Higher Education at the Crossroads

The Australian Council of Professions (ACoP) has responded to the various reviews and papers initiated by the government over recent years and is now submitting comments on the overview paper ‘Higher Education at the Crossroads’.

ACoP Members are the major professional associations and they maintain contact with the professional schools in the universities in the various states. In many cases this contact is maintained by visiting panels of practitioners, in some cases in relation to the accreditation for professional purposes of professional courses and in others to sit on academic advisory panels. Additional contact is established by the presence on university teaching staff of practising professionals as part-time members of staff or as adjunct professors and senior advisers. In addition the presence of academic professionals as members of the professional associations on the courses boards and committees of the professional association further strengthens the lines of contact. The professions therefore have the opportunity to observe the state of professional education which forms a major component of the university system and to form opinions about its condition and in particular about the effect of successive changes to the system made in the fourteen years since the Dawkins Report.

In its various submissions ACoP has drawn upon the experience of many professional associations and many individual professionals to draw attention to the progressive deterioration in the funding of universities.

In its submission to the political parties prior to the last election, ACoP drew attention to the following special needs which it believes are still entirely relevant:

  • Academic salaries must be at a level to attract the best minds and to recognise the importance of teaching and research – recurrent funding must recognise this need.
  • Student to staff ratios must be substantially improved.
  • Teaching equipment and university infrastructure must be renewed and remain relevant to changing standards and changing needs.
  • Proposals for improved research funding must be fully implemented and encouragement of research kept as a vital priority.
  • The loss of talented individuals departing from Australia, (the “brain drain”), must be staunched – not however to prevent essential intellectual interchange taking place between countries in order to keep in touch with new knowledge.
  • While applied research and partnership with industry must be further developed it should not be at the cost of pure research from which creative innovation emerges.
  • Balance must be maintained so that the essential components of a civilised society embodied in the social sciences and humanities are not prejudiced.
  • New and innovative ways of learning must be encouraged, which may challenge conventional systems – especially for the professions.
  • New concepts of knowledge and of knowledge management must be encouraged.


The Australian Council of Professions acknowledges that the situation varies greatly from university to university, within universities from one disciplinary area to another.

Decisions have had to be made in many universities which have given priority in funding either to new buildings or to major new technological and other equipment for one disciplinary area while others languish creating internal tensions.

The shortfall in funding has been acknowledged in some ministerial statements, in the material presented by the Australian Vice Chancellors’ Committee and by independent observers.

In the seminar conducted by the Australian Council of Professions convened in July 2001, entitled ‘Professional Education in a Changing World’, the then President of the Australian Vice Chancellors’ Committee, Professor Ian Chubb AM, presented a paper entitled ‘Between Knowledge and Ability – Hopeful Signs for the Future’ in which he made a compelling case for greater resources for universities pointing out the disparity in the support being given to higher education in a number of other countries who are our trading partners by comparison with the support given in this country. It was clear that Australia was falling behind and in danger of losing our international competitiveness and our international standing in education and in research.

The Australian Council of Professions understands that the present paper and the present series of investigations instigated by the Minister are expected to lead to changes which will reverse the trend that has occurred over recent years.

While many other factors have been identified in the paper which may lead to beneficial changes the Australian Council of Professions is convinced that a major change must be in both the priority given to higher education by the government and the amount of money it is prepared to allocate from the public purse.

The earliest support for the development of Australian universities was seen by the government of the time, and indeed by the general community, as an important investment in the future of the country and an investment to enable the youth of the country, through education and the acquisition of knowledge and skills, to contribute to that future. It appears that over recent years public funding contributions to tertiary education have been seen more pragmatically as a cost to be considered in competition with other costs rather than as an essential investment which will yield benefits to contribute to all cost areas.

Governments must have the vision to see beyond immediate political imperatives and accept the absolute necessity of preparing the nation for the complexities and competitive demands of the knowledge based era in which we are now engaged.

While ACoP supports the investigation of alternative funding sources for universities we point out that universities generally have responded to shortfalls in public investment in universities by seeking alternative sources of funds in overseas fee-paying students, in collaborations with commerce and industry and in other innovative ways. While these developments have assisted they have also diverted university resources from their central roles of funding scholarship and research in many of the teaching disciplines.

We do not support any increase in the share of funding of universities paid by students which is already higher than fees paid by students in many other OECD counties. Nor does it support proposals by the Australian Vice Chancellors’ Committee that higher HECS rating may be paid for some courses since this would introduce equity considerations and prejudice students from lower income families.

We are concerned at the amount of reliance on full fee paying overseas students, to augment university funds, pointing out that there are educational developments in many of the countries from which these students come which could well reduce the flow in the future.

The Australian Council of Professions views with caution the implementation of specialisation which would cause the closing down of certain disciplines in some universities, although accepting that some careful rationalisation may be supportable. The particular geographic dispersion of population centres in this country can justify the retention of courses which may otherwise appear not to be viable. Such courses may well exist with support from and collaboration with local professional communities and fulfil a local need extending beyond immediate educational purposes.

