General staff
Human resources
Casual employment
Funding of wage
movements
Competitive models
Competitive neutrality
Employment
contributions
Pricing
Regulator
Consumer protection
Regional
employment
Nationally co-ordinated system
Equity
The Community and Public Sector union is the general staff union around Australia. Our members wish to stress that general staff are service providers in their own right, are directly responsible for research and teaching functions, relate directly with students and other third parties. They are integral to the operation of the higher education sector. Their contribution is crucial to the educational and other outcomes from the sector. A clear example is the need to integrate the sector libraries into comprehensive communication strategies which will allow new learning methodologies. We also have very significant membership amongst employees of TAFE colleges whose interests are also touched by the Review's terms of reference.
General staff range across almost all the diverse job classifications to be found in the economy. Their qualifications range from work for which a professional qualification is mandatory, through technical administrative and physical occupations. Including:
laboratory
library
administrative
computing
building trades
ground staff
research staff
accounting
health
retail
We suggest the Review must reflect on the training and well being of the employees. Grandiose re-visioning of the sector is futile unless careful attention is paid to the morale, commitment and training of the producers of the services.
The kind of thing which we have in mind is the increasing casualisation of the work force. Close to 50% of general staff are casual. In some sections of institutions such as some major libraries it can be well over this. We argue that casualisation is destructive of efficiency, corporate memory, expertise, training, policy formulation and commitment.
Another difficulty is the supplementation of wage movements by the funding source, that is the Commonwealth. This is a problem in many public sector contexts. The lack of supplementation creates distortions of management and wage fixation which are detrimental to the efficiency of the institutions. The sector should be fully funded for pay increases for enterprise bargaining rounds. Endless rounds of productivity negotiations are inappropriate in a not for private service environment.
A basic principle, surely is, that better results emerge from secure, fairly remunerated, resourced, respected, well trained and committed staff. Any proposed model must satisfy this premise of organisational and human well being.
Support for the traditional premises
It is obvious that many currents of change are impacting on this sector. Some are positive; some not. Our members believe that the basic traditional principles at the heart of the enterprise remain sound. These include central co-ordination and funding by the national government, establishment through state legislation, local flexibility, universal access, equitable provision, and adequate funding.
Rejection of a dominant Commercial Model
We would stress that the importance of this sector to the cultural and economic life of the nation demands that the application of competitive models be rejected. Our members can cite many examples of the inefficiencies, financial and human deriving from this model. The inappropriateness of this model is the major theme of this submission.
Regional Economic contributions
Many institutions are the major employer in their sometimes remote regions. The maintenance of viable regional economies is a legitimate policy objective and is supported by universal national consensus. Such a role is incompatible with the fully fledged competitive model, with a Hilmerised higher education sector. Competition policy assumes that there is something to compete with. In the case of a regional location such as Northern Australia this is not and is unlikely to ever be the case.
Commercial imperatives, logically and absurdly, allow for institutions to become insolvent and therefore obviously conflict with Australians' rights to universal access to a higher education. The touting for business, spotters fees, free trips to Uluru and the like are the tacky face of the competitive model.
Complementarity with the vocational training sector
Till now there have been clear distinctions between Vocational Training(VET) and higher eduction, but these are becoming blurred. TAFE now offers parts of university undergraduate courses under licensing agreements, particularly in regional areas. Articulation and credit transfer between courses in the respective sectors means that subjects leading to degree qualifications are offered in TAFE. Open Learning and other forms of distance education at higher education level make use of TAFE facilities and resources. Credit transfer also follows graduates of universities to vocational courses at TAFE. Several institutions actually straddle the sectors eg: RMIT, Northern Territory University and the Southern Cross University. We support these trends and the types of affiliations which are rapidly being developed between universities and TAFE colleges. The distinction between the technical/technological and the professional, inherited from England, has been a major impediment to Australian science and economy.
This trend will demand some reconsideration of the responsibility of the states in funding the TAFE system.
There are exciting new possibilities for new designs of educational, administration and communication systems. General staff are at the forefront of these innovations. We are concerned that the promise of some of these is threatened if resources are not available to make access equitable. For example, rostering of use of facilities at all hours demands that funds are spent to ensure that campuses are physically safe for all. Resources should be applied fairly to all institutions irrespective of their stage of evolution, geographic location of profile.
It is important in making such changes that the consumer rights of service users are provided for. Our members are often caught between legitimate consumer demand for the level of quality advertised and scarcity of resources allocated to that service.
In our experience many sector employers are poorly equipped to manage the changes the sector is facing and to manage its people through change. There is little evidence of modern human resource frameworks which integrate the staff management aspects of change including outcomes of redeployment, training or retraining, recruitment and selection. It is critical in our view that staff have assurances on job security at this time and that a commitment is made to managing change and retraining skills rather than throwing people out with a bag of money.
