A new private uni, established just in time

Andrew Norton4 Comments

The American for-profit university conglomerate Laureate International Universities is to open a campus in Adelaide, to be known as Torrens University Australia. (An earlier, detailed description of the proposal is here (big pdf).

Universities Australia, the lobby group for current universities, said that it would be pleased to consider an application from Torrens. But it added:

“However, Universities Australia is surprised that the South Australian Government has made this decision prior to the Tertiary Education Quality and Standards Agency beginning its regulatory functions in January 2012.”

Actually, it is not very surprising at all. The proposed rules for admitting new universities under the TEQSA regime make it extremely difficult to become a university. At best, it would be a slow, evolutionary process for another kind of higher education provider to become a university. The biggest obstacle is that to be approved as a full university, research activity is required in three broad fields of study. Not many institutions can sustain loss-making activities across such a range.

The current protocols for approving new universities are also quite protectionist. But there
is a provision in the protocols on ‘greenfield’ universities that have a ‘high probability’ of meeting the general criteria for being an Australian university. That’s what Torrens and the SA government are using, before this option is closed off by TEQSA rules.

I fear TEQSA is going to bury higher education in red tape, so I am pleased that this new competitor was allowed in before they get the chance to stop it.

A degree and net worth

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Last Friday the ABS put out their latest report on household wealth and wealth distribution. This includes average ‘study loan’ debt, though there is nothing in the ‘assets’ section on the value of human capital. This is not a criticism of the ABS; human capital is not a directly tradeable asset and there are substantial methodological issues in valuing it.

Nevertheless, for most younger people their human capital is their most important asset. If what we are hoping to measure is capacity to command resources over the longer term (superannuation is included), then excluding human capital gives a fundamentally misleading idea of how wealth is distributed.

Combining numbers from two tables gives us an idea of what impact this has. The highest average HECS debt is in the households with the lowest net worth. Unfair! Students impoverished by debt! But looking at average HECS debts by gross household income quintiles things are reversed – the highest average HECS debt is in the top income quintiles. Equity! The rich being forced to pay their way!

What I suspect is happening here is that the net worth numbers are picking up many new households, graduates starting to earn good salaries but still renting and with little superannuation. But the household income numbers are picking up graduates living together; since they tend to overtake the incomes of non-graduates early in their careers putting two or more graduates together in a household gives them high collective earnings.

Because there are very large life cycle effects in wealth distribution, it will always be far more equal over a lifetime than at any one time. HECS/HELP will make it mildly more progressive.

Separate student amenities fees to return

Andrew Norton12 Comments

After much Coalition stalling, the government’s amenities fee legislation passed into law today. However, it is not a restoration of the previous status quo. The key differences are:

* while before 2006 unis could charge what they liked in a separate amenities fee, now it is capped – a maximum of $263 next year, with indexation for future years;

* before 2006, it was an up-front fee, but now it can be deferred through a new income-contingent loan scheme, SA-HELP;

* before 2006, there was no Commonwealth regulation of what they could spend the amenities fee on (though there had been some state legislation), but now there are some restrictions, including on political parties and local, state or federal campaigns;

* before 2006, there was no Commonwealth regulation of universities in their provision of general student and advocacy services, and now there is (same legislation, but not connected to the amenities fee – the trigger is receipt of Commonwealth grants, not the amenities fee).

So overall there is a substantial increase in bureaucratic complexity compared to the pre-2006 situation.

As longtime readers of my blog will know, my position is that both sides to this debate are wrong. A separate amenities fee is a relic of an earlier funding system, in which the Commonwealth paid grants that were specifically for academic matters (some of which they recovered via HECS from 1989), and permitted universities to charge students for non-academic matters.Read More »

When is is ok for politicians to break their commitments?

Andrew Norton3 Comments

Today’s Essential Research poll asks about when politicians should be able to break commitments. Unfortunately it is marred by poor wording, especially in the options not being mutually exclusive, but the plurality for the option ‘as situations change, it is reasonable that politicians change their positions’ suggests a pragmatic attitude. It is the common sense morality that I expect most people apply in their own lives – commitment keeping is a virtue, but sometimes things we assumed in making that commitment turn out not to be the case, and that affects the morality of whether or not the original commitment should be kept.

