Bob Hawke called an early election for July 1987 to take advantage of the Opposition’s disarray after Joh Bjelke-Petersen led the Queensland Nationals out of the Coalition. Despite a slight decline in Labor’s share of the vote, the government was returned with an increased majority, although it remained dependent on the Democrats for passage of legislation through the Senate. In reconstituting his ministry Hawke announced a major change in the machinery of government. Hitherto there had been twenty-eight Commonwealth departments and thirty ministers, seventeen of them members of the Cabinet. Now, with the aim of better coordination and greater ministerial control, the number of departments was reduced to eighteen and all but a single member of the Cabinet was given responsibility for one of them. The ministers outside Cabinet no longer controlled their own portfolios; they were junior ministers handling a part of one of the new ‘mega-departments’.
The exception among the Cabinet ministers was Susan Ryan, who lost Education but was let down gently with appointment as Minister of State in the Department of Prime Minister and Cabinet with responsibility for the Office of the Status of Women, along with the Bicentenary and the ill-fated Australia Card. She bailed out at the end of the year. Dawkins lost his portfolio of Trade, which was merged with Foreign Affairs, so he needed a new ministry. He had indicated his interest in Education, especially if it was enlarged to take in employment and training, and rumours of such an arrangement preceded the election.1
How strongly he sought this new responsibility is open to question. One of his advisers has recalled that Dawkins was surprised, perhaps even disappointed, to be made Minister for Employment, Education and Training. Although he had a strong conviction that the three components needed to be brought together, he also knew that each of them was a large and complex area of government activity. Reorganising and integrating them would be arduous, requiring his full attention and depriving him of the wider influence he had exercised in a key economic portfolio. ‘But for all that’, this insider stated, Dawkins threw himself into the task ‘like a whirlwind.’2
The expanded Department of Employment, Education and Training (DEET) took in the Office for Youth Affairs from the Department of Prime Minister and Cabinet, the research programs of the Department of Science (which was absorbed into John Button’s Department of Industry, Technology and Commerce), and responsibility for the Commonwealth Employment Service and labour market programs from Ralph Willis’s former Department of Employment and Industrial Relations (now just Industrial Relations).3 This was unmistakably a mega-department with a staff of around 10 000, although it had no junior minister during the government’s third term of office since Dawkins preferred to have a free hand as he set about realising his objectives. He also determined the name of his department, its three components arranged in non-alphabetical order for reasons he explained in a departmental bulletin: ‘Employment has been placed first in the title because it represents our ultimate objective’.4 He brought with him his secretary from the Department of Trade, Vince FitzGerald, to help wield the new broom, yet by his own admission had no detailed plan: ‘I rolled into the Department in July and I knew what I wanted to do, at least to a large extent … It was all in my head—I didn’t have a piece of paper.’5
His administrative style was to direct policy and avoid cumbersome deliberation over the details: ‘You don’t get cluttered up with decisions and paperwork that don’t really matter.’ He preferred decisive action to consultation, handpicked task forces to representative inquiries, and quickly assembled a personal staff that assisted him to maintain momentum. Dawkins’ energy and ambition attracted able advisers, and he used them effectively. When determining how to proceed, he liked to summon those working in his office along with members of the Department whose judgement he valued in order to ‘bounce ideas around’. He would often play the role of the provocateur at these gatherings, trying out exorbitant suggestions in order to gauge the strength of the resistance they were likely to encounter and thereby work his way to a solution.6
In July, within a week of taking charge, Dawkins initiated a review of the administrative arrangements for higher education. In August he announced a delay in the next funding triennium to allow consideration of the changes needed to meet the nation’s needs, and in September he indicated the scope of those changes. In releasing further details at the end of the year, he gave notice of an inquiry into new funding sources. By then he had settled on the design of the Unified National System, which was to begin from the end of 1988 and in turn required further policy development, changes to the party platform, legislation, acceptance by the states, reorganisation of the sector and securing its compliance with the new order.
This fundamental reconfiguration of higher education was conducted at a hectic tempo. Each step in the process led to the next, although there was slippage in the timetable and many changes were still in train when a further instalment began. The obdurate resistance of the sector to Dawkins’ blitzkrieg caused some of the delays. Occasionally he offered concessions; more often he exploited the disunity of his opponents or caught them off-guard by opening a new salient. This chapter follows the components of the Unified National System in the sequence that he determined.
On 29 July 1987, the new departmental secretary notified the Australian Vice-Chancellors’ Committee (AVCC) that a task force would consider appropriate administrative arrangements to enable the education and training system to ‘facilitate structural adjustment and increased competitiveness of the Australian economy’. Charles Halton, former secretary of the Department of Communications, would lead it; he had previously worked with Dawkins on the design of the new youth allowance scheme and knew what the Minister wanted. The other members were drawn from the new department with the exception of the administrative head of the Commonwealth Tertiary Education Commission (CTEC). Stressing the urgency of the task, FitzGerald asked the AVCC to give its views within ten days.7
An in-house review conducted with no terms of reference, no call for submissions and no academic involvement set the alarm bells ringing, but on this occasion Frank Hambly’s intelligence network failed him. Hugh Hudson was shut out of any involvement and unable to shed light on the Minister’s intentions, while Halton assured the AVCC secretary that his was to be only a preliminary investigation of the current arrangements. Accordingly, John Scott of La Trobe University, who had recently assumed the chair, wrote to Halton and conveyed the AVCC’s satisfaction with the current role of CTEC.8 It soon became apparent that Hambly was misinformed. In September, even before Halton completed his review, administration of the Commonwealth’s TAFE programs was moved from CTEC to the Department. Hudson now realised that his commission’s very survival was under threat and broke his silence at the beginning of October. A statutory authority must be retained, he declared, to shield universities and colleges from ‘direct government intervention’ and maintain ‘a non-political system of higher education’.9 By then Halton’s recommendations were before the Cabinet.
On 15 October, Dawkins announced that CTEC was to be replaced by a new body that would advise the Minister on a much broader range of activities, in keeping with the government’s approach to the ‘rationalisation of employment, education and training’. There would be a National Board of Employment Education and Training (NBEET), and within it a Schools Council, an Employment and Skills Formation Council for the TAFE sector, a Higher Education Council (HEC) for universities and colleges, and the Australian Research Council (ARC). The board and its four councils would be more representative of ‘users’ and allow business and unions to make their needs known. The new advisory structure would also have a more restricted function since the Department was to initiate and implement policy, and accordingly it would operate with a much smaller staff of about twenty-five public servants, appointed by the Department. The board was to base its work programs on formal references from the Minister, although it could offer him advice, and the councils could not initiate inquiries.10
The document that the Minister finally released at the end of the year explaining this new advisory structure cited a number of benefits. It would improve the information flow from industry, ensure that advice could be sought and provided promptly, allow the Board ‘to address the whole spectrum’ of education and training, and eliminate duplication of effort. Similarly, ‘the location of all program delivery with the Department’ would bring ‘improved coordination of programs and achieve more efficient use of Commonwealth resources’.11
The universities were alarmed by the relegation of higher education to a subordinate position in the new structure, the loss of operational knowledge if NBEET and the HEC no longer had direct contact with institutions, the lack of public accountability if they reported directly to the Minister, and the ‘increased scope for political influence in the higher education sector’. The AVCC raised these concerns in perfunctory consultations that followed the October announcement, but the statement Dawkins issued in December accorded no recognition of them. It recorded cursorily that there was ‘wide acceptance of the government’s proposals’. That was true of the ACDP, which regarded CTEC as an impediment to its ambitions. Otherwise, the sector regarded them with grim foreboding.12
The legislation to establish NBEET awaited parliamentary consideration, so it began at the end of 1987 with some temporary appointments. Helen Williams, former secretary of the Department of Education, was interim chair of NBEET. Gregor Ramsey, a former CAE director and Director-General of Edu cation in New South Wales who had chaired CTEC’s Advanced Education Advisory Council, made a successful transition to the new order as interim chair of the HEC. Don Aitkin, a political scientist at ANU before becoming chair of the Australian Research Grants Council, had already been chosen to play the same role in the ARC.13 Since most of the other appointments were still to be made, and most of CTEC’s officers had been transferred to the Department, the new advisory structure remained largely dormant until some way into 1988.
