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Higher Education Review ProcessSetting Firm Foundations: Financing Australian Higher Education5. key issues for financing teaching and learning
89 In considering possible future directions for the financing of Australian higher education, there are a number of fundamental questions and key issues that need to be considered in determining the best way forward. Some of these, as brought out in submissions and consultations, are presented in this section. a. how big should the australian higher education sector be?90 This is a fundamental question because the size of the higher education sector is central to the overall level of funding required and the capacity of the nation (through both public and private sources) to pay. 91 Before addressing this question it is important to establish what is meant by the term ‘higher education sector’. While a majority of higher education students attend public institutions, a small but growing number of students attend private higher education institutions. Furthermore, the funding differences between private and public institutions are less clear than they once were. For example, several private institutions are receiving public funding for specific programmes and services. Conversely, in a growing number of public institutions public funding now contributes less than half of the institution’s income. 92 In considering the size of the sector it is also important to consider issues of quality. There is a relationship between the two. In circumstances in which total funding for the sector is held constant, any significant increase in the size of the sector is likely to have adverse effects on quality.
how does australia compare?93 Higher education participation and graduation rates in Australia compare favourably with those of other OECD countries. 94 OECD net entry rates show that 45 per cent of Australians can expect to begin a university level education, which is the OECD average and equivalent to the United States and United Kingdom. New Zealand (71 per cent), Finland (67 per cent) and Sweden (65 per cent) have the highest rates (OECD, 2001). 95 OECD data show that 18 per cent of Australians have a university degree. This compares favourably with the OECD average of 14 per cent. Only the United States (27 per cent), Norway (25 per cent), the Netherlands (20 per cent) and Canada (19 per cent) have higher levels of university attainment (OECD, 2001). 96 One distinctive feature of Australian higher education is the extent to which it can be accessed by mature age students, contributing to a culture of lifelong learning. In 1999, five times more Australians over the age of 40 and nearly three times more Australians between 30–39 years participated in higher education compared to the OECD average. 97 A number of ways to determine the size of the sector have been proposed in submissions. Some of these are considered below. should a target be set?98 Not all those who apply to university succeed in gaining a place. In 2002, about 170 000 undergraduate students gained entry to university (preliminary student data). The AVCC estimated that between 10 600 and 17 450 eligible applicants failed to gain entry. It is self evident that not all those who apply for university education at that time have the capacity or commitment to succeed. It is entirely appropriate that a significant percentage of school leavers decide to move into vocational education and training as their preferred choice, particularly given the capacity in Australia to access university education later in life. Indeed, a cause for concern is that the year-on-year attrition rate is on average 22 per cent, suggesting that for significant numbers who do gain entry the decision to attend university was, at least in the short-term, inappropriate. 99 A key question is whether Australia should determine an appropriate level of university participation. 100 An arbitrary target could be set on the basis of the level of funding the Commonwealth is prepared to provide. To some extent this reflects current arrangements, although fee paying domestic students and international students in public institutions and all students in private institutions need to be added to the number of Commonwealth funded places in public institutions to arrive at the total size of the sector. 101 Some argue that the level of Commonwealth funding and the parameters that determine individual decisions about participation in higher education are the critical issues. Size will be determined by these factors. 102 In its submission to this Review, the AVCC (Submission 22) proposed that a target of 2 per cent of Gross Domestic Product (GDP) be set for total investment in higher education and for it to be achieved by the year 2020. Several other submissions proposed the same target. The Australian Scholarships Group (Submission 91) proposed that a target of 1.5 per cent of GDP be set. The current level of investment is about 1.4 per cent. 103 The AVCC also proposed that by 2020 ‘All Australians will access post school education or training with more than 60% completing higher education.’ (Submission 22, p2). As noted earlier, at present 45 per cent of Australians can expect to begin a university level education under current rates of entry to university. 104 If a target were to be considered, it would need to take into account a range of factors, including demographic and labour market trends. 105 Several submissions suggest that the size of the sector should be determined on the basis of those who want or can benefit from a higher education experience. For example:
The challenge, as we have seen above, is to define who has the capacity to participate or benefit. 106 In Higher Education at the Crossroads it was suggested that a higher education system that permits subsidised access to all those seeking it is likely to be unaffordable. There is sometimes a too ready assumption that higher education is the only worthwhile educational goal both from the individual and national perspectives, yet this is demonstrably not so. For example, growth in demand for skills obtained from the vocational education and training sector is strong and could be expected to continue in the foreseeable future. Indeed, more university graduates go on to study in vocational education and training than vice versa. 107 In describing the key characteristics of a healthy university system in 5 to 10 years, the Group of Eight suggests that ‘It would be accessible to all Australian students on merit.’ (Submission 181, p3). Under such circumstances the overall level of funding needed for the sector would depend on the standards set and the take-up rate by eligible students. 108 A related question here is who should determine the specific standards. Currently this responsibility rests with institutions. 109 Several submissions from business and industry argue that the size of the sector should reflect the needs of the economy. They argue that the size of the sector should be tailored to the needs of the labour force. For example:
