Disquiet over the way education was provided in Australia was accompanied by criticism of its efficacy. A conviction that standards were slipping was not new, for selective memory allows every generation to contrast its own assiduity with the laxity of the one that follows, but in this case the comparison spanned the much larger number of young Australians who stayed on to complete secondary education and the transformation of higher education from an elite to a mass system. Unease with the changes made in schools to accommodate the newcomers—greater attention to their needs with a more inclusive curriculum and more flexible assessment—brought a backlash from traditionalists, who gathered in 1973 around a Council for Educational Standards.1
The criticism intensified with the economic downturn as part of a more general assault on the meliorist policies of the welfare state. ‘Public education at all levels has just passed through a period of unprecedented generous funding’, wrote one of the principal critics (a purist might have queried his syntax), yet ‘employers complain of failings in literacy, numeracy, personal presentation, discipline and motivation’, while universities and colleges were forced to provide remedial classes in basic skills. He blamed the permissiveness that absolved students of personal responsibility, the progressivism that replaced learning with self-fulfilment and the egalitarianism that spurned intellectual rigour.2
These claims were taken up by organisations associated with the New Right, so that Leonie Kramer, a professor of English at the University of Sydney, became head of an educational policy unit of the Institute of Public Affairs, an influential, business-backed ‘think-tank’. Geoffrey Partington of the education department at Flinders University was a regular contributor to Quadrant, which had begun as a combatant in the Cold War and was now turning to prosecution of a culture war. The weekly Bulletin magazine was an early publicist of ‘The scandal of our universities’ and two of its younger journalists, Greg Sheridan and Tony Abbott, pursued the same crusade when they moved to The Australian in the early 1980s.3 The assertion that educational standards were falling appealed to market liberals, but it was led by cultural conservatives who argued for a restoration of traditional values and a return to the core curriculum.4
The concern over standards had some influence on government, notwithstanding an official inquiry into The Quality of Education in Australia chaired by Peter Karmel in 1985, which found no hard evidence to support the anecdotal accounts of a decline. On the contrary, testing of current students against their predecessors showed an improvement in cognitive outcomes.5 But by this time a different kind of criticism was being levelled at the country’s educational arrangements, diagnosing other problems and proposing much more radical remedies. It was conducted not by the cultural conservatives, who were drawn in the main from humanities disciplines, but by an iconoclastic school of economists. The language of economics—efficiency and effectiveness, inputs and outcomes, providers and consumers—was already entering education and other branches of public policy, for the task of economic reconstruction dominated the government’s decision-making. The novelty of the analysis that these economists conducted was an assumption that education was no different from any other economic activity.
Their argument proceeded from the theory of free market liberalism in which individuals exchanged goods and services at prices set by the laws of supply and demand, these prices providing the signals that allowed factors of production to be allocated with maximum efficiency. Application of this theory to education rested on the proposition that it was a service to the consumer that should be bought and sold like any other commodity. A free market would allow purchasers to choose from a range of providers, all competing with different products and therefore responsive to consumer preference.
The proposition that education was simply a private good without any public benefit occasioned considerable discussion. Some of these economists accepted that education had beneficial ‘spillover’ effects that justified some public support, such as a more literate and better informed society, whereas others held that these benefits were too insubstantial to warrant interference in the market. Some thought of education as a consumption good and others as an investment yielding returns in future earnings. Some linked it to increasing productivity, while the faltering economic performance in the late 1970s and early 1980s led sceptics to see it as a screening device that simply gave its beneficiaries credentials to improve their economic position at the expense of those who missed out—therefore they asserted that it had negative rather than positive spillover effects.6
Regardless of such differences, the free market school of economists was in broad agreement on the defects of the existing public system of higher education. First, the government’s allocation of block grants to institutions gave them no reason to adjust their offerings to changes in demand or seek improvements in quality. There were no performance incentives for universities or the tenured academics they employed on uniform salaries. The abolition of fees in 1973 was regressive since it increased the impost on taxpayers for the benefit of students who came predominantly from well-to-do families and were destined to earn high incomes; the result was a perverse system of rationing in which course quotas determined admission regardless of any consideration of cost. Furthermore, the monopolistic advantages of these public institutions excluded private providers.7
There were various suggestions for how a market in higher education should be created. An early proposal from Richard Blandy of the National Institute of Labour Studies at Flinders University was to provide students with ‘vouchers’, or advances repayable through income tax on their future earnings, and allow them to enrol in a course and an institution of their choice; the institution would be free to set the fee, and there would be loans to bridge any gap between the voucher and the fee. Michael Porter of the Centre of Policy Studies at Monash University favoured a system based on student loans, with an immediate cut of 50 per cent in the Commonwealth grant to universities, and Ross Parish, a professor of economics at the same university, suggested that this reduction could be phased in over five years. George Fane of ANU went furthest with his ‘optimal policy’ of ‘leaving students to purchase their higher education from private institutions, free from government regulation and without the assistance of subsidies, grants or special loan schemes’. He even proposed a market in tertiary entrance: a student with school leaving results sufficient to secure a place in a highly sought-after course would be free to sell it to a student who missed out.8