The pragmatic position may well have secured more support had not respondents read it as excusing Julia Gillard’s carbon tax backflip. Other polls conducted in a more neutral context do not show Coalition supporters as more cynical about politicians than Labor supporters. Not only does the correct thing to do change when relevant facts change, but also according to the identity of the people involved.

Please study at home

Andrew Norton6 Comments

The bill introduced last month to reduce the discounts for up-front payment of student contribution amounts or early repayment of HELP debts (discussed here and here) contains a previously unannounced policy: to stop Australian students getting tuition subsidies or HELP loans if their course of study is primarily at an overseas campus of an Australian university.

Peter Garrett’s second reading speech explained the rationale:

As students are only required to pay back their HECS-HELP debt if they file an Australian tax return, there is a higher risk that HECS-HELP debts incurred offshore will not be repaid, or not repaid for a longer period of time.

I’m not sure how big a problem this is in itself, but it is a sign that the government is concerned about HELP debt held by people not living in Australia. That the government makes no attempt to recover HELP debt from Australians working overseas is one clear design flaw in the income-contingent loan scheme.

It’s a flaw that has been exacerbated by other changes to law and policy. As dual citizenship has been permitted by Australia and other countries, the number of people with work rights in multiple countries has increased. More people can work overseas, and it would be very surprising if we did not see more people doing so.

The source countries of migration to Australia have also shifted towards the Asian countries in which Australian universities have their overseas campuses. According to the 2010 enrolment data, nearly 7% of domestic students speak an east or south-east Asian language at home (and probably more can speak one, but tend to speak English at home). A similar proportion were born in those countries. It would presumably be relatively easy for them to return to Asia to study at an Australian campus.

The flow of people between Australia and other countries is not a problem it itself. But it becomes a problem when it interacts with a debt recovery system designed for a less mobile world.

Another baseless campaign finance story (and one not so baseless story)

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There’s an odd campaign finance-related story on page one of today’s Australian. Apparently the brother-in-law of Queensland Opposition leader Campbell Newman put in a bid for a contract with the Queensland Reconstruction Authority. The Australian‘s assumption seems to have been that Newman somehow has questions to answer, which as Newman’s response makes clear he does not:

“I am not a state government decision-maker nor am I an elected member; therefore there is no conflict of interest. I can categorically state that Lisa [his wife] and myself have not received any financial benefit and will not in the future receive any financial benefit from the operations of Frank and Seb Monsour’s company.”

I don’t think there was any story here, and certainly not a page one story. But if there was a story to be extracted from this thin material, what about the angle that the Queensland government wouldn’t do business with a company because its owners had family associations with the LNP leadership? The possibility that politicians might improperly use information about the financial associations of their opponents seems to be largely ignored in the campaign finance debate.

Also on page one, another campaign regulation story: Jewish doctor John Nemesh being prosecuted for posters critical of anti-Israel Green Fiona Byrne, which failed to include the name and address of the printer. An example of how complex campaign rules result in people who are not political professionals being prosecuted for inadvertent and trivial violations of the law.

Overseas student reforms bad for higher ed market design

Andrew Norton2 Comments

Declining international student numbers prompted the government to commission a report from former NSW politician Michael Knight, and his report was released today. The government has accepted his recommendations.

Most of Knight’s recommendations are sensible. But his report would also lead to a visa system that is biased in favour of universities at both ends of the course of study: in a easier process for getting a student visa, and for a new two-year work right after completing the course. This would put non-university providers at a significant disadvantage.

Coming on top of the government’s decision to uncap Commonwealth-supported places for public universities, letting them compete more strongly against private providers and TAFEs offering degrees, and to lift the FEE-HELP debt surcharge from 20% to 25% for undergraduate courses, I could see why the non-university higher education sector could come to the conclusion that the government is trying to put them out of business.

I don’t think the government is trying to wipe out the non-university higher education sector; rather this situation is the result of an ad hoc approach to policymaking, with decisions made without adequate consideration of their systemic consequences.

