Learning bank for Oz Labor

May 23, 1997

AS BRITAIN'S New Labour government begins to put its education policies in practice, a defeated Labor Party in Australia is preparing a dramatic overhaul of its previous attitudes to how universities and technical colleges should be funded.

Two key members of the federal opposition have outlined bold new schemes which would transform the tertiary education sector in this country. Adopting their British counterpart's campaign slogan - and some of their ideas - the two describe their plans as "New Labor thinking for post-secondary education".

Under the plans, former education minister and Labor's current finance spokesman, Peter Baldwin, and opposition education spokesman, Mark Latham, have proposed the introduction of a "learning account" as crucial to the reforms a Labor government would introduce.

According to the scheme outlined by Mr Baldwin, on leaving school each person would gain an entitlement to education and training in the form of a "balance in a flexible learning account". Mr Baldwin says this would provide a flexible cross-sectoral funding framework which would be fully consistent with lifelong learning.

He says he was attracted by the learning bank idea developed in the United Kingdom, with each person having a learning account. It would be "front-loaded" to cover the costs of initial education and then replenished periodically. Students would use the education and training system more efficiently, with much more capacity to choose "customised combinations" that met their needs.

The account could be expressed in either monetary terms, with specific provisions to prevent its use for non-educational purposes, or in terms of full-time equivalent years of study. It could also be a combination of the two, with a "years of study account" being particularly useful to those using the services of private or overseas providers.

The value of the account could contain direct grant and loan components, with the student able to vary the mix. A university student could select a grant/loan combination broadly equivalent to the balance reflected by current funding, or could opt for a different mix.

Students could also take all of their entitlement in the form of financial support and be able to fund their course without recourse to loans by selecting relatively cheap, cost-effective study modes for most of their studies.

"The model provides clear incentives to select the most cost-effective study methods, making optimal use of advances in information technology," Mr Baldwin says in a paper setting out the plan.

"People would also have far more scope to select the timing and context of study, with less pressure for school-leavers to commit themselves too early before they have had a chance to properly consider their careers."

A person using a "low-cost learning kit" to successfully complete a unit of study would have their learning account debited by a lesser amount than someone who did the same unit as an on-campus student attending lectures.

In a paper delivered to a conference in Melbourne this month, Mr Latham said the powerful mix of flexible, time-sequenced, public and private entitlements held immense potential for reform of the welfare state. It also held the key to systems of lifelong economic security designed specifically to cope with an era of permanent change.

The next Labor government would abolish the system of full-fees for some home students that the Howard government is introducing next year, Mr Latham said. Under-performing school leavers should not have "a second bite of the cherry simply because their parents have a spare $100,000 in the bank", he said.

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