When Dawkins introduced the Employment, Education and Training Bill to the House of Representatives in April 1988, he conceded that the disappearance of CTEC would be ‘a matter of regret to some’. The AVCC was among the mourners and pressed its objections to the new arrangements at a meeting with Dawkins in the following month. The vice-chancellors were particularly concerned that the HEC lacked independent status and would be unable to take up their concerns. The Minister said he was prepared to consider amendments to strengthen the councils, although he dug in his heels when the Opposition spokesperson, Jim Carlton, moved amendments to his Bill that bore close correspondence to the changes the AVCC sought. ‘We are not establishing this elaborate structure so that the Board and these councils can go off on a frolic of their own’, he replied, but was forced to give ground when the Democrats joined with the Opposition in the Senate. Their amendments broadened the educational membership of NBEET, strengthened the reporting arrangements and also ensured that HEC would be able to initiate inquiries on higher education.14
With the passage of the legislation, the Minister announced appointments to the Board and its councils. Bob Smith, Vice-Chancellor of the University of Western Australia, became the chair of NBEET; he was a confidant of Dawkins and wanted to move to the east. All four Council chairs were members of the Board and Gregor Ramsey was its deputy chair, but apart from Smith and Aitkin, the only other academic on the Board was Max Brennan, a scientist and Pro Vice-Chancellor of the University of Sydney. Two members drawn from the business sector, two trade unionists, two school educationists, Julian Disney of the Australian Council of Social Services and Charles Halton made up the remainder. The idea was that the councils would have to justify their advice on higher education, research, schools and training to the representatives of these ‘outside bodies’, as Dawkins called them, but in practice the outsiders struggled to grasp the complexities of the papers put before the Board and the council chairs usually dominated discussion.15
Gregor Ramsey was confirmed as chair of the HEC, with Brennan as his deputy. Two other members were drawn from universities, along with a representative of the Federation of Australian University Staff Associations (FAUSA) and the president of the National Union of Students (NUS), and there were two representatives of the college sector, a businessman, a research officer of the Australian Council of Trade Unions (ACTU) and the head of the Victorian Post-Secondary Education Commission. The HEC was seen as a privileged player in NBEET, its involvement in a triennial funding system a source of envy and resentment. The ARC encountered similar difficulties. Successive chairs of the Employment and Skills Formation Council criticised the esoteric nature of academic research, and senior officials of the Higher Education division of DEET felt similarly.16
In its first eighteen months, NBEET was largely absorbed with trying to catch up with the sweeping changes Dawkins made. Bob Smith was a consensual chair with little public presence and resigned at the beginning of 1990 to take the vice-chancellorship of the University of New England. Gregor Ramsey, his successor, was more closely involved with the Minister and raised the Board’s profile, not always happily. When he left in mid-1991, the Board was left with a series of part-time chairs and diminished influence. In addition to their chairs, the councils had full-time counsellors to assist their work; most came from academic backgrounds and undertook a large number of investigations over the following years. NBEET and its councils also commissioned reports from higher education specialists on a wide range of topics. The Minister kept his advisory bodies busy, and they provided him with a greater understanding of the difficulties in realising his objectives. They did not deflect him from his purpose.17
That he was able to replace CTEC with the toothless NBEET with so little resistance was striking. From the time the Commonwealth began making direct payments to universities, an independent body to safeguard their autonomy had been thought essential. Its triennial process of consultation and recommendation allowed for planning and development beyond the vagaries of the political cycle, but for that very reason it was a barrier to the control the new Minister was determined to exercise. CTEC was vulnerable, not just because the policy community it led was fragmenting under external pressure but because it had done its work too well. In comprehensive public reports it set out recommendations, so that the government in turn had to put its response and directives on the public record, and then allow the Commission to administer the Commonwealth grants.
Few of those who worked in the institutions whose fortunes it guided were aware of CTEC’s role or even of its existence, and by 1988 their attention was in any case absorbed by other changes that affected them directly. The protests of universities and informed observers had little public resonance, and the concessions the Minister made to ensure passage of his legislation were merely cosmetic, leaving him free to propose, decide and administer higher education policy. The historian Paul Bourke, one of Dawkins’ most outspoken critics, suggested in early 1988 that the execution of CTEC ‘might be the most far reaching of the “reforms” which the government has set in train’.18
As soon as the new department was announced, the AVCC and ACDP sought a meeting with the new Minister, but during the first two months of his new ministerial responsibilities John Dawkins was inaccessible. It was not until 15 September that he finally met a delegation of three senior vice-chancellors, Brian Wilson of Queensland (who was acting chair of the AVCC), Michael Birt of the University of New South Wales and David Caro of Melbourne. Their principal object was to establish a modus vivendi with the new regime, and they believed they did so. Wilson wrote afterwards to thank the Minister for his receptiveness and remind him of his offer of ‘closer consultation’. ‘Australian universities today are very different from the institutions they were five years ago’, Wilson assured Dawkins, along with an affirmation that they were ready to assist him.19
On the same day Wilson sent this letter of appreciation, John Dawkins made a ministerial statement in the parliament setting out The Challenge for Higher Education in Australia. It began with a reminder of the central role that ‘human skills’ would play now that the country could no longer rely on natural resources to support its living standards. ‘Just as these circumstances have changed dramatically, so must our attitudes and practices in education and training.’ Higher education had particular importance since it was the main source of scientists, engineers and technologists, universities the place where most basic research was conducted and where young researchers who would be the prime source of innovation were trained. The government was strongly committed to ‘further development of our national higher education system’, but he was ‘not convinced’ that a perpetuation of the current funding arrangements would serve the interests of the system or the nation. Accordingly, CTEC’s advice on funding for the 1988–90 triennium would be set aside for special arrangements in 1988 while the government worked out what it wanted to do.