These ideas were advanced during the 1980s at intramural forums sponsored by organisations promoting free market policies across Australia’s entire institutional spectrum. In publicising them the economists were conscious that their proposals ran counter to deeply held beliefs and ‘may no doubt appear fanciful, academic or utopian’. That was undoubtedly true. Roger Geiger, a distinguished American professor of education who visited Australia in 1987 for a conference on the push to privatise universities, observed that ‘arguments grounded upon supposed differences between the social and individual rates of return to higher education are likely to strike the non-economist as arcane’. Many of the Australian economists had undertaken their doctoral studies at American universities and were strongly influenced by the neoliberal approaches that were in the ascendant in the United States; they often referred to the United States as an example of how dynamic universities could be if only the dead hand of government was lifted from them. Roger Geiger reminded his audience that even the best American universities depended on subsidies provided by the student aid program and government funding of research.9
The Australian market economists thought there was a case for subsidising research as a public good so long as it was put on a competitive footing. The current system of including a component for research in universities’ operational grants was wasteful since it supported all academics regardless of their research effort and ineffective since it gave no incentives to the most productive. The same was true of teaching, where they claimed that tenure protected the indolent and uniform salaries resulted in a uniform mediocrity; Australian universities were ‘essentially large-scale worker cooperatives’ funded by the state, ‘sheltered workshops for intellectuals’ who were ‘cocooned from cradle to grave’.10 The absence of incentives preoccupied market liberals, largely because they assumed human behaviour was determined by pecuniary self-interest. Their claims of declining standards and low morale were as anecdotal as those of the cultural conservatives, largely reliant on personal experience in faculties of economics and business studies that fared poorly in student surveys and where research performance was particularly unimpressive. There was little evidence outside their own profession that a lack of incentives was driving the more enterprising out of academic employment, but then the principal incentive of many academics in non-vocational areas was the opportunity to pursue their discipline.
The other preoccupation was a lack of competition. This again was dubious. School-leavers competed to gain entry to the course of their choice, and universities competed to attract the ablest in their catchment area. There was competition within universities to attract enrolments since a department’s staffing depended on the number of students it taught. Staff recruitment and promotion were also highly competitive in all but a few professional disciplines. It would be more accurate to say that Australian universities competed for reputational prestige and academic standing; the fact that they did so within a uniform funding system that determined their size and resources did not make that competition less keen.
The market economists believed the problem lay in the wasteful and unresponsive nature of the university while it remained a ‘government institution’. But the Australian university was not a government institution; it was a statutory entity, in legal parlance a body corporate and politic. ‘All tertiary institutions should be restructured’, said Michael Porter, ‘as separate, legal non-profit corporations with independent and legally accountable boards.’ They were so structured with their governing bodies serving as trustees of the body corporate and its assets. He added that they should be reconstituted ‘in a form in which they are independently capable of takeover, merger and other forms of restructuring, including becoming purely private institutions’. This would indeed be a radical change, one that reposed remarkable faith in treating higher education as a market.11
Several of these academic economists made submissions to the Commonwealth Tertiary Education Commission (CTEC)’s review of efficiency and effectiveness at the beginning of 1986, while their counterparts in the Departments of Finance and the Treasury urged clearer market signals. In its discussion of Richard Blandy’s scheme for full fees and vouchers, the review committee observed that no country had ever tried to operate a system in which even a large proportion of institutional income derived from fees. They warned there could be a misallocation of resources if institutions responded to student demand in occupations strongly influenced by economic cycles, such as engineering, or others such as medicine where a sharp increase in the number of practitioners would drive up health costs. There was a danger that prestigious metropolitan universities would prosper at the expense of smaller regional ones. The long lead time for developing courses, the limited capacity of students to foresee the outcome of their studies, and a lack of mobility to take advantage of alternative providers led the reviewers to conclude that the necessary conditions for a market in ‘the supply and consumption of knowledge at the higher education level do not exist’.12
