Labor’s centralised higher education system poses risks, says Andrew Norton

Labor’s higher education reforms risk imposing a technocratic system which produces graduates who do not match Australia’s economic needs.

Australian National University higher education researcher Andrew Norton. Picture: Aaron Francis

Labor’s higher education reforms risk producing a technocratic system that will mire universities in bureaucracy and produce graduates who do not match Australia’s economic needs, according to researcher Andrew Norton.

In a new paper Professor Norton argues that a new body, the Tertiary Education Commission proposed in the government’s Universities Accord review, is likely to over regulate funding leading to a misallocation of places and a reduction in student choice.

The setting up of the new commission to oversee higher education is expected to be a recommendation in the accord review’s final report, due in February. “Its authors clearly want to replace current decentralised modes of decision-making, under which universities and students co-ordinate the allocation of student places to courses, with a more centralised and bureaucratic system of control,” Professor Norton says in the report published by the Centre for Independent Studies.

The details of the TEC’s role are not yet known but Professor Norton said there is a clear preference in the accord’s interim report for adopting a centralised approach to deciding how much funding, and how many student places, would be available for individual universities to deliver particular courses.

He said the centralised approach was unlikely to outperform the demand driven system set up by Labor over a decade ago which gave universities freedom to decide which courses they would offer and how many students to enrol.

Professor Norton also believes that the Morrison government’s Job Ready Graduates policy — which used differential fee levels to try to steer students away from courses such as business and law and into nursing and teaching — is also better than a centralised approach.

“It did not intervene in university supply decisions, instead giving universities more flexibility in moving public funding between courses,” he writes in the report.

He said that a system in which a TEC is responsible for the number of student places offered in each course at each university, guided by job demand forecasts by the government agency Jobs and Skills Australia, would lead to slow decision-making on a bureaucratic cycle.

“Bureaucratic systems could lock public funding into yesterday’s labour market needs, causing stranded resources that cannot be used effectively,” his report says.

Professor Norton said the Albanese government had “already shown appetite for this level of regulation”.

First there was its announcement (following an election promise) of 20,000 new university places and the government specified how many would go to each university, which course types they could fund, and who they could go to. They were restricted to disadvantaged students.

Then in August this year the government offered new student places to train graduates for the AUKUS nuclear submarine project. Universities which applied had to provide detailed strategies and timelines for using the funding.

“It reflects a low-trust, high regulation approach to funding higher education with strong parallels to the Universities Accord interim report,” Professor Norton writes.

In the report he compares the way numbers of nursing and engineering students changed over the past decade to match demand under university funding systems which were not centralised.

Professor Norton contrasted this market driven approach to Australia's medical training system in which the number of student doctors is decided by government. The result is “not encouraging”, he says.

“Australia relies on doctors from overseas and has many doctor job vacancies.”