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Uni deregulation? It’s the budget bottom line, stupid
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Peter van Onselen

Contributing editor

Illustration: Eric Lobbecke
Illustration: Eric Lobbecke Source: Supplied
THE government is putting health and education policy reforms front and centre between now and the next election. Notwithstanding the rise and rise of national security as an issue set to dominate political discourse, the policy debates surrounding higher education reforms and reining in Medicare costs are central to budget discussions. They are what you may describe as core elements of the economic debate.

This creates an interesting *dichotomy. In the minds of *voters, Labor tends to register as the preferred party to manage health and education policy, but according to Newspoll the Coalition has long dominated as the best party to manage the economy. Which is why a Galaxy poll two weeks ago showing more voters, since the budget, trust Labor to manage the finances must have been chilling for government MPs. Arguably, managing the economics of health and education into the future is becoming more central to fiscal sustainability, given the financial constraints on government and the ageing of the population.

Last Saturday this column praised the job being done by Education Minister Christopher Pyne when it comes to setting out his agenda and negotiating reforms through the Senate. He indicated his respect for the bicameral process, and he is tackling higher education reforms previously thrown into the too-hard basket, including by the Howard government.

But there are problem areas in the delivery of higher education in this country, and it appears the minister is turning a blind eye to at least one of them. In so doing, contradictions have developed in the way the Coalition deals with evidence-based policy work in education initiatives compared with reforms in healthcare.

Last weekend on Sky News Australian Agenda, it was put to Pyne that “because international students pay three or four times the fees of domestic students, standards of entry have slipped for international students, particularly English proficiency standards. Is this something that you are across and concerned about?”

The minister responded: “No, I am not concerned about that because I asked the Kemp-Norton reviewers, David Kemp and Andrew Norton, to advise me specifically on the issue of whether change that had been made over the previous few years had affected quality in our higher education. Because there was a lot of anecdotal evidence, that was the case and a lot of talking over the water cooler, if you like, about that. And the answer came back that in fact the reforms of recent years had not affected quality in higher education, and I’m satisfied with that.”

In fact, the review the minister used to bat away concerns about international student standards didn’t even look at international students. It wasn’t included in the terms of reference, no mention of them was made in the final report, and the authors didn’t even anecdotally address the issue with the minister when handing him their report. Put bluntly, the minister misrepresented the findings of his own report, or didn’t know what they were, to avoid answering an important higher education concern. So we are left with a situation where Pyne acknowledges anecdotal evidence exists about the standard of some international students, but he uses an unrelated review to summarily dismiss these concerns.

Contrast the dismissal of anecdotal evidence in higher education policy with Health Minister Peter Dutton’s use of purely anecdotal evidence to justify totemic changes to Medicare. On Adelaide radio station 5aa on Wednesday morning, Dutton was asked: “Is there a presumption that people are overusing the Medicare system”, and that is why co-payments for GP visits were included in the budget, to send a “price signal”? Dutton responded: “That’s the anecdotal advice from a lot of doctors that we speak to.”

Incidentally in that same radio segment, the head of the Australian Medical Association dismissed such claims. More important, we already know from Senate estimates hearings earlier this year that the Department of Health has not undertaken any quantitative research into the usefulness or otherwise of a price signal to deter unnecessary doctor visits. Nor has it done research into whether anecdotal evidence that people do unnecessarily visit the doctor is more broadly applicable.

So we have a situation where higher education anecdotal evidence is dismissed, with reference to a study that didn’t even examine the issue in question, versus reliance on anecdotal evidence in healthcare policy formulation, with no empirical research done to investigate the veracity of the claims. Why might this be?

The answer is fiscal: Pyne needs international students to prop up his plans to cut funding for domestic students by 20 per cent as part of his deregulating reforms. Dutton is looking to rein in spending on health, irrespective of whether waste exists via unnecessary GP visits. Balancing the budget now and into the future is important, but most readers would surely agree that it needs to be done with considered evidence-based inquiry, lest unintended consequences develop.

Tackling the issue of international students being admitted to university courses that they are ill-equipped to undertake (usually because of a language barrier) is a delicate one. The viability of many degrees depends on strong international student numbers. They bring in more than $15 billion in revenue annually for our universities, making higher education the third largest export industry.

It is also an important backdoor migration system: if you study in Australia you are eligible for permanent residency and ultimately citizenship. This is just one reason so many international students are willing to pay through the nose for their degrees, and it is probably why the government and universities aren’t interested in debating standards.

If you look at the growth in student numbers coming here from overseas, the hub is China. In 2001 China was the fifth largest provider of international students to our universities, with 8000 arrivals. Last year they topped the list with 94,000 students studying here, nearly three times Singapore, which came in second. The scale of the growth is phenomenal, and with anecdotal evidence that standards of entry perhaps aren’t what they should be, no one wants to pick at the sore.

Interestingly, if Pyne were merely deregulating the university system, as his reforms stipulate, thereby allowing better Australian universities to charge more for entry, that might reduce their reliance on international students to cover government funding shortfalls. But he is using deregulation — a potentially very worthy policy goal, and certainly one Liberals should philosophically support — to justify a 20 per cent funding cut to help the budget bottom line, which means vice-chancellors will need to continue to rely on international students to balance their books, irrespective of anecdotal evidence about lowering standards.

Peter van Onselen is a professor at the University of Western Australia.
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