In both teaching and research the Council believes that funding savings can be achieved by greater collaboration between universities. However current competition policies and proposals to increase competitiveness may well prejudice such collaboration.

We endorse the principle of learner centred education stated in the paper. Nevertheless ACoP believes that there is a danger in placing too much emphasis on the concept of teaching rather than learning with the implication that there are those who possess knowledge, the teachers, who then transmit it to those who receive, the students.

Many universities now have procedures for studying and improving teaching practices and also for encouraging and acknowledging excellence in teaching. It is significant that in at least one university the relevant centre is called ‘Centre for Learning and Teaching’, thus giving emphasis to the concept that, at a university it is the learning experience of the student that is most important, in which the individual student engages in a personal quest, developing the capacity for self learning and for critical enquiry. Too much emphasis on the concept of teaching diminishes the true nature of the university experience which is to share the search for knowledge. The best teachers are those who are capable of engaging the enthusiasm of the student for the area of knowledge and of encouraging the student to take part in personal exploration.

It can be said that the majority of teaching in universities is directly for the professions. Modes of teaching vary from profession to profession and in recent years developments have taken place in some professions giving greater emphasis to practical experience in courses, that is learning through doing or ‘situated learning’ as opposed to the traditional discipline knowledge based approach or ‘propositional knowledge’.

The dichotomy between theory and practice, the relationship of one to another and when and how they are taught in universities is a perennial consideration in professional courses. The degree to which the professional associations or individual practitioners can or should be involved in the educational process as well as student involvement in work situations, in which learning is part of work, is a subject for further investigation. It takes place in varying degrees in some professions as clinical experience and sometimes as simulated work experience. There are complex organisational and funding implications in the further application of this concept.

We believe that there is an urgent need for a discussion paper to be developed to study the concept of professional education taking account of societal changes which have taken place and to ensure that the education of professionals will serve Australia well into the first decades of the present century. The paper would examine changes in the concept of professionalism, professional educational modes, professional standards and ethics and the role of professional associations in education.

The Australian Council of Professions would welcome the opportunity to assist in the development of a discussion paper to define a concept of professional education for the twentyfirst century.

In view of the pressures to which universities and their teaching staff have been subjected over recent years it does not appear to be reasonable to expect that there will be further productivity gains unless it is by reforming administrative structures and reporting procedures to ease the present burdens on university staff. Present requirements for regulation by government and for the transmission of information, statistics and complex reports should be reviewed. Simplification of managerial demands and greater autonomy should be sought at all levels. The Council supports a thorough and sympathetic examination of current levels of regulations and reporting consistent with reasonable means of ensuring accountability.

ACoP agrees that there must be in Australia universities which can attain the highest international standards, measured by the quality of research undertaken, by contributions to global knowledge and by the excellence of performance of graduates. Generally centres of research excellence will be in one or a small number of disciplines in a university which can also act as exemplars to raise the general level of attainment in other disciplines. As has been pointed out the existence of such centres demands a sufficient number of high quality researchers to interact and to maintain international contacts and they will need accommodation, facilities and equipment at the most advanced level. That requires the provision of special funding.

We believe that special endeavours should be made both to provide additional public funding for this purpose and to have a national appeal to industry to support such a programme.

We do not believe that there should be a withdrawal of research funds from some universities to provide funding for such centres. ACoP considers that the best teaching is done by those who are seeking knowledge in research and that the best staff would not be attracted to universities which do not engage in research.

There should be an essential link between teaching and research in all disciplines so that the knowledge students gain is vital living knowledge growing out of research and continuous contact with evolving scholarship and not static knowledge.

The Australian Council of Professions would welcome the opportunity to take part in discussions on the Research Paper and to receive and comment upon subsequent supplementary papers. It would also be willing to contribute in whatever way is practicable to the Minister’s Reference Group, which it appears does not have a strong representation from the professions, bearing in mind the particular interest the professions have in the professional courses in universities.


This submission has been prepared for the Australian Council of Professions’ Education Committee; chairman emeritus Professor R N Johnson AC

Professional Skills Development

Reflecting our concern about the longer term economic and social impacts of ongoing professional skills shortages, Professions Australia has been working with our member associations to better understand the nature of these shortages (or in some instances – oversupply) and to explore possible approaches to better matching supply and demand over the longer term.

Our Education Committee has prepared a discussion paper “Skills Mapping: Assessing Australia’s Longer Term Requirements for Professional Skills”, which outlines some of the issues and makes recommendations on a possible way forward.
Professions Australia considers that a critical input into better matching the supply and demand for professional skills over the longer term is more comprehensive, robust and forward looking information on Australia’s likely future requirements for these skills, or “skills mapping”.

The objective of skills mapping would be to identify professional workforce issues, challenges and opportunities facing Australia over a 5-10 year timeframe to support broader based priority setting on a national level.  In our view it is an essential input into a more cooordinated approach by all stakeholders to professional workforce planning and policy development.

Our paper has been circulated widely including to relevant Ministers and Opposition spokespeople.

For more information call 1300 664 587 or contact CEO@Professions.org.au. Thank You!

