|Subject: Money = new investment
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Date Posted: 07:14:59 11/01/99 Mon
Changes in the financing of Higher Education - Commentary by Walker
Should the government rescind the fee increases in higher education? What are the implications? What are the institutions of higher education attempting to institutions running? These questions are examined in a superficial way in this paper.
Many suggestions have been offered none have addressed the matter of resource diversification to fill the shortfalls from decrease state grants to institutions. At the outset there appeared to be a mismatch between the government's push for cost recovery measures and the long requirement for new kina for investment in building and equipment. The move towards restructuring of the National Scholarship Scheme which is taking too much of the sector energy is one small part of the financing question. In the same vein, policy makers are spending much time in cost containment through large-scale staff redundancies, and increasing student access to university. Yet staff redundancy is a short run operation, and savings from the exercise is used in pay out to redundant staff. Yet lack of funding has not slowed the call for increases in places in the colleges and universities. Increasing access as we know is rhetorical in the absence of new resource outlay, and emphasis on economic efficiency has foreshadowed any serious moves for change.
Higher education linkage to the monetary economy is important to understanding the need for policy change in PNG. For some time government has being trying to increase the size of the economic pie than spending it. However in PNG demand for social service often outstrips resource and debt service amount to 50% of revenues raised. This puts great strain on the recurrent budget; hence PNG is forced to devoting a great deal of attention to funding money for day to day activities. These raises questions about how much should government pay and how much to be met by users. Major economic, political, social policies and the need to control balance of payment disequilibrium are reasons for the country to look at its priorities and undertake what it can achieve within current resource constraints.
Comparatively education is the single largest item of government expenditure, and most highly subsidized of all-economic and social services. Expenditure accounts for 18.2 percent of the Government's budget. In 1996 total government appropriation for the provision of higher education through the four universities, and 26 single discipline colleges, was 111 million kina. This appropriation excludes appropriation to six other single discipline colleges. The appropriation represents 6 percent of all total government budgets for all state departments and statutory bodies, and 30 percent of allocation to the education sector. At least 20% was for funding the national scholarship scheme. But the NATSCHOL is only one in many intervening variables as described below.
One issue is the differences in per student education between levels of education. Data shows that one student year in university costs about 53 times as much as one student in primary education. Observations from both the major external donors show that university unit costs are considerably higher, on average, than other levels of education. The cost pattern is exacerbated by reliance on expatriate contract staff working on costly short-term contracts and low enrollments. Yet, when the expenditure is subjected to scrutiny, it revealed considerable economies of scale could be attained. For instance, per student cost decreased as enrollment rises with pronounced reductions from a point corresponding to gross enrollment rates of three to five percent.
The second is the size and type of the PNG higher education. The system has often been criticized as being inefficient with heavy duplication of programs and lacking in creativity. The Commission has attempted efforts for Higher education for the mother departments, i.e. Education and Health, to let go colleges under their jurisdiction as a way to rationalize institutions and make colleges more autonomous. Through this unified and greatly streamlined higher education system, it is expected that the system would play a more prominent role in the development in producing new knowledge through research, disseminated knowledge, support government and business with advice and consultancy services and earn their money.
The third discerns tuition, board, lodging, and pocket allowances and ancillary support, which are provided free of charge by the state. This practice was essential in the 1960 to the early1980s when the newly independent state lacked a critical mass of skilled people required by the employment industry. In addition, many students could not afford the high cost of higher education.
Reduced government funding is a challenge the PNG Higher education system must contend with in the medium to long term. Poor management of state funds, misuse of resources for political expediencies and strict conditions of the aid donors has brought on these changes and the structural adjustment program, which began in 1995. Universities have had to raise funds to meet needs for expenditures previously covered by the state. While these efforts have earned the universities praise from government, they are at best temporary stopgaps and unsustainable over the medium term. What is required is a sustained effort, through the adoption of expediencies from the private sector and foreign countries. A system of enterprise higher education holds promise for PNG, but proper study is needed to design one that would best suit PNG's higher education legislation, economic, management capacity, and academic culture.
The move by the public universities to control public expenditure, recover costs and raise funds to supplement state appropriations through a system of user pays is part of a concerted reform.
The system of user pay and cost recovery emphasizes the transfer of cost to the consumer of higher education and or public service. Tuition fees, boarding and lodging and state support given on a non-cash basis and offered to those with demonstrated need are major policies in the 1990 higher education plan. The actions by government to countenance these requirements are threefold. First, government has decided to end the previous system of totally free government support for fees at higher education. Secondly fees have been introduced for tuition; boarding and lodging were recently raised by 30 percent. Thirdly, a new system will make state support available on a non-cash basis and offered only to those with demonstrated need. In these arrangements, the government's role to maintain budgetary support to institutions continues, but the students would be responsible for meeting some of the costs of their education.
Under the plan it was envisaged that from 1991 PNG would implement these policies. Strategies designed from the policy matrix prescribe five major changes. First is a restructure of academic programs in line with market and client demands. The second, to improve the capacity of faculty, their personnel requirements, and compensation. The third was research development, intertwining graduate programs, and patent research. The fourth is the maintenance and improvement of teaching facilities, equipment and student support services. These changes were anticipated to initiate and systematize resource diversification in the higher education institutions either individually or as a consortium of colleges and universities. The beneficiaries are the students who will benefit from institutional level employment from the proceeds from the resources disbursed from private university earnings. The third beneficiaries would be the private sector enterprises in the different economic sectors that will benefit from meaningful research interaction with research institutions.
The concept of entrepreneurial institutions is an attempt to gain autonomy to decide and mobilize resources, with the relaxation and not abrogation of central government policy. Executives of the higher education agencies and institution, and senior faculty would take a leadership role in refocusing higher education and resource mobilization initiatives to be undertaken. These efforts must result in increased resources flow to the institutions, with improvements in their use, and ensure equitable access to schooling.
There is no doubt that although the initiative on resource diversification would have some early problems, a drastic turn of events if properly managed may give rise to a much-improved financial environment to universities. Review of the higher education and university Act and enactment of national higher education development guidelines would enable the institutions to gain control over their management.
There would appear to be little disagreement that the overall policy was in the right direction. The real challenge however, was the ability; the willingness and commitment to implementing initiatives put in place to achieve the desired policy objectives. The current crisis illustrated this and the ineptitude of a weak government to see through its policies to their conclusive ends. Many well meaning policies fail because of the lack of will to implement them.
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