Tertiary Education

Abstract: This article argues that there is no role for the Government in tertiary education. The social argument that the Government should provide free tertiary education, has long been exposed as a myth. The process of commercializing tertiary education has now shifted any residual regulatory function to the Trade Practices Act.


A. Fee-paying Students

In Australia, the Government recently changed the Higher Education Funding Act. In 1998, universities will be allowed to charge up-front fees to up to 25% of undergraduate students in any one course. Of course, universities have already charged overseas students for a long time. Nevertheless, the change is regarded by many as a milestone in the commercialization of tertiary education.

Melbourne University has now released figures for the proposed fees, ranging from $9,000 a year for music, arts and education, to $22,000 a year for dental science and veterinary science. The figures add up to $110,000 for a dental degree. Interestingly, medicine will not be exposed to the new fee regime, since the Commonwealth Government does not wish to "add to the oversupply of doctors".

Some argue that it is a social responsibility of the Government to provide tertiary education to all. Others argue that well-off families proportionally benefit more from such policies, in other words that the poor pay taxes so that "rich kids" get professional diplomas. They argue that rich families are much better in evading tax and rorting the system. They argue that commercialization will at least make some "rich kids" pay for their education themselves.

B. Restrictive Trade Practices

The move has prompted Professor Allan Fels, chairman of the Australian Competition and Consumer Commission (ACCC) to conclude that universities should act "on the starting assumption that (charging fees for courses) is a trading or commercial activity" which would be covered by the Trade Practices Act. This would expose universities to prosecution for acts such as deceptive and misleading advertising, price-fixing arrangements and collusion that keeps new entrants out of the tertiary education market.

It would also make universities liable for litigation by students who believe to have received substandard education. New Zealand has taken an early lead in this approach over Australia. In New Zealand, the Fair Trading Act regulates truthfulness in advertising and redress for consumer complaints. Last month, four graduates of an applied masters degree in environmental studies lodged a claim under the Fair Trading Act that they had received substandard teaching from Victoria University of Wellington between 1991 and 1994.

The ACCC seems set to outlaw practices of institutions that collude in limiting the number of trainees with the intention to increase demand and fees for their services, as well as for practicing graduates. State laws that currently allow a single organization to control a specific profession are to be revoked, as agreed under the Hilmer reform program.

As an example, the medical establishment is often accused of using restrictive practices. The Australian Medical Council controls accreditation of foreign-trained doctors living in Australia and typically requires such doctors to complete courses at medical colleges. But such colleges often limit places for trainees or make it unattractive for practicing specialist to take on trainees.

The reach of the Australian Medical Association (AMA) goes well beyond control over medical colleges. Despite severe shortages of doctors in rural areas, particularly in Queensland, immigration of medical specialists into Australia is limited, partly due to lobbying by the AMA that any issue that combines health care, education, employment and immigration in politics is bound to evoke populist policies.

Quintessence's position is that restrictive trade practices by professional associations and by trade unions should be exposed as evil. This position was discussed earlier in the article Reform at Work. That article concluded that any policy aiming to create competition in medical professions will have to tackle not only the huge monopoly of the health care system, but will have to tackle the education system as well.

The ACCC now seems set to take this direction. Under the Trade Practices Act, professionals who deceptively or misleadingly promise commercial services without the intention to deliver, face criminal prosecution. This applies both to medical practitioners and to medical educators. Consequently, there is no justification for legal enforcement of occupational demarcations based on educational qualifications. In medical professions, patronage by the Government should make way for the rights of patients to decide what happens to their body. Professional liability insurance and the risk of litigation and exposure by patients will sufficiently discourage incompetence among professionals. Adoption by medical professionals of more commercial practices, such as advertisement of their performance record, will furthermore raise standards.

C. No Role for the Government

Let's face it, education has become one of Australia's biggest earnest of foreign currencies. This is a commercial practice, not foreign aid! As more commercial practices become common, educational institutions should face more scrutiny by the ACCC. Society is full of closed shops and tertiary education institutions are selling entree tickets. The problem is that the Government encourages such practices. Some argue that the existing educational institutions should be protected from commercial enterprises that might provide substandard education. But if the existing institutions really provided anything worthwhile in educational respect, they did not need government funding, they did not need legal protection by the Government of an exclusive position and they did not need all the other privileges, such as exemption from copyright law, etc. Consumers are better protected by the Trade Practices Act. Any authority that tries to combine consumer protection with supervision over institutes, risks conflicts of interests.