New Knowledge – New Opportunities

Introduction

The Australian Council of Professions acknowledges the importance of the matters raised in the Discussion Paper on Higher Education Research and Research Training and appreciates the fact that the Minister is giving proper attention to this area. Nevertheless, it is generally acknowledged that the university system, including university research, is seriously affected by funding shortfalls. It is difficult to see that the present unsatisfactory situation will be retrieved without the acceptance by Government that the funding of universities and of university research must receive a higher level of priority in the allocation of funds under the Budget than at present.

Funding of higher education must not just be seen as a cost but as an investment and that investment is for the contribution those who undertake a university education will be making to the general community and the general economy. Certainly a university education enables an individual in many fields to achieve a higher level of earning but it also enables the individual to assist in raising the overall social and economic level of the community. It is fair that there should be a sharing between the government representing the community and the individual. This is achieved by HECS which is not only generally accepted but is seen as a desirable model by other countries.

The Minister’s discussion paper acknowledges the importance of knowledge as a ‘key factor’ and the importance of research as a ‘key source’ of knowledge. The aim of the paper in the encouragement of research, leading to innovation, must be accepted as an aim crucial to this country’s future and should certainly receive general support.

The attention, and the funding, given to knowledge growth and innovation through research in developed countries, most of which are our economic and trade competitors, emphasises the importance of the high priority this country must give to the encouragement of both pure and applied research as a vital component of our higher education system.

There does not appear to be disagreement on the aims – the critical question is whether the proposals in the paper are likely to achieve its aims and to improve research and research training in higher education as the Government expects, and whether there are included in the paper proposals which may damage the research capacity of some, or all, institutions of the higher education sector.

The response by the Australian Council of Professions recognises that individual professions have made their own submissions and that there are some differences of opinion on some issues. It is intended here to comment on some matters which may generally be seen as problematic and which are considered to need revision or further development rather than giving attention to the various positive aspects of the proposals in the discussion paper.

Funding

While acknowledging the Government’s recognition of the importance of research in the higher education sector, it cannot be seen in isolation from the general unsatisfactory state which universities have reached as a result of government policies and funding reductions. It is to be welcomed that the Minister now acknowledges in his recent Cabinet paper what is termed a ‘perception’ but which those with any real knowledge of the situation will know as a reality, that the University system as a whole is in a state of decline.

The Minister acknowledges both the importance of universities in our society and economy and that universities “are currently in a difficult financial position.

Research and learning in a university situation are closely linked, especially in relation to funding. In all disciplines it is necessary to encourage scholarship and research as a vital part of the living, evolving nature of the disciplines. If a level of research in all disciplines is not encouraged, the link between student learning and the encouragement of a critical, searching, expanding view of the discipline by both staff and students will be unlikely to occur. Students respond best to those who continue to explore in their discipline and who can convey the excitement of expanding knowledge. Furthermore, the attraction to the university faculty of the brightest minds will not take place without opportunities to engage in research. While this does not mean that every discipline in every university needs to be a centre of excellence where the most creative and forward looking investigation into the growth of the disciplines takes place, it does mean that some research in all disciplines in all universities should be encouraged. Those whose work merits it can then gravitate to universities which are regarded as centres of excellence in their discipline.

Bearing in mind the need to encourage research generally, it is important that the Research Infrastructure Block Grant should continue in its present form with adequate funding and not be made part of project grants of the various agencies. In the form proposed in the Green Paper it is likely that grants would come in relatively small amounts specifically for particular projects and would not allow universities to make adequate provision for general infrastructure and for large items of equipment which would be for general use and not be restricted to the recipient of an approved ‘discovery’ or ‘linkage’ application. Furthermore, it would make it extremely difficult to remedy existing shortfalls and build adequate infrastructure to meet expanding and changing future needs.

The principal objection the ACoP has to the Green Paper is that the changes proposed will demand more funds but there do not appear to be any proposals for increasing the funding to universities to provide for the changes. As previously stated, the universities are already seriously underfunded and any changes which further reduce funds would have serious consequences for the overall quality of the university system.

The following proposals in the green paper all appear to demand additional funding:

  • Additional research fellowships and Prime Minister’s scholarships are worthy objectives but are only to be funded, it appears, within existing funding for universities, and therefore must cut into scarce funds for other purposes.
  • The proposal that the eligibility for funding should be extended to a wider range of institutions ie to “all institutions undertaking research and research training” could well lead to a considerable expansion of applications by institutions outside the university system, with the result of further reducing funds for universities.
  • The proposal for grants of up to $500,000 a year for periods of up to 5 years under both the Discovery and Linkage systems does not appear to be predicated on new funding.
  • The support the Government has already given to research funding for biotechnology and health and medical research must be acknowledged as a valuable contribution. Nevertheless, the present funding proposals will mean that overall research and research infrastructure funding will drop significantly from the year 2000 at a time when there is a pressing need for expansion of funds.


There is now general acknowledgment of the need for increased funding of universities, both for general purposes and for research. Proposals in the Green Paper which will result in reduction in general funding due to increases in research activities will be to the serious detriment of the system as a whole. Some other means must be found to prevent this happening.