Change was required in three areas. There needed to be ‘changes of attitudes’ to reflect national imperatives and to ensure that the system could respond quickly and positively. There needed to be ‘changes in processes’ to enhance higher education’s capacity to ‘produce quality graduates utilising necessarily limited resources’. And there needed to be ‘changes in structures’ to remove impediments to improved performance. The government would therefore embark on a process of planning and consultation leading to the establishment of a new set of arrangements for Commonwealth support of higher education from the beginning of 1989. To guide the process, DEET would issue a policy discussion paper by the end of 1987 as a basis for ‘consultation and community comment’. The paper would be prepared by a new departmental task force, which would consult with outside bodies ‘as appropriate’ and cover the range of government concerns about the present performance of the system. Among the ‘issues to be addressed’ were the desirable rates of growth, the resources needed and new funding sources; ‘productivity issues’ such as better use of facilities and rationalisation of activities; elimination of the ‘“me-too” approach’ to course offerings and greater concentration of effort in teaching and research; a clearer definition of institutional roles and removal of the distortions of the binary system; improved institutional decision-making and staff management; and a shift in public funding from input costs to measurement of outputs to establish a basis for competitive bidding for resources.20
That Dawkins intended to reorganise higher education came as no surprise; as Paul Kelly, national affairs editor of The Australian, pointed out, ‘he was made minister to change the system’.21 It was the sweeping scope and peremptory tone of his September statement—neither apparent when he met the vice-chancellors a week earlier—that caused alarm. He assumed that higher education existed to serve the national interest and that government could determine how it should do so. He suggested that the funding system had held it back, disregarding the fact that the amount of funding had been frozen for the past decade. Even his palliatives were discordant. He did not want to ‘dispute or belittle the achievements of the past, but rather to signal the need for further progress, at a rapid rate, beginning now’. He acknowledged the ‘crucial contribution made by our economists, historians, philosophers and others in the humanities’, but took it as axiomatic that they must bend their efforts to the production of ‘broad and transferable skills’. The statement provided little evidence for the defects it proposed to remedy and simply assumed that the higher education system would ‘accept the need for change’ and ‘cooperate in its implementation’.22
The statement contained one of the provocations that were the Minister’s hallmark. While claiming that ‘many within the system do accept the need for rapid change’, he warned that he would not be deterred by ‘those who have a vested interest in protection of the status quo, regardless of the wider national interest’. Another such sally followed at a public lecture delivered in early October at the Royal Melbourne Institute of Technology (RMIT), where he compared its success in enrolling fee-paying international students with the meagre numbers at the University of Melbourne. ‘The older universities are simply being left behind by the younger, more flexible institutions’, he declared, and unless they could shake off their ‘ingrained resistance to change’ and ‘put the lie to their images as ossified bodies incapable of adaptation’, opportunities would pass them by. Or so he was reported: in fact he omitted this passage in his address, but by then it had been delivered to the press boxes in Canberra and the damage was done.23
University leaders responded angrily. ‘The universities are very, very cross’, Frank Hambly said, ‘and if they think we’re a bunch of wimps, they’d better have another think.’ Brian Wilson phrased his rejoinder more obliquely: ‘In coming to terms with a new and complex portfolio it is important that the Minister be accurately advised, and not regurgitate erroneous stereotypes put forward by university bashers.’ Ken McKinnon of Wollongong, better versed in the realpolitik of educational lobbying, was the most outspoken. ‘Advice is coming to the Minister’, he alleged, ‘from academics with an axe to grind.’ With the demise of CTEC, university autonomy was giving way to ‘politically motivated decision-making, cronyism and pork-barrel responses to special pleading’.24 The reference here was to an informal group of academics and administrators Dawkins had assembled as he prepared the September statement. Three were vice-chancellors and two college heads, all with axes to grind. Their privileged access to the Minister became an open secret in Canberra, and it was the sidelined Hugh Hudson who drew attention to their malign influence.
There were seven of them. The buccaneering Don Watts of the Western Australian Institute of Technology had defied CTEC to create Curtin University and was now inaugural Vice-Chancellor of the private Bond University. The other two vice-chancellors were new to the job: Bob Smith of the University of Western Australia and Mal Logan of Monash, both geographers and both eager to shake up the status quo. Brian Smith, director of the Royal Melbourne Institute of Technology, was an engineer, as was Jack Barker, recently retired from Ballarat CAE. Helen Hughes, an economist at ANU, was a strong champion of the market, and Don Aitkin had recently directed his frequent public commentary against the universities. The seven became known as the Purple Circle, that term sometimes understood as a comparison with the College of Cardinals and sometimes attributed to the bibulous dinners that accompanied their meetings.25
The minister deliberately kept the existence of the Purple Circle ‘a bit mysterious’ and, in the absence of any explanation of their role, rumours abounded. They were certainly not the authors of the September statement, more of a sounding board than an advisory committee. Dawkins’ senior advisers were economists with strong ideas on how higher education should work but limited familiarity with how it did. The members of the Purple Circle provided insights into existing practices as well as ideas for change. After their first meeting with the Minister, each prepared a paper for a second one that enabled him to translate his policy design into the institutional fabric (if not the idiom) of higher education and thus assisted him to formulate his September statement so quickly. As one of his advisers put it, the Purple Circle ‘confirmed John’s ideas; it gave him confidence to go ahead with the reforms’. For that very reason it was detested by many in the sector.26
The task force for the policy discussion paper consisted initially of Vince FitzGerald, with Helen Williams and Paul Hickey from the Department, and Hugh Hudson and Gregor Ramsey from CTEC, but Hudson refused any accommodation and ended his Commonwealth employment. John Ray, from the Council for Employment and Training, was secretary, and the secretariat included officers from Treasury and the Departments of Prime Minister and Cabinet, Finance and Industry, Technology and Commerce.27 By design, few of the participants had experience in higher education since Dawkins wanted the work to be undertaken by public servants with views unhampered by established practice.
The conduct of the task force marked a sharp break from previous inquiries, which were characterised by formality, openness, an elongated timescale and representative membership. Those chaired by Leslie Martin (1961–64) and Bruce Williams (1976–79) were composed of numerous experts in the field; they had clear terms of reference, called for (and recorded) submissions, visited institutions, undertook or commissioned extensive investigations and published their recommendations in lengthy reports, each of three volumes, that were closely argued and fully documented. This exercise, on the other hand, was conducted by officials with no public terms of reference, no process of consultation and no mention of the miscellany of unsolicited correspondence the task force received.28 Occupying less than three months, the exercise relied on available data of varying reliability, and appeared as a document of just 126 pages. Entitled Higher Education: A Policy Discussion Paper, it provided no recommendations on the grounds that it was simply part of a ‘consultative and collaborative process’.29 That process, of which no details were given, would allow the Minister to make decisions (there was no need for him to make recommendations to himself), which he would announce in Higher Education: A Policy Statement. The statement would constitute a White Paper, and this preliminary excursus was a Green Paper.
As with the Halton task force, the AVCC and ACDP were given ten days to provide their views to this one. Both hastily assembled statements that welcomed the prospect of growth, so long as it came with additional funding, and gave a mixed response to the changes canvassed in the Minister’s September statement. They endorsed a strengthening of their management prerogatives and increased control over staff, but insisted that they had already taken necessary steps to improve efficiency and effectiveness. Disagreeing predictably over the binary divide, they turned a blind eye to the passages in the statement that signalled a far more directive relationship between government and higher education.30
The Minister’s statement had given notice of the government’s objectives. The purpose of the Green Paper was to set out the arrangements needed to achieve them. Many of the changes it specified—clearer definition of role and mission, strategic planning, better utilisation of resources—were taken from the Review of Efficiency and Effectiveness, but its recommendations had been directed to the universities and colleges, which were free to heed or disregard them. A central purpose of the Green Paper was to devise and justify a method of holding the sector to account. This was done in brainstorming sessions with officials and advisers. Dawkins set aside an afternoon a week for these meetings, and the secretariat gathered the information needed to support the decisions made at them. The task force worked quickly and ranged widely: Australian embassies gave copies of Dawkins’ September statement to the higher education ministries of nearly all OECD member countries and gathered information on their approaches to the issues it raised. Gregor Ramsey and Paul Hickey, now acting as the assistant secretary in charge of DEET’s Higher Education Division, did most of the drafting, and the penultimate version was provided to members of the Purple Circle for their suggestions.31
As with Gaul in Julius Caesar’s account of its conquest, the Green Paper on higher education was divided into three parts: the need for change, the form that it would take, and ways of funding it. The first part rehearsed the role that higher education must play in microeconomic reform, compared Australia’s participation rate with that of other OECD countries, and proposed that the number of graduates be increased from 88 000 in 1986 to 125 000 by 2001.
