Opinion: Public good loses out to personal benefits in valuing universities

Professor Giselle Byrnes

Public universities should deliver on the public good – or at least that is the theory. But in New Zealand and Australia, the definition of what value means in publicly-funded higher education has shifted from one of collective societal benefit to a stark emphasis on individual return on investment.

So pervasive is this thinking that the suggestion that we value research-led teaching and learning as an intrinsic public good is easily dismissed, derided as fanciful and idealistic thinking. Politicians and policy-makers may find the redefinition of higher education from public good to individualised commodity an easy and convenient shift but those of us who work in universities have been easily led, too.

When did this shift occur and why? And what does this now mean for universities and for their students?

The fourth Labour government of the mid to late-1980s is usually credited as being the architect of change in the way we view education (and much else) in this country. The focus on market forces, underpinned by deep faith in the results of natural competition, led to the premise that publicly-funded higher education was no longer a right but a service to be procured and consumed.

The 1990s witnessed the expansion of private and public providers and by the end of the decade this demand-driven system, with next to no quality control, followed the libertarian ethos to the extreme.

With the introduction of student loans in the early 1990s, and the formation of a new central government funding agency, the pendulum swung back.
When the Tertiary Education Commission was established in 2003, both funding and policy settings became more tightly controlled; to the point where today a provider’s ability to innovate is seriously compromised.

What this shift in policy and ethos did was to redefine public higher education from being a collective benefit leading to an educated citizenry, to one where only the individual sees the return. This is neoliberalism pushed to the maximum.

Australian experience
The story in Australia is eerily similar, though arguably our cousins across the Tasman have not embraced the free market philosophy as wholly as in New Zealand.

By the mid-1980s in Australia it was clear that universal access to free higher education was no longer sustainable and student fees (as well as the Higher Education Contribution System) were introduced. This, as in New Zealand, signalled the start of the individualised commodification of higher education.

The 1980s saw the sweeping Dawkins reforms, where the previous system of universities, institutes of technology and community colleges were merged into a two-tier system of universities and technical and further education institutions (TAFEs). This period also witnessed amalgamations and the rise of new universities, with a strong focus on equity and access, especially for non-traditional first-in-family learners.

Changes to fee structures in the 1990s, in line with regulation and then deregulation of the sector (not to mention the massive rise in the number of onshore international students in Australia), effectively worked to further reposition higher education as less of a public good and almost entirely in terms of the return on value as measured for and by the individual.

This tendency toward an actuarial approach in valuing in higher education has also been evidenced in the recent Australian public political debates around the sustainability of the current demand-driven system.

Individualised approach
For all its protestations otherwise, the New Zealand Productivity Commission’s draft report into new models of tertiary education, released last week, further entrenches this individualised approach toward tertiary education. While the report pays passing reference to the social good of education, acknowledging that tertiary education does improve the lives of students and, by extension, that of society, by and large it underscores further this notion of the individual return on investment.

The draft report includes a raft of little hand grenades – such as abolishing inter-university mechanisms for quality control, opening up the sector to even more providers, de-coupling research from teaching, loosening up the ways in which we measure student outcomes and abolishing University Entrance.

It briefly notes the public and civic benefits of tertiary education but, on balance, its focus (perhaps unsurprisingly) is on how education contributes to a person’s human capital and how the development of a skilled workforce can contribute to productivity and wellbeing.

The commission variously describes tertiary education as a co-produced "consumer good," a capital good, a "merit good" and a "consumption good." But doesn’t this lose sight of what universities are for?

Surely higher education delivers more than personal benefit. As civic institutions, universities are essential to the maintenance and stability of democracy; they are, in the New Zealand legislated sense, "critic and conscience" of society, and in addition the work they do – both in terms of research as well as through teaching and producing an educated citizenry – contributes to reducing poverty and crime, understanding and managing environmental balance and needs, as well as creating and disseminating new knowledge for its own sake.

If universities are only designed to deliver personal and individualised benefits, such as a good job and a high standard of living, and a private good is the outcome, then at what point do they cease to become public institutions?