An Entrepreneurial Culture

The statement that it should be a key policy to develop an “entrepreneurial culture among researchers” may be misguided as it suggests that this should be a dominant, if not the most important, attribute to be held. The best researchers are those with the creative vision and the application to pursue their particular research area with a level of commitment and determination which leaves little time to engage in entrepreneurial activities. It is well-known to those in the private sector that the most successful entrepreneurs are those who are also dedicated and spend time and effort promoting their entrepreneurial proposals. For good researchers to spend the time it takes to be a good entrepreneur diminishes the time available for research and may even taint that research, notwithstanding the fact that there may well be some academics who can combine the two.

This is not to say that universities should not employ entrepreneurial managers who will work alongside and assist researchers to promote and commercialise discoveries, when those discoveries are at the point where development into commercial viability is possible. There is often a lengthy time span, sometimes of many years, during which a “research discovery” is worked on and developed. There may well be points along that route when consideration of possible commercial application becomes apparent and when an entrepreneurial outlook would be helpful but it should not dominate the attitude of the research, nor unduly reduce the researcher’s time and energy to the detriment of the research.

It must also be said that some research never leads to commercial implementation but adds to knowledge generally and this kind of research must not be discouraged by placing too much emphasis on “the development of an entrepreneurial culture”.

Our best researchers need to be able to both maintain their contact with the most forward looking research being carried out overseas, and to contribute to that research by their own work. If that doesn’t take place, the research record and reputation of this country will be diminished and, as one of the consequences, our researchers will seek posts elsewhere. The Green Paper acknowledges that there is already some evidence that this is happening. As there are many areas in which Australian research is at a high level internationally, the loss of leading researchers would have serious effects for the whole system.

The most effective and the most enthusiastic entrepreneurship should be coming from industry and there is evidence in many universities that such links with industry are taking place, primarily at the instigation of universities. The cooperative research centres and SPIRT programmes, which are to be retained and expanded, have shown what can be achieved, although there has been some criticism of the slowness of achieving results. There must be sympathetic and patient understanding that research results do not come off an assembly line. Industry must be prepared not just to expect short term rewards but to plan ahead over what may in some cases be many years, requiring the kind of research patience which is shown in progressive industries in countries overseas.

The Green Paper records that R&D investment by industry has declined recently and acknowledges the need for greater engagement by industry, especially in the provision of venture capital and the commercialising of research discoveries. An important role for Government is to provide incentives and the Australian Council of Professions will welcome taxation incentives and encourages government to develop other incentives.


Users and the Research Agenda

There is a danger that too great an emphasis on the role of users in defining the research agenda may lead to constraining research into areas which are already understood and acknowledged by users, with the result of failing to explore new, unfamiliar areas which may prove more innovative and productive eventually.

Some areas of research simply do not have immediate uses but may do in the long run. Others contribute to the general knowledge in ways which enrich the culture. It would not only be difficult to select appropriate users in such areas, for example in areas involving creativity, but users, almost by definition, would come with pre-established attitudes which could be prejudicial to innovative and high risk proposals which may in time prove of great importance.


Research Quantum

The ACP supports the proposal to simplify the means of arriving at the Research Quantum (or its equivalent) component of the Operating Grant, especially the proposal to include consultancy income which contributes to innovation, since this is entirely relevant to a number of professional faculties where consultancy is an essential component of the interaction between university and profession.


Social Science and Creative Arts Research

There are research areas of importance to a number of professions which involve creativity and social sciences research and which have not been given adequate attention under funding systems at present in place. Work in some professions and in their university faculties in the investigation and development of new products or new procedures relevant to that profession may not use the methods generally understood to constitute research and, unless this is understood, may not qualify for research funding under the proposed new system. The importance of these areas needs to be acknowledged and funding arrangements developed under any new system to ensure that they are not disadvantaged.


Research Student Numbers

In view of the recognised and accepted need to develop further this country’s, and therefore the universities’, research profile, the proposal to reduce the number of research students appears ill-advised. The statement about lack of success in employment of some PhD graduates does not appear to be based on a thorough analysis of causes and should receive more in-depth analysis before being used as a basis for reducing the number of research degree students. In any case there have been developments in universities of professional doctoral degrees targeted at the needs of industry and of the professions which may well lead to an expansion rather than a reduction in the number of places needed in the future.

In relation to the generally agreed overall need for more and better research as we move into a more intensely knowledge based economy, the proposal to reduce numbers is unfortunate and is not supported.


Research Student Funding

The proposal to reduce funding for PhD research students from 5 years to 3.5 years and for masters students from 3 to 2 years would seriously disadvantage many forms of research training, especially involving cross disciplinary research needing greater time to encompass a range of contributing disciplines. There are many practical realities which come in the pursuit of research goals which cannot always be encompassed in the restricted times now proposed. Undue restrictions on time could well lead to short cuts and failures to consider all necessary factors. At the very least there should be flexibility to take account of particular programmes which cannot be contained within the times proposed in the paper.