110 In considering labour market needs, account should be taken of the fact that there will always be some imbalances in particular occupations, specialisations and geographic areas. Often they are temporary. They are influenced not only by the supply of graduates or the effectiveness of the higher education sector but also by factors such as remuneration and working conditions, career prospects and the relative attractiveness of occupations more generally or of geographic areas. The imbalances vary over time and are addressed by individual employers adjusting remuneration or reorganising how the work is done, as well as governments adjusting education and migration parameters. Where imbalances are likely to be persistent there is a need to identify the underlying causes and most appropriate measures to address them. The Government has done this in information technology and is currently doing so in nursing and veterinary sciences. 111 In most situations labour markets will adjust without the need for Government intervention. However, perhaps a more critical issue is to retain the occupational skills provided by higher education. Large numbers of trained nurses and teachers, for example, fail to work in their field of expertise. Too few doctors and veterinarians choose to work in rural Australia. To the extent that the Government might consider incentives to produce labour market skills in high demand, it may be better to focus on improving retention as opposed to increasing the numbers gaining access to university. Rather than providing additional subsidies (for example, scholarships) or reduced fees for those undertaking education in skills in short supply, one option may be to lower or postpone loan repayments to those who remain employed in such occupations and/or critical locations. some other issues related to size of the sectorinstitutional structure of the sector112 There is a relationship between the size of the higher education sector and the number of its constituent institutions, although this is by no means straightforward. 113 Australia currently has 39 universities, 4 self-accrediting higher education institutions and approximately 86 higher education private institutions. On the basis of the ratio of universities to population, Australia is similar to many other countries (that is, about one university per 500 000 people). The ideal number of institutions is difficult to determine because a range of factors need to be considered, in particular to do with access and efficiency. In Australia there are special considerations given its relatively small population, which is geographically spread. In particular, this presents special challenges in ensuring appropriate levels of access. 114 In submissions to this Review, few addressed the issue of the number of institutions. The Group of Eight (Submission 181, p3) argues that in 5 to 10 years for a healthy university system:
115 Would a rationalisation of the number of institutions provide efficiency gains without adversely affecting student access, notably in regional Australia, and institutional responsiveness? 116 Drummond (Submission 20) argues that the large number of separate universities in Australia results in teaching capacity being spread too thinly across too many different faculties and departments, and that 10 to 15 universities would be an appropriate number of institutions in the Australian context. He refers to the public university system in California, observing that the University of California has some 200 000 students across nine campuses and California State University has around 400 000 student in some 23 campuses. 117 The Western Australian Department of Education Services argues that rationalisation could result in significant efficiency gains:
uneven distribution of access to higher education118 The current levels of participation in higher education vary significantly between and within States and Territories. Higher Education at the Crossroads (Table a10) showed that participation rates for persons over 15 years vary significantly. Excluding the ACT (which has a very high rate because it has a natural catchment that extends beyond its borders) Victoria has the highest rate, at 4.0 per cent in 2000 and Northern Territory has the lowest, at 3.0 per cent. To some extent participation rates are affected by patterns of population growth across Australia. They vary even more between regions with some rural areas, for example, experiencing very low participation rates. 119 If average participation rates across Australia were to reach levels currently applying in Victoria, the additional number of places for the sector would be about 33 000. 120 To accommodate changing patterns of population growth in various locations, there would need to be either a shift in the geographic spread of higher education places or an increase in the overall size of the sector. In the past the latter has tended to occur because of rigidities in moving higher education places between institutions. 121 In the future should there be a more direct policy approach by redistributing places on the basis of population growth and demand? students in private institutions122 There are about 86 private higher education institutions operating in Australia. The number of students in these institutions was estimated at between 30 000 and 35 000 in 1999 (Watson 2000). Student enrolments are concentrated in business, administration, economics and arts, humanities and social sciences. The survey by Watson indicated that expectations for continued growth in the private higher education sector are high. b. how should public and private contributions to higher education be balanced?123 In answering this question it is appropriate to look at who benefits from higher education. national benefits
124 It is widely acknowledged that the generation, assimilation, diffusion and application of new knowledge and ideas significantly influence a nation’s ability to compete in the global knowledge economy and, importantly, to adjust successfully to the changing social, economic and physical environment.