The second part set out a new structure, to be known as the Unified National System. This was a new term, devised during the creation of the Green Paper as a composite term for the universities and the colleges, although in its capitalised form it quickly came to signify their comprehensive reconfiguration. All higher education institutions (this too was a neologism, which replaced universities and colleges in the official lexicon) would be eligible for Commonwealth support on a common basis—the binary system was abolished. They would be larger and fewer: 2000 equivalent full-time students (EFTSU) were set as a minimum size, 5000 were needed to conduct any research and 8000 for comprehensive research; and since twenty-one colleges had fewer than 2000 EFTSU and nineteen more—as well as eight universities—were under 5000 EFTSU, this would mean a major ‘consolidation of institutions’. The Green Paper claimed a number of benefits for unification and enlargement. Students could be offered a greater breadth and depth of awards and disciplines; staff would have increased opportunities; institutions could take advantage of greater flexibility and economies of scale.32
Membership of the Unified National System would require the institution to accept a number of conditions. There was no compulsion to join, but failure to do so would result in reduced funding—this was the crucial mechanism whereby the Commonwealth was to secure compliance with its directions. Members were expected to adopt strategic planning with ‘strong managerial modes of operation’, ‘stream-lined decision-making’ and adequate mechanisms of accountability to government, employers, employees, students and the community. They were to improve the ‘productivity of their capital resources’ by adopting a common academic year and possibly increasing its length. Particular attention was given to staffing since it accounted for more than 80 per cent of recurrent funding: there must be greater flexibility in allocating duties and determining salaries, more rigorous appointment and confirmation procedures, an increase in fixed-term and part-time appointments, and individual performance appraisal. Each member of the Unified National System was to define its role and mission, reduce duplication and eliminate subjects with small enrolments.33
Institutions were also to adopt measures to make higher education ‘available to a broader range of clients’. These included an equity plan to increase enrolments of ‘disadvantaged’ groups (students from ‘financially disadvantaged backgrounds’, rural and isolated regions, non-English-speaking backgrounds, Aboriginal and Torres Strait Islanders and women) and new selection procedures to facilitate transfer from TAFE to higher education.34
All these expectations were embodied in a new funding system. A member of the Unified National System was to receive an operational grant according to an educational profile setting out its proposed teaching and research and presenting its plans for implementing the conditions of membership. The profile would be negotiated with the Commonwealth and form the basis of funding agreement or contract against which the institution would be held accountable. The Green Paper foreshadowed the development of measures that would allow future funding to be based on performance, and indicated that 2.5 per cent of funding (although just 1 per cent initially) would be held back to reward those institutions that contributed to ‘national priorities’. Research was also to be made more selective by diverting funding from the universities for competitive allocation by the ARC, which would also determine national priorities.35
The final part of the Green Paper on how to finance the Unified National System was inconclusive; the task force had explored various avenues but reached no decision. The current level of Commonwealth annual expenditure was $2.5 billion, and rough calculations suggested that another $1 billion would be needed to meet the growth target. There was no prospect of securing that amount in the existing climate of budgetary restraint and the Green Paper canvassed the prospects of increased donations and bequests, commercial activity, income from full-fee paying international students (no-one anticipated just how important this would become), industry support and private providers. Additional sources would need to be investigated, ‘having regard to both the public and private benefits that higher education confers’, and the task was assigned to a committee that would report in February 1988.36
A strongly polemical tone ran through the Green Paper. Offering very little exploration of options, it relied heavily on assertion for brusque declarations of government intent. Many of the details remained unclear but three design features stood out. First, the device of a Unified National System allowed the Commonwealth to assert an unprecedented control of higher education. The cooperation of the States would be needed to effect institutional consolidation since they retained constitutional power over education, but none was in a position to defy the Commonwealth. The universities also remained self-governing institutions but they would have to comply with the prescriptive conditions of membership if they were to participate. At the same time, the Green Paper proclaimed an increased freedom. All institutions would be free to define their roles and determine their teaching and research with greater control of resources and an enhanced decision-making capacity.
Second, in place of grants there were to be funding agreements negotiated directly with each institution on the basis of an agreed set of activities. This again was presented as allowing more flexibility: an institution would receive a consolidated operating grant on a purchaser-provider basis and be free of the restrictions that CTEC had imposed by specifying how the components of the grant were to be used. The contractual arrangement was accompanied by competitive bidding for discretionary funding and research support as further inducement for institutions to meet government objectives. Finally, the Green Paper foreshadowed strengthened university management with a combination, at both the system and institutional level, of centralised control and decentralised accountability. Higher education providers would therefore have both an incentive and an increased ability to serve the national interest.37
It was a potent combination, although not all of Dawkins’ colleagues were persuaded of its merits. When the Green Paper came before Cabinet on 8 December 1987, Treasury and the Departments of Finance and Prime Minister and Cabinet questioned the target of 125 000 graduates by 2001. The two economic departments argued that ‘there is no simple or mechanistic link between numbers of new graduates and economic growth’ and that to foreshadow such growth would hold the government to ransom. The Department of Finance feared that a high growth strategy ‘might debase the currency’. Both departments would have preferred ‘demand-driven arrangements’ instead of ‘centrally identified targets’, and worried that the discretionary component of funding was too small to effect the necessary improvement of institutional performance. Accordingly, Cabinet requested the paper be revised to emphasise ‘the purely indicative nature’ of the 2001 figure and make clear that the government had made no ‘firm decision’ on the changes it foreshadowed. Since the document had already been printed for official release just two days after the Cabinet meeting, no such changes were made.38
Dawkins briefed the ACTU on the contents of the Green Paper the day before it was released and arranged for the accountancy firm Price Waterhouse to organise launch functions at the Wentworth Hotel in Sydney and the Hyatt in Melbourne. Those who paid the $20 admission charge heard business and union leaders endorse the new directions set out in the publication, which now bore the title of Higher Education: A Policy Discussion Paper. Dawkins himself embarked on a hectic round of visits to universities, which Gregor Ramsey and DEET officers continued in the New Year.39
There were no academic speakers at the Melbourne and Sydney launches, although the Australian Teachers Federation organised a seminar at ANU a week before the document’s appearance at which several vice-chancellors (one, Don Watts, a member of the Purple Circle), representatives of both the Business Council of Australia (BCA) and ACTU, and Hugh Hudson were among the speakers who anticipated its contents.40 That was the first of many such forums. The University of New England’s Department of Administrative and Higher Education Studies convened a national conference at Armidale in February, which was followed by another under the auspices of the Academy of the Social Sciences and ANU’s Research School of Social Sciences in Canberra, and then a seminar of the Australian Institute of Tertiary Education Administrators in Brisbane. FAUSA and the FCA also met in February to consider the Green Paper, and FAUSA’s Australian Universities Review devoted a special issue to it in mid-1988. By then the proceedings of the Armidale and Canberra conferences had been published, and many of the participants also contributed feature articles to the press.41
The Minister was invited to speak at a number of these gatherings and took the opportunity to rebuke his critics. He dismissed the suggestion that government outlays on higher education should return to the levels of the 1970s as ‘fanciful’; condemned those who confused excellence with elitism; ridiculed the nostalgia for a ‘golden age’ of a ‘cosy relations between universities and successive conservative governments’, and reminded his audiences that these universities had been ‘the playgrounds for the sons (and certainly not the daughters) of gentlemen’.42 It was his habit to deliver such admonitions in an opening address and then depart, although departmental officials kept a systematic record of the presentations that followed. These raised a series of criticisms of the Green Paper, some technical (the international comparisons of participation in higher education were challenged, as were the demographic projections of future student numbers and the estimates of demand for graduates), some structural (the specifications of institutional size were arbitrary, the assumption of economies of scale specious), but most concerned with the loss of autonomy and the threat to academic values.
