POLICY & REFORM campusreview. com. au
‘ Restructure’ is not a dirty word
Keep an open mind; perhaps the best way for the majority of public universities to get over the hump is to let a few go to the wall.
By Paul Oslington
Something that cannot be spoken of in higher education policy circles – and thought about by policymakers only in private off-duty moments – is the possibility that some of our public universities will go to the wall.
There are roughly 40 of them, and higher-education policy is constrained by the unspoken imperative to leave all of them untouched.
We are quite willing, it seems, to let entities in other sectors go to the wall. It’ s happened with Ansett Australia when the two-airline policy was abolished, car makers when tariffs and subsidies were finally scaled back, and public providers whenever various government services have been reformed.
Some underperforming public schools have closed with the extension of funding to all schools. In 1996, then-minister of employment services Tony Abbott opened up competition in job search services to non-government providers, which involved restructuring government monopoly provider the Commonwealth Employment Service as a corporation to compete against non-government providers.
As it turned out, although some for-profit providers have been remarkably successful, the CES was unable to keep up with the new entrants, most of which were not-forprofits and many of which were churchrelated. Service has improved and costs are much lower than the old CES, whose demise is lamented by few.
COULD THIS BE A MODEL FOR REFORM IN HIGHER EDUCATION?
One of the assumptions of policymakers is that a public university going to the wall would mean the end of higher education in a particular region.
It is assumed that thousands of students would be left without a place, large numbers of specialised academic and professional staff would have to learn to flip hamburgers, and specialised multimilliondollar facilities would be left idle.
What is more likely, however, is that the university would come under new management, with a serious reassessment of strategy and a high likelihood of being better run.
For this to happen though, universities would have to be restructured in a way that would allow them to be passed to new management if the incumbents were failing either at quality or financial viability. The restructure might consist of making the ownership of the organisation explicit through the issue of shares and having shareholders elect the governing board of the university, as with any other corporation.
Of course, all the existing regulatory controls, as well as the newly created market discipline of the demand-driven system for students and the competitive research system would continue to apply.
Perhaps a red light from TEQSA on either quality or financial viability grounds should provoke such a restructure.
Rather than destroying confidence in such a university, my prediction is that restructuring would attract students and good academic staff, either through the wake-up call to existing management or the expectation of a change of management.
No doubt the low-ability and low-effort rent seekers amongst the university staff and students would complain bitterly about the restructure. But labour relations would most likely change, with restrictive unionnegotiated enterprise agreements being dumped. Quality would probably rise and costs fall. Diversity in our university system would be enhanced.
Instead of making restructuring a conversation stopper, we should realise it is how some of the largest cost and quality benefits of reform will be realised. Studies of reforms in other industries show some of the largest gains come from the exit of inefficient firms( or restructure under new management), rather than from established firms changing their practices.
The key question is: do we have the courage to realise these benefits in the face of fierce opposition from incumbent university managers and the unions with whom they often have a cosy relationship? ■
Paul Oslington is dean of business at Alphacrucis College and adjunct professor of economics and theology at Australian Catholic University.
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