Saturday, November 03, 2007

Saturday Morning Musings - Student Unions and other assorted topics

Another Saturday morning, this time wet. I got a good night's sleep last night, I don't always, so my brain is a little clearer than normal.

Saturday morning tends to be a good time for me simply because there is less pressure. During the week I am always thinking of the other things that I have to do, while on Saturday mornings the vast expanse of the week end still stretches before me.

I know that this is illusory, the weekends are busy too and always end far too quickly, but the illusion is still helpful.

Student Unions

There was discussion during the week in the newspapers on the impact of the abolition of compulsory student union fees. For the benefit of international readers, these fees were charged for things such as membership of unions, sports unions, Student Representative Councils. The Howard Government argued that these fees should be a matter of choice and were, in any event, spent in part on things that did not really benefit students.

Neil carried the story on Lines from a Floating Life, so I did not feel the need to say anything. However, in comments on Neil's post, Thomas from Deus Lo Vult has argued strongly in favour of the changes. Thomas is a student at Sydney University. He detailed the previous break-up of fees for services that he never used, putting a dollar value on the savings to him from the Government's decision.

The Government's original decision was ideological. Their formal argument lay in freedom of choice for students like Thomas. In the words of Minister Bishop quoted in Neil's post: The challenge for student unions is to attract student support by being relevant and efficient.

Regardless of Minister Bishop's words, the outcome from the abolition of student fees - a decline in services, a skewing of the playing field against smaller and poorer universities, a further change in the texture of the university life - was always inevitable. To understand this, we need to look at the economics of student services.

Individual students always benefited from the various services at different levels and in different ways. Further, some of those benefits - the broader contribution to the texture of university life - were simply collective and unquantifiable.

In abolishing fees, the Howard Government did three things. It stopped certain services entirely. It limited the capacity of universities to step in with replacement funding. And it forced all students to focus on the narrow equation of costs versus the benefits of specific services.

The last is very important. Student cash is very tight, so the cost/benefit equation in a voluntary system comes back to some very tight judgements indeed. In Thomas's cases, he concluded that fees were not worthwhile and opted out.

As students like Thomas did so, revenue fell. This had a number of effects.

The fixed costs associated with service delivery remained the same, but now had to be supported by a smaller business base. In some cases, services stopped. In other cases such as food and beverage, prices had to be rebalanced, increased. So students paid more for the same service.

In still other cases, university bodies were able to look outside the university itself for revenue. My youngest is one of many playing sport for the University of NSW; we pay a reasonably hefty fee for this. In all cases, universities had to make judgements about the extent to which, within fairly arbitrary Government rules, they would now pay for some services, in so doing transferring funds from other university activities.

These effects have had quite differential impacts within and between universities.

To begin with, the changes affected smaller universities more than big ones. The big universities had greater economies of scale in service delivery anyway. They also had more cash in absolute terms to subsidise or pay for continued services. Most also have larger population catchments in their immediate areas, making it a little easier to find new markets for specific services.

The impact has also, and I think this is little recognised, been greater on poor students than on wealthy ones. Yes, the compulsory fees themselves had a greater impact on poor students, but the story goes well beyond this.

Wealthy students can afford to buy things, including services. I have not checked this, but I suspect that one would find the greatest drop in membership in student bodies in those universities with larger cohorts of poorer students, making it harder to maintain services.

Those poorer students who do wish to access services or particular activities are now paying more. Further, and this is another judgment, I also suspect that the various now abolished welfare services were most accessed by poorer students.

Finally, the impact has been far greater on regional universities and on the communities that surround them.

These universities are generally smaller and have less funds, their student cohorts are generally poorer, their student bodies have less access to alternative market places, the student services provided are more important to the very texture of life not just on campus but in the community.

These are the places that have been hurt most, notwithstanding bridging funding forced by the Nationals. It is not just money. I find it interesting that a number of those who opposed the change - Tony Windsor (Independent, New England), Barnaby Joyce (National Senator, Queensland) and for that matter me - are all people who experienced and valued the intensity of student life at the University of New England.

Other Matters

I have spent more time than I intended on the student union issue, but it is important to me. As a simple example as to why, have a look at this post. This was an activity funded out of compulsory fees, one enjoyed by thousands of students.

