NEW ZEALAND's universities are not afraid of change. Through the 1990s, we adapted quickly to a completely different method of funding, a huge increase in the number of students, a sharp cut in funding per student, greatly increased demands for accountability from students and taxpayers, rapidly changing competitive pressures on an international scale - and we did it all at two-thirds of what it costs to produce an Australian graduate and with only half the general staff per student of a British university.

So the critics who predicted that New Zealand universities would resist the proposals in the recent green paper on tertiary education are completely wide of the mark. We know better than anyone else that if we are to maintain internationally competitive standards we cannot afford to rest on our laurels.

That begs the question, however, of what sort of change is needed. If the agenda is too limited and parochial it could prejudice the very international standards we need to address. A New Zealand university system whose quality suffered because of under-resourcing or undue government interference would rapidly find its international reputation in free fall.

The green paper offers a chance to adopt a wide-ranging agenda so that we achieve academic standards and participation rates at international level, produce graduates who are relevant to New Zealand's needs, and make a contribution that is rightly expected of the university sector. We need a green paper that is not narrow and timid but is ambitious.

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Unhappily, the green paper fails this test. While it says some sensible things, about research and university status, for example, it seems to be driven by two rather narrow considerations - first, that the universities can be made more efficient only by exposing them to a market-driven and exclusively producer / customer relationship with individual students, and second, that the taxpayer's investment is at risk and can only be protected by the crown acting as owner. Both considerations, while legitimate in some respects, give only a partial version of the full picture.

The first consideration seems to be driven entirely by ideology. While lip service is paid to wider objectives, the assumption seems to be that if the mechanisms are got right the desired outcomes will follow automatically. With little supporting argument it is assumed that the correct mechanism is to place the universities within a marketplace relationship with student customers whose demands will ensure that the desired outcomes are produced.

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Our objection to this is not that we are unwilling to regard our students as customers in what is essentially a student-driven system - we do that already - but to the view that this is all there is to it. There is no room in this model for wider or longer-term considerations such as the national interest, academic independence or the role of universities - enshrined in statute - as "critic and conscience of society".

In this respect at least, the role of government as the agent of the wider community interest is simply abrogated in favour of short-term marketplace transactions with a myriad of individual student customers. A university system in which the customer is king and market forces prevail to the exclusion of all else would be unique to New Zealand. In other countries where universities operate as private corporations they at least have the independence provided by substantial assets and endowments. We would have little protection against the tyranny of the customer, which would be just as threatening to academic independence and just as inimical to the longer-term and wider perspective as direct government intervention.

Ironically, the corollary of this exclusively market-driven model is not greater freedom from government control but a greater degree of government intervention. This is shown in the second consideration - the government's preoccupation with the need to protect the taxpayer's investment. The proposals will increase the risk of financial failure by making institutions more vulnerable to the short-term vagaries of the marketplace. The crown's response is to claim exclusive ownership of the universities and to appoint its own board of directors. But this flies in the face of the fact that university assets have been financed from a variety of sources (including students and the public) and this will become even more true as government funding falls further below its current level of about half of university income.

Running universities through a board of directors appointed by the government would mean a much increased degree of direct government control of the universities. The same can be said of another element of government intervention - in the area of quality assurance. The green paper gives fair warning that funding could be made conditional on the universities accepting a subordinate role in relation to a statutory qualifications authority. This degree of statutory control - presumably seen as necessary to offset the fallibilities of market-driven provision - would again place New Zealand universities in a uniquely disadvantaged position.

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The green paper, in other words, paints a picture of New Zealand universities as subject to an unattractive combination of market pressures and government control, which would raise real question marks over our international acceptability.

Similar paradoxes arise in other parts of the paper. For example, the proposal that limited resources should be spread more widely in order to encourage greater participation could well have the opposite effect if the result is that the higher price of tertiary education for each potential student acts as a disincentive.

Our problem is that, by taking such a narrow and ideological view of what is needed, the mechanisms suggested will be self-defeating, will create further and avoidable problems and will miss out on a wider and more constructive agenda for change.

The universities have no wish to be unhelpful. We have made constructive suggestions as to how the funding system could be modified so as to increase competition, innovation and efficiency without prejudicing the protections to academic freedom that it importantly provides.

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We favour a compact with the government in which we jointly identify those objectives that are desirable in the longer-term national interest if we are to invest effectively in education for the 21st century, and then work together pragmatically to ensure their achievement. Our record shows that we are willing and able to adapt and change. What New Zealand now needs is an agreed agenda for change in which the universities can be willing partners.

Bryan Gould is vice chancellor of the University of Waikato.

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