Conclusion

It is entirely appropriate that the importance of research should be acknowledged and the research record of the higher education sector examined, especially as the Australian community and economy come to grips with the rapidly changing and technologically complex world. At this time, investigation of innovations and putting the results of innovation into use must have the highest priority. The Government should acknowledge this and ensure that the additional funding necessary is provided. The proposals in the Green Paper do not give confidence that this will happen.

Professional Services under Threat

Australia’s professional practitioners – from veterinarians, physiotherapists and engineers to doctors, lawyers, accountants and surveyors – are under threat.

The threat stems from the fact that professionals have become obvious – and often unjustified – targets when something goes wrong and the “victim” looks around for someone to blame.

In our increasingly litigious society, professionals are being seen as “easy targets” because they have reputations to protect, they are often covered by professional indemnity insurance and they are regarded as having deep pockets.

Professionals are being sued more frequently today than at any other time in our history – and there is an alarming escalation in the size of the judgments being awarded against them. Claims for alleged negligence by professionals have out-stripped the capacity of those professionals – and the insurance market – to cover them. In other words, even where litigation is successful, plaintiffs may well have trouble recovering the damages the Courts award.

The Nature of the Threat

The costs of defending claims, insuring against them and paying the ones that are successful are borne, eventually, by the whole community. This is because in the professions, as in all sections of commerce and industry, these business costs are unavoidably passed on to their clients and customers. However, there is another down-side. As more professionals realise the nature of the threat they face, they are tending to respond to this dilemma by:

  • giving their clients more cautious and/or defensive advice;
  • recommending more costly approaches;
  • taking legally proper action to ensure that they own very few assets;
  • carrying no or only a bare minimum of insurance; or
  • in some cases, notably obstetricians, withdrawing from the very type of work which the community needs them to do.


What can be Done?

Australia has been in the position before where claims have out-stripped the capacity of defendants and insurers to pay. This has happened with motor vehicle accidents, worker’s compensation and aviation accidents. In each of these areas, legislation has been introduced to limit the amounts which can be claimed. It is now time for governments to come to grips with the four factors which are at the heart of the problem facing professional practitioners. These factors are:

Unlimited Liability
To overcome the exposure of professionals to unlimited liability, the amount of damages that can be awarded must be capped. In return for capping, professionals would be obliged to undertake continuing education to maintain high standards, take out appropriate levels of professional indemnity insurance and adopt appropriate risk management, complaint handling and disciplinary procedures. The New South Wales Parliament has enacted legislation, the Professional Standards Act 1994, to this end.

Joint and Several Liability of Defendants
This legal principle can lead to the unjust situation where a professional who may be only 10% responsible for a plaintiff’s loss pays 100% of the damages. Professionals are frequently the main target in legal actions even where their involvement is minimal because their professional indemnity insurance is the most obvious source of assets. Legislation is needed to replace joint and several liability by proportionate liability, where the liability of defendants is apportioned according to their respective degrees of responsibility. This approach already exists in the USA and a joint Federal/NSW Government study has recommended that it should also apply in Australia. Model legislation to introduce proportionate liability has been prepared and should be implemented by governments as a matter of high priority.

Vicarious Liability for Co-Partners
This is a concept under which the partners in a professional practice are responsible for the acts or omissions of all other partners. To overcome this, the professions should be permitted to incorporate with limited liability. This would put them on the same footing as every other service provider. Preventing professionals from having this right is unjust and unjustifiable. The incorporation of professionals is permitted in the United Kingdom and in most States of the USA.

When does Professional Liability end?
Because of the difficulty of determining when a cause of action arises and the varying periods of limitation, both between States and between different statutes, it is often unclear when the professional liability of a professional for a particular act or omission ceases. In some instances the liability remains indefinitely. The interests, both of the community and of professionals, call for time limitations to be uniform, based on clearly ascertained dates, and of reasonable length.

Australia’s professional practitioners accept that they must bear appropriate liability for negligence. They also acknowledge that the community should have the right to recover reasonable damages where professionals are negligent. However, professional practitioners should not be asked – as they are now – to bear unlimited or disproportionate liability.

How can Reform be Achieved?
Achieving these reforms will require co-operation between the State and Federal Governments. Australia needs a national, co-operative scheme whereby the States adopt uniform legislation and there is complementary Federal legislation.

We can help bring about change by supporting current moves seeking the required legislation for a national scheme to achieve reasonable limitation of professional liability.

The Nture of the Threat

National Competition Policy and the Professions

Can the Professions survive under a National Competition Policy?

This is a timely and significant conference and one with which the Australian Council of Professions is very pleased to be associated.

