Higher education reform important in improving budget balance

I’m broadly pleased with the new Federal Government’s planned reforms of the higher education system (reported in the Brisbane Times article Christopher Pyne reveals university shake-up). Policy targets are generally useless, as they are rarely achieved and are often misguided, so it’s no loss the Government is scrapping the target to have 40% university attainment among 25-34 year olds by 2o25. Also I’d welcome any re-capping of university enrolments, because the current un-capped, demand-driven system is a big fiscal risk to the Government, given the high level of Commonwealth subsidies involved, as discussed in a previous post:

Commonwealth should give up student target – big savings possible from higher ed reform

I’m less excited by the removal of the student services fee, because removing it runs the risk of a decline in the quality of student facilities and services at universities. That said, universities could impose user charges for the use of specific facilities and services, rather than a general student services fee. While this appeals to me as an economist, I think it might have an adverse impact on the university experience for many students. It would certainly make it difficult for clubs and societies if, for example, they had to pay cost-reflective room hire fees to hold meetings or events.

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