125 A study commissioned in 2000 by the Business/Higher Education Round Table (BHERT), Of dollars and cents, reported that higher education contributed $10.6 billion annually to the Australian economy, about 2 per cent of national GDP, with a total economic impact of over $22 billion. Universities employ about 79 300 people, and contribute about $8.7 billion per year to the economy through expenditure on staff, non-wage purchases and net capital expenditure. In addition, students spend a further $1.79 billion on education and related activities, while university staff add an additional $70.5 million by way of consultancy income. The study estimates that Australia's universities receive over $1.18 billion per year in research income, and that this results in about $2.23 billion worth of spill over benefits to Australian industry. 126 Perhaps a more significant measure is the return to government for its investment in higher education. Borland et al (2000) determined that the average rate of return to government in Australia from its investment in higher education is about 11 per cent. This was calculated using a balance sheet approach where the level of spending on higher education by government was compared with the revenue it received from taxes attributable to the higher earnings of graduates. A more recent study by Johnson and Wilkins (2002, p2) using a similar approach produced comparable results. They concluded that
127 There is thus no doubt that the higher education sector makes a huge contribution to the economy. However, this in itself is not justification for public funding of higher education. The fact that graduates earn above average incomes and therefore pay high taxes does not automatically justify a public subsidy. Conventionally, the argument for public subsidy is based on the existence of externalities that are associated with higher education. For example, the presence of graduates in the workplace is likely to improve the productivity of other workers by changing attitudes to work organisation and innovation. Other examples are the transfer of positive attitudes toward education from educated parents to their children, research outcomes where a new design can raise the productivity of future designers and ‘the promotion of culture, music and an appreciation of history...the creation of a better informed and more tolerant society’ (Round and Siegfried, 1998). private benefits128 The private benefits of higher education are also significant. The recent Senate inquiry into higher education (Universities in Crisis 2001, p40) reported that it:
129 Graduates overall have a greater annual and lifetime income than non-graduates. Chapman and Salvage (2001) determined that Australians who hold a bachelor degree will earn around 55 per cent more over their lifetime than Australians who hold no qualification (leave education at age 18). Using data from the 1994/1995 Australian Bureau of Statistics (ABS) Income and Housing Survey, they showed that the gross lifetime earnings of someone with a bachelor degree (adjusted to 2000 dollars) were around $622 000 more for males than those who left education at the age of 18 years and for females around $412 000 more. The latest data available from the OECD (2001) show that persons who complete a university level qualification will earn on average 63 per cent more per annum than those with an upper secondary education. 130 Graduates are more likely to obtain professional or managerial jobs, are relatively protected from unemployment and experience greater stability in employment (Borland J et al 2000, Bynner J 2001). 131 There are also important social benefits of higher education including improved health and life expectancy, improved quality of life for offspring and an increased capacity to make informed, efficient decisions as consumers (Merisotis 1998). 132 Studies over the past decade have indicated that average private returns to higher education are between 9 and 15 per cent (for example, Borland, 2001). Several studies have highlighted the fact that private returns vary, depending on the course of study undertaken. Borland (2001), in calculating private rates of return by fields of qualification, arrived at results ranging from 11 per cent for science graduates to 19 per cent for engineering graduates. is there an appropriate balance?133 While some of the public and private benefits of higher education can be measured, others cannot. Therefore, it is not easy to calculate what an appropriate balance between public and private investment might be, yet many agree that striking a balance is important:
134 West (Learning for Life 1998, p52) argued that striking the right balance was ultimately one for the Government:
135 Of the submissions to this Review which call for an increased level of public funding, many focus on investment levels per student. For example:
136 The inference is that increased public funding is required to maintain or improve the quality of higher education. However, given the private benefits that accrue to the individual, it can be argued that any increased per capita investment could be funded in part by those who are directly advantaged. 137 Other submissions argue for the need to focus on unmet demand and increasing the size of the sector.
