Professor Bruce Chapman from the College’s Crawford School has been named the most influential person in Australian higher education.
The honour, given by The Australian newspaper, recognises Professor Chapman’s role in revolutionising funding of and access to university study though the creation of the higher education contribution scheme (HECS). The Prime Minister Julia Gillard has recently announced that the scheme will now be extended to all Technical and Further Education in Australia.
HECS was created by Chapman in the 1980s at the request of the incumbent education minister John Dawkins, who wanted to introduce university fees to meet the costs of the rising number of Australians enrolling in university.
The scheme, a world first when introduced, works as an income contingent loan, allowing students to study at university without paying upfront fees, and repaying the government through the income tax system once they are earning enough money.
Professor Chapman said it was an honour to receive the award even though all the attention was a “little embarrassing”.
“Of course, you’re always pleased if what you care about and the work you do has a positive effect on policy. Since I was a teenager, I’ve wanted to be part of the policy world and often you can do a lot of work, particularly technical work in economics, which doesn’t directly become policy. But I was lucky.
“It was also a team effort and it couldn’t have done it without the hard work and support of members of the Wran team, particularly Dr Meredith Edwards, which recommend HECS. Many other public servants assisted greatly, and the political contribution of John Dawkins was extraordinary.
“At the time we needed to find a fees system which was universal and which took away all the upfront costs for students. And I thought that income contingent loans would solve this problem. Nobody has to find the money upfront and the government can recover the loan in the future through income tax once students are earning. It’s like life-long means testing. That’s why an income contingent loan like HECS is the fairest and most progressive model for education funding.”
Twenty three years after the introduction of HECS, the Australian Tax Office collects A$2 billion a year in university fees for the Federal Government. Over those two decades more than 2 million Australians have completed university study. In addition, England, South Africa, New Zealand and Hungary have adopted the HECS model, with Thailand, Colombia, Malaysia and Chile considering similar systems.
Building on the success of HECS, Professor Chapman is now using an ARC Linkage Grant to investigate the prospect of establishing a ‘reverse HECS’ system for students who studied overseas but now work in Australia. It has the potential to stop ‘brain drain’ in the developing world.
“A lot of poor countries produce excellent graduates who leave and go to work in richer countries. For example Haiti provides great engineers and doctors to the United States. India provides engineers to Europe, the Philippines provides nurses to everywhere. It’s really unfair, because some of the poorest countries in the world are providing excellent human capital to some of the world’s richest countries.
“But, for people working in Australia, we can put them through the tax system and take a HECS debt off them. This money could then be remitted to their home country to help fund education systems there. It won’t affect the workers at all, because HECS is such a small amount of tax obligations over someone’s lifetime.”
In addition to reverse HECS Professor Chapman’s ARC Linkage Grant will also examine how best to apply income contingent loans to other areas of social policy, including paid parental leave, as well as extending funding of university income support.
Professor Chapman is a professor of economics at the Crawford School of Public Policy in the ANU College of Asia and the Pacific. He is also a fellow of the College’s Research School of Asia and the Pacific.