Turning to other matters, but briefly because I am out of time.

One of the issues of the week for me proved to be gay marriages. Now this - gay issues - is territory I normally do not venture into. I am not gay, far from it, and did not intend to go this route since I was just using this as an example to illustrate some broader points. So in all I felt a bit uncomfortable. However, I think that the discussion generated was useful, so will put up a reference post at some point.

Another issue, really a theme, lay in the role of the state and the relations between state and the individual. Looking back, I have written a lot on this because these are issues that both interest and worry me. Again, I will put up a reference post so that readers can follow up should they be interested.

It is now 9.50am. I am well out of the time window I allowed for this post, so will stop here.


Thomas said...

I'd leave a more substantial comment, but I'm afraid of being slapped in the face again.

I guess it's lucky I look out for myself, rather than have other people look out for me. If you find your 'comfort' in services that other people can use, partly at my expense, then I'm glad I'm looking out for myself. I sleep well at night knowing I've saved X amount over X years - money which I can better direct to to other areas of my life that desperately need it.

Jim Belshaw said...

Thomas, very quickly because I am trying to cook lunch.

I do apologise for the fact that you feel that I have slapped you in the face. That was not my intent. I will edit the post to remove the reference that I think you most objected to.

I am not interested in beating people around the head. I want to explore the issues on a topic that ia ctually feel quite strongly about.

The key issue is one of externalities. I will explain later.

Thomas said...

Whatever. You said what you said - and that's what you believe. I can't change that, but I can certainly change which debates and discussions I take part in. I had initially though I'd hold off from commenting on Neil's post - then thought the better and assumed there'd be a good chance it would evolve into something that would be civil.

Jim Belshaw said...

As you say, Thomas, whatever. I was concerned that I had upset you, I apologised for that, indeed deleted the sentence that I thought had caused you hurt. All this is consistent with my belief in civil conversation.

All these things were matters of common courtesy. I do not resile from my arguments, not have you answered them. My core point centred on externalities and the public good. I will let it stand at that.

Anonymous said...

Sorry for my ignorance but what do services do these unions provide (is this like the food court or something similar)?

I am at a complete loss as I try to equate this into my University experience.

Jim Belshaw said...

Good morning, David. The exact structure varied from university to university a little.

At UNE when I was there there were three such bodies.

The first was the Sports Union. This maintained, developed and managed the campus sporting facilities. From memory, the uni itself did general grounds maintenance, but everything else was done by the SU. Students got free or low cost access to the facilities. Others couls also use them, but had to pay. The SU also subsidised some sporting activities.

The Union itself provided central campus facilities such as eateries, common rooms, music room, billiard room. Again, access to facilities was free, including use of rooms by student societies. It also put on activities - speakers, social activities etc - and subsidised a range of student societies from classics through economics to drama to political societies. It also negotiated deals for its members such as a 5% discount at local Department stores.

The SRC or Students Representative Council was the smallest of the bodies. It's role was to represent student interests on campus. It also part paid for the student newspaper, bridging the gap between ad revenue and costs. It also made a contribution to funding the national student union.

Membership of these bodies was compulsory, with universities collecting the fees.

The Federal Government both abolished compulsory fees and restricted the universities capacity to provide alternative funding. The Government's argument was expressed in terms of freedom of choice, but also carried a strong ideological overlay. The fact that so many of the bodies were called unions - a term derived from Oxbridge - did not help.

The universities opposed the move. They argued that it would reduce the diversity of student life, but also had serious concerns about the impact on overall university funding.

There were particular concerns for the smaller, regionally based, institutions where the various bodies were relatively more important. Here the National Party forced substantial bridging funding to try to ease the impact.

Nationally, the impact of the changes has varied depending on the specific circumstances of the institution.

In general, services to which a fee could not be attached ceased. In other areas, fees or prices were increased to compensate for reduced income from membership fees. I think that most universities are now paying to keep some services going within the limits dictated by the Government. Newspaper reports suggest that around 1,000 jobs have so far been lost.

I also have the impression that the change has forced at least some universities to step in and take direct ownership of union facilities because of the financial risks involved.

The effect has been greatest on the smaller universities.

I have not seen a full objective economic analysis of the impact of the change, but it has certainly been significant.