Kim Beazley is right to be critical of the full-fee undergraduate places at Australian universities, but for the wrong reasons.

What’s wrong with these places is not that they undermine fair access. It is that for arbitrary reasons they treat alike students very differently. Students in full-fee places often pay twice or more as much as other Australian students for exactly the same education. Their high fees are then used to provide a second subsidy to the students who have already received a government subsidy.

There is no good reason for this differential treatment. The twin-subsidy students are not necessarily from poorer families. To the contrary, students from private schools dominate entry to subsidised university places. Nor do full-fee students lack merit – many of them are in the top 5% of school leavers.
The reason they miss out on HECS places is that they fall outside the government quotas imposed on every public university. These quotas lead to artificial shortages of student places. If Labor was promising to abolish quotas, its opposition to full-fee places would be defensible.

But that’s not what it is doing. Its policy is that because some students fall short of what is needed to get a within-quota place they should miss out entirely, possibly shattering dreams of a particular course or career. And for what? Labor’s policy creates losers but no winners.

While the quota system exists, the full-fee places lessen its opportunity-crushing consequences. It’s second-best policymaking, but no excuse for Labor’s third-best alternative.