This was not so much a debate as an acrimonious exchange of polemics. Two observers likened the strident response from the sector to that of ‘minnows in a puddle’ flitting around the shadows cast by Dawkins. There is no doubt that he held the initiative. Having released the Green Paper at the end of the 1987 academic year, he was able to promote it during the summer. While the forums held from February 1988 onwards offered cogent criticism of his plans, the more strident opponents were carried away by their own rhetoric. He was quite happy to respond in kind, always insisting that their objections were self-serving and that the future of higher education was too important to be left for them to resolve. The speaking notes provided to members of the Department who assisted his public campaign emphasised that the government would not be swayed by ‘narrow sectional interests’.43
‘I suppose I should suggest a greater degree of humility’, Dawkins confessed in an interview at this time.44 He did make some tactical concessions. Responding to the criticism that the Green Paper disregarded the university as a place of critical inquiry, he affirmed that function in his public presentations. When a group of academics from the Arts Faculty of the University of Western Australia wrote to complain of the threat to the humanities, he invited them to his electoral office in Fremantle and persuaded them of his solicitude. Peter Karmel was a prominent critic of the Green Paper but wrote the Minister a letter a week after it appeared with ‘personal thoughts’ on how he might modify the machinery of the Unified National System to secure his objectives. Dawkins took the opportunity to recruit Karmel as adviser on the design of the educational profiles.45
Karmel accordingly developed a template for the profiles that specified the information they should contain, and he also offered advice on how they should be used. Since each institution was to negotiate its own funding agreement on the basis of a profile specifying the courses it proposed to teach and the research it planned to conduct, there needed to be some way of aggregating the profiles to ensure that a suitable mix of disciplines was maintained and geographically accessible. Since the negotiations would occur behind closed doors, there was a danger that private deals would be struck. And since the funding agreement had a contractual status, with the Commonwealth acting as a ‘monopsonistic buyer of educational services’, there needed to be safeguards against institutions undercutting each other and reducing standards. For all these reasons, Karmel urged that the HEC conduct the profile negotiations—and while Dawkins resisted that, he did ensure that a Council member participated in each of them. Karmel also warned that withholding 2.5 per cent of funding for competitive reallocation was excessive and said his experience at ANU showed that 1 per cent was sufficient—Dawkins settled on that proportion.46
It was the same with changes to university management. Karmel accepted the need for a ‘more managerial mode’ of operation in place of the ‘slow and cumbersome’ collegial procedures of consultation and consensus. There had to be institutional planning to establish priorities, and academics had to be accountable for their performance. At the same time, Karmel cautioned against imposing a business model of management. Universities had multiple objectives, and their success could not be measured by profit or market share. No vice-chancellor possessed the wisdom to determine course design or direct research, activities that necessarily depended on the expertise and judgement of those who undertook them. While Dawkins continued to insist that vice-chancellors be invested with strong executive authority, he left institutions to determine their internal management structure.47
‘It could be argued that I have changed too much with the times’, Karmel allowed in an interview as he approached retirement from ANU at the end of 1987.48 He grasped the logic of proposals set out in the Green Paper and, no longer a participant, he was also able to appraise their consequences for the whole of the national system. That could not be said of the universities and colleges: their responses to the Green Paper were selective, commending passages that served their aspirations and condemning those that did not. The AVCC welcomed the prospect of growth, strengthened institutional management and performance-based funding, but worried about the threat posed to standards by amalgamations and credit transfer. The ACDP applauded abolition of the ‘ill-conceived binary system’ and embraced greater autonomy, but was alarmed by the prospect of smaller colleges being swallowed up in larger and fewer institutions. FAUSA and the Federated Council of Academics (FCA) made a joint submission that rejoiced in an end of the steady state but rejected the changes to staff management as a threat to salaries and conditions. The NUS and Council of Australian Postgraduate Associations were hostile to the utilitarian spirit and directive thrust of the Green Paper, as were particular universities—those that consulted most widely in preparing their submissions expressed the greatest indignation at the threat to collegialism. Various disciplinary associations and individual academics submitted similar remonstrances.49
Dawkins had set the end of April 1988 as the deadline for responses to the Green Paper, and a large number came from outside the sector. He had the ACTU onside, and Laurie Carmichael, its abrasive assistant secretary, accused the universities of pampered arrogance. The BCA also gave support, although not the more confrontational Australian Chamber of Commerce.50 Its position was similar to that of the free market economists, who saw the Green Paper as compounding the inefficiencies and inequities of public provision. Any genuine reform had to devolve funding and control, and they saw ‘no hope for the general restructuring of tertiary education if it is to be based on such centralist or “top-down” proposals’. With somewhat leaden humour, Richard Blandy awarded ‘Student Dawkins, J.S.’ a fail for his essay on ‘Higher education policy’ since it plagiarised an essay previously submitted by ‘Student Thatcher, M.’, but then explained that since his colleagues had reminded him that ‘Student Dawkins’ owned the university, he had amended the result to an A+. In the wake of the Green Paper there was a striking convergence between such erstwhile critics of Australian higher education and its defenders: they agreed that big was not beautiful, that outside direction was to be resisted, that specification of national priorities was misconceived and even that the Green Paper had ‘a disturbing emphasis on narrowly economic objectives’.51
Jim Carlton, the shadow minister, sounded a similar note of concern for the academic mission. A science graduate and former business consultant, Carlton had been a prominent ‘dry’ in Malcolm Fraser’s ministry, demoted from responsibility for the Treasury to education following a damaging accounting error during the recent election. The Coalition was moving from its earlier policy of portable free places and additional fee places towards a full-fee model, and Carlton linked this to an attack on the ‘highly regulated and centralised’ nature of the system described in the Green Paper, one that would give ‘enormous power to bureaucrats’. He went further in his rejection of Dawkins’ ‘utilitarian and technocratic’ approach and identified an ‘inherent conflict’ between the dictates of the corporate state and ‘the university ideal of the disinterested pursuit of knowledge in the long-run interests of society’.52
Both the government’s pledge to contain public expenditure and Keating’s determination to balance the 1987–88 budget ruled out any substantial increase of outlays on higher education, so the growth proposed in the Green Paper would have to be financed by other means. It was also apparent that raising the amount required from students was fraught with political difficulty. The fees charged international students had so far yielded meagre returns, and there was fierce resistance to the modest administration charge of $250 levied on domestic students from 1987. Dawkins’ September statement included an announcement that from 1988 institutions could charge fees for postgraduate courses aimed at improving employment qualifications, but this too would provide a minor source of income.
That announcement also revealed the obstacles to reintroducing undergraduate fees. When the September statement was under consideration by the Expenditure Review Committee, Peter Walsh renewed his campaign for all students to pay for their degrees on the grounds that ‘middle-class “trendies” were the main beneficiaries’ of free university study. There was press speculation that Walsh was flying a kite for his friend, who was reported as taking an ‘agnostic’ if not supportive position, but Dawkins was aware that any such measure would require a change to the Labor Party’s platform. Much persuasion would be needed before the national conference met in June 1988, and the Finance minister’s impetuosity was counter-productive. Dawkins recalls saying to Walsh at this time: ‘For Christ’s sake, just shut up. I’ll get you your fees, but it won’t be helped by you bloody weighing into the issue.’53
The Green Paper was meant to include a chapter on funding options, and Bruce Chapman, an economist at ANU, was commissioned to help draft it. Among the options canvassed were fees with scholarships, subsidised bank loans or repayment through the tax system. Dawkins at this stage favoured the first of these options, but when he read the material he realised that because of its complexity and sensitivity the funding issue was better handled separately. For that reason the Green Paper stated that a higher education funding committee would examine options. In the meantime he had Chapman do further work on the various approaches.54
It was already determined that users would pay. The proposition that higher education conferred private as well as public benefit was taken as axiomatic, and the committee gathered statistics demonstrating the income advantage of graduates. Since these beneficiaries paid higher rates of income tax, it could be argued that they were already paying, but the committee made much of the fact that all taxpayers contributed to the cost of higher education courses to which only ‘a small and privileged’ minority had access.55 Accordingly, there needed to be a direct charge—but how? Up-front student fees would put higher education out of the reach of many; even with means-tested scholarships, there would be a deterrent effect at the very time the government wanted to increase participation. A loan scheme faced the problem that students provided no collateral, and a DEET official who looked at overseas practice found high rates of default. By a process of elimination, that led the committee back to deferred repayment by graduates through the tax system.