If this were the case, as with private universities elsewhere, then high student fees might make sense. If, however, higher education in general, and universities in particular, deliver tangible public benefits, then we need to accept this in the way we think about and describe these institutions. We also need to agree on what those public benefits are.

Tertiary education is good for society as well as for individuals. The onus is on universities themselves to make these arguments. We need to talk about what our universities should do and what ought to define them, not just focus on how much students should pay. We also need a mature public conversation about what our universities are for.

Professor Byrnes is Assistant Vice-Chancellor, Research, Academic and Enterprise at Massey University. She was previously head Pro Vice-Chancellor of the Faculty of Law, Education, Business and Arts at Charles Darwin University in Darwin


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So much was wrong with the 1980's Labour government, infiltrated by Douglas and co; playing upon Lange financial ignorance.

Anyone seen Douglas lately, because he needs to be tried for treason. Its self evident when you see the lowering of NZ inc wealth, and continuing reduction in public services; with Universities being one.

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Bloody nonsense! Roger Douglas saved NZ from bankruptcy.

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Both wrong, Roger Douglas inherited a portfolio cleaned out of credit and in a big hole, so he followed Maggie Thatcher and simply threw the people into the hole with the advice, "dig yourselves out". And the people promptly did. For that I thank Sir Roger, sadly though when the people got the country out of the hole the poli's, most of whom are unable to make it on civvy street, come back and start playing "pin the taxpayer dollar on the donkey/the dog/the lemon or where-ever" *sigh*

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Although I have sympathy for the argument that education delivers a public benefit it nevertheless it does provide a private benefit. Since it is neither a pure private good or a pure public good the most appropriate funding model should reflect that. I'm not certain what the current split is but I thought it was about 70% public funded vs 30% from fee structure. Why is that a bad thing? There is also an argument that having it 100% public funded is just another subsidy from the poor to the rich.

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The government's share, by the last numbers I'd seen on it (the Prod Comm report released in February), was about 82% after we count the costs of the subsidy provided by interest-free loans. The casual reader might be forgiven for not having caught that anywhere in Prof Byrnes's piece.

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On that note, however, surely it's a better investment for the country as a whole than paying the pension to wealthy people. At present the pension is surely the biggest subsidy from the poor to the rich.

Not to mention we've effectively subsidised businesses somewhat by removing their need to train high-school graduates (as they did for past generations who like to say "I went straight to the workforce from high-school, and I've done alright!"), so unless we're going to all start hiring high-school graduates again it seems a bit pointless to be spending a massive chunk of change on giving the pension to wealthy, landed folk, while driving younger generations into massive debt then hoping they stick around to pay for the pension load.

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I have some sympathy for both sides of the argument, and tend to agree with those that some sort of public/private split seems to be a sensible approach. The greater issue, I believe, is the degree (pardon the pun) to which that split should vary across the options available, and how/whether that split should also vary over time.

What's the public v private value of, say, a religious studies degree compared with medicine or pure science? And what about the value of either compared with training to be a pilot or a hairdresser or a carpenter? When the societal 'we' need more aged care, should the public value (and therefore proportion) increase?

Or should the proportion remain essentially the same and we let the market decide on return? One assumes that as aged care demand, for example, increases then those performing the work become more valued and valuable so get paid more. But that requires quite a bit of prescience (or a gamble) on the part of the individual. And where does the passion to do something come into all this? I'd rather a less passionate but well-trained surgeon (or motor mechanic) than one passionate but self-taught.

As Prof Byrnes says, 'The onus is on universities themselves to make these arguments'. I've yet to see much from them that can be classed as cogent rather than woe and wailing.

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>"What's the public v private value of, say, a religious studies degree compared with medicine or pure science?"

Indeed, it's an issue of some depth. On the surface you might instantly conclude "well, obviously we should heavily fund STEM and leave people to pay their own way for philosophy, literature, art, theology etc.", but how much have these things played a part in the natural curiousity and inventiveness that is part of our culture? Difficult to say.

We don't want to end up creating graduates who are automatons skilled in wrote learning and memorisation, but completely lacking in inventiveness, curiousity and breadth of thought. That doesn't end up helping the country much.

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