The Australian this week broke the news
that Monyx, the student services company at Victoria’s Monash
University, has been stripped of some of its functions following
allegations that it has “mishandled” student funds. Income from student
fees has apparently been used to fund overseas “junkets” and
postgraduate degrees for staff.

Monyx is deeply unpopular on
campus (notably following an attempt last year to close the student
bar), although the university has defended Monyx’s record.
A university spokesman said “the expenditure on trips and staff courses
was derived from Monyx’s ‘commercial operations'” – evidently failing
to understand that money is fungible, so a company’s expenditure can’t
be traced to one particular source of income.

The scandal is
important because the introduction next month of voluntary student
unionism (VSU) will cut off a large part of student fee income. Part of
the rationale for establishing Monyx in the first place (apart from
avoiding pesky things like student interference with how their money
gets spent) was to make profits from commercial operations that could
be used to fund student services after the introduction of VSU. The
experiment seems to have been a failure; “sources said Monyx could face
millions in debt when the collection of student fees is phased out”.

In
principle there are two ways of ensuring accountability for providers
of student services: either fund them entirely from voluntary fees and
user charges, so that market discipline is allowed to operate, or else
have compulsory fees administered by democratically elected student
bodies. The Monyx experience shows what happens when you give up
democratic accountability but retain compulsory fees: professional
administrators, with no incentive to spend money for the students’
benefit, will instead spend it on themselves.

This should be a
lesson for those opponents of VSU who wanted to keep compulsory fees
just for service activities, not student politics. The reality has
always been that the big areas of waste are non-political – students
just don’t think in such grandiose terms. But there’s also a message
for VSU supporters, who hold as an article of faith that student
politicians can’t be trusted with student fees, but who have become
complacent about university administrators and their private sector
partners.

Peter Fray

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