Although it was new, this method had a long intellectual lineage: Milton Friedman advanced it in the 1950s, and the Australian economist Russell Mathews took it up in the early 1970s. As soon as the Green Paper appeared, Peter Karmel suggested that fees be set at the level before they were abolished in 1973 and students offered the opportunity to pay them retrospectively through an income tax surcharge. The ACDP proposed a similar arrangement, and the AVCC had Gerald Burke prepare a paper that canvassed this option.56 Bruce Chapman already favoured it, as did one of Dawkins’ senior advisers, Allan Mawer, after he read a paper by Meredith Edwards of the Department of Social Security on the use of income tax to collect special purpose payments—she pioneered this mechanism to facilitate contributions to child support from non-custodial parents. Dawkins remained dubious that it could be applied to education. As Mawer recalled, ‘when he knew the answer and only expected you to find a way of getting him to it, the trick was to intrude a lateral thought’. The opportunity occurred when Dawkins was contemplating the strength of resistance to fees and Mawer suggested the advantages of a graduate tax.57
The composition of the higher education funding committee indicated the Minister’s interest in exploring this approach. Meredith Edwards was a member along with Bob Gregory, another ANU economist with expertise on labour markets, while Bruce Chapman continued as consultant. Their task was to design a deferred payment scheme that would be efficient, equitable and administratively feasible. The committee chair was Neville Wran, the former premier of New South Wales, and his role was to allay the widespread hostility to any reintroduction of student charges. Never one to mince words, ‘Nifty Nev’ accepted the task without illusion: he had been handed a ‘shit sandwich’.58
After considering the options, the committee settled on income-contingent repayment of part of the cost of tuition. Some members of the interdepartmental secretariat were resistant to this option, and a paper from the Department of Finance proposing full-cost fees was leaked to the press in March. The Australian Taxation Office was initially opposed to any involvement on the grounds that it was not a debt collection agency, although intervention by Paul Keating helped to secure its cooperation.59
The committee spent some time considering the amount that should be charged. While there was ample evidence that graduates earned more than non-graduates, it was not possible to calculate the exact proportions of public and private benefit, and the decision to charge students approximately 20 per cent of the cost was adopted principally because it was close to the pre-1974 charge. The cost of courses ranged from $6000 per annum to more than $20 000 in the case of medicine, and the committee settled on three levels: $1500, $2500 and $3000 for each year of study. Repayment at a rate of 2 per cent per annum would commence when the graduate’s income reached average weekly earnings. Finally, to alleviate a lengthy delay in repayment and generate the income needed for immediate expansion, a 40 per cent discount would be offered to students who paid the charge when they enrolled.60
As had the ministerial task forces, the committee met behind closed doors—although Peter Noonan, the Minister’s adviser, showed an early draft to the AVCC to secure its acceptance.61 The need to establish the actuarial details of the scheme and model its likely effects on student demand pushed back completion of the report, and the delay added to hostile speculation. Dawkins, who ran the gauntlet of angry protests against any form of user pays, was closely informed of the committee’s progress, yet continued to claim that the government was being accused of ‘something it has not done and may never do’.62 It was imperative to present the charge as a fair and reasonable way of providing increased access to higher education, so the committee dusted off earlier research on the under-representation of students from low-income families (ignoring Don Anderson’s protests that it misrepresented his findings) and designed a substantial expansion of the living allowances that were known as Austudy. To drive home the message, Wran recommended that the charge be called ACCESS—Australian Contribution to the Cost of Education for Students Scheme. As a further concession, the committee also suggested that the principle of user pays could be extended to employers through an industry levy.
The release of the committee’s report in early May brought vehement rejection from staff and student organisations. Working through a Higher Education Round Table, they denounced the imposition of charges and released a public opinion poll showing that 71 per cent of respondents opposed a ‘graduate tax’. The government replied with its own poll in which 68 per cent of respondents agreed that the beneficiaries of higher education should pay part of the cost when earning enough to do so. In both cases, the framing of the question produced the desired result; a third survey, conducted independently, found a slight majority opposed a tax levy, although there was strong opposition among younger respondents. In an effort to win them over, Dawkins wrote to all 400 000 students currently enrolled in higher education with a justification of the new charge and recruited a former national student president to consult with student organisations.63
There was no need to win over the institutional heads. The press releases of the AVCC and ACDP in response to the committee’s report were principally concerned with the revenue calculations, which fell short of the amount needed to meet the enrolment targets. Both wanted a clearer commitment to an industry levy, and the AVCC called on the government to restore its spending on higher education to 1 per cent of GDP (it had fallen from 1.5 per cent in 1975 to 0.83 per cent by 1988) as a condition of the new arrangements. Dawkins replied that this was an ‘unrealistic and fanciful hope’, and was rewarded when the AVCC wrote to him later in May to say that ‘of the options raised so far, the proposals of the Wran committee appear to us to be both feasible and the least inequitable’.64
This was not the first time the vice-chancellors meekly surrendered. A DEET official thought they were ‘hopeless in negotiation’, incapable of holding a line; ‘they don’t know how to fight’.65 Of course they had little experience of fighting. Their natural inclination was to seek agreement. They were unaccustomed to hard bargaining, too easily mollified by vague reassurances and inhibited in their public statements. Even so, after their indignation over the Green Paper, it was noticeable that the prospect of any extra money from whatever source secured consent. ‘Very useful’, Dawkins wrote on the margin of their letter.
