Tertiary Fees Cap
November 27th, 2008 at 8:10 am by David FarrarThe Herald reports:
The New Zealand Vice-Chancellors’ Committee yesterday called on the National Government to view universities as national “infrastructure” that was in desperate need of investment.
The committee’s primary concern was that student financial support had been put ahead of university funding.
Victoria University vice-chancellor Pat Walsh said: “Put simply, the financial interests of students have been put ahead of the universities they attend.”
Th committee said the OECD average was for 82 per cent of government funding to be devoted to institutions and 18 per cent to student financial support. But in New Zealand 58 per cent went to institutions and 42 per cent to students.
The VCs are absolutely right. But you know they are a few years too late in complaining.
While in theory this would mean taking money from student’s allowances to give to the universities, University of Auckland chancellor Hugh Fletcher said “politically that’s not a reality, is it?”
Nope.
Professor Walsh said its preferred outcome was to get $230 million to $250 million a year from Government to avoid a “zero-sum game scenario of institutions versus students.
The VCs get 0/10 for timing. I presume they have read headlines about a decade of deficits, the recession getting worse etc.
The Vice-Chancellors’ Committee said if universities were not going to get increased funding, it would need more money from fees – which is prevented for domestic students by the “fees maxima” cap.
It said New Zealand’s fees were on average cheaper than in Canada, Australia and the United States.
Education Minister Anne Tolley said National’s policy was to retain the fees maxima “so no doubt we’ll disappoint them [vice-chancellors] with that”. She said there were no great plans to change the proportion of funding to students and to universities either.
The cap on fees tertiary institutes can charge is basically a crap policy. National I suspect knows it is a crap policy but pledged to retain it as Labour would have scaremongered about higher fees if you vote National. We have an inherited legacy of bad public policy, and sadly National has ruled out sensible reform.
The motivation behind a fees cap is to keep pressure on universities to keep costs (esp staff wages) down. But this turns universities into a competition for the lowest common denominator and makes universoty councils fall guys for the Government, just as DHBs are.
The Government sets the level of government subsidy and the level of student fees, yet leaves it to the institutions to take the blame for not being able to increase wages etc.
I prefer to keep costs down in universities by that dreaded word competition. I would let universities price their courses to meet demand. Why shouldn’t Vic Uni be able to make a commerce degree more expensive than an arts degree?
And competition is not just on price, but on quality. A law degree at Vic should cost heaps more than a law degree from Waikato, as it is far more highly regarded. Students should have the choice of a cheap B class degree or a more expensive A class degree.
Now don’t get me wrong – I don’t actually want fees on average to be increasing. I’d still want incentives to keep fees down. Some of those incentives will be competition. But the other is putting the right people on university councils. The Government should get rid of price caps, but put people on Councils who will support efficency measures, and strove to keep fees low. But at the end of the day the individual universities need to be able to control both their income and expenditure and be held accountable for it. Taking away any say over income, and making them responsible for expenditure only is not a sustainable model.
Related posts:
- Interest on Student Loans
- National’s Tertiary Policy
- Tertiary Education Costs
- Spending compulsory fees on a pro-compulsion party
November 27th, 2008 at 8:35 am
What competition? The fees would have to be increased very significantly for moving to another city, probably halfway through a degree, to become a preferable option. And that’s only for those fields where there are multiple universities teaching them. I don’t see competition being a factor, until we have three or four universities per major city, all competing with each other for students of all fields.
And what would be the incentive for the right people on university councils to keep fees as low as possible? They’re running a business. The optimum price is not the lowest. The optimum price is the one that brings the most profit, surely.
Vote:November 27th, 2008 at 9:05 am
As long as the Universities here are being run by unions and committees they’ll never be able to compete anyway. What’s the point?
Vote:November 27th, 2008 at 9:24 am
Competition is a pretty crap model for universities in a country the size of NZ – we end up with duplication of the ‘popular’ courses in universities throughout the country – with all of the wasteful replication of resources that accompanies that. We could get a more efficiently performing tertiary sector by not replicating the resources at each university, but instead focusing on each institution’s distinctive strengths. That way we not only have a more efficient sector, but can realistically begin to compete on the international scene, with stronger and better resourced programmes – which is where we need to become more competitive – both to increase the quality of our own research output, and also to attract foreign investment in the form of overseas students and research funding. In many respects the universities need to be considered as one institution (a return to the University of NZ?) – we could learn much from Fonterra…
Vote:November 27th, 2008 at 9:38 am
“The New Zealand Vice-Chancellors’ Committee yesterday called on the National Government to view universities as national “infrastructure” that was in desperate need of investment.”