Peter Karmel remarked at this time that higher education had been subjected to ‘unsupported criticism and unthinking hostility’ in the popular media ‘stimulated by some economists’ who had an unrealistic faith in the market. In the following year he noted that their proposals were linked to allegations that the current system was inefficient and inflexible, provided inadequate incentives to encourage staff and insufficient sanctions to prod them to perform better, that universities were playgrounds of the rich and academics were bludgers. Allowing these were ‘gross exaggerations’, Karmel now conceded that they contained ‘some elements of truth’—for, as he concluded his term as Vice-Chancellor of ANU and came to the end of a distinguished career, he reached the conclusion that higher education had become ‘somewhat slack and unresponsive’. He set aside the scheme proposed by Michael Porter at the Centre of Policy Studies to cut public funding by half. Institutions would have to charge at least $4000 a year to make up such a loss and even with a loan scheme there would be a sharp reduction of enrolments. The voucher scheme was more practical, but it would create greater inequality in social and geographical access; some institutions would go to the wall, and some workforce needs would not be met. He was not opposed to smaller fees of perhaps 15 to 20 per cent of course costs, so long as they supplemented rather than reduced Commonwealth support, as a means of escaping from the debilitating effects of the steady state.13
When George Fane put forward his maximal policy of private education in a 1984 report to the Economic Planning Advisory Committee, he did so in the knowledge that it was most unlikely to ‘find any significant political support’. That was hardly surprising since his report included the recommendation that every government school, college and university be sold to the highest bidder even if the purchaser had no intention of using it for educational purposes.14 John Dawkins might well have had in mind this quixotic foray into the doctrinal extremes of market liberalism when he warned in 1986 against an ideological obsession to reduce the size and scope of the public sector. In his view privatisation and deregulation, like social ownership and intervention, had no intrinsic virtue and should be judged by their capacity to promote equity and efficiency. Certain ‘merit goods’, such as basic education, health care and social welfare, were best supplied by the state because, if left to the disposition of the market, they would be distributed selectively and inequitably, but that did not mean the government saw an immutable boundary between the public and private sectors. It was committed to improving the performance of both, using similar techniques so that they served each other in the task of national reconstruction.15
Dawkins was not alone in condemning the libertarians who wanted to roll back government and allow the market to prevail. Their growing influence within the Liberal Party was apparent in disparagement of moderates as ‘wets’, who in turn criticised the ‘dries’ for an excessive faith in the market. This was a division that government ministers were keen to exploit. An attack on market fundamentalism also mollified disaffected Labor traditionalists.16 Beyond these tactical considerations, however, Dawkins was at odds with the neoliberal economists’ understanding of higher education. Their scepticism about its public benefit contrasted with his conviction of its pivotal significance.
The earlier expansion of Commonwealth support was based on the commonly accepted proposition that an increase in higher education would enhance the knowledge, skills, judgement and capacity of the workforce and thereby improve productivity. That was the starting point of the Martin report, which cited the economic literature on the subject for its declaration that ‘It is both realistic and useful to regard education as a form of national investment in human capital’.17 The international recession that set in from the mid-1970s discredited the proposition that there was a direct link between a higher level of investment and economic growth, but a new form of human capital theory was revived during the 1980s in the Organisation for Economic Cooperation and Development (OECD).
The OECD, which originated in the rebuilding of Western European economies after World War II, had grown to encompass all the advanced industrial countries (Australia joined in 1971) with a mission of promoting economic progress and world trade. It was supported by a large secretariat and provided a forum in which these countries could compare their experiences, seek answers to common problems and coordinate their domestic and international policies. Participation in OECD projects was voluntary and its reports had no formal force, but the organisation’s detailed knowledge of developments in member countries allowed it to identify policy issues. One such issue in the 1980s was the high and persistent level of unemployment, another the changes needed if members were to retain their competitive advantage over newly industrialising countries. Education had previously been encouraged as a driver of economic growth, although the OECD’s Directorate for Social Affairs, Manpower and Education was also concerned to promote greater equality of access. Now it was tied directly to the task of restoring competiveness through a process called ‘structural adjustment’ to the uncertainties of a rapidly changing global economy.18
Structural adjustment required a program of microeconomic reform to promote greater enterprise and innovation. New forms of education and training would equip workers with the skills, flexibility and readiness to adapt to emergent employment opportunities. The two components came together in a major policy statement of the OECD in 1987, Structural Adjustment and Economic Performance, which opened with a chapter on ‘Education and Human Capital’ and stated that a ‘basic policy goal’ in education was ‘to increase the productivity of human resources’. The same report signalled a shift in the source of investment, away from reliance on public expenditure on public institutions and towards a mixture of government and private funding of a greater diversity of educational providers. This would reduce the fiscal burden, improve allocative efficiency, increase customer awareness and promote closer links with industry. An OECD report on the Australian economy in the same year called for attention to the education system so that it could broaden and deepen skills formation. In the following year the OECD observed that Australia lagged in private sector involvement and that its universities had failed to adjust with sufficient urgency to the country’s skill needs.19
