verging_on_random

They’re customers, stupid

April 4, 2007 on 12:34 pm | In Uncategorized |

For a little while now the Fairfax press and the ABC have been running a series of shock horror stories about higher education. The gist is that universities and other post-secondary colleges have been accepting international student enrolments even though the students might struggle to complete their courses successfully. Not only that, but the students’ real motivation for enrolling might not be the sheer joy of learning but the crass desire to get some extra points to count towards permanent residency in the glorious land down under.

Lots of people seem to think that these stories, if true, are absolutely dreadful. Poor old Central Queensland University, which for some reason has been singled out for special treatment (maybe because Melbourne is a funny place to find a campus for a Rockhampton university) has had to announce some kind of inquiry and Julie Bishop, the responsible minister who gives me the absolute creeps with her humourless gimlet-eyed primness, has tut-tutted all over the place and requested that any evidence of wrong-doing be sent to her and she’ll look into it. She promised to look into so much stuff on the 7.30 Report the other night that she’ll be busy for weeks, which is good I guess because it will delay her mad ideological campaign to fuck up public schools even more than her predecessors did.

I find the whole thing morbidly entertaining.  It’s like watching car manufacturers being lambasted for not making sure that people who buy cars can drive properly, or for selling them to folk who only want them to impress the neighbours instead of, well, driving them. It’s a great example of the cognitive dissonance that exists amongst pollies and pundits in the media who demand that (a) everything should be forced to be as competitive and efficient as possible all the time, while simultaneously (b) providers of essential services should observe some vague public interest ideals that don’t apply to the private sector. As lots of people have been telling them for years, you can have one or the other but not both, but they persist in pretending that you can. Either they just don’t listen or they’re really dumb.

What’s the background to this latest non-story? Well for years and years Australians have been told that we have to expose ourselves to the forces of global competition or perish. At first this only applied to the production of tradeable commodities but in no time it spread to everything. Want to justify selling off infrastructure to overseas interests, introducing a GST or having the most anti-union IR laws of any ‘democratic’ country in the world? Piece of cake … just say you have to do it to be globally competitive.

Higher education wasn’t exempt of course. Year after year, governments cut funding. When universities complained, they were told to get competitive. Higher education is a market, they were told. Find ways to raise your own money. So they have.

Most Australians don’t know half of the things that have been done to higher education in this country in the name of becoming competitive and succeeding in the marketplace. For a little while life was great; lots of fee-paying students came from Asian countries and the money rolled in. Howard’s mob said “See that wasn’t so hard” and cut government funding some more. However the party was never going to last.

Other countries’ universities woke up to the opportunities and started aggressively chasing Asian students. And let’s face it, if you’re a South Korean with the choice of graduating from a university based in Paris vs one in Nambour, which one has the greater cachet? As it got harder to recruit students, it became more tempting to admit ones whose English proficiency meant they’d missed out on their first choice universities.

Even amongst the teaming hordes of Asia, the number of comparatively wealthy families prepared to send their kids overseas to study for three years or more is finite. Accordingly the government’s wish has come true, and Australian universities are competing in a scary marketplace against a horde of others to attract students customers whose numbers have peaked. It’s a classic case where demand is stable and supply is increasing, and any economics student knows what that means. In an entirely predictable manner, suppliers are using increasingly desperate tactics to chase customers and the market is awash with agents working on commission, partnership agreements with local institutions and so on.

Into this seething Hayekian marketplace the Australian government has thrown its own bonus - get one of several nominated Australian credentials and you get extra points towards a permanent residency visa. This of course is the jackpot for some students. Australian campuses are suddenly full of international students who originally enrolled in IT or horticulture or something but who now realise that the vocation to which they have been called all their lives is truly … accounting. Transfer me to the Master of Professional Accounting degree immediately please … no, it’s complete coincidence that accountants have been deemed by the government to be in short supply.

Off topic … how many freakin’ accountants do we need for chrissake? Anyways ….

Higher education institutions in Australia are now behaving like any other business that’s in a market. I don’t just mean universities of course; some of the things that the TAFE people get up to would make your hair stand on end and the private colleges are just an endless series of horror stories. But what did the government expect? Why do media pundits act shocked and stunned? They’re giving the customers what the customers are prepared to pay for. That’s what suppliers do in a market. Get used to it.