Open Letter to Dr Michael Spence about Pyne’s proposed changes to higher education

This is a letter that I have just sent to Dr Michael Spence, the Vice-Chancellor of Sydney University, about the de-regulation of university fees.

Dr Michael Spence, Vice-Chancellor
29 August  2014

The Pyne Higher Education proposals

Dear Michael,

I am writing to express my concern about the way in which the prospects currently facing Australian universities are being portrayed in the public debate, but most especially by yourself as the representative of the University of Sydney, in Senate discussions, in the media and in your account of the Town Hall suggested by Senate. My apologies for the length of this letter, but the issues are complex.

You’ve said on a number of occasions that the current system of funding universities is ‘unsustainable’, but coupled to the idea of fee de-regulation in a way that suggests that deregulating fees is the only way to restore sustainability. The basic premise seems to be that a demand-driven system, with significantly increased student enrolments, necessarily requires only one possible change to the funding system: allowing universities to set their own fees at whatever level the market will bear.

This suggests that fee deregulation is a solution to a problem. However, this is to misrepresent what is actually going on in the government of Australian higher education. I think it’s misleading to represent what the students were saying in the Town Hall as reducible merely to the practical problems surrounding exactly how university education is to be financed.

Fee deregulation is not the solution to a problem, it is in itself the pursuit of a particular aim, the complete marketization of as many aspects of Australian society as possible, as far as possible. It is ideology dressed up as fiscal responsibility, it is the IPA’s agenda, and it has been part of the Liberal Party’s agenda since David Kemp first attempted to deregulate fees in 1999, with Andrew Norton being its vociferous champion ever since. Earlier in this discussion our colleague, Professor Colm Harmon suggested that Christopher Pyne must have loftier aims, ideas and convictions than merely saving money. Indeed he has, and they revolve around aiming to organize as much as possible of Australians’ lives around the market, around thinking entirely in terms of private and individual costs and benefits, and around destroying utterly the concept of the public or collective value of anything – in this case, university education.

The intellectual foundation for this approach to universities, which has as much of a presence in the ALP as it does among the Liberals, can be seen most clearly in Andrew Norton’s Graduate Winners, the Grattan Institute report published in 2012. Norton reduces, as he has since The Unchained University in 2002, all the public benefits of higher education to the private return to graduates in the improvements to their future earning capacity. He’s basically sceptical about the whole idea of public benefits, but in the end it doesn’t even matter for him, because he’s confident that students will be so willing to pay ever-higher fees, that those public benefits will be generated anyway. University fees in this perspective operate as a cunning kind of taxation: you get university graduates, over time more and more of the population, to pay for the public benefits that ought to be covered from the public purse, so that those funds can be used to give tax breaks to the very wealthy and global corporations. Increased student debt? Not a problem, as long as they keep coming through the doors. Make no mistake, the aim of Norton and those inspired by him is to reduce Commonwealth support for universities as close to zero as soon as politically possible, to produce a completely marketized system of higher education. The clue is in the consistency with which Norton and Pyne praise the virtues of market dynamics, paying no attention at all to the discussions of how badly suited the market model is to the specific character of higher education. The opening of the door to private providers is a central part of this vision. In a revealing comment, Tony Shepherd said that it’s mere historical accident that tertiary education is provided by organisations like universities, and it follows from what he’s said that there’s no reason, other than sentiment, why they shouldn’t disappear altogether, to be replaced by the Walmart University.

You’ve also said, in justifying your approach, that you think it’s unfair for the university education of the children of wealthy families to be subsidised by children from families with less well-off backgrounds, and that this is the equity and fairness principle underpinning setting higher fees, offset by bursaries and scholarships. However, the concept of ‘subsidy’ being applied here is wholly misdirected, in two senses. First, it’s like arguing that because wealthy people pay the same amount as poor people for their newspaper, or their gas supply, or their internet connection, this means that poor people are subsidising the wealthy in all those areas. Although it may capture an aspect of the nature of economic and social inequality more broadly, it has no relevance for the setting of prices. Its relevance lies in completely different arenas, most notably taxation. Just as it doesn’t mean that the rich should be required to pay more for their internet connection because they are rich, it also doesn’t justify wealthy families paying more for their children’s education at the same university, sitting in the same seminar rooms, being taught by the same academics.

Second, the idea presumes that parents contribute to their children’s university education costs, that this is where the ‘wealth’ lies, rather than in the hands of newly-entered students, who rarely possess a portfolio of shares and investments. The fact is, however, that families, on the whole, don’t pay for their children’s university education: roughly 90% of university students do not receive such support from their parents, accumulating the debt themselves. The majority of Australian parents feel that their financial obligations to their children, in relation to education costs at least, end when their offspring leave school. The whole concept of ‘wealth’ that actually runs through the policy discussions refers to the prospective wealth of ‘graduate winners’, to use Andrew Norton’s ugly phrase, in their future employment, not to the background wealth of  students’ families.

It’s disappointing, then, that the debate appears to have lost sight of the philosophical and intellectual aims of these changes. As Margaret Thatcher explained in a moment of frankness, albeit grammatical constipation, ‘Economics are the method, the aim is to change the heart and soul’. What changes to the heart and soul of Australian universities are being pursued here? You seem confident that we will be able to retain all that we regard as valuable about university teaching, learning and research, but I have to say I can’t see the basis for such confidence, and neither could most of the students at the Town Hall.  Insisting on how committed one is to particular values and principles is all very well, but the salience of that is significantly undermined if at the same time one is supporting systemic changes that undermine those very values and principles.

The view that was being articulated at the Town Hall meeting, and that isn’t reflected in your portrayal of it, was that we need to re-assert the public value of universities, as well as the idea that such value should be financed publically, not privately, precisely contrary to the inclinations of all Australian Commonwealth governments since the 1980s. I don’t know if it’s true that frogs placed in gently boiling water don’t realize they’re being cooked until it’s too late, but it’s an accurate enough analogy for the situation Australian universities find themselves in now. We have been very slow to raise our voices against the systematic re-construction of tertiary education as an entirely private good, perhaps because we’ve been misled by the fact that it characterizes both major parties to a greater or lesser extent.

But it is the public value of university education that needs to be returned to the centre of the debate, and addressed, instead of being made unthinkable in favour of generating supposed problem-solutions that are in fact the core aim of the whole exercise. I would suggest that it’s simply not enough to be content with observing, as Belinda Robinson has, that Australian governments are ‘disinclined’ to invest properly in universities and that this is why we should support fee deregulation. It ought also be possible to show a bit of backbone and defend the case for precisely that adequate public investment in higher education, so often trumpeted as so essential to the nation’s future economic development.

You’ve said that you think the public debate to date hasn’t been very sophisticated. My own view is that it would enhance the University’s reputation enormously if it played a role in bringing these concerns back into the debate, including your own contributions to it, and I, together with a number of the other Senate Fellows, would be grateful if you would give these observations your considered attention.

Regards, Robert van Krieken