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In the media: VC in pre-emptive strike to head off Pyne on levy

The Australian, 08 Apr 2015

by Andrew Trounson

University of Melbourne vicechancellor Glyn Davis appears to have made a pre-emptive move to head off any plan by Education Minster Christopher Pyne to adopt a progressive tax on high fees as a way to allay concerns among crossbench senators that fee deregulation will lead to excessive prices unless part of a wider review.

Writing in the HES today, Professor Davis said adopting a levy risked entrenching the current discipline cluster funding rates that don’t reflect the cost of delivery and are unfair since students in areas like law and business contribute a much higher proportion of the cost of their degrees than other students. He warns that a wider review of funding is needed before ideas for a levy or a loan cap could be pursued.

His comments reinforce the Group of Eight’s call for a pause and a review because it is concerned the government’s plan to deregulate fees will be compromised in ongoing negotiations to secure the support of the six Senate crossbench votes it needs to pass legislation.

The prestigious Go8 stands to gain most from the government’s plan to fully deregulate fees since they have the strongest brands and carry out the bulk of the sector’s research, which remains chronically underfunded. As a result Go8 universities are likely to be hit most by any levy on high fees depending on how the tax operated.

“The model of deregulation proposed in the present legislation allows universities to deal with the inequities of CSP rates through differential charges and cross-subsidies. A levy would limit this ability, while imposing significant new reporting and regulatory monitoring,” Professor Davis said.

A progressive tax on high fees has been proposed by HECS architect Bruce Chapman and sector consultant David Phillips, while another version has been put forward by Victoria University vice-chancellor Peter Dawkins.

Such a tax is expected by sector insiders to be the most likely strategy Mr Pyne would adopt if there were a third attempt to secure Senate support for fee deregulation, with the details of any levy possibly outsourced to an expert panel.

That could allow a revised package to be ready by in time for the August or September parliamentary sittings.

But some suggest that the government wants the idea to be publicly supported by some of the crossbenchers before it adopts it.

Professor Chapman has offered to brief crossbenchers on the levy idea and has met senators Ricky Muir and John Madigan.

“The government thinks it (a tax on fees) is a goer,” said one sector insider.

“That’s the way they are heading,” said another.

The government has already said it planned to put the legislation to parliament again, and there is speculation that if it can’t secure Senate support for amendments it will put an unchanged bill to the vote, giving it a double-dissolution trigger.

David Phillips backed Professor Davis’s concerns. He said the levy was only ever meant to be a “tweak” to what he still believes is a flawed package overall.

“It was only ever intended to address problems in one part of the package. It was never of itself a comprehensive reform. It was an improvement to a package that in my view was still flawed,” Mr Phillips told the HES.

While a levy addresses concerns about the potential for excessive prices in a deregulated market where cheap loans and status could fuel price rises, Mr Phillips remains concerned that plans to open up the market for bachelor degree and sub-degree subsidies to non-universities is too rash and should be staged.

“I’m not opposed to opening up the market but the government would be wise to move with more caution given the abuses that have happened in the VET (vocational education and training) market,” he said.

But Adrian McComb, chief executive of the Council of Private Higher Education, said such concerns were groundless given high-bars to entry in higher education. He said the expansion of the private sector would be slow and gradual.

“Regulation and course accreditation is entirely different in higher education compared to VET, and I don’t see a massive expansion as a result of this,” Mr McComb said.

Source: The Australian

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