are only the second-worst.  Universities take the prize.  This country's car executives are far-sighted visionaries compared with the average vice-chancellor.

For example, last month a group of universities calling itself the "Innovative Research Universities" (Flinders, Griffith, James Cook, La Trobe, Murdoch, and Newcastle) made a submission to the government's review of higher education.  Notwithstanding that the submission notes the failure of "central planning", it nevertheless demands that the government establish even more targets than already exist.  The submission argues against further deregulation of higher education and it specifically says that market forces should not apply to universities.  The submission opposes more private universities, funding via vouchers, and the government allowing universities to set their own fees.

If these "Innovative Research Universities" had been given the opportunity, they probably would have argued against lowering tariffs, floating the dollar, and selling Commonwealth Bank of Australia.  It looks like Julia Gillard might be holding two opposed ideas for some time yet.


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