We adamantly oppose the application of competition law to higher education. The Australian Competition and Consumer Commission is not the body to regulate higher education by default. This is the likely outcome of the full elaboration of the competitive model. Alan Fells, the Chairman of the Commission, has already warned that the fixing of a common fee by institutions would be a breach of trade practices law. Such regulation by the ACCC could also be triggered by consumer complaints about misleading advertising, allegations by private companies about misuse of market power, refusal to grant access to infrastructure or breaches of competitive neutrality.
There should be a consideration of a new industry regulator or ombudsman designed to regulate commercial activities of the sector and provide hearings for breaches of consumer responsibilities.
Applicability of the National Competition Policy
An examination of the legislation, inter governmental agreements and the second reading speech would indicate that the National Competition Policy is of little strict legal relevance to the operation of the Higher Education Sector.
Section 4 and section 5 of the Trade Practices Act extends the coverage of the competitive conduct and the consumer protection rules to businesses. We contend that a determinative case can be made that Higher Education institutions with their public sector educational mandate, funding sources and uses, and ownership structure, are not businesses.
The limited relevance of the NCP to educational institutions was set out in the Assistant Treasurer's Second Reading speech. He said the following:
"There has been some concern that implementing a national competition policy will lead to the wholesale dismantling of the public sector. This is a serious misunderstanding of the proposed reforms. For the most part, these reforms are relevant only after governments have taken the threshold policy decision to introduce competition, and then only to 'significant' business activities. Many public sector organisations have both commercial and non-commercial functions, and these reforms are not designed to affect the non-commercial functions.
In sectors such as education, health, welfare, community services and labour market programs where the public sector has, and will continue to have, a dominant role, the relevance of competition policies will be limited to those circumstances where enterprises are engaged in business activity. In most cases where this is an issue at all, this is a small part of their overall role. or ancillary to the provision of core services.
For instance, government schools are not normally engaged in business activity. While they may be seen as competing with private schools (for students), this is not competition to earn revenue and profits, and is therefore not a 'business' activity to which the competitive neutrality principles apply. Similarly, these reforms will not be relevant to public hospitals treating public patients or providing in-house hospital services, but may be relevant where those hospitals are treating private patients or operating commercial cleaning services. In these areas a public hospital would be directly competing with private firms.
There will always be a legitimate role for the public sector in Australia, but this role is evolving and changing over time. The Government does not see these reforms accelerating those changes in the public sector's role, but the competition principles will provide a coherent framework for responding to the implications and consequences of those changes, particularly in the areas of third party access, prices oversight and competitive neutrality."
The second place to look to establish whether NCP is intended to cover the sector are the rules governing Competitive Neutrality. These rules are found in section 3 of the Competition Principles Agreement. Here the objective of the competitive neutrality policy is that it only applies where a public sector body is involved in "significant business activities". Significant, in the context of the NCP, is generally understood to apply to activities which are national in their scope, instrumental to the operation of the economy and very difficult to reproduce. Examples given are such things as power stations, ports, rail networks. We can perceive no activity of the education sector which would fit into this category.
It is further stated explicitly that Competitive neutrality does not apply to the "non-business, non-profit activities of these entities". We would argue that therefore that in practical terms Competitive neutrality should not be applied to tertiary institutions.
Who can grant Exemption?
The document gives each party the freedom " to determine its own agenda for the implementation of competitive neutrality principles". This is believed to give to the signatories of the Agreement, the Prime Minister and the Premiers the right to exempt from this policy any bodies which come under their authority. In the case of the tertiary education sector it is not clear to which, if either, of the tiers of government would fall the capacity to exempt the sector. Premier Groom has said he will exempt the Hydro Electricity Authority, Premier Kennett the taxi industry and it is likely that the Queensland government will exempt the sugar industry. Who will exempt the higher education sector? Perhaps it falls to the tier of government which funds the sector, the Commonwealth to make the exemption. A recommendation to this effect should be adopted by the Review Committee.
Financial Losses from the application of Competitive Neutrality
If there is any dispute about this then we should look at the practical wisdom of applying Competitive Neutrality to the sector. The institutions are likely to suffer very serious financial losses if the NCP is applied. The loss of sales tax exempt status would be catastrophic for university funding and counter productive from any governments point of view. We cannot provide any estimate of the cost of full sales tax obligations of the sector. It would be of benefit is the Review Committee could attempt to cost this aspect.
Review Committee members will be aware that the Commonwealth Government is to compensate the states for revenue foregone through implementation of the NCP. The money available is 1.2 Billion by 2002. If it was intended that the sector would have the NCP applied to it then it would have a case for some of this money. If it were applied then the sector would lose income through having to pay full Commonwealth, State and local government taxes. The cost of borrowing's would also rise to comparable private sector levels. It would also be subject to pricing policies which would clash head on with the institutions' public sector and educational objectives.
