The Grattan Insitute is cutting a dash in education policy.
Earlier in the year its Learning from the best asked some hard questions about why our schools are spending so much more money without producing any more education. Now Grattan poses another very good question: why is the taxpayer coughing up $6 billion a year to subsidise undergraduate education?
The political answer is that people have come to expect it. Three in four Australians think that students already pay more than they should have to. The intellectually respectable answer is that while graduates themselves benefit from higher ed, so do the rest of us.
And that’s where Grattan makes its stand. It argues that we’re paying more than our fair share, to those who least need it. Public subsidies range from 81% of the cost of a science degree to 16% for law. Most undergrads are charged only a quarter or a third of the cost of their degree.
Graduate winners author Andrew Norton points out that this haphazard arrangement owes more to history than to logic. His logic would lead the federal government to charge according to actual public/private benefits and thereby save about $3 billion a year.
There are debates to be had among economists about Grattan’s calculations. For example, ANU economist and architect of the transformational HECS Bruce Chapman argues that public benefits are more elusive, diffuse, and cumulative, and therefore larger, than Norton allows.
But the big questions won’t be coming from economics. Economics is good at revealing who’s in for their chop, and, specifically, how higher education ends up being a form of middle-class welfare. It runs a nice, clear, testable argument, a relief from the cant and waffle of so much debate in education. And economics forces us to confront choices. Will we spend the money here? Or there?
So economics is attractive to think tanks. They need to cut through the noise with sharp, clear policy, numbers attached. But life, and therefore policy, is more complicated.
For example, only an economist could make the heroic assumption that all the public consequences of higher education deserve to be called “benefits”, neatly divided into “financial” and “non-financial”. For Norton the latter include, for example, graduates’ tendency to be better behaved (less crime), healthier (lower public health costs), and more tolerant.
But what about the blinding wizardry of the MBAs who brought us the GFC? Or the contribution of university-trained lawyers to an ever-more litigious society? Or medicos who congregate where need is least?
More generally, higher education contributes to intellectual arrogance, a sense of entitlement, and a disdain for knowledge won from practice and experience, and it therefore does an ordinary job of its main task, occupational education.
Only an economist could fail to wonder whether the road to hell is paved with good economics. What Grattan proposes is one more step along a journey started in the mid-1980s, when HECS and full-fee places for international students were introduced. These policies have been pursued by both sides of politics, and in a common direction: to market, to market.
Markets often look rational when you look at the choices of individuals, as Grattan does. Can and will they pay more for a degree? Grattan says yes, they can, so let’s do it.
But millions of such decisions can leave everyone worse off. The marketisation of higher education has fuelled credentialism, with every occupational group chasing ever-longer and “higher” (i.e. theory-based) qualifications in pursuit not of a bigger pie but of a bigger slice of it.
Aside from the waste involved in padding out courses with abstract fluff, market-fuelled credentialism in Australia has helped diminish the scale and appeal of work-based education, the so-called “skills” sector. And it has helped to produce a lot of graduates nominally trained for their occupations but in fact just about useless. Consider teacher education.
Economics doesn’t notice such complications. But where do they take policy? In directions different from both what we’ve got and what Grattan recommends, I would guess. Perhaps the next Grattan project could make the economists sit down with people wearing other intellectual specs and see what they come up with.
In the meantime, Grattan is on the money. The savings it finds will be irresistible to an Abbott government. And, who knows, perhaps Labor will be tempted by the carrot of $3 billion? It would go a long way towards paying for Gonski.
*Dean Ashenden has been a consultant to state and federal education ministers and agencies, and was co-founder of the Good Universities Guides