The title of the conference is challenging: the short answer to the question posed must be ‘yes’. The Australian Council of Professions has, over the years, been closely involved in the public processes, culminating in the Hilmer Report, which have addressed the position of the professions in the context of national competition policy. Generally, the Council has always accepted the Hilmer proposition that the Trade Practices Act should have universal coverage, including the professions — this position was acknowledged in the Hilmer Report itself. ACP Policy

In its submission to the Hilmer Inquiry, however, the ACP said that it endorses the principle of competition on the basis of merit for the provision of any specific service. In fact, the Council supports the removal of unnecessary barriers to competition, but the key word is ‘unnecessary’. We must not abandon those barriers which, whilst perhaps appearing to be anti-competitive, can be shown to be in the public interest. The ACP submission also said that “The public interest and the protection of consumers should be the paramount criteria in assessing the need for any change.” Uncertainty in the Professions

This remains the ACP’s basic policy stance but there is a pronounced degree of uncertainty existing within the professions about the evolving processes of implementation of the Hilmer recommendations in respect to professional practice.

This uncertainty is compounded by the fact that there are many players participating in the implementation processes:

    nine governments are the custodians of change and a multiplicity of semi-governmental authorities have a critical interest in outcomes;
    regulatory bureaucracies at Commonwealth, State and Territory levels come increasingly into focus and constitute one of the few growth areas in the public sector;
    peak business councils opine on the categorical imperatives driving competition reform while less prestigious business associations address the day-to-day realities;
    the Industry Commission in its latest manifestation as the Productivity Commission continues its work with extreme rationality of thought;
    while academia continues to find much to claim its attention in respect of both the theory and practice of bringing about a more competitive Australia.

ACCC

At the national level, the Australian Competition and Consumer Commission is of pre-eminent importance to the processes of implementation. Some professions have had a long association with the ACCC (and the antecedent Trade Practices Commission) in addressing the issue of compliance of their respective codes with the provisions of the Trade Practices Act. I must at this point commend Professor Fels, his fellow Commissioners and the ACCC staff for their efforts in establishing consultative mechanisms in which the professions can participate in pursuit of this vital dialogue. We welcome our membership of the ACCC’s Consultative Committee and the more recently established Small Business Advisory Group, as we do the ACCC’s co-sponsorship of this conference.

These avenues for consultation allow us to keep before the ACCC our views on the need, in the public interest, to measure the provision of professional services on grounds significantly broader than price. Our concern is that competition policy outcomes measured solely or predominantly in terms of price would undermine professional standards and the quality of professional services provided to the community. In that context, I was interested to learn from the evidence given recently by Professor Fels to the House of Representatives Standing Committee on Financial Institutions and Public Administration that the Commission is having another look at its approach to pricing arrangements in professional practice. Considering the enormous volume of business which the ACCC will have to review it is important that it does not waste its time over professional association matters which are conceivably anti-competitive but quite internal and have no effect at all on the public interest. Penalties

As the sponsors of this conference have pointed out, non-compliance by professional practitioners with the provisions of the Trade Practices Act could give rise to heavy penalties.

An underlying issue is whether the present penalty provisions in the Act, which were formulated in an earlier and different context, are appropriate when applied to the professions. I am pleased to note that the ACCC is aware of this issue and I can indicate our support for their activities which will hopefully lead to a review by the Government based on the recommendations of a report prepared by the Australian Law Reform Commission a couple of years ago.NCC

Also at the national level, the National Competition Council has its role to play but that role is not as clearly discernible as that of the ACCC, at least in respect of its impact on the professions. Apart from its designated functions, any work undertaken by the NCC must be agreed by a majority of Australian governments. In a comment on its work program last October, the NCC suggested that a matter that would benefit from examination would be “restrictions on the provision of various professional services”. The NCC does not currently have a work program identified by Australian governments but I understand from remarks made recently by a senior NCC official that, if the NCC were to receive a remit relating to the professions, it is likely that a public inquiry would be mounted. I would have thought that there has already been a surfeit of public inquiries into the issue of the professions and competition policy. Admittedly, this is no more than a straw in the wind at this stage but it is of potential concern given the processes already in place with the ACCC to which I have already referred.

There is also a question mark over the role of the NCC in the legislative review processes, with particular reference to the determination of public interest.

When looking at the roles of the two regulatory bodies following on the Competition Principles Agreement endorsed by governments some two years ago, a question remains:

“Do the processes of the NCC and ACCC overlap and, if so, what are the likely consequences for the professions?”

CPA

Under the Competition Principles Agreement, Australian governments are committed to reviewing by the turn of the century some 1,800 pieces of legislation (including subordinate legislation) to identify and assess ‘anti-competitive’ provisions — there is a lot riding on the outcome of this review process:

    State and Territory governments will receive significant financial rewards if, in the opinion of the NCC, they undertake their reviews in an appropriate way;
    what constitutes ‘appropriateness’, however, is arguable and inevitably raises the issue of public interest;
    there is inherent difficulty in factoring public interest into a proper cost/benefit analysis but to rely simply on economic efficiency criteria (which seems to be the stance of the Industry Commission) would be to initiate, by default, a major de-regulation exercise on an extremely suspect basis;
    already there is evidence that at least one State has devised a methodology in which an objective base has been clearly established to ascertain economic outcomes, whilst only a minimal and subjective base has been established to ascertain the public benefit outcomes;
    with different authorities in nine jurisdictions each doing their own thing, the professions are particularly concerned that an ill-founded outcome in one jurisdiction could, in effect, prejudice a profession nationally — this would occur through the operation of the mutual recognition regime which requires that individuals able to practise in one jurisdiction are automatically able to practise in any other;
    on the evidence to date, we are concerned about the divergence in approach among the different jurisdictions, the form, substance and effect of ‘national reviews’ that can be set in train by any of the parties, and the lack of terms of reference and consultation in some cases.