Dawkins took a close interest in the work of the OECD. Its work on youth unemployment provided a rationale for his closing of the gap between the Commonwealth’s unemployment allowance and the stipend provided to needy students. He would quote passages from the OECD’s report on Structural Adjustment and Economic Performance in his foreword to the paper announcing the government’s plans to restructure higher education, and drew heavily on its annual publication of statistics on expenditure and participation to compare Australia’s modest level of higher education enrolments with the more comprehensive provision of such countries as the United States and Japan, which were at the forefront of innovation.20
He made time in early 1988, when the debate over his proposals was at its most intense, to fly to Paris and chair a high-level conference on the role of education in structural adjustment. The OECD’s educationists were resisting the narrowly instrumental approach of its labour market economists, and both sought endorsement of their competing approaches. In his opening address Dawkins related the course of events that had taken Australia from disillusionment with human capital investment to realisation that a renewal of education and training must be part of microeconomic reform. He also argued for the complementarity of the economic and social purposes of education: ‘A society which does not respond to the needs of its disadvantaged groups will incur the heavy social and economic costs of underdeveloped and under-utilised human resources. From this viewpoint … I see the goals of equity and efficiency in our education and labour market arrangements as fundamentally compatible rather than conflicting.’21
Dawkins initially resisted calls for a conference communiqué, but as he and his staff listened to the polarised arguments of other participants, he saw the need to dispel the dichotomy they were propounding. Hence he delivered a closing statement on the final day that again harnessed equity to the economic function of education but acknowledged that was not its only function. If he could not bring himself to embrace the OECD educationists’ language of ‘personal development and self-fulfilment’, he allowed that education served ‘a wide range of social, cultural and individual interests, which in turn need to be appropriately protected’. And while accepting that government should make room for other providers, he affirmed the need for regulation, planning and coordination.22 The head of the OECD’s Directorate of Social Affairs, Manpower and Education recalled that the organisation adopted Dawkins’ closing address without changing a word.23
The government wanted both efficiency and effectiveness. The terms were so often twinned in policy statements that they were commonly regarded as meaning the same thing, but the distinction holds the key to Dawkins’ differences with the market economists. Efficiency referred to the ability to do something successfully and without waste, to maximise the outputs from a given level of inputs. The neoliberal argument was that if universities had to attract customers in a competitive market, they would provide the courses that attracted students with the least waste of time, effort and resources. Effectiveness, on the other hand, referred to the purpose of the activity and the quality of execution. It was concerned with the outcomes that higher education was meant to achieve: serving the national interest by conducting research that supported technological innovation and preparing a more enterprising and capable workforce. Reliance on consumer preference would not bring about such a transformation; an effective system of higher education required a closer partnership of government and business.
Dawkins was not alone in taking up the role of education in economic reconstruction. The business-centred Committee for Economic Development of Australia did so in a 1985 report on Education for Development, as did the Economic Planning Advisory Council in its 1986 paper on Human Capital and Productivity Growth and the Australian Science and Technology Council’s report on Education and National Needs in the following year. Like Dawkins, these bodies differed from the neoliberal zealots in stressing the importance of a substantial increase in higher education. To be sure, they wanted to reorient it to the requirements of business and to improve its performance. They also opened the possibility of alternative funding sources, but this was to expand provision and there was no suggestion that the Commonwealth should reduce its support.
The OECD’s report on Structural Adjustment and Economic Performance emphasised the need to change the way governments provided such services. The allocation of resources to education, health and welfare had escaped ‘the control of market processes’ and their expanded operation had outstripped ‘management capabilities’, so that such programs needed greater transparency, accountability and a continual search for cost efficiency.24 Dawkins had already initiated such changes in the Commonwealth public service, and he required no encouragement to see their applicability to universities and colleges. As we shall see, he wanted ministerial control over policy, a contractual relationship between government and higher education institutions, and management changes that would enable them to respond quickly to rapid change through business methods such as program budgeting, performance measurement and quality assurance. Higher education would thus become more efficient and, by increasing capacity, would serve the needs of those who had been denied entry. Equity and efficiency were brought together here in a form that strengthened the hand of government.
This was an approach that broke with the education policies of the Whitlam government. It had pursued a social democratic model in which education was provided as a public good that enriched the lives of citizens, statutory commissions were used to distribute funds to schools, colleges and universities in the expectation they would make best use of them, and increases in government outlays were expected to lift standards and improve access. The policies of the 1980s were enunciated in an atmosphere of economic crisis when the needs of the economy prevailed over all other considerations while schools, universities and other institutions were judged to have failed and public provision was regarded as a burden. In its search for economic recovery, the Labor government resisted the harsh social measures of the United States under Ronald Reagan and the United Kingdom under Margaret Thatcher, where considerations of equity were not entertained and outlays on higher education were cut—but it was no less determined to bring the sector to heel.
