An Australian professor of economics has picked apart what he sees as the main failings of the Group of Eight universities in the stance on deregulation.

The Group of Eight (Go8) long-standing Australian universities have keenly welcomed the proposed deregulation of university fees, despite the changes potentially leading to fewer options for poorer or more remote students.

University of Queensland (a G08 uni) Professor of Economics John Quiggin says the Group’s position is based on some faulty foundations.

Dr Quiggin says the Go8 cling to a dated belief that microeconomic reform is an effective way to achieve their goals. Microeconomic reform had a heyday in Australia during the nineteen-eighties in moves such as the float of the Australian dollar and various forms of deregulation and privatisation.

“The most notable example is the persistent belief... that for-profit institutions like the University of Phoenix, particularly in their online form, are the way of the future,” Dr Quiggin claims.

“The exposure of this group as scams based on extracting US government grants for students who will never graduate has been met with the response [from the G08] that ‘learning from failure is a step to success’.”

Quiggin says moves to extend a Victorian Government policy for privatised vocational education to higher education in general, with Go8 support, could be a “failure so catastrophic [it] must surely be an omen of future success.”

In his attack on some of the highest-rated tertiary institutions in Australia, Dr Quiggin also took aim at what he sees as the misguided idea that competition will enhance diversity in choices and prices.

“This is nonsense,” Dr Quiggin says.

“As has been shown by previous limited experiments with deregulation, where universities have been allowed to choose their fees, subject to a maximum... in most cases fees have been raised to the maximum level allowed in a very short time.

“It is also evident that most universities see higher fees as permitting them to raise entry standards and reduce student intakes.

“So, students will see uniformly higher fees and less choice of institutions.

“With regard to diversity, the striking feature of competition in higher education is that, while it amplifies inequality in resourcing, it produces ever greater homogeneity in approaches to teaching and research,” he said.

The professor of economics said that in the nineteen-seventies, “universities of technology and former colleges of advanced education had a distinctive ethos reflecting their diverse origins”.

“Now these differences have disappeared.”

As the incentives are the same for all universities, many have made identical structural reforms; replacing discipline-based departments with numbers-driven “schools”, expanding business and MBA programs while killing off arts, philosophy and other classic.

Finally, Dr Quiggin says the Go8 is driven by the belief that Australia lacks top-tier universities comparable with US institutions like Harvard, Princeton and MIT, and a more stratified system is the way to get there.

“These educate around 1 per cent of the US population, with total undergraduate enrolments of 100,000. Adjusting for the fact that the US population is around 15 times as large as ours, an “Australian Harvard” would enrol around 7000 students,” Dr Quiggin states.

“Virtually all observers now agree, the US system of undergraduate education is failing badly.

“Many other countries [including Australia] have overtaken the US in terms of the proportion of young people who complete a university education.

“Moreover the stratified system in the US reproduces and amplifies an increasingly stagnant social structure [where] inherited wealth is the key to success,” he said.

As university leaders and Education Minister Christopher Pyne push Australia down the path toward a US-style higher education system, many are banking on the Senate rejecting the changes.

“Once it fails, our leaders should abandon this model and consider how to build a post-school system based on assumptions of affordable and universal access to diverse and high-quality education,” Dr Quiggin said.