138 As we have seen, it is difficult to assess the level of that demand. Factors impacting on it include labour market conditions. Li et al (2000) estimate that for every one percentage point increase in the unemployment rate (for 20 to 24 year olds) the rate of application from Year 12 students to a higher education institution increases by one percentage point. Another factor impacting on the level of unmet demand is the private cost of study. If costs were to decrease, unmet demand could be expected to rise. Unmet demand is a moving target, whose size depends on university entry standards, student expectations and access to alternative educational opportunities. 139 Several submissions refer to international comparisons to argue for a greater level of public funding. As noted earlier, the Productivity Commission is undertaking an international study on the financing of universities, with a draft report available for consideration before the end of the year. 140 While the submissions may argue that externalities described above provide a powerful argument for the continued public subsidy of higher education, there is little empirical evidence of the size of these externalities and no formula that enables the Government to select an optimal balance between public and private investment. The extent of subsidy for higher education is a matter of judgement by governments based not only on an assessment of the external economic, social and cultural benefits that flow from public investment, but also on the merits of competing demands on the public purse. 141 West (Learning for Life 1998, p52) agrees:
142 Several submissions note that there has been a shift in the balance of funding towards a greater contribution from the individual (for example, Group of Eight, Submission 181). In this, Australia is similar to other countries. The latest available figures from the OECD (2001) show that in 10 out of 16 countries, the proportion of tertiary education funds from private sources increased between 1995 and 1998. As a proportion of revenue per student, in the United States tuition fees increased from 17 per cent in 1980 to 24 per cent in 1998 (National Center for Public Policy and Higher Education, 2002). Statistics Canada (2001) figures show that tuition fees as a share of total university revenue increased from 9 per cent in 1989/90 to 16 per cent in 1999/2000. A study undertaken for the New Zealand Vice-Chancellors' Committee (Scott & Scott, 2000) showed that the proportion of university operating revenue from tuition fees rose from 14 per cent in 1991 to 21 per cent in 1998. 143 The public benefits of higher education are not restricted to that provided by public institutions. With that in mind, a number of submissions argue for an extension of public funding to private institutions. For example:
144 If public funding were to be spread across a larger number of institutions would this result in some diversion of funding away from public institutions? If so, what would be the impact on quality in public institutions? 145 Some argue for a more progressive taxation regime to limit financial imposts on students. The Council of Australian Postgraduate Associations argues that:
146 The submission from The Australian National University (Submission 323, p4) makes a similar point. Such arguments prompt the question of whether the level of student contribution should more closely reflect the personal benefits derived from higher education? 147 The Council of Deans of Science (Submission 38, p3) argues that current arrangements are not a fair reflection of benefits:
148 Would a more equitable way be for the Government to determine a level of subsidy per student with students making personal choices in a deregulated fee environment? 149 Other submissions point to the need to attract funding from private sources other than the student. Discussion of these issues is presented later in this paper. c. funding mechanisms—some key considerationsstudent-targeted or institution-targeted funding?150 A fundamental issue that will determine the shape of any particular financing model is whether funding should be directed to students or institutions. 151 Arguments for both approaches are presented in submissions to this Review. In arguing for a student-targeted approach, especially if combined with deregulation or less regulation of course fees, several point out that the rigidities inherent in current arrangements would be addressed. For example:
152 It has been suggested that all Australians could have access to a learning account which they would be able to draw upon to undertake higher education that they select from that offered by universities. Those who gain access to higher education would know the extent of public subsidy available and make decisions about the level of private investment they would be willing to make in their future. 153 However, several submissions warned of the need to guard against market failure, suggesting the need for some degree of public intervention. For example:
154 Others argue that a true and effective market cannot operate in higher education as it would undermine the capacity of Government to pursue the national interest and market failures would be inevitable. Concerns are expressed that some institutions, notably in the regions, may not compete successfully for students.