If higher education could not escape the steady state, it was at least able to conduct its affairs with a large measure of common purpose until some way into the 1980s. CTEC, under Peter Karmel’s leadership, had an unrivalled knowledge and understanding of the sector. Its responsibilities, which extended from formulating policy to administering institutional grants, were exercised with a high level of consultation. It had close relations with the two principal representative bodies, the Australian Vice-Chancellors’ Committee (AVCC) and the Australian Committee of Directors and Principals in Advanced Education (ACDP), which in turn maintained adjacent offices on Canberra’s Northbourne Avenue and frequently made joint submissions. There were good channels of communication with the state coordinating agencies and other interested parties. CTEC respected the autonomy of institutions and the sensitivities of the federal–state relationship. Its preference was to resolve differences through extensive negotiation, compromise and adjustment until it could reach an agreement to which all participants were committed.25
Neil Marshall, a close observer of this arrangement, sees it as exemplifying a ‘self-contained, internally regulated policy community’ with sufficient goodwill and common interest to accommodate differences. This cohesion, he argues, gave the higher education lobby substantial influence and allowed it to control its destiny. He also suggests that the very strength of the policy community was a source of weakness. Its mode of decision-making was consistent and coherent, but it was also cumbrous and allowed only incremental change. Moreover, the decision-makers made little effort to build links with other policy communities or to promote higher education to the wider public. CTEC’s lengthy and detailed triennial reports were too technical for all but the initiated, yet it resisted calls to explain its work or publicise the achievements of the sector; ‘nobody cared what we did’, one commissioner reflected.26 Some vice-chancellors could see ‘the growing public disillusionment with universities’ and urged the need for better communication with the communities they served, but the AVCC paid little attention to public relations until the threat of a Unified National System was upon it.27
There were intermittent efforts to lift the visibility of higher education. In an effort to draw attention to its plight following Malcolm Fraser’s initial cuts, the AVCC hit upon the idea of sponsoring a newspaper section. An offer to direct university advertising of staff vacancies attracted bids from the Fairfax press and the weekly National Times, but the AVCC favoured the pitch from The Australian ‘to highlight the achievements of the universities’, and its Higher Education Supplement commenced at the beginning of 1980. This certainly provided an outlet for universities’ public relations officers, although it also gave space to student and staff complaints (and soon acquired the soubriquet of the ‘wailing wall’), while the newspaper became increasingly sympathetic to the arguments of the cultural conservatives and market economists. The placement of the Supplement, at the back end of a mid-week edition, indicated its intra-mural character.28
Marshall’s understanding of the isolation of the policy community enables him to explain why it was so vulnerable when a number of government departments and agencies began to invade its territory. He also notes that its cohesion came under strain as conflict over the binary divide escalated to the point that several state governments took unilateral action to turn their institutes into universities; but this is a minor element in his account of the collapse of CTEC’s authority. He surely overstates the strength of the higher education lobby before the fall, for it was unable to break out of the steady state or even to ward off the indignities imposed by the Fraser government’s razor gang in 1981. He probably understates the differences within the sector, for we have seen that the university and advanced education councils of CTEC consistently proffered competing advice. He is right to observe growing differences between the AVCC and the ACDP, but this disunity was also apparent within their ranks as well as in their dealings with staff organisations and other academic bodies. All were frustrated by the unresponsiveness of government to their pleas for growth, and their response was to become more parochial, determined to protect their own fiefdoms without offering any way out of the impasse.
The AVCC was an association that enabled universities to arrange matters of common concern. It had initiated a Graduate Careers Council to facilitate and track employment outcomes; a cooperative scheme to promote Australian universities overseas, which became the International Development Program; an industrial association, later the Australian Higher Education Industrial Association, to represent them before industrial tribunals; a superannuation scheme, now UniSuper; and a computer network, which as the Australian Academic Research Network connected this country to the internet. Once established, however, these undertakings were hived off to separate organisations so that the AVCC could concentrate on its principal task of representing the sector.