Sure. We’re not already exporting enough of our young people after partially funding their education so they can turn their backs on NZ with a cheap degree by world standards.
Vote:November 27th, 2008 at 9:52 am
Really?
They haven’t been complaining about funding and investment in education for the last 30 years?
This is something they do – and say – every year, DPF.
Vote:November 27th, 2008 at 9:58 am
The universities have been complaining for some time. I found this from two years ago:
http://www.students.org.nz/files/Press_2006/7-11-06%20-%20NZVCC%20Report%20Highlights%20University%20Underfunding.pdf
We have the ridiculous situation where we are behind the OECD average in university funding and massively ahead in student loans and grants. Advanced Macrame was never more popular.
JC
Vote:November 27th, 2008 at 10:57 am
I look forward to how the Massey VC acts in regard to fees, given his role on the other side of the fence for the past 20 years.
Vote:November 27th, 2008 at 11:31 am
Just as Labour gave us Taxation-by-Stealth, so too must National reverse this process and give us Sensible-Public-Spending-by-Stealth.
1. Universal Student Allowances “switcheroo” to *replace* interest free loans. Sell it to the public as a “better deal” and “no debt”. Link the allowance to performance in Exams.
Vote:2. Keep the allowances at fixed amounts that do not increase at the rate of inflation, until the level of student funding is at correct/ sensible levels relative to university funding. Leave student loans to the market.
3. Increase funding to the Universities at above the rate of inflation.
4. Gradually reduce funding to courses that are “non-essential” to the productive economy (media studies anyone?)
5. Introduce areas of excellence for each institution. Increase funding to these departments.
6. Bring in tax-rebates on R&D spending by companies that is done in association with NZ universities.
7. Introduce more government funded scholarships for bright students that perform well at each level – first year through fourth.
8. Encourage the development of high quality 1-year MSc degrees like the UK.
November 27th, 2008 at 11:42 am
How about no funding to Universities. Just fund students. (insert preferred voucher system here). Or even better combine the Universities into one University of New Zealand (with city campuses).
Vote:Vic Uni can sell their property and move to Porirua, Auckland sell and move to Otara. They save money and find that it is cheaper to run etc.
The tiger Asian economies found that it was better to 100% fund primary and secondary education and bring everyone up to a high level that it is to fund tertiery education. More bang for the buck.
November 27th, 2008 at 12:20 pm
Who wants to listen to the broken down socialist who destroyed our biggest company. I refer to Fletcher. He is advocating more of the same. Fire him and a whole lot more of them and fund the students at primary, secondary and tertiary. Get some better attitudes among the whole lot.
Vote:November 27th, 2008 at 1:17 pm
I don’t recall the VCC doing much more than complaining in the 14 or so years I’ve been involved in tertiary education. You could distill their strategy over this time into a single sentence: leave us alone and give us more money. I can’t see that working now, I can’t see it ever being particularly strong.
Government’s a price maker in tertiary education in many countries, including in Australia, and the alternative, entirely unregulated fees, would blow-out debt. I think you’re being too simplistic in your commentary David. Probably the single biggest factor in constraining student debt was Labour’s decision to regulate fees. The student loan scheme was not designed to accommodate fees as large as National allowed to develop, if your policy is to let the market decide the price for students, you’d first need to redesign the loan scheme.
I do, however, agree with you about governance reform however I don’t think it’s a complete solution. The failures at CPIT for instance were the function of both governance and management.
Vote:November 27th, 2008 at 6:33 pm
A bit more private philanthropy wouldn’t hurt: Auckland uni launches $100m campaign.