155 Other problems relate to institutional planning. Would a student-targeted, demand-driven approach provide sufficient certainty for university management to plan effectively?
156 In the short-term there may be some uncertainty in terms of the patterns of enrolment. Over time, trends in demand are likely to be more predictable. 157 Another issue associated with a student-targeted approach would be the challenge to government as to how it might allocate learning entitlements. For example, attention would need to be given to the development of satisfactory mechanisms for determining the relative academic merit of potential students. Since there are currently no national mechanisms for determining academic merit this would have to be determined at the State and Territory level. There would therefore need to be either a new process to moderate these rankings nationally, the creation of a new basis for national rankings or a process for dividing the available number of places between the States and Territories. This is not likely to be a simple task. McClelland and Topley (2002) observe that for Queensland ‘There are about 400 ways for tertiary applicants to present admissions evidence.’ 158 Furthermore, any allocation process would need to take account of unevenness in levels of participation rate and of unmet demand across Australia. 159 In his submission to the Review, Dawkins (Submission 339, p11) proposes a hybrid model where components of an institution-targeted model could be combined with those of a student-targeted model. On equity and efficiency grounds he suggests that there are
flexibility160 A majority of submissions to the Review highlight the need for any future funding model to maximise flexibility for institutions.
161 A key point made in several submissions is that any future model should give individual universities the opportunity to pursue their own objectives, allowing them to make their own decisions on appropriate funding strategies:
162 Many submissions highlighted the need for greater flexibility in relation to student load. For example:
163 Others, while supporting the need for greater flexibility in terms of student load argue for gradual change:
fee deregulation164 The variation in personal benefits derived by students on the basis of the course they undertake, as discussed above, argues for some flexibility in pricing by universities. 165 Many submissions to this Review support the deregulation of fees arguing from the perspective of the need for more flexibility for universities to pursue their institutional goals. The AVCC (Submission 22) and the Group of Eight (Submission 181) see deregulation as an important element of any reform package but with institutions having the responsibility to make decisions on strategies appropriate to their own circumstances. A deregulated fee environment is likely to increase the availability of higher education places and make university more accessible. 166 Others support fee deregulation but suggest that it be limited:
167 Chapman (Submission 317, pp11-12) presents four reasons for not supporting full deregulation:
168 If capping of fees were to be adopted a key issue would be what form the cap should take and how much additional flexibility it should provide. A cap allowing a very modest price range could mute the potential benefits of fee deregulation and could simply see all institutions charge up to the cap, especially if subsidised places continue to be rationed and centrally allocated. This outcome may be little different from the Government simply determining an increase in HECS and passing on the full increase to institutions. 169 Others argue strongly against capping:
170 Several submissions argue strongly against fee deregulation primarily from the perspective of a reduction in student accessibility. For example:
171 A small number of submissions argue that fee deregulation would have an adverse impact on institutions with intrinsic disadvantage, such as those with high cost structures as a result of their location. The South Australian Government makes the same point in relation to fee deregulation as it does for the introduction of a learning entitlement model, noting that smaller institutions in regional locations may be adversely affected (South Australian Government, Submission 334, pp5-6). 172 Others argue that safeguards need to be built in to any fee deregulated model to protect vulnerable institutions:
173 Several other opponents of fee deregulation expressed concern about its impact on quality:
174 However, others see stronger links between what the students pay and what they receive in a deregulated fee environment:
should all higher education students have access to income-contingent loans?175 To optimise outcomes from higher education, access needs to be based on ability, not ability to pay. This point is highlighted in many submissions. There is near unanimous agreement in submissions for income-contingent loan arrangements. There is also near universal support for an extension of such arrangements to all students in public institutions irrespective of whether they have a government-funded (that is, subsidised) place. private institutions176 It has already been noted that, with just a few exceptions students in private higher education institutions have no access to loans. Several submissions argue that they should have access.