The vice-chancellors met four or five times a year, insistent that all business remain in their hands. They were supported by a small secretariat in Canberra headed since 1966 by Frank Hambly, a former university administrator who was expected to defer to his academic superiors. He relied on the occupant of the chair, elected every two years, to lead delegations and make public statements—providing that office-bearer could spare time from his university duties. Since the heads of the larger and more prestigious universities generally avoided such distractions, the office often fell to those of lesser status, who in any case were constrained by the need for consensus. As the difficulties of the sector mounted, Hambly tried to persuade them of the need to put their case more forcefully. ‘The Vice-Chancellors have always been reluctant to become too visible’, he told a meeting of the executive in 1984, ‘but the AVCC needs to lift its performance both in regard to “lobbying” and making public comments on issues.’ The members were not yet ready to do so. As Hambly put it, the AVCC preferred to function as a ‘gentlemen’s club’.29
In happier days this small and exclusive body enjoyed ready access to the federal minister for education—and, if need be, could sometimes put their case to the Prime Minister—and were thus able to lend their weight to AUC submissions for additional financial support. That cosy relationship passed with the formation of CTEC, which had to balance the claims of the universities with those of the CAEs and the TAFE sector, and the AVCC complained to Susan Ryan in 1985 that CTEC was becoming ‘increasingly centralist and authoritarian’.30 In the same year the AVCC began to compile, and publicise, statistics of the number of eligible applicants unable to find a university place, and established a working party with the Business Council of Australia to improve links with industry. But it was only when Dawkins took over the portfolio that the AVCC moved belatedly to play a more active role in the debate on higher education. Frank Hambly’s responsibilities were expanded, Vin Massaro was recruited (from the Victorian Board of Education) to advise on policy and Helen Trinca (formerly a higher education reporter for The Australian) became public relations officer. Meanwhile the AVCC remained flatly opposed to private universities or any new ones—it brusquely dismissed an ACDP proposal for amalgamation and would not even contemplate taking in the larger institutes of technology.31
In 1984 the AVCC and ACDP met to discuss the structure of tertiary education. Then and afterwards, they were unable to agree (except to recognise that ‘antipathy existed’), and their arguments over the binary divide became increasingly acrimonious.32 The secretariat of the ACDP was as constrained as that of the AVCC and the directors and principals more fractious, for they represented a much larger and more diverse category of institutions. The heads of the larger metropolitan institutes pursued their aspiration for parity of status with universities through a further association, the Directors of Central Institutes of Technology (DOCIT), and their smaller counterparts resisted subordination with an Association of Regional Colleges of Advanced Education. The ACDP made much of student demand for its professional courses and the fact that entry standards for many college degrees were higher than those offered by the newer universities; DOCIT drew attention to the growth of industry-funded research. Don Watts, the academic entrepreneur who by 1987 had turned the Western Australian Institute of Technology (WAIT) into Curtin University, was a prominent advocate of establishing a market in higher education, whereas the former teacher training colleges and the smaller institutions that taught art and music were completely dependent on public provision.33
There was a growing dissatisfaction among those who worked in higher education. Within each university there was an association that represented the academics, and nationally they comprised the Federation of Australian University Staff Associations (FAUSA), which had about 9000 members. FAUSA traditionally operated as a professional body rather than a union, for even though academics were employed on salaries, they enjoyed a large measure of control over their duties and regarded themselves as members of the university as much as its employees. Their professional lives were self-directed and closely tied to the intellectual tasks on which they were engaged, so that the loyalties of these ‘academic tribes’ to their own field of knowledge extended beyond the university in which they worked.34 Various disciplinary associations and four learned academies—covering science, humanities, social sciences and technological sciences—added their voices to the call for relief from the steady state. FAUSA’s journal, the Australian Universities Review, provided the principal forum for discussion of higher education in Australia and during the 1980s marked out a growing concern with the pressure to which the sector was subjected.
The college staff aspired to such professional status but in quite different circumstances. With their origins as state instrumentalities, the CAEs had been governed by public service conditions and were still subject to much greater supervision; many of the teachers had prior experience in industry or state education departments. Their principal representative, the Federated Council of Academics (FCA), adopted a union approach to industrial bargaining over pay and conditions, as did unions covering general staff. A similar approach emerged within FAUSA as academic salaries fell behind those of comparable occupations (the public service was used as a yardstick) and universities made increasing use of fixed-term and casual academics. Until 1983 the staff bodies were ineligible to obtain a national award, but a High Court decision in that year gave them access to the Conciliation and Arbitration Commission. FAUSA obtained coverage of the universities at the end of 1986, and the FCA (under the title of the Union of Australian College Academics, UACA) did the same in the college sector in early 1987. When the AVCC first met Dawkins later that year, it drew attention to the consequences: FAUSA had become ‘more rigid in matters relating to academic employment’, and its demands were causing ‘serious management problems’.35
Both unions presented a log of claims to the Conciliation and Arbitration Commission (which became the Industrial Relations Commission in 1988), but by this time it had handed down a national wage decision that provided all employees with a flat increase of $10 and required their unions to negotiate productivity improvements for any additional amount.36 This occupied the academic unions, heads of institutions and the Commonwealth in extensive bargaining over a wide range of issues that will be discussed later since it enabled Dawkins to pursue extensive changes to university management as part of his plan for a Unified National System.
The consequences were far-reaching. Ken McKinnon, a sagacious vice-chancellor, observed that tenured academics enjoyed ‘a measure of personal freedom virtually without parallel in any other occupation’. Their terms of employment, which had grown through ‘a system of conventions rather than rights and treaties’, allowed them to control their disciplines and conduct them with a minimum of supervision.37 This informal system of determining academic duties by custom and practice was already giving way to a more prescriptive form of personnel management, but now the vice-chancellors were recognised as employers with their own Australian Higher Education Industrial Association. Any lingering notions of collegial self-government disappeared with the transformation of staff associations into unions, for how could academics bargain with themselves?