A supervising body such as the Higher Education Council that claims to develop standards, to check performance indicators and to conduct quality assurance reviews, is a relic of the past that is better forgotten. Such a so-called independent body represents the values of central control that are now globally accepted as a failure. Instead, students are well capable of choosing the institution that best fits their needs, especially as advertising and marketing becomes more common among such institutions. The name and fame of educational institutions may well be their best advertisement. Satisfied graduates will proudly add their educational background to their name and thus contribute to the success of such institutions. Conversely, institutions that produce graduates that fail in all respects can expect to face more exposure. Investigative journalism is not encouraged in a system in which arrogant bureaucrats claim to be the only ones capable of setting performance standards and judging outcomes.

The inevitable conclusion is that there is no justification for the Government to continue acting as a guardian of educational standards. There is no role for the Government in funding of education, nor in regulating education as a sector, nor in actively teaching and training of students. The current course of ACCC-scrutiny and court cases under the Trade Practices Act is clear. There are no valid arguments to revert this course.

D. The Case of Teachers

Since 20 June 1996, the Senate Employment, Education and Training Reference Committee has been conducting an inquiry into the status of teachers and the development of the profession during the next five years. The Committee is due to report on or before the last sitting day of the Autumn session 1998.

As this article argues, there is no virtue in legal protection for specific occupations or professions. Furthermore, single union coverage of specific professions and occupations should be exposed as evil. The practices of professional organizations should not be shielded from trade practices that are common in the commercial world.

Teaching as a profession deserves special attention in this regard. Many people warn that there is a growing shortage of teachers. Quintessence suggests that the best and quickest solution is to deregulate legal requirements that students can receive instruction only from teachers who are formally qualified and registered in the respective State as teacher. It should be clear that what is perceived as a problem, is in fact a situation fabricated by those who abuse a monopoly position. The Hilmer reform program offers a simple solution. Abolish the monopoly and the problem disappears.

This logic can be applied to perceived problems in many occupations and professions, but the monopoly stranglehold of the trade union over teaching should be broken as a matter of urgency. State Acts that make it compulsory for children to be taught by State-registered teachers, should be invalidated for their unconstitutional restriction of trade. Furthermore, there is plenty of material available showing that children who are not sent to school can outperform their peers at school in all respects. Yet the education establishment keeps on eulogizing the massive failures of the education system. Do academics who glorify the virtues of the education system knowingly commit scientific fraud? Do protection rackets set up by politicians constitute an insult to public intelligence? Who needs more arguments? This issue should not be buried in discussions about academic achievements, about economics, about trade practices or about what is prescribed in the Constitution. The teachers' case deserves urgency for one simple reason. In the pluralist, multicultural society that Australia likes to be, teachers should stop poisoning impressionable children with dictatorial values.

Abolition of the monopoly of teachers will also solve many of the problems associated with the perceived function of schools to prepare students for tertiary education. Deregulation of tertiary education means that completion of high school should no longer be regarded as a free ticket into university. It should not be up to a bureaucrat at a Department of Education to decide who goes to university. Instead, educational institutions should be the ones setting the conditions for entree, progress, completion and expulsion. Political influence on such institutions constitutes both academic fraud and deceit of the market that is to employ graduates on their merits.

D. What about Research?

Research is often said to be the distinguishing factor between university studies and vocational training. However, even some academics now dare to admit that this research aureole should be exposed as a myth. There is no universal truth waiting to be discovered. There are no laws of nature to be patented. Students who were fooled into believing such nonsense, have allowed themselves to be used and exploited in a political funding game. Instead, research is a plot jointly construed by politicians and academics to mislead the public that something very important was going to happen that required huge public funding. Well, the curtain has been raised. Nothing important appeared, except a scramble for public money and a huge waste of that money. In many cases, public funding of research has had detrimental effects on education and money that should have been spent on education, was wasted on frivolities of professors that cannot be sacked. University research in Australia is largely irrelevant, only costing tax-payers money, with no overall benefits whatsoever and, importantly, teaches students the wrong values. This is reflected in the Government's policy of tax privileges for research among business that has already been widely described as a system that encourages rorting and distorting at a huge scale. For more background, see the article How Education corrupts Research. The conclusion is that the research aureole that some universities like to glorify is no justification at all for any role for the Government in education.

E. Conclusions

Conclusion A: Restrictive practices by professional associations and trade unions, such as exclusive coverage, collusion and institutionalizing of demarcations between occupations and between professions based on educational qualifications, should be exposed as evil.

Conclusion B: State Acts that discriminate on the basis of educational qualifications should be invalidated. Acts that make it compulsory for children to be taught by State-registered teachers should be invalidated as a matter of the highest urgency.

Conclusion C: Students should be regarded as capable to decide for themselves what is a good preparation for a professional career. There is no role for the Government in funding nor in regulating education. Experience from the past shows that the Government's involvement in education clearly has many negative effects, while no positive effects are visible.

Conclusion D: Government funding of research, whether at universities or in business, should be stopped and be exposed as a wasteful political plot to gain the populist vote.




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