He needed all the support he could muster to persuade the Caucus and the party to accept the Wran committee’s scheme. The Left faction of Caucus was flatly opposed, the Right increasingly nervous about its electoral consequences, and there was unrest within Dawkin’s own Centre-Left group; accordingly a special committee was established, two from each faction, to examine options that might make the scheme more palatable.66 The ACTU executive rejected the proposal to charge students and called instead for a levy on business and high income-earners. Dawkins was reported to have ‘responded with derision’ to the ACTU resolution on the grounds that it ‘involved fanciful levels of tax increases’, but he was faced with mounting opposition on the eve of the party’s national conference. Two Labor premiers, John Cain of Victoria and Peter Dowding of Western Australia, rejected the Wran committee’s recommendation, and Gough Whitlam broke his silence to condemn the graduate tax as a ‘terrible idea’.67
The Left would have thirty-five votes at the party conference, the Right forty-four, with a smaller number of Centre-Left and unaligned delegates holding the balance. Support from the Right was essential, and when its dominant New South Wales branch let it be known they did not think Dawkins had the numbers to change the platform, the fate of his funding proposal hung in the balance. His adviser Peter Noonan recalls accompanying the Minister to a meeting on the eve of the conference where the menacing demeanour of senior figures put him in mind of a gathering of dons in The Godfather. As Graham Richardson and others warned Dawkins of the dire consequences of persisting, Paul Keating made them an offer they couldn’t refuse and saved the day.68
When conference delegates met in Hobart in the first week of June, they had a message from Wran urging them to accept student charges and intimations from Dawkins that he would lift the payment threshold and give further consideration to the proposals of the ACTU. That was enough to win a tight vote of the Centre-Left delegates and give Simon Crean, ACTU president, justification for moving a compromise resolution. The existing commitment to ‘the maintenance of free tertiary education’ would be replaced by a statement that Labor’s objective was that higher education should be accessible to all who wished to participate, and accordingly the party accepted the need to find additional funding ‘from income tax levies on all high income earners, the proposals of the Wran committee and any other proposals’ that served this objective. Amid cries of ‘Sell out, sell out’ from the gallery, the resolution was carried by fifty-six votes to forty-one.69
The government quickly rejected any impost on high income-earners or employers (for it intended to impose a training levy on business), and Dawkins effectively nullified the Caucus committee, leaving him free to proceed with the student charge. By this time he had secured a budget commitment to 40 000 extra places for higher education in the 1989–91 triennium as well as an increase in capital grants.70 The student charge, now known as the Higher Education Contribution Scheme (HECS), was calculated to raise only a third of the $843 million in additional funding in the course of the triennium—partly because the discount for students who paid when they enrolled was reduced to 15 per cent in deference to Caucus critics who regarded it as favouring better-off students. The Wran committee’s recommendation for three levels of charge was changed to a uniform charge of $1800 per year—student organisations had sought this change on the grounds that the higher charge for more costly courses would deter less wealthy students. And the 2 per cent rate of annual repayment was replaced by a graduated rate: 1 per cent by those on average earnings of $22 000 per annum; 2 per cent for incomes between $25 000 and $35 000, and 3 per cent for those earning more.71
Both Treasury and the Department of Finance opposed the uniform charge on the grounds that it gave no incentive to students to choose their course on the basis of its price, but to no avail. HECS was not meant to provide price signals, for it did not establish a higher education market; rather it was a means of raising some of the cost of a system in which the government allocated an increased number of places. Cabinet agreed on 4 August 1988 that the charges be introduced from the beginning of 1989.72 To explain them, DEET established a telephone hotline, which received more than a thousand calls a week in the month it operated. There was substantial confusion. Postgraduates (who would need to obtain a HECS-exemption scholarship) and part-timers (who, if earning above the threshold, could not defer payment) were particularly aggrieved.73
At the end of the year, the legislation came before parliament where it met Opposition criticism. Dawkins accepted some minor Senate amendments (requiring the Higher Education Council to monitor HECS as well as educational profiles) but issued an ultimatum: without the new charge there would be no additional government expenditure. To drive home that message, the authorisation of HECS was embedded within the legislation to authorise the expenditure. The Higher Education Funding Bill was passed four days before Christmas.74
Preparation of the White Paper began in April while responses to the Green Paper were still being received. From its analysis of the first hundred submissions as well as the seminars, conferences and public commentary, the Department judged the proposal for a Unified National System had been well received, although with substantial reservations about how it was to be directed. The strengthening of management was ‘strongly endorsed by the managers and resisted by the managed’. Since some had read the sections on access and equity as a specious attempt to palliate the imposition of purely economic objectives, this component would be strengthened. There was also a need to counter the criticism that the Green Paper was ‘too narrow, instrumental, focuses on narrow, short-term labour needs’. By May, when all submissions were in, it was decided that the White Paper would include a statement of ‘educational philosophy’ that affirmed the importance of liberal learning.75
The timetable was tight. Dawkins spent several days at the end of May in meetings with vice-chancellors and college principals, staff and student unions, the ACTU and BCA. A week later he had the first draft of the White Paper, which was completed in late June for circulation to other government departments before it went to Cabinet. It was a more measured document than the Green Paper and clarified how the Unified National System would work. Some new passages caused a flutter. While the Green Paper had signalled an increased emphasis on technical and professional fields, the White Paper specified that growth would be directed to courses in engineering, science and technology, and business and management studies, and that the ARC would determine research priorities with a similar emphasis on ‘strategic and applied research’. The change that caused greatest anguish to universities was the transfer of research funding to the ARC. The Green Paper had suggested that $50 million dollars might be reallocated from their operating grants ‘over time’, whereas the White Paper foreshadowed that this ‘clawback’ would amount to $125 million across three years.76
The Department of Finance thought that amount excessive and, along with Prime Minister and Cabinet, repeated its criticism of the enrolment growth targets. It also questioned the White Paper’s confirmation of institutional consolidation. A minimum size of 2000 EFTSU remained a condition of membership of the Unified National System, and institutions with fewer than 5000 EFTSU were urged to give ‘serious consideration to their future as independent institutions’. Finance thought these specifications ‘excessively prescriptive and bureaucratic’, but Dawkins had come too far to be denied and the White Paper was endorsed in July.77
He began implementing the changes set out in Higher Education: A Policy Statement long before it appeared. In April DEET held training seminars on the educational profiles with universities and colleges. They were required to submit them in July so that negotiation of the funding agreements could commence in the following month. Such was the haste that the profiles documentation was still being designed as institutions submitted their plans for teaching and research, and DEET’s peremptory requests for additional information went far beyond the level of detail Karmel had recommended.78 The profile negotiations that followed in August and September proved anticlimactic. The large team of DEET officials who visited each institution with members of the HEC were conciliatory but unforthcoming. The university officers who met them remarked on the lack of discussion of the profile or any consideration of the exhaustive management plans that had been demanded. The DEET team arrived, it seemed, with the funding decisions predetermined, and its ‘reluctance to depart from script’ obviated any real negotiation.79
Before the profile decision could be turned into a funding agreement, however, the institution would have to join the Unified National System. Dawkins sent the head of every university and college a formal letter of invitation: membership required a commitment to undertake a management review, establish and implement a staff management plan and research plan, adopt a system of credit transfer from TAFE and incorporate equity as an integral part of planning and management. The Minister’s letter fixed the end of September as the deadline for acceptance, but he was already facing an incipient rebellion.
The colleges were on board; indeed, Dawkins described their statement of support as ‘sufficiently effusive to be somewhat embarrassing’.80 The universities responded to the White Paper with dismay. Apart from the cuts it foreshadowed in their operating grants—1 per cent for the national priorities fund and now 3.5 per cent for transfer to the ARC—they objected to the imposition of teaching and research priorities. Brian Wilson described the White Paper as a ‘blue-print for over-regulation’, and David Penington, who succeeded David Caro at the University of Melbourne at the beginning of 1988, said that ‘while espousing deregulation’, it heralded the imposition of ‘political interference and central regulatory control’ to a level ‘virtually unknown elsewhere in the Western world’. John Ward of the University of Sydney wanted the AVCC to consider a challenge to the constitutional validity of the powers the Minister proposed to exercise.81
Faced with the prospect of a boycott of the Unified National System, Dawkins arranged to meet a group of vice-chancellors at the beginning of September. In response to their concerns, he offered some concessions. Since the universities were worried that HECS obligations might deter students from embarking on research higher degrees, there would be additional scholarships to cover the charge. He would ask NBEET to reconsider the size of the clawback and give further consideration to the determination of research priorities. With many universities still negotiating the amalgamations needed to take them over the enrolment numbers specified for research activity, he accepted that institutional consolidation could be completed during 1989. And to allow them time to fall into line, he set back the date for joining the Unified National System to the end of October.82
The seven vice-chancellors who met Dawkins welcomed these concessions, but they were unacceptable to a more determined absentee. David Penington, who was overseas when the Minister offered them, had no confidence that NBEET would make any significant change to the clawback and could see that the ARC was hardly likely to surrender its augmented role. Don Aitkin, the outspoken chair of the ARC, had already dismissed university concerns with the new arrangements—‘the sacred cows were brought out for the ritual moo’—and derided his critics at a stormy meeting with Monash academics as ‘wankers’.83 At Penington’s insistence the AVCC informed Dawkins three weeks later that it could not recommend joining the Unified National System unless the universities were involved in reconsideration of the research arrangements. Dawkins arranged a further meeting with Penington and Brian Wilson, and agreed to suspend the clawback pending a review of research policy by a new and enlarged committee on which Penington would serve.84
The Melbourne vice-chancellor was by far the most outspoken of Dawkins’ critics, and his university, with its heavy engagement in expensive laboratory research, had more to lose from the clawback than the newer ones. Earlier in the year, he had approached his Sydney counterpart to suggest that they refuse to join the Unified National System. Ward’s objections to the conditions of membership were on record, and a joint stand by the two oldest and most prestigious universities might well have rallied others to join them, but the Sydney vice-chancellor judged that resistance was futile.85 The cost of going it alone would certainly be ruinous. As Penington explained to his University Council, if Melbourne stood out it would be funded for teaching only and could potentially suffer a cut of up to a third in the salaries component of its operating grant (that being the proportion imputed for the time academics spent on research). He signed up as soon as the review of research funding was conceded, as did all other universities. Ward, labouring a point, did so last.86
Dawkins had set out to establish new arrangements for higher education by the end of 1988 that would raise participation, improve access, make it more responsive to economic and social objectives, and secure greater efficiency and effectiveness. With all institutions signed up to the Unified National System by the end of October, he secured his objective. Much remained to be implemented. The process of institutional consolidation was lagging, and the government had yet to devise a funding formula to reconcile the distinctive missions of universities and colleges. Both the Green and White Papers insisted that the efficiency gains of larger institutions would not compromise the strengths of smaller, more specialised colleges: ‘the new arrangements will promote greater diversity in higher education rather than any artificial equalisation of institutional roles’.87 But uniform funding of a Unified National System threatened to create a one-size-fits-all template for homogeneity.
