Uncomfortable conversations ahead for Australian universities

Australian universities face a resumption of the tuition fee deregulation debate when the “dust settles” from the coronavirus pandemic, according to some sector strategists and consultants.

Research strategist Thomas Barlow said that with revenue collapsing “at least temporarily”, some form of fee deregulation – last proposed by in 2014 by Christopher Pyne, who was then education minister, and twice blocked by the Senate – would be “back on the table”.

“[It] would provide universities with a mechanism so they can operate,” he said. “It makes sense to reopen the conversation and think a bit differently about the implications for access.”

Dr Barlow said the key argument against deregulation was that it priced the poor out of university. “But 40 per cent of the population goes to university anyway. Deregulation may afford a mechanism for using the fees, from people [able] or willing to pay more, to help subsidise the education of those unable to pay at higher rates.”

Limits on fees would be needed to protect students and stop loan costs spiralling out of control, he said. “You don’t want the government underwriting a loan scheme where prices are completely deregulated.”

But a carefully designed approach might attract political support by sidestepping the “tension between a wealthy elite and the deprived masses”, he argued.

Stephen Parker, national education sector leader with consultants KPMG Australia, said he would support consideration of tuition fee deregulation as “part of a rebuilding strategy”.

“It should at least be looked at,” he said. “But it can have huge reverberations. There could be universities that just aren’t viable under that arrangement.”

Professor Parker was Australia’s only vice-chancellor to publicly oppose the 2014 deregulation proposal when he headed the University of Canberra. He said the idea had been a “rush of blood” that would have given universities a “sugar hit” but spawned long-term disaster.

“It came from nowhere and wasn’t thought through. It would have led to higher fee and debt levels and lifted inflation,” he argued.

Professor Parker said that if fee deregulation were revisited, there would be questions over students’ tolerance for debt. “Those old days of university at whatever cost, we’ll pay it back mañana – that’s gone,” he added.

“Times have changed. You may find that universities can’t even command [current] fee levels. Value for money and debt aversion – the pincer movement of those two social forces could lead to real change.”

Professor Parker said there was also a need to revisit the “bloated cost bases” of a sector where academic staff constituted less than 45 per cent of the workforce. Universities would need to jettison their “administrative intermediaries”, harnessing self-service, outsourcing, automation and machine intelligence to improve administration and reduce costs, he added.

“I don’t see why a university shouldn’t aim to have no administrators at all,” he said. “Core human resources, finance – [these are] business processes which just cost too much money in universities, because of the way they do things.

“And there’s no reason why an academic shouldn’t share an office. They don’t need all their books. No one ever looks at them.”

Dr Barlow said: “It’s hard to even imagine what things are going to look like in two years.

“But by thinking about what could happen, it will help [universities] position themselves in dealing with policymakers when things return to something more like normal.”

john.ross@timeshighereducation.com