They may be whining, but they also acting. They’ve raised $48 million dollars already! And when I say ‘they’, I really mean ‘we’
Vote:November 27th, 2008 at 7:41 pm
Not cited above is the Auckland University Chancellor’s suggestion that law students pay more as they have higher earnings capability than an arts student. I assume that he would agree to drop the fees for Engineerng students on the basis that their renumeration and fees have been screwed into the ground by accountants and lawyers who hold the purse strings. Not to mention consulting engineers being forced to work under terms of engagement that law and accounting practices would not tolerate.
Vote:November 27th, 2008 at 11:27 pm
The VCs ignore the fact that much of the $ spent on student support in the OECD stats is student loans for fees – this is paid directly to the universities by govt.
Vote:DPF – hard to see that an unregulated fee system will work when the loans scheme provides 0% loans – this undermines any price sensitivity from students and means fees will rise faster than a “pure” would allow. As long as govt is both the main funder and owner of the “sellers” and giving free finance to the “buyers”, it makes sense for govt to regulate the prices.
Gotta agree tho – what are the VCs smoking that makes them think this is the right time to ask for an extra 1/4 billion a year for doing nothing more than they are already?
November 27th, 2008 at 11:37 pm
Take any claims from the VCs with a grain of salt. For institutions dedicated to quality research and peer-reviewed excellence, the universities’ “research” and lobbying for funding from govt is generally based on bogus numbers. I’d hope that a student at any NZ univeristy would get failed if they submitted a paper with analsis as shonky as the average NZVCC funding whinge. Not only have they ignored the fact that a large slice of student funding is loans advanced for fees paid directly to unis, they usually ignore research funding that has been separated out from per-student tuition subsidies in recent years. Then there’s the q of scale economies, other revenue sources, etc. I’m not saying unis are over-funded (I can’t imagine there’s any amount of money you could give them that would stop them bleating for more), but they’re hardly about to fall over from neglect either.
Vote:November 28th, 2008 at 12:28 am
stephen says on November 27th, 2008 at 6:33 pm:
Because that worked out so well for Owen Glenn. What a nasty piece of work Helen Clark was. Thankfully she is gone forever now, never to blight New Zealand again. Perhaps immigration could refuse her entry back into New Zealand and she can be deported back to Samoa. I’m sure Taito Phillip Fields has a few mates that can look after her.
Vote:November 28th, 2008 at 6:53 am
The heart of the problem in NZ tertiary education is the excessive number of providers.
No piss-ant country with 4 million people can [or should] support something like 8 universities, 19 polytechnics and God alone knows how many 3rd floor PTE bucket shops.
Take a small city like Christchurch for example, by what perverted logic does it get host no less than three major tertiary providers?
Personally I live in hope that some bright spark in Treasury sits down and works out the direct cost overhead savings of forcing radical amalgamation onto this sector. Remember each of these individual providers have a full complement of back office budget sucking bureaucrats – from CEO’s through the entire range of pseudo-managerial place holders – and these fixed cost monsters are where most of the financial value is lost.
And there’s a precident for sweeping tertiary sector amalgamation in NZ. The Australian government did the same exercise nearly 20 years ago. From memory, the Aussie sector was told 5,000+ EFTS makes you a university, anything less than that, you’re TAFE – and you have 18 months to find your dance partners. Ready. Set. Go.
Vote:November 28th, 2008 at 7:31 am
I’m not sure how you can tell if there is an excessive number of providers or not.
Unuiversities have moved into the poosition of being one of the largest earners of foreign exchange, based on the number of international students.
Without this influx (I’ve regulalry taught classes in excess of 75% internationals) there would not have been much scope for expansion.
Nonetheless, the previous Govt’s direction has been about ‘getting students’ to go to ‘varsity (echos of the knowledge wave), while funding to the providers have not kept pace. Recruitment of new staff is umm, very challenging as salaries are not competitive with respect to Australian and North America. Most academics spend 50-80 hours a week working, on a job that nominally pays for 37.5 hours.
Teaching is much harder given the number of domestic and international students with weak backgrounds in english, essay-writing, maths and the like.
The PBRF scheme has inflated individual staff administrative workloads, the boost to research has been at best invisible, and our international rankings have been slipping.
The TIES reported that UK academics now spend on average, 50% of their time on administration issues now and I suspect that is the same for NZ.
Vote:November 28th, 2008 at 7:45 pm
Lesson – stay out of politics, or at least the high-profile type.
Vote: