Discussion about this post

User's avatar
Saranga Sudarshan's avatar

This series is a nice laying out the arguments. The only real reason one would do user-pays is for political feasibility. And that in turn because the public is by some combination of the equality and fairness arguments, and so would prefer fully privatisation to free uni. He ideal form of their view ends up being a graduate tax of some sort

Expand full comment
Nicholas Gruen's avatar

I was a staffer in the (then) new ALP Government in 1984 and suggested income contingent loans to the (then) Minister for Education Susan Ryan in the corridors of the Senate. She said that was much bolder than the government fancied being. Anyway Dawkins succeeded her and was more gung ho. I didn't much go for the way it was designed. The Wran Committee proposed that just 20% of the cost of tuition be met — on the grounds that many of the benefits of education were external. But since education in general generates benefits well beyond cost to the individual themselves, this didn't seem to make much sense to me.

Moreover they didn't seem to integrate equity into the scheme. Beyond the basic idea that people should contribute (because without this education was a subsidy by the — poorer — less educated of the — richer — educated) the logic on equity went no further.

I thought it might be reasonable for average graduates earning not so much to meet 20% of the cost of their degrees — teachers, nurses, social workers, army officers and so on. But why wouldn’t you up this for those who end up being very highly paid. 100% of costs was fine with me. But so too was 150% for people in the top — say 5% — of the income distribution. And if that's the case, what's wrong with just having a higher tax rate for such people and forget the fancy accounting for the cost of their education?

Anyway, in the same sweep of policy the ALP reduced the top marginal rate from 60% (or perhaps a tad more given the Medicare levy) to 49.5% and then Keating fought a long and fortunately ultimately unsuccessful campaign to reduce it to 30. That was bad for equity and bad for efficiency too if you think that the ultimate output of the economy is utility or wellbeing not dollars.

Anyway, you follow this logic and I'm not sure you don’t end up where you started in 1982 — free tertiary education, but higher taxes on the wealthy. Another option to consider among the ones you do.

Expand full comment
4 more comments...

No posts