AUSTRALIAN public higher education would be totally deregulated and have to compete with private institutions for government funding and students under radical proposals published last week.
Universities would have greater autonomy and be able to set their own tuition fees. To survive, they would be forced to operate much more like efficient businesses and be encouraged to dispense with unnecessary assets.
Despite an outcry from academic and student groups following the release of a discussion paper foreshadowing the changes last year, the final report of the West review of higher education calls for a voucher or "student-centred" system of funding universities.
"Students should have a direct relationship with universities and a real say in what they provide," the report says. The best way to achieve this is to ensure that public funding for tuition is driven by students' choices at both the undergraduate and postgraduate levels, not to negotiate between individual universities and the education department as at present.
Under the plans, all Australians would receive a "lifelong-learning entitlement", which they would be able to use to study at either Australian or overseas institutions if reciprocal agreements existed.
The report makes 38 recommendations, including a complete overhaul of public funding of higher and vocational education and training. It says the federal government should assume control of all post-secondary education and set national directions for both the university and technical and further education sectors.
TAFE colleges are largely funded by the states at present, which the report says is unnecessarily complicated. The Commonwealth or central government should assume full responsibility for both systems.
The review was commissioned by former education minister Amanda Vanstone who appointed a committee in January last year. The deregulatory recommendations appear to have been inevitable given the composition of the committee.
In a surprise move, Senator Vanstone nominated the former headmaster of a private boys school in Sydney, Roderick West, as chairman. Other members of the committee included a former conservative minister of education, a vice-chancellor renowned for his reactionary views on education, a businesswoman and a deeply conservative dean of education.
The discussion paper was widely criticised by all the main interest groups, including academic, student and postgraduate organisations. While the Australian Vice-Chancellors' Committee supported the idea of greater university autonomy, individual vice-chancellors condemned the voucher proposals.
The final report, however, is possibly even more deregulatory than the draft. It argues that competition for students and funds should be the driving force for change and innovation. Central control over student numbers and research funding at institutions should be abandoned and the marketplace - via student choice - used to enhance competitiveness.
"Because most domestic students have no direct financial relationship with their institutions, universities have few incentives to ensure that their products and services meet the needs and preferences of Australians," the report says.
Institutions have few incentives to be innovative or to "re-engineer" traditional approaches to teaching and administration. Diversity is not encouraged and universities seek government help rather than using their assets, exploring alternative delivery mechanisms or attracting new customers.
The report recommends the government should:
* Move to a student-centred approach to funding higher education as soon as possible
* Maintain the average level of public funding of universities in real terms for five years
* Allow institutions to set fees for all students, subject initially to an upper limit for students receiving federal tuition funding
* Offer loans - with repayment contingent on future income - to all students to cover fees up to the limit that universities are able to charge
* Make first-time access to postsecondary education to all Australians the highest priority in implementing the student centred funding model
* Implement student-centred funding of research training by allowing postgraduates greater freedom in choosing the universities where they wish to study
* Expand the role and independence of the Australian Research Council
* Establish a loan fund to finance major programmes of innovations and structural change, including technological investments associated with such changes.
"Our conclusion is that fundamental reform is needed in the funding of teaching and research and in the way that government supports higher education as an industry," the committee says.