Distributing Student Places in Australian Higher Education

• Author: Andrew Norton
• DOI: http://doi.org/10.1111/1467-8462.12329
• Published date: 01 June 2019
• Date: 01 June 2019

The Australian Economic Review, vol. 52, no. 2, pp. 217–225 DOI: 10.1111/1467-8462.12329

Distributing Student Places in Australian Higher Education

Andrew Norton*

Abstract

Higher education systems need policies for

distributing student places between higher

education providers, courses and students. In

supply‐driven systems, government and uni-

versity decisions dominate. In demand‐driven

systems, student choices play a larger role.

Over the last 35 years Australia has moved

from a supply‐driven to a largely demand‐

driven university system and then partly back

again. When students pay their own costs,

both major political parties have supported

market distribution of student places for

decades. But for subsidised student places

there is policy instability, due to fluctuating

priorities for containing public expenditure

and responding to demographic and labour

market changes.

1. Introduction

Historically, Australiaʼs public higher educa-

tion system has been supply driven. The

Government set student numbers in total and

at each higher education institution. The

institutions decided which courses to offer

and which students to select. But starting in

the late 1980s, demand‐side influences began

playing a larger role. Controls on postgraduate

coursework and international student numbers

were relaxed in the 1980s, and between 2012

and 2017 public universities were paid for as

many government‐subsidised bachelor‐degree

students that enrolled (for most courses).

With a long trend towards demand‐driven

enrolments, a recent return to more supply‐

driven policies is significant. Its principal

advantage is making government spending

lower and more predictable. But reducing

demand‐side influences could reverse increases

in attainment rates and make the system less

responsive to labour market changes. For these

reasons, a return to demand‐driven funding has

significant support.

2. Systems of Allocating Student Places

Block grants intended for teaching and other

costs have been the most common way of

funding public higher education institutions in

Australia. These grants typically came with

conditions, especially for minimum numbers

of student places, but universities generally

decided which courses to offer and how many

students to take in each course. Government

priorities were implemented at the margins,

specifically financing or rejecting expanded

enrolments and new courses or activities

* Grattan Institute, Carlton, Victoria 3053 Australia;

email <andrew.norton@grattan.edu.au>.

© 2019 The University of Melbourne, Melbourne Institute of Applied Economic and Social Research

Published by John Wiley & Sons Australia, Ltd