Uncertainty in Government

I mentioned earlier that the professions are suffering from a great deal of uncertainty. It is obvious that all nine governments are also suffering from this uncertainty. It follows that the ACP, its constituent bodies and the 200,000 plus professional practitioners they represent will be looking to governments to pay due heed to the legislative review process with a view to enhancing the level of consultation and, in so doing, to assist in bringing about a necessary degree of consistency among jurisdictions.
Professionalism

All of which brings me back to where I started: in answer to the question, – ‘Can the professions survive under competition policy?’, I gave the answer, “yes”. There is, however, a more important question to which I don’t know the answer. That question is ‘Can “professionalism” survive under competition policy?’. I believe that the great majority of the members of the professions strive to practise in a professional manner. The Australian community looks for and is entitled to demand the highest professional service. I would claim that the level of professionalism we enjoy is a national asset which, while not lending itself to quantitative measurement, is a critical component in the processes necessary to preserve social cohesion. Professionalism is difficult to define and yet it is the essential difference between the professions on the one hand and business and commerce on the other. History with your indulgence I would like to recall the history of theof the development of the professions which provides an important perspective on their functions in society.

The early meaning of the word “profession” was a declaration or promise or vow made by a person entering a religious order. By the late middle ages, its meaning had changed to identify that class of persons who professed knowledge of some department of learning or science and used that professed knowledge in application to the affairs of others.

In particular, it came to refer to the three learned professions of those days – divinity, law and medicine and also to the military profession.

With the development of that “professionalism”, associations of such persons formed together for the purposes of controlling the conduct and standard of behaviour of those persons professing to provide and providing those services. As society became more complex, the numbers of such professions and associations increased.

The elevated position of professionals in the community did not occur by accident. It was because of the function of individual professionals in banding together and agreeing amongst themselves to adopt high standards of entry and to observe high standards of performance that the community came to respect and trust persons providing those services.

Self regulation and autonomy were an integral part of the development of those standards and it was in the interest of the members of the professions that those standards be maintained. From the point of view of the community it helped to ensure the quality of the services being provided.

The public interest in maintaining the highest standards in the provision of professional services and in the behaviour of those professionals was given effect to by statutes empowering professional associations, or in some cases licensing boards consisting mainly of the professionals, to set criteria for entry, to control conduct of members and, where appropriate, to exclude from professional practice those whose standards fall below acceptable levels.

It is an unfortunate development that the word “profession” has over the last two or three centuries come to have several meanings apart from the ones I have just mentioned. It can now be used to describe any calling or occupation by which a person habitually earns his or her living and, as we all know, that covers a multitude of things which have nothing to do with learning.

It is, I believe, a more fortunate change that has brought about the inclusion of a number of other occupations into the ranks of the professions as we define them through their adopting the high standards and ideals of professionalism.
Definition

Within the ACP, a profession is defined as:

    a disciplined group of individuals who adhere to high ethical standards and uphold themselves to, and are accepted by, the public as possessing special knowledge and skills in a widely recognised, organised body of learning derived from education and training at a high level, and who are prepared to exercise this knowledge and these skills in the interest of others; and
    inherent in this definition is the concept that the responsibility for the welfare, health and safety of the community shall take precedence over other considerations.

Effect of CPA

The application of pure competition principles to the professions may very well take away the professional commitment to the welfare of the client and the community, and replace it with a commitment to business principles and profit.

A great difficulty with the provision of services is that the members of the community are generally not in a position to assess the quality of the service, or for that matter, the qualifications of the providers. Professional services are often extremely complex and the assessments are often made according to the provider’s manner, presentation, advertising claims and prices without an awareness of their knowledge, skill and judgement.

Provision of a licensing or regulation process provides some degree of protection for members of the public. Deregulation removes it and must be introduced only after very careful assessment and consultation with all stakeholders.

These problems also exist at government level. I am aware that in the engineering profession there is a great concern that governments’ outsourcing policies have led to a situation where government departments no longer have the expertise to make good or informed decisions when awarding government contracts.

Both government and individuals must rely on the professionalism of our members and that professionalism must be encouraged. I don’t believe that competition policy is doing this.

I was pleased to note that the NCC in its publication “Considering the Public Interest under the National Competition Policy” states that subclause 1(3) of the Competition Principles Agreement is “not about maximising competition per se, but about using competition to improve the community’s living standards….”, and it further states that it recognises the public benefit to include….”improvements in the quality and safety of goods and services….”. I hope that the many authorities involved will recognise this.

Professional people respond well to the trust placed in them by the community to provide quality and safety in their service. To do this they must be able to charge a commensurate fee. If, however, they are forced to compete, especially in regard to price, quality and safety will be diminished. That trust and the response to that trust will also be diminished. Professional standards involve many criteria apart from price.