Though Knight correctly observes that there have been more migration-related problems in the vocational sector than in the universities, I could not find any evidence that the non-university higher education institutions were particularly prone to taking students who broke visa conditions (especially compared to the universities at the cheap end of the market, attracting students from poor countries with the strongest reasons to want to stay in Australia). There was a discussion of the difficulties in setting rules institution by institution, but not for different classes of institution.

An effectively functioning higher education market in Australia requires – to use the now cliched metaphor – a more level playing field. International students are important to building economies of scale in the non-university sector, and making those institutions more able to take on the universities in the domestic market. So Knight’s recommendations, and the government’s apparent acceptance of them, are a setback to good market design in both domestic and international markets.

Is academic professionalism adequate?

Andrew Norton5 Comments

“Over the past two decades, there has been a serious diminution in professionalism as we are
compelled more and more to complete accountability/kpi measures, as if jumping over ‘productivity’
hurdles could substitute for professional ethics.”

– quote from an academic, p.24 of the Australian Academic Profession in Transition report.

Overall, 37.3 per cent of academics have never undertaken training in university teaching,
and 72.1 per cent indicate that training is not mandatory in their institution.

– report of survey research, p. 25 of the Australian Academic Profession in Transition report.

As this report makes clear, collecting data and filling in forms – administrivia, as Conrad calls it – is the bane of academic life. I’m quite prepared to believe that some of it is unnecessary and much of the rest could be delegated to administrative staff.

But I am much less prepared to believe that we can put our faith in the ‘professionalism’ of academics. Quite clearly in my view, academia failed to develop a proper professional ethos around teaching. Though things have improved in the last 20 years, still a very large minority of academics have not undertaken any training in one of the key tasks of their occupation. The previously abysmal results recorded in the survey sent to completing students are now reasonable though not great.

Until the norms of good teaching practice are internalised in the academic profession, external pressures to protect and promote student interests are necessary.

According to the polls, the public both supports and opposes offshore refugee processing

Andrew Norton3 Comments

The Australian public don’t want refugee boats to keep coming, but other than that it’s pretty hard to work out what they think. Earlier this week, new polling from both Nielsen and Essential Research was published on what to do with boat arrivals.

The questions were slightly different, but the results were opposite: Nielsen find a majority for onshore ‘assessment’, while Essential find a majority for offshore ‘processing’. I would have thought the questions were getting at the same thing, but perhaps respondents did not think so, or there was some other issue with the polls.

But to me this looks like at least a very significant minority of people have no clear opinion on the policy details.


Essential question: Thinking about the issue of asylum seekers arriving in Australia by boat – do you think they should be processed in Australia or should they be sent to another country for processing?
Nielsen question (inferred from table in Age print edition): Asylum seekers arriving by boat should be … allowed to land in Australia to be assessed/sent to another country to be assessed/sent back out to sea/other or don’t know.

NSW Libs in ‘cynical attempt’ to restrict their political opponents, part 2

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As well as potentially making the ALP guilty for actions committed by others, the campaign finance reform bill introduced into the NSW Parliament yesterday would, if passed, ban all donors who were not on the electoral roll for state, federal or local government elections. So unions, business, and all other associations and organisations would be banned from giving money that would support ‘electoral communication expenditure’ in NSW state elections.

I discussed this idea in my Democracy and Money paper, published in June. As with all the cascading campaign finance regulation, this attempt to tighten the law simply generates new anomalies.

Though this provision is partly aimed at the unions, the unions are better off than most third parties. What any laws restricting donations do is damage donor-reliant third parties compared to third parties that can self-finance their campaigns. So ironically the vested interests that campaign finance law was originally intended to curb – principally the unions and business – can use their own income to continue as before, within the restrictions imposed by the expenditure caps (which obviously would be significantly tightened for the unions if the bill passes). However the more public interest organisations that typically rely on donations would have their fundraising curbed by being denied organisational gifts (the 2010 Labor amendments had already restricted them to maximum $2,000 a year donations).Read More »