Monday, 22 June 2020

University fee changes announced by Dan Tehan combine market-based economics with social engineering.

Extract from ABC News

Analysis

By business reporter Gareth Hutchens
It's a reality of politics: there will always be people who sign up to party politics, and who run for office, because they're more interested in moulding society so it reflects their personal version of the "ideal society" than in representing an electorate.
The impulse undermines the spirit of representative democracy.
But it's never going away. And every politician is engaged in some kind of social engineering, to a degree. Voters, too. It's a by-product of living in a democratic community in which laws are designed to apply to everyone.
But there are some policy areas that are especially attractive to folk who are keen on social engineering en masse.
Education is one. In the classical Western intellectual tradition, there has been a preoccupation with education since the ancient Greeks.
Plato believed the education minister was the most important of the supreme offices in the state, and the job should be given to the best all-round citizen.
He thought a harmonious society could be created if girls and boys were given equal educational opportunity from an early age, and an unjust society would emerge without it.
He was so convinced of the benefits of education that he established his own university — the Academy (which his most famous student, Aristotle, attended for 20 years).

The fight over education has changed form

Fast-forward 2,500 years and education remains a major political battleground.
But in the capitalist era, the fight over education has its own characteristics.
Since market-based economies require a steady replenishment of consumers and workers, the modern education system is expected to give young adults the skills to secure a job in the marketplace.
There are different interpretations of what that means.
Last week, Federal Education Minister Dan Tehan announced his intention to radically overhaul the university education sector.
He said he planned to reduce the Commonwealth's overall financial contribution to university degrees from 58 per cent to 52 per cent and lift student contributions (i.e. fees) from 42 per cent to 48 per cent.
He planned to increase the number of university places by 39,000 within three years, at no cost to the Government — so the cost of the extra places would be borne by student fees.
He wanted to establish a $900m "industry linkage fund" for investment in technology, engineering, maths, and science education, to be funded by cuts to teaching and learning budgets, and provide a yearly $500m for Indigenous and low socio-economic students to help them attend university, among other things.
But overall, it would be a zero-sum initiative, with no new money coming from the Government.
The overhaul would rely on fee hikes and budget cuts and a shift-around of money so the enterprise could be "budget neutral".
But some of his proposed fee changes were very controversial.
He proposed increasing the cost of humanities courses by 113 per cent, putting them in the highest price band of $14,500 a year, meaning an arts student's contribution to the cost of their degree would be higher than someone studying medicine.
He proposed lifting law and commerce degree fees 28 per cent.
Meanwhile, the fees for agriculture and maths degrees would fall 62 per cent. Teaching, nursing, clinical psychology, English and language degrees would fall 46 per cent, and science, health, architecture, environmental science, IT and engineering degree fees would fall 20 per cent.
Mr Tehan used the language of the "market" to justify his proposed changes.
There was no mention of political philosophy.
He said the overhaul was designed to boost the number of graduates in areas of expected employment growth, such as teaching, nursing, agriculture, and STEM.
He said the Government wanted to steer prospective students away from humanities courses that weren't "job-relevant".
Arts graduates would need to start "thinking about the employment outcomes that they are going to get from their degree", he said.
"We [want to] incentivise students to make more job-relevant choices, that lead to more job-ready graduates, by reducing the student contribution in areas of expected employment growth and demand."
He said he was focused on employment outcomes for the next five-to-10 years, to match the timeframe for Australia's economic recovery.

'Short shelf life for technical skills'

But what will happen after that? What will the economy and labour force look like in 30 years?
If you asked a politician in 1990 to predict what the workforce of 2020 would like look, how do you think they'd go?
In the past 30 years the world has changed immeasurably: the internet's gone mainstream, lithium-ion batteries have been commercialised, and those in turn have led to smart phones and laptops, renewable energy systems and electric vehicles, artificial intelligence and self-driving cars.If a politician in 1990 spoke about "job-relevant" university courses in 1990, their conception of relevance would be confined by their imagination.
A recent economics paper — Earnings Dynamics, Changing Job Skills, and STEM Careers — found the trade-off between technology-specific skills and general skills was a tough one for policymakers to consider.
It found high-skilled vocational preparation provided by STEM degrees — in the US labour market — paved a "smoother transition" for college graduates entering the workforce, but the rapid pace of technological change often led to a "short shelf life for technical skills".
It found although new graduates from computer science and engineering courses earned larger wages upon entering the workforce, their relative wage returns reduced over time.The opposite was true for humanities, social science, and physical sciences graduates.
Their wages upon entering the workforce were lower, but their relative wage returns were much higher within 10 years and they often continued to climb over the following 15 years.
"This trade-off between technology-specific and general skills is an important consideration for policymakers and colleges seeking to educate the workers of today, while also building the skills of the next generation," the paper concluded.
As for Plato, he didn't charge fees at all. One wonders what he would think.

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