The academic unions supported some of the Labor government’s policies on higher education such as greater participation and equal opportunity, but above all they wanted a restoration of funding and were extremely critical of the erosion of conditions, especially larger classes and increased workloads, that accompanied the steady state. Schemes for a higher education market horrified them. In these attitudes they were in close accord with student bodies, the Australian Union of Students—replaced in 1987 by the National Union of Students—and the Council of Australian Postgraduate Associations. The undergraduate union was a volatile arena of student activism, its militant manifestos frequently falling on deaf ears, but mobilised large numbers in opposition to the Fraser government’s attempt to reimpose fees and did so again when Labor introduced the Higher Education Administration Charge in 1986. Less inclined to rallies and demonstrations, the staff unions were able to seek broader support through their membership of the Australian Council of Trade Unions (ACTU), whose interest in education had been indicated in the report on Australia Reconstructed. The FCA, especially, appealed to the principle of tripartite participation of government, industry and unions in the reconstruction of higher education.
That principle was central to the Labor government’s strategy of economic recovery by means of consultation, cooperation and consensus. The spirit of common endeavour was enshrined in a formal agreement arranged at the National Economic Summit in 1983, signed by representatives of business and the unions, and maintained through regular meetings of the Economic Planning Advisory Council. The difficulty was that the agreement was based on a Prices and Incomes Accord arranged beforehand between the government and the ACTU. Employers were not a party to the Accord and profoundly mistrusted the corporatist approach it enshrined. They saw no need for the unions’ pledge to restrain wage claims in return for involvement in decision-making since economic conditions were such that there was no prospect of a wages breakout. Their participation in the Summit was forced on them by an atmosphere of emergency, their agreement to its decisions obtained by Bob Hawke’s masterful direction of proceedings in the spirit of national reconciliation. They repented at leisure as periodic renegotiations of the Accord by the government and ACTU produced new agreements to which they were expected to adhere.38
Several of the principal business organisations—the Australian Mining Industry Council, the National Farmers Federation and the Confederation of Australian Industry (a peak body of other associations)—were resistant to the government’s corporatist approach from the outset. Partly for that reason, and partly because he preferred to negotiate with the heads of the largest companies, Bob Hawke encouraged them to form the Business Council of Australia (BCA), and the Prime Minister was not averse to comparing the reasonableness of these captains of industry with the more confrontational approach of the employer federations. Yet the Business Council had strong views of its own on the need for reform, including reform of education and training.39
Hawke also encouraged the BCA to explore greater cooperation with the AVCC, and a joint working party laboured for more than a year to produce a set of modest recommendations.40 When the Prime Minister opened a forum of the two organisations in 1986, he cited OECD reports and the recent downturn in the terms of trade to declare that the government was ‘determined to make the education system more responsive to the needs of the economy’. By this time the BCA had established an Education and Training Committee and commissioned research to document its members’ dissatisfaction with the quality of the graduates they employed. The vice-chancellors and the business chiefs professed a common purpose, yet their forum revealed a mutual incomprehension. Graham Spurling, head of Mitsubishi Motors’ Australian operations, said that funding must be channelled to the needs of industry: ‘Law schools must get poorer and engineering schools must get richer’, but even the engineers had to change their ways. Brian Wilson, Vice-Chancellor of the University of Queensland and a scientist, insisted the universities had already turned their effort towards technology transfer but warned that research and innovation were not amenable to central direction: ‘the real value to the country will be to allow universities to continue much as they are’.41
The hostility within economic and business circles to an active government in a mixed economy is sometimes dated to a speaking tour of Australia in 1975 by Milton Friedman, which was organised by the Sydney stockbroker Maurice Newman.42 The publicity this outspoken monetarist attracted at a time when the failure of the Whitlam government to contain public spending and inflation was so painfully evident certainly weakened the hold of Keynesian methods of economic management, but neither the Fraser nor Hawke governments embraced neoliberalism with the zeal its advocates demanded. The aim of ‘think-tanks’ such as the Centre for Independent Studies and the Institute of Public Affairs was to disseminate the cause within business and government, and promote it to the public.
