The Productivity Commission on Education

The Australian has a story that caught my eye:

The Productivity Commission has called for universities to shoulder more responsibility for the quality and the job fitness of their graduates and to be exposed to consumer protection laws to give students legal recourse for poor service.

Okay – that sounds like sensible policy. So I went to the PC website to see what, exactly, they had in mind.

Proposal 1:

If, on further examination, it appears that action in Australia is difficult to mount and that the UK arrangements have had a positive impact, the Australian Government should clarify in legislation that the Australian Consumer Law does relate to higher education. This should give the student the right to compensation or the ‘right to a repeat performance’, on the same basis as other products that prove to be not fit for purpose.

Okay – so in English, the actual language of the land that we expects students to speak and write – what I think the PC is suggesting is that if students don’t do as well as they had expected, say for example they fail a subject, they should be financially compensated, or repeat the subject.

Now I was under the impression that PC employees tended to be university graduates,  i.e. have some idea as to what actually happens at an university, but perhaps not.

Universities already have a system whereby those students who fail a subject get to do it again. As far as I’m aware universities have always run such a program. I’m surprised that the PC didn’t know this already. If none of them actually attended university they could simply have asked. As to paying students who fail a subject I suspect – one can never be sure though – that this would result in perverse incentives; something economists tend to understand, but maybe not at the PC.

Proposal 2:

One way to realign the incentives of universities is to introduce ‘skin in the game’ — financial incentives linked to student or taxpayer outcomes. Currently, universities provide education services to students with no responsibility for their post-graduation outcomes or the quality of the teaching they provide. Linking student outcomes to university payments could help to overcome this.

Ah yes – the statistical discrimination model of education. Okay, at face value this sounds very plausible – let the universities bear the costs of poor post-university (financial) performance.  You know, those pesky women who go off and get pregnant and don’t pay their HECS loans back in a timely manner. Or those ethnic students who go back to the “old country”. Not to forget those selfish tax evaders who go and die before discharging their debt. Or those upper class twits who get jobs in London and New York. Costing the government money! Easy solution to that: accept only white middle-class males into university and you can be assured the government will get back its money pretty smartly and in quick time. Too bad if you’re a woman, or poor, or too rich, or not-white. Poor financial risk and all. You understand – Director’s law and all that.

Bottom line is that the PC proposals are not serious – in fact, they are lazy. Once we decide not to ration education by price and ability-to-pay there is going to be waste. Now we can waste human capital or we can waste money. For a long, long time Australia wasted human capital. The unseen. Now we waste money. The seen. I understand the government hates wasting money (cough cough submarines, NBN, NDIS, Gonski, …) but having a system where we pay students to fail or we encourage statistical discrimination (on grounds of class, gender and race) on the part of universities is not a solution to waste.

Now I suspect that some acceptable compromises and trade-offs can be found – but the Productivity Commission is not even in the ball park.

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9 Responses to The Productivity Commission on Education

  1. Natural Instinct

    Currently, universities provide education services to students with no responsibility for their post-graduation outcomes or the quality of the teaching they provide.

    Have they not heard of reputation?
    And students seeking the best brand they can afford/access?

  2. struth

    Sinclair. …..
    Accept only white middle class men…………………really?

    You really are capitulating to leftist dribble.

  3. EvilElvis

    How about taxpayers just help out those exceptional students that may actually need assistance instead of ramming more and more idiots, at taxpayers expense, through humanities, law and economics?

  4. jjf

    Limit HECS to one degree only and make it a 10 year loan treated as a tax debt if not repayed within 10 years.

  5. closeapproximation

    The decay started with Dawkins reforms. Turning vocational colleges into “universities” by fiat. When everybody is expected to go to uni, what do you expect will happen to the value of a degree?

    The managerial-corporatist takeover of the academies has made everyone poorer, economically and intellectually.

    Leave the few who are actually skilled and inclined to generate new knowledge & research do the university gig, safe in the knowledge that 0.1% of the output (we may not know for hundreds of years which 0.1%) will have a massive impact (think Fourier analysis by Lagrange in the 1700s -> everything electrical today, or abstract number theory -> cryptography, modern internet over HTTPS, and of course blockchains!).

    The currency has been diluted and mediocrity reigns supreme.

  6. EvilElvis

    The managerial-corporatist takeover


  7. True Aussie

    Defund all universities now. Problem solved.

  8. David from Canberra

    I don’t agree. I think the current system where universities can offer any course whatsoever and get paid up front for it, no matter what the cost is, leads to unwanted outcomes. Three year basket weaving degrees costing $100,000 leaves students with debt that cannot be repaid, no enhanced job prospects, taxpayers out of pocket, and universities untouched and able to gorge further on the public teat.

    Make university funding contingent on actual HECS payback. No HECS payback, no university funding. This will sharpen the pencils as universities only offer courses that can generate payback, useful courses such as electronics, plumbing, nuclear, engineering, physics and so forth.

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