Gillard government microregulation of higher education is damaging a vital sector

One of the most important industry sectors in Australia is higher education.

In a competitive globalised economy the premium earned by people with innovative ideas is enormous. High wage advanced economies like Australia need to compete in areas of relative strength. Research and higher education is one such area.

We hear a lot about the fact that the resources sector is contributing a huge amount to our export earnings – and so it is, with coal and iron ore the two largest generators of export revenue in 2010-11. But the third largest generator of export earnings in that year was education – earning almost $16 billion.

Our major research universities are vital national assets. It is critical that we encourage them to be active, innovative and internationally competitive. Unfortunately, the Rudd Gillard Government is going in the wrong direction – imposing detailed micromanagement on universities rather than freeing them up to make their own management decisions.

Last year the Rudd Gillard Government established a new regulatory body in higher education, the Tertiary Education Quality and Standards Agency. In private discussions in recent months the vice chancellors of two universities have told me of their frustrations with this body.

Now the Dean of the Law School at University of New South Wales, David Dixon, has made some powerful criticisms in a public forum. According to a report The Australian last week, Dixon called TEQSA “overreaching, excessive and ill-informed.” He added that “invaluable time and energy is being diverted into worthless compliance exercises.”

TEQSA is apparently seeking to impose specific requirements on law schools. For example, if they are to award an honours degree, this must require an extra year of study (rather than awarding honours based on academic merit in a standard course, as most law schools have always done.)

Professor Dixon makes the point that Australian universities are competing to attract students who might otherwise go to the UK where they can do a three year law degree (including honours) – compared to the minimum already required in Australia of five years. The requirement to add another year before a student can gain honours will make the Australian degree even less attractive by comparison.

While Professor Dixon makes a good point, in my view there is an even more fundamental objection to TEQSA’s approach. These decisions should be made without the assistance of federal bureaucrats. Until now, the standards for degrees have been set by the relevant faculty, taking account of such matters as the requirements set by professional colleges (such as a Law Society or College of General Practitioners or Australian Institute of Architects) and also of the competition in the marketplace from other universities, in Australia and abroad. That system should remain.

The great American research universities like Harvard and Columbia and Chicago are free to determine their own course requirements – they do not face second guessing from government bureaucrats. If our universities are to be world class, the last thing they need is prescriptive micromanagement from a government agency set up, in Professor Dixon’s pithy phrase, to crack down on “dodgy language and cooking schools.”

In my view under the Rudd Gillard Government policy for the higher education and research sector is going in precisely the wrong direction. There should be less control over universities rather than more.   Government should determine the number of places it wishes to fund through the HECS system and allow universities to offer those places (although it should be the student who chooses which university to go to, and the funding should follow that choice.)

But beyond that I would like to see universities free to allocate as many places as they want in whatever courses they choose; to charge fees for non HECS places; and to raise money from other sources in addition to the public sector funding they receive.