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.