The provision of services is quite different to the provision of goods. The quality of a service can readily be changed to match the price and this is not in the public interest. I believe Michael Peck, who will be speaking after me, will be illustrating this in his address in regard to the construction industry. He will be showing how the consultants’ fees have been reduced dramatically but their incomes have not declined proportionately. In other words, services and standards are being adjusted to meet the market.

In my own case I can speak with some personal knowledge of my practice of dentistry. Virtually every service which I provide to my patients on a daily basis could be done by me in half the time if I chose, but, need I say, it would not be in the public interest. Post operative complications would increase only marginally but long term failure (with accompanying increase in permanent damage and costs) would increase markedly. By that time my patient would in most cases have no idea whether it was my work which was at fault.

Under pressure of price competition, it is relatively easy to manipulate (falsify) item numbers so that the cost to the patient is minimised through increased health fund rebates. As I currently work, I need do none of these dubious practices and in fact there are many occasions where patients request treatment which may or may not be expensive and I persuade them not to have it where I believe it to be inappropriate. There is no price competition or profit motive involved in this type of service, there is “professionalism” and the freedom to charge what the service is worth. I believe this is in the public interest. Thank goodness I am not answerable to an outside owner of my practice.

There are hundreds of thousands of professionals in this country who are providing this kind of service. The cynics among us in government and in the community will not believe this statement and will point to the small minority of so-called professionals who are only profit motivated. The introduction of a third party into the provider-client relationship such as we see with Medicare, bulk billing and the health funds unfortunately tends to encourage profit-motivated unprofessional behaviour. We all regret that this exists and I believe that the importance of service to the community and ethical behaviour should be emphasised continually in all undergraduate courses and by all professional organisations.Professional Associations.

I mentioned earlier that professional associations formed together in the late middle ages for the purposes of controlling the conduct and standards of their members. Their priorities were quite different to the merchant guilds. Today, professional associations still work to promote high standards among their members and, through this and various other ways in their areas of expertise, to promote the welfare of the community as a whole. There is still a tradition or a requirement among members of these associations to share all knowledge, research and new techniques. This is quite different to commerce and business where new ideas are kept secret or patented in order to maximise profits. This sharing for the benefit of all is also part of our professionalism. Professionalism may be at risk under competition policy. It is a valuable community asset and, if it is lost, then that will not be in the public interest.

Dr John Southwick
President – Australian Council of Professions

Professional Self-Regulation

The Australian Council of Professions endorses the proposal by the NSW Government that the limitations of liability on time and money provided under the legislation be available to the defendants of an action in which the “Professional of Record” in the matter is listed on an approved register.

The NSW Government has defined a “Professional of Record” as the professional who authorised the documents or actions related to the matter in contention in an action within the ambit of the legislation. The Australian Council of Professions endorses the incorporation of this definition in the legislative framework, in which an “Approved Register” is defined as one in which membership is voluntary and is limited to professionals who:

  • have defined minimum qualifications in both tertiary education and experience such that the holders can operate as professionals independently within their field of competence;
  • adhere to a Code of Ethics (the NSW Government’s special requirements for risk management and continuing professional development are an inherent part of ethical practice required by the Code); and
  • are covered by professional indemnity insurance, either directly or indirectly, to the level required by the legislation.


An “Approved Register” is also defined as one which provides for:

  • eligibility competently assessed using established processes against well-defined criteria for tertiary education standards, professional experience and continuing professional development;
  • access by the public to a register of current members and ability to lodge complaints;
  • disciplinary action for breaches of the Code of Ethics;
  • the right of appeal by professionals judged ineligible for entry to the scheme or judged liable for disciplinary action;
  • access to a mediator or arbitrator, nominated by the President of the Professional Association, to assist in the resolution of disputes; and
  • a scheme to be run by a “Registration Board” administered by the Professional Association and able to draw on the full range of Professional Association experience and expertise.


The Australian Council of Professions further proposes that the following aspects be included in the processes and documentation for a register to be submitted for approval under any legislation:

  • the definition of standards of qualification (both academic and experience) for admission to the register;
  • processes for accreditation of educational programs (both Australian and overseas) which satisfy the academic qualification requirement;
  • processes for assessment of applicants’ conformance to the qualification requirement;
  • a process for appeal by applicants who have been judged ineligible for entry to the register;
  • a definition of standards to be achieved in continuing professional development;
  • processes for assessing conformance of persons on the register to the professional development standards (quality and quantity factors);
  • a defined Code of Ethics;
  • defined requirements for professional indemnity insurance;
  • a process for issuing of annual practising certificates on payment of the annual fee;
  • disciplinary processes for breaches of conditions of register;
  • a process for appeal by persons subject to disciplinary actions;
  • processes for mediation and arbitration in disputes; and
  • administrative processes and fee structures for the register.


The Australian Council of Professions expects that, as a result of this practice, registration by the Professions would supersede other registration procedures so that costs on the individual professional would largely be offset.