Let the source be with us

August 13, 1999

If the private purse is neither big enough nor open wide enough to fund education then we need a full public debate, says Bryan Gould.

Some years ago, a viewing platform at Cave Creek, a well-known New Zealand scenic spot, collapsed, killing many of those who fell with it. A government inquiry concluded that the underfunding of the department of conservation was a major contributory factor.

Underfunding will not, we hope, produce a single moment of tragedy for New Zealand's tertiary education like Cave Creek. The problem is to focus on the damage that is being done. We will struggle on, engaged in a long battle of attrition in which the quality of what we do is gradually but inevitably eroded and by the time this has become so apparent that it can no longer be ignored, it will be too late.

The reduction in public funding per student that has characterised this decade has meant that our main source of income is declining without any corresponding certainty that the gap can be made up from other sources.

This takes enormous risks with the affordability and quality of tertiary education, with the participation rates that are seen as desirable from a national viewpoint and with the financial viability of the institutions.

We have been forced to put up the cost of tertiary education to our customers and compelled to behave in a more and more commercial fashion in order to survive in the market.

Now we are beginning to see increasing threats to the goals so bravely stated in a recent white paper - increasing participation, improving quality, economic relevance and so on.

For most universities, less than half of our income comes from the government grant. We use our resources so efficiently that we now produce graduates at less than two-thirds of the cost of an Australian graduate. But there are limits to how far we can keep on in this direction.

In direct response to government policy, student fees doubled over the past five years without any market research to determine the price elasticity of demand. There are already worrying signs that, for many school-leavers at any rate, the price of university education has risen too high.

The prospect of flat, let alone falling, enrolments is very disturbing. Universities have been running fast on a treadmill in order to keep going. They have responded to the annual cuts in funding per student by increasing numbers so as to maintain the size of the government grant.

This has created its own problems. Increased numbers funded at a lower level have put increasing strain on our capital base as well as on our staff. If numbers were to fall, the pressure to cut costs further would become acute.

What should the latest in a long line of groups set up over the years, which met for the first time this summer, tell the minister for tertiary education about all this?

We were invited to identify the "risks" to the achievement of the government's goals. At one point, I ventured the view that the main threat to their achievement was a shortage of resources.

The reaction was surprising. Some felt it necessary to say something like "Well, of course, you don't solve problems merely by throwing money at them".

Others indicated that there might be more pressing issues that, unlike the resources question, were within our power to do something about.

Most of those present seemed a little embarrassed, as though I had said something that one would normally not expect to hear in polite company.

We are asked to relate perceived "risks" to the stated goals. The problem is that the goals nowhere indicate any intention to reduce government funding, yet this is clearly one of the main drivers of policy.

It would be helpful to the exercise if the government would come clean and include as one of its goals in tertiary education the reduction in public spending and the transfer of the funding burden from the public to the private purse. We could then make more sense of the obvious dichotomy between goals and current policy.

The debate, in New Zealand at least, is heavily conditioned by the endlessly repeated message that the state cannot be regarded as a milch cow, that there are strict limits to the taxpayer's willingness to fund tertiary education, and that the only solution to any shortfall in resources is to use existing resources more efficiently.

Yet this can hardly be regarded as a rational response to our situation. It is the merest common sense to acknowledge that what a society can expect from tertiary education is directly affected by the resources it is prepared to commit to it.

This is not necessarily an argument for public funding. There are societies where tertiary education is substantially and satisfactorily funded from private sources. But it is a statement of the proposition that the level of resources committed by a society - from whatever source - does matter.

If we insist, for ideological or other reasons, on entrusting the funding of tertiary education to private sources, we need to be very sure that the private purse will be deep enough and will be opened wide enough to meet the goals given pride of place in the shop windows of political parties.

If there is doubt about this, it would be more honest to acknowledge that, as a society, we give a lower priority to tertiary education than we like to pretend we do and that we prefer to have lower taxes rather than the level of resources demanded by a quality university sector. We could then have a proper debate about the importance of tertiary education to our national future.

Bryan Gould is vice-chancellor of the University of Waikato, New Zealand.

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