Some ministers and senior officials were sympathetic to the application of market principles to public policy, but not in the form these evangelists proposed. Since they were so antagonistic to the entanglement of business and government, their growing influence within employer associations only diminished the receptiveness of the Labor government, as did the industrial campaigns waged by prominent figures within those associations such as Hugh Morgan of the Mining Industry Council, Ian McLachlan of the National Farmers Federation and Andrew Hay of the Australian Chamber of Commerce.43
Such ideas gained traction as the decade proceeded. Having embarked upon financial deregulation, Paul Keating delivered homilies on the need for further market reform with an idiomatic force that won over the Canberra press gallery. ‘In the game of life, always back self-interest—at least you know it’s trying’, was one of his aphorisms, taken up in calls to make users pay, end provider capture and resist the specious pleas of rent-seeking interest groups. Universities were only one of many such sectors of the economy seeking special consideration and some way down the commentators’ order of priorities, but they were not overlooked. After the release of the Economic Planning Advisory Council’s 1986 paper on Economic Capital and Productivity Growth, Ross Gittins, economics editor of the Sydney Morning Herald, declared that ‘the development of Australia’s human capital is far too important to our economic future to be left in the hands of patch-preserving educationalists’.44
Neoliberalism also exerted a growing influence within the Liberal Party. The senior Coalition party’s goal by 1987 was to create a market in higher education through the introduction of student vouchers that could be used at public or private institutions, and by allowing both to charge fees. Its task, in the election of that year, was to make such a scheme palatable. Peter Shack, the shadow minister, made much of the inadequacy of current provision because of its economic effects (‘we have been paying the price for neglecting investment in human capital’) and the denial of opportunity to eligible students. He argued that existing institutions needed to be set free to plan, operate and grow without government control of their income and expenditure. Accordingly, the Liberal Party proposed that 20 per cent of higher education funding be converted into a scholarship scheme tenable wherever the student chose. Beyond this, once a public institution had allocated the places supported by government, it would be allowed to enrol additional fee-paying students on the same basis as overseas ones.45
There was an element of smoke and mirrors in this election policy. Since the Opposition was pledged to lower taxation and government expenditure, the removal of a portion of the grant to public institutions could only reduce the number of places they offered. And while the Liberal Party spoke of opening the doors to those currently denied the opportunity to undertake a degree (John Howard claimed there were between 30 000 and 40 000 of them), it gave no indication, beyond an undertaking to explore a loans scheme with the banks, how those without wealthy parents could finance their studies. The neoliberal thrust was clear: ‘Government has been playing God with higher education for too long’, and ‘higher education is mature enough to leave the nest’. The problem lay in the uncertainty and inequity of such a poorly prepared proposal.46
The platform of the Labor Party declared that higher education should be free. The Accord provided for maintenance, and where necessary expansion, of funding. In repeating that commitment, the communiqué of the Summit stated that ‘education, training and retraining are of fundamental importance’ and that participation in tertiary education should be increased. Even though the government failed to meet the funding commitment, any retreat from its pledge that higher education would be free of charge was bound to be contentious. The members of the Expenditure Review Committee backed off the introduction of a fee in 1985, not simply because Susan Ryan appealed to Caucus but in the knowledge that any proposal of this kind would require skilful political management. When Peter Walsh persisted by appearing at the National Press Club to propose a loan scheme and the chair of the Caucus education committee issued a public rebuke, the Federal Executive stated that such airing of differences must cease. It was partly to preserve the shibboleth of free tuition that the $250 impost on students introduced in the following year was described as an administration charge.47
By this time, as we have seen, a number of government departments and agencies were proposing new sources of funding and new arrangements. Although their ministers were reluctant to take up these proposals, it was common knowledge they were attracted to them. Two political scientists have traced a persistent instrumentalism in Labor attitudes to higher education: throughout the expansion of the 1960s and 1970s the university was seen as a device to serve public ends, be they the needs of the economy, the cultivation of citizenship or promotion of greater equality of opportunity, but there was little regard for intellectual and cultural endeavour as an end in itself. The very word ‘academic’ carried pejorative connotations. Thus John Button, the Minister for Industry, who was pushing for research to be tied more closely to the development of new products and services, was disdainful of the academic orientation of the work done in universities: ‘while this may be edifying for international journals, it contributes little to the welfare of the country’.48
Before Whitlam, Labor politicians had limited familiarity with universities and saw them as places that reproduced social advantage. The overwhelming majority of Hawke’s ministry were graduates, and several pursued academic careers before entering parliament, but their involvement in higher education did not engender greater sympathy. Like Dawkins, a number of them had been student activists at odds with the university authorities and critical of the lack of attention to their concerns. The university they recalled was self-absorbed, the engaging lecturers less often remembered than those who brought little enthusiasm to the task. In their demands for greater accountability, the privileges of the academic profession loomed large. As politicians they were constantly on call with no security of employment beyond the next election, yet academics enjoyed tenure and taught for only half the year. If the change and uncertainty brought on by economic reconstruction had removed the expectation of a job for life from so many occupations, surely higher education should not be immune.
By 1987 it was clear that change was imminent, although the form it would take was unclear. The proposals advanced by neoliberals were impractical and politically unacceptable. Those providing for a continuing role for government in a move towards an education market were more likely to provide a solution, although that would require devising an arrangement acceptable to the government’s support base. It was also clear that the higher education sector was unlikely to adopt, let alone initiate, change of the magnitude that was sought. In July 1987, just five days after the new Labor ministry was sworn into office, Peter Karmel spoke to a conference of Australian and British university administrators on the changes needed if they were to maintain their autonomy. ‘Rapid change is possible’, he warned, ‘when external factors force a rupture in the institutional fabric, but the costs of this may be considerable.’49