Australian reforms rejected

October 22, 1999

MELBOURNE. David Kemp has just suffered one of the worst humiliations ever experienced by an Australian education minister. And it was at the hands of his prime minister and cabinet colleagues.

Secret plans for radical reforms to university funding that he had hoped to have adopted by cabinet were leaked to a delighted Labor opposition, which accused the government of planning to introduce "$100,000 degrees" for Australian students.

The recommendations included scrapping Australia's unique Higher Education Contribution Scheme (HECS), allowing universities to set their own fees, introducing student vouchers for public and private institutions and adopting a universal student loans scheme with a real interest rate.

The submission said reform was imperative and that the preferred option was for a "demand-driven system characterised by fee and admissions deregulation, improved quality assurance arrangements, a universal public subsidy for undergraduates in a broad range of accredited institutions, and a loans scheme to finance the costs of tuition".

"Under the new arrangements, student numbers, course choices and the price of higher education would be determined more closely by student demand, with government providing a standard subsidy, sensitive to discipline-specific teaching costs," the submission said.

After an Australia-wide outcry from academics, students and parent organisations, prime minister John Howard rejected most of Dr Kemp's key recommendations even before cabinet met.

Mr Howard left open the question of whether the government intended to scrap the HECS and replace it with a system under which students would pay full interest rates on loans.

This generated further controversy with every vice-chancellor in the country condemning the idea and calling on the government to retain HECS. Following the cabinet meeting last Monday, Mr Howard was forced to back down and tell parliament there was no intention of altering current arrangements.

HECS would remain and student loans would not attract real interest rates, Mr Howard said. He announced an additional Aus$259 million (Pounds 100 million) over three years for pay to go to universities prepared to change their industrial relations policies.

Mr Howard said greater salary justice for academics could not be delivered if they continued to embrace "Neanderthal industrial relations practices".

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