Pressure of time and the Minister’s insistence on control meant that some components of the Unified National System were poorly designed. He needed the cooperation of the states to enact amalgamations and created Joint Planning Committees to obtain it while denying these committees any significant role. Holding financial control, he was able to override proposals from state ministers for amalgamations he deemed unsatisfactory. However, the states retained responsibility for the training sector, TAFE, which was integral to the Commonwealth’s consolidation of employment, education and training. The Green Paper acknowledged that more school-leavers embarked on TAFE courses than went into higher education and that an increasing number were undertaking two-year diploma programs equivalent to those offered by colleges. It proposed to include these courses in the Unified National System, but the states refused to surrender control.88 Hence the White Paper fell back on the stipulation that all universities and colleges must accept applicants from TAFE, with credit for their prior studies, a commitment that each gave and then interpreted as restrictively as it determined. In abolishing one binary divide, the Unified National System reinforced another.
We shall see how other requirements of membership proved illusory, but they did not detract from the transformation Dawkins effected. From the outset he insisted that higher education must be held to account. When John Ward raised doubts about the legality of the conditions of membership of the Unified National System, a spokesman for the Minister replied: ‘Basically the Government is asking the institutions to be accountable for the blank cheques they have been getting for years. If they have their noses in the public trough then they need to be accountable.’ Dawkins himself claimed that the negotiation of funding agreements simply made explicit ‘what was implicit in the relationship between government and higher education ever since it had been publicly funded: that it was accountable to government and taxpayers’.89
As Bruce Williams observed, the White Paper used the term ‘accountability’ in two different ways. In stating that ‘institutions are accountable to governments, to their students, to employers and to the community they serve’, it meant they needed to give an account of their activities. In requiring universities to reorganise themselves and adopt new methods of management, ‘accountability’ meant subordination to government direction. With extensive experience of administering higher education in England as well as Australia, Williams described the sections on management as ‘some of the most amateurish parts of the Green and White Papers’.90
The Unified National System changed the funding relationship between government and higher education from a grant to a contract. This was a common device in public policy at the time, one indicative of a lack of trust in the performance of public institutions. Institutional theory described the risk in such relationships as the ‘principal agent problem’: the principal contracted with the agent to perform an activity but lacked the information to know whether they were doing so or acting in their own interests. The problem was acute in universities, which were large, complex institutions notorious for their cumbrous decision-making and disdain for outside direction. Besides, the government was not in a position to choose between providers—all of them were needed to meet the growth targets—and it would take time to develop ways of measuring their performance.91
It was for this reason that the sections on institutional management in the Green and White Papers were so prescriptive. The university itself was viewed as a series of principal–agent relationships specifying the obligations of faculties, departments and individual academics. Strengthening the authority of the chief executive officer was crucial to the new structure, and it was for this reason that Dawkins issued his invitation to join the Unified National System to the vice-chancellor or principal, with whom the funding agreement would be made and the responsibility for accountability would lie. The institutional heads were happy to accept their enhanced standing.
Australia was not alone in its reconfiguration of higher education. Other countries were wrestling with the task of increasing participation and improving performance without additional public expenditure. Across the OECD students carried an increasing share of the cost of their degrees: the United States reduced financial assistance to undergraduates and, while most European countries did not charge fees, they increased the loan component of student support. Australia stood out for the imposition of a universal tuition charge, but with a higher repayment threshold and lower rate of repayment than was the case with loans elsewhere.92 Other countries were consolidating higher education into larger, more inclusive institutions, although European ones retained a binary divide and Britain, which raised its polytechnics to university status in 1992, made no effort to amalgamate them. Australia went first and furthest in its creation of a Unified National System. All countries promoted research that would seed innovation and serve the national interest. In Australia there was to be just one funding body for all fields of research except medicine.
Other countries were also moving towards new funding arrangements. In place of providing institutions with public funds and relying on their professional integrity to use them appropriately, governments were setting priorities and using financial incentives to influence patterns of activity. They too delegated authority to encourage stronger management while making their universities more accountable for performance. There was no single model of institutional design. In some European countries, where higher education had been highly centralised, universities were given greater autonomy; in Britain, where the University Grants Committee had operated at arm’s length, it was replaced by a new funding council under government direction. A survey of the different structures created at this time concluded that Australia went furthest in its application of the new public management policies to higher education.93
How was it that Dawkins changed so much so quickly? The narrative sketched here is one of a determined minister who designed a complex yet compact package of measures that was difficult for his opponents to defeat. He designed the sequence of change, he set the timetable and he defined the issues. He had a freedom of manoeuvre that his many opponents lacked, and his abrupt changes of stance disconcerted them. He was able to exploit their disunity, playing the colleges against the universities, the institutional heads against staff and student unions. Vin Massaro, who joined the AVCC in 1988, noted that the universities fixated on particular passages of the Green and White Papers without articulating a coherent critique of its aims and assumptions; they fought over details but missed the larger import of the Unified National System.94
Taking advantage of the internal divisions, Dawkins conducted his campaign beyond the confines of the policy community. It would have been relatively easy to establish a consensus within the sector, he told a meeting organised by the Arthur Andersen accounting company at the beginning of 1989, but any such agreement would have been futile. ‘Confidence in the sector was lacking and attitudes to higher education ranged from indifference to criticism, particularly from industry groups.’ As Paul Bourke observed at the time, the universities had few friends. There was not the same popular constituency for higher education as in the United States, nor the links between Oxbridge and Whitehall that provided some protection to leading English foundations. Yet as the dust settled on the upheaval at the end of 1988, John Dawkins confided to Frank Hambly that he was amazed the vice-chancellors had caved in so quickly.95
The literature on higher education policy is suspicious of narratives constructed around the decisive action of bold reforming ministers. It emphasises the role of coalitions that form to seek change as existing policy ossifies and consensus within the policy community breaks down. There is ample evidence of growing discontent as the steady state imposed increasing strain on Australian higher education and new ways of thinking about how it might be conducted gained strength. The literature also draws attention to complexity of policy implementation as the new procedures are introduced and those involved in the activity come to terms with them. Policy change can be slow and organic or sudden and disruptive, but even the most radical new design is subject to modification in the process of implementation. This too is evident in the introduction of the Unified National System. Devised so forcefully and with such limited consultation, it had yet to be accomplished.
Studies have shown that few changes as far-reaching as those introduced into Australia in 1988 satisfy the condition for successful implementation of clear and consistent policy objectives. Most contain a multitude of partially conflicting objectives, and it is common to underestimate the capacity of those affected to find ways around a policy handed down from on high. As the editors of an international collection on such episodes in higher education put it, ‘Given the well attested obduracy of academics in the face of proposed changes’, the question arises: ‘will full implementation be secured?’96