it's all about whether students should pay, except i don't think the arguments for adopting a user-pays model over free university are particularly compelling
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
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.
I suppose I do end up back in 1982 again. Free tertiary education with higher taxes on the wealthy would be the goal. I guess there is going to be some question of incidence and 'regressive spending' if tertiary education is still ultimately funded via general revenue but that could be managed in the same sort of way that HECS was when it was introduced: the government could promise to set up a nominal trust fund to receive additional tax revenue from the wealthy and spend it exclusively on higher education. Bruce Chapman says that when HECS was proposed the government also said they would establish such a fund to receive all the HECS revenue and that helped sell the policy to voters, although such a fund was never established in the end.
I'm not sure what the point of such hypothecation is. It adds complexity and creates pressure points for activism (like the scandalously complex superannuation system the ALP began setting up at the same time). And there are lots of government costs — that's what taxes are for (though an MMTer would insist on some circumlocutions in taxes 'funding' anything which I'll ignore here).
On the other hand if it really is necessary to (politically) sell what we want, hypothecation will often be a price worth paying.
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
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.
I suppose I do end up back in 1982 again. Free tertiary education with higher taxes on the wealthy would be the goal. I guess there is going to be some question of incidence and 'regressive spending' if tertiary education is still ultimately funded via general revenue but that could be managed in the same sort of way that HECS was when it was introduced: the government could promise to set up a nominal trust fund to receive additional tax revenue from the wealthy and spend it exclusively on higher education. Bruce Chapman says that when HECS was proposed the government also said they would establish such a fund to receive all the HECS revenue and that helped sell the policy to voters, although such a fund was never established in the end.
I can't recall when it was abolished, but the trust fund was legislated, see the original Act: https://www.legislation.gov.au/C2004A03750/asmade/text
But it was always an accounting fiction that had no influence on the level of university funding.
I'm not sure what the point of such hypothecation is. It adds complexity and creates pressure points for activism (like the scandalously complex superannuation system the ALP began setting up at the same time). And there are lots of government costs — that's what taxes are for (though an MMTer would insist on some circumlocutions in taxes 'funding' anything which I'll ignore here).
On the other hand if it really is necessary to (politically) sell what we want, hypothecation will often be a price worth paying.
Agree that it would only be valuable if it's needed to politically sell the policy