Thursday, May 29, 2014

CEO Danny Bielik's article in the Australian on the changes in Higher Education!

Choice of access key benefit of reforms

In all the noise about $200,000 university fees, one of the key messages of the government’s
reforms is being lost.

Until now, higher education students have had very little choice. Public university number one, two
and three has been the choice in most capital cities with even less choice in regional areas.
Yes, they use brand names like Sydney, Macquarie and Federation, but in reality they offer similar
courses at identical prices, no matter where they are located or the quality of their offering.

Private providers, on the other hand have typically had narrow offerings that don’t offer much threat
to this government-imposed order, because of a bifurcated pricing structure.

No access to capital funding such as the EIF (Education Investment Fund), no access to subsidies
like at government universities and a 25 per cent education tax on their loan scheme.

What other kind of industry gets that level of taxpayer- funded protectionism against private
Universities owned by states and funded by the commonwealth continue to be, by-and-large, the
order of the day.
And these same universities are sliding down the international scales. What a surprise!

Yes, universities have independent boards but in reality I will call them for what they are — a cartel.
And what is it that this cartel really doesn’t like about the government’s proposed reforms?
The combination of uncapping of fees and the broadening of the HECS offering to private providers
on a more-equal footing is the modern-day equivalent of the antitrust movement in the US at the turn
of the 1900s.

This is right at the heart of the reforms the government has put in the budget. And it’s all lost in the
noise about expensive degrees. Whether by design or not, this is actually very clever.
Should these reforms pass the Senate, Australia now has the opportunity to completely remake the
higher education sector.

A more level playing field will become more inviting for high-quality foreign-owned institutions and
encourage investment by homegrown ones.
This should stimulate the largest investment boom in tertiary education capacity Australia has ever

Private investment — not taxpayer investment — leading to diversity and choice for students, local
and foreign.
Why shouldn’t an Australian student have access to some of the best institutions of learning and
research in the world?

Wouldn’t it be nice to attend Yale or Harvard; INSEAD, Nat ional University of Singapore or Oxford
in Sydney or Melbourne; Albany or Wollongong?
Wouldn’t that be attractive to international students who are now being drawn to Singapore and

Think how many sustainable jobs that would create and what it would do to our economy?
We sometimes send strange signals as a country — on the one hand we want to throw taxpayer
money at foreign car manufacturers to keep jobs that make no modern economic sense.

But we also demand the same government use taxpayer money to prevent foreign providers of highquality education setting up shop.
What is an educational investor to make of this?
Yes, in this new paradigm Australian universities will have to compete.

Or we can leave up the walls of protectionism and continue to pour money into further decline.