The same result emerges if one imagines universities being subject to the access rules, the provisions for regulation review and also those dealing with structural reform of public monopolies. The applicability of the NCP begins to reveals its absurdity. For example the issuing of degrees can be described as a regulatory activity. Hilmer, applied strictly, would see a separation of the regulatory function and service provision functions. The universities could no longer both provide an education service ie teaching degree students, and also be the regulator and award the qualification.
Such a separation is one of the great inefficiencies which would emerge if Hilmer is applied to the sector. Such an exercise also indicates the inefficiency of separating out core and non-core business. A research project and its communication to the outside world is clearly a core function. Students participate in this work and learn through this work, again clearly a core function.
The research results may have some commercial attractiveness and be sold in a market but this does not mean that it is for profit. The income is directed back through the faculty and the institution generally and used for educational resources.
Public Interest Test
Another place to test whether the NCP is applicable to the sector is to look at the drafting of the public interest test as found at section 1(3) of the Competition Principles Agreement. The matters to be taken into account are found at 1(3) (d) to (j). These refer to ecologically sustainable development, social welfare considerations, occupational health and safety, economic and regional development, consumers' interests, the competitiveness of Australian businesses and the efficient allocation of resources. None of these matters bear on the development of the intellectual capital and the democratic liveliness of the nation. The absence of anything particularly relevant indicates that, in keeping with the Minister's speech, the Higher Education Sector is not intended to be subject to the NCP.
Pricing
The idiosyncratic nature of some university roles means that market pricing is inappropriate. Universities sometimes carry out functions/testing that are not charged at full cost recovery since the product/service is still under development or is a research tool and full cost attribution would make them prohibitive and therefore stymie the research. Development work in body part transplants is an example.
On some occasions also it has been useful for institution to carry out commercial functions in an attempt to gain funds to cross subsidise other functions for which there is no private market. this applies equally to the cost of purchasing machinery which would not be economic in purely commercial terms.
Commercial Ethics and Regulation
The increasingly commercial environment of higher education creates the conditions and temptation for fraud and unethical commercial behaviour. However regulatory structures and awareness are nugatory, embryonic. The situation is ripe for very significant criminal behaviour of various sorts. Efficient tight and comprehensive regulatory structures need to be invented. If you are inventing a market, external powerful regulation must be established. The behaviour of institutions as market players and recipients of public funds, of individuals within institutions and of the behaviour of institutions as retailers of goods must each be covered by rules, regulation and remedy which is swift. In each case our preference is for the sector to be covered by mainstream regulatory bodies such as small claim tribunals, the court system and the Australian Competition and Consumer Commission. The caveat we must keep repeating is that we adamantly oppose a commercial model other than at the margins of the institutions.
Only direct government funding from taxation is adequate to fund the bulk of Higher Eduction costs. Funding from business is subject to cyclical trends and funding from fee paying students is discretionary and subject to many variables such as the state of the economies of a range of Asian countries. It is possible that the limit of user pays may have already been reached and beginning to show up in declining enrolments. Government funding needs to be maintained at least at its current levels. Further foreshadowed cuts should be abandoned.
Competitive methods of service delivery including Outsourcing will threaten the stability and quality of education provision. The competitive atmosphere imposes intolerable pressures on all higher education providers to cut corners in order to cut costs. The result, for students, will be poorer standards, fewer support services and lower quality higher education. For academics it would mean reduced opportunity to maintain their research, scholarly and teaching. Stability of employment for general and academic staff would be undermined since jobs would depend on the winning of teaching "contracts" by institutions. Outsourcing has all the problems of diminished accountability, loss of corporate memory, looser standards of probity, privacy breaches, equity, inflexibility and inefficiency. This scenario has clear implications for staff recruitment, for quality of programs of teaching and intellectual freedom. Professional workers need access to career paths and the benefits of long term job stability.
The demographics of Australian higher education also mitigate against competitive mechanisms of service delivery. The Australian student population is immobile, and there are only a few population centres large enough to sustain true competition.
Consistent with our vision of the sector, we believe it is inevitable public sector funding will need to be the predominant funding source. Research is pivotal to the rationale of higher education, too important to be subject to market booms and busts. The sector carries the predominant responsibility for research in the Australian political and cultural community. It is a fundament community service obligation. Consequently all academic and general staff employed in research related capacities should have adequate facilities and opportunities for this work.
Submission of the Community and Public Sector Union
Level 10 390
Lonsdale St
Melbourne
pH 0392062399
fax 0392062370
email
tmonagle@cpsufed.asn.au