Uni shake-up mustn’t reheat the Gonski fallacy

A new Gonski-style funding model for universities will not improve higher education outcomes, but will prove the federal government has not learned the lessons from the tried and failed approaches of the past.

Education Minister Jason Clare has stressed a key objective of the Universities Accord will be re-tilting admissions and funding policies in favour of disadvantaged students. This includes a possible Gonski-style ‘needs-based’ university funding approach and guaranteed admissions for Indigenous and rural students. Even means-testing of tuition subsidies (in effect, a penalty on better-off students) hasn’t been ruled out.

While there are many sensible reform options proposed by the Accord’s reviewers, Clare’s apparent emphasis on increasing and redistributing inputs as the system’s silver bullet is a clear echo of Gillard-era education reform.

Gillard introduced the so-called ‘demand-driven system’ principally intended to increase university participation from disadvantaged students and to uncap funding of subsidised places. But the Productivity Commission’s review of the policy graded it a “mixed report card”. Namely, while it did dramatically increase enrolments and funding overall, it also made little dent on equity grounds. In effect, the policy mostly improved university access for middle-class, and middle- and low-ability students, rather than the most disadvantaged.

An even more illustrative case was Gonski school funding reforms, also spearheaded by Gillard. As is now clear, this funding splurge has not substantially reduced funding inequities, raised student achievement or reduced achievement gaps. On all counts, progress has gone backwards, despite an additional $20 billion in annual spending, and around 20 per cent more per student in real terms.

The cautionary tale from these expensive and ineffective policy experiments is that simply increasing and redistributing inputs is no way to improve an education system. That lesson must be learned if we’re to avert billions of additional spending going to waste.

Of course, the government is right  — as was Gillard’s at the time —  to highlight the persistent problems of educational inequality. But it’s wrong in its proposed solutions. Rather than fixating on inputs, funding reform must be focussed on lifting outcomes and improving incentives.

The Gonski fallacy that a lack of inputs was the source of educational underperformance should not be repeated. Just as Australian school funding is around 18 per cent higher per student than the OECD average, university funding (while admittedly a fickler international comparison) is around 22 per cent higher per student.

Despite this, university students’ reporting of teaching quality and experience have long been disappointing (and certainly predate Covid-19 era online learning).

More could be done to make university resourcing more impactful. Some funding could be quarantined for teaching and universities could better value the work of teaching-based academics.

A healthier dose of competition between universities could better stimulate innovation in students’ course offerings. A better sharing of financial risk between the taxpayer, university, and students could create a more sustainable compact for consumer protection.

And the performance-based funding arrangements — that have only cautiously been implemented to date — could be a vehicle for driving greater efficiency.

The government may also need to moderate its ambitions for expanded university enrolments. Australians already spend more of their life in formal education than any other OECD country. But the salary premium — increased earnings of university degree-holders compared to school-leavers — is lower than in most countries.

As the Productivity Commission has shown, the market is not valuing university degrees as much as it has in the past, due to a glut of qualifications in some fields. This ‘degree inflation’ hits disadvantaged students the most, as was outlined in Prof Stephen Schwartz’s CIS paper.

The government may need greater patience in addressing university access gaps to ensure that reducing inequality doesn’t come at the expense of the sector’s quality.

Unfortunately, the primary reason of underrepresentation of disadvantaged cohorts at university requires a long-term correction of school underachievement, rather than a university funding and admissions fix.

As the watering down of admissions policies over recent decades shows, it’s easier to increase the number of enrolments than it is to increase graduations.

Dismal and worsening completion rates — particularly of lower-ability and (the disproportionately disadvantaged) students who balance work and study — reflect issues with onboarding and remediation of students who could use more support.

The government could embark on meaningful university reform through this Accord, but for it to achieve its lofty ambitions, it must avoid another reheat of failed inputs-based approaches on education reform.

Glenn Fahey is program director in education policy at the Centre for Independent Studies.

Photo by Emily Ranquist.