Interview with Andrew Norton

Here’s a longish interview I did via email with Andrew Norton, who many readers may know from his writings at Catallaxy. Andrew is a research fellow at the Centre for Independent Studies and also works for the University of Melbourne. He wrote a paper on VSU that was published in August 2005.

You not only argue against the Higher Education Support Amendment (Abolition of Compulsory Up-front Student Union Fees) Act 2005, but also against the status quo. Could you summarise your position?

The whole VSU debate assumed that we needed these separate amenities or student union fees to provide student services. But this was increasingly becoming untrue even without VSU. Historically, the separate amenities fee was necessary because universities were not allowed to charge for tuition. If they were, they could have just combined the two charges. After all, what’s the point in having two fees for one bundle of services, some of which were academic, and others non-academic? But from 1974 to 2004 universities could not charge Commonwealth-subsidised students for tuition – HECS went to the government, rather than universities. The amenities fee was the only way to fund student services. In 2005, HECS was replaced with a student contribution amount that went to universities. In principle, universities could then merge all their fees into one. None of them did, because the maximum student contribution amount was too low. If the student contribution amount had been higher, the VSU bill would have had little impact.

I prefer the merging of the two fees because separate amenities fee funds have been quarantined from proper internal university budget scrutiny. While teaching has been starved of resources, student unions have kept their inefficiencies. We would not get these muddled priorities if all parts of the university had to compete for the revenue raised from students.

It has been suggested that students get to vote on whether VSU will be implemented on their campus. What do you make of this?

This was a fall-back position for Education Minister Brendan Nelson, when he thought his VSU bill as going to be rejected in the Senate. As it has turned out, his bill passed and VSU will be implemented at every university, regardless of what students think.

In any case, voting on VSU wasn't a good policy. We need to think of universities as marketing services to students, most of which are academic, but some of which are non-academic. Some universities, generally those with relatively young and mostly full-time student populations, offer a large number of non-academic services. Their students have the time and inclination to use them.

Universities need to make long-term commitments to students. The shortest undergraduate bachelor degrees take 3 years. Many undergraduates will be at university for five or six years. But how can universities commit to providing services over all that time, if the services can be voted out within that period?

A far better way of dealing with this is to have markets. Those students who want services will go to universities that have them, and pay more. Those students who do not want services will go to universities that don't have them (or don't have many), and pay less. That way, everyone gets their choice - rather than having something they don't want imposed on them politically, possibly half-way through their course.

The Senate’s Employment, Workplace Relations and Education Legislation Committee has in its report criticised the impact of VSU in Western Australia. Labor South Australian Senator Penny Wong has said that “Health services, child care, sporting infrastructure, counselling, clubs and societies, orientation activities, financial services, housing services and legal support services are all hanging in the balance”. Will the impact be this widespread?

This is an exaggeration. Sport and clubs and societies will manage without subsidy, as they do in thousands of voluntary associations around Australia. Health services, apart from dental services, are largely funded by Medicare anyway. If student associations are half-competent they will attract some members without compulsion, as they did in Western Australia when it had VSU. Universities will pay for some other essential services. And don’t forget that students will have hundreds of dollars more in their pockets each year from not having to pay the amenities fee at the start of the year, which they can use to buy services they used to get as part of the amenities package.

Leaving aside the allegations that Canberra is deliberately crippling a “breeding ground” for ALP candidates, do you believe student unions can be trusted to manage student funds?

Only a small minority of student union office-holders are dishonest, but few have the management skills needed to run large organisations, or to make good judgments on the recommendations of permanent student union staff. I think most student services should be run by the university or private contractors.

Your suggestion is to allow university administrators the choice of whether they will implement VSU. As a long-term solution you also recommend the raising of student contribution amounts to cover the loss of the amenities fee. Is up therefore the only direction prices for a tertiary education can go these days?

I think universities should be able to decide what services they offer and what prices they charge. I don’t think there is any place for compulsory membership of student organisations, though whether the government should do anything about it is another matter. Prices for tertiary education are more likely to go up than down. Commonwealth-supported students are getting their education at well below cost, so their fees will have to go up over the medium term. Prices for full-fee students sometimes go down, in real terms at least, reflecting the competitive global market they operate in.

Does America’s higher education system contain lessons for Australia?

America doesn't have a higher education “system” in the way Australia does. Here, there is a lot of conformity imposed from Canberra. While there is some federal funding in the US, public universities are primarily state institutions. Also, there is a large private higher education sector, which includes most of America's (and the world's) top universities. In Australia, the private higher education sector is very small, and largely operates in niche areas rather than competing with the public sector.

The great strength of American higher education is its diversity. Almost all Australian universities are conceptually roughly equivalent to the state public universities in the US. But to that the Americans add: elite research universities, teaching-only universities, liberal arts colleges, religious universities, community colleges, corporate universities, and for-profit universities. The Americans cater to a much wider variety of educational needs and possibilities than we do, and are much more innovative.

In Australia diversity is diminished by two main things: funding restrictions and price control in the public sector, and rules against setting up teaching-only universities. Both these obstacles to diversity ought to be removed.

If mass student protests have minimal impact, then what is the political way forward?

Arguments are more likely to work if the government has trouble rejecting them. They have no in-principle reason for rejecting a higher student contribution amount. They wanted a higher amount in their original 2003 reform package, and they already support complete deregulation for full-fee students. This is the only argument with a realistic chance over the next two years.