full fee paying domestic undergraduates177 A number of submissions argue that in a deregulated environment there should be no full fee paying domestic undergraduate students. However, the University of Melbourne warned against the abolition of full-fee paying places without appropriate deregulation, pointing to the benefits of current policy:
178 Several submissions argue for the abolition of the requirement that no more than 25 per cent of students in a course be full fee payers indicating that, in particular, it limits their scope for raising non-government income, especially in light of the regulation of HECS contributions, and limits their capacity to respond to student demand. 179 Others are concerned that the removal of any limit would result in high demand courses, such as law, being filled disproportionately by those sufficiently well off to pay higher fees, resulting in turn in lower quality of intakes and graduates overall and increased social stratification of some professions. Is this a realistic scenario in an environment in which income-contingent loans are universally available for tuition fees at zero or low levels of interest? If so, are there better ways of avoiding it than the present arrangement? loans in a deregulated fee environment180 Many submissions make the point that access to income-contingent loans become even more important in a deregulated fee environment. For example:
181 A deregulated fee environment could increase the availability of higher education places and make university more accessible. However, others argue that concerns about the level of debt that might accrue to students heighten. Opponents to fee deregulation also suggest that low socio-economic status students tend to be risk averse and this may seriously affect their access to higher education because of concerns regarding debt.
182 A study undertaken for the state Public Interest Research Groups in the US (King and Bannon, 2002) suggested that student debt became unmanageable when loan repayments exceeded 8 per cent of monthly income. The income-contingent arrangements that apply to higher education borrowing in Australia have a maximum repayment rate of 6 per cent of annual income (once the borrower is earning beyond $41 838). This suggests that current arrangements do not place an unmanageable burden on graduates. Certainly, the income-contingent nature of HECS and PELS repayment arrangements and the lack of a real interest rate mitigate against seriously adverse impacts of debt. That is, if a person’s annual income declines significantly, so too does their repayment in that year, but the real value of the debt does not increase. In these respects they are very different from a mortgage-type debt. 183 To address the issue of affordability of higher education in a deregulated fee environment should it be contemplated, some have suggested that one measure that could be considered is the raising of the minimum HECS repayment threshold and increasing loan repayments at higher income levels. implications for the government184 Because HECS and PELS are interest free income-contingent schemes, any extension of these would result in increased levels of support by the Commonwealth. The extent of the increase would depend on the degree to which the schemes are extended, the extent to which fees are raised and the parameters applying to any new arrangements. 185 If income-contingent loan arrangements were to be introduced for full-fee paying students, irrespective of whether they are at a public or private institution, how might these be structured to limit the overall increase in government subsidy? Should a surcharge be applied to cover the in-built subsidy in the loan arrangements? 186 Should the introduction of interest on loans be considered? Should it be considered for any new arrangements for full fee-paying students? 187 Chapman (Submission 317, p12) argues strongly against imposing a real rate of interest on government income-contingent loan arrangements. He points out that HECS already has a rate of interest greater than the rate of inflation and that adding a conventional real rate of interest would be equivalent to increasing the charge in real terms by about 30 per cent. Importantly, the relative increase would be much higher for relatively poor graduates (who would generally take longer to pay off their loan). 188 Conversely, it can be argued that the Government should apply a real rate of interest, with the additional returns being used by the Government to increase investment in higher education institutions. Under this scenario the Government’s investment can be directed to priorities it sets itself. regional issues190 A number of submissions argue that regional universities face special challenges because of high cost structures and the characteristics of their students. Several argue that provisions should be built into any future funding model. For example:
191 Others argue that a distinction between regional universities and others is not clear:
192 Regional issues will be discussed in more detail in another paper produced for the Review looking at diversity, specialisation and regional engagement. 193 Many submissions to this Review argue for targeted mechanisms to ensure equitable access to higher education. Several make the point that under current arrangements participation of particular equity groups is low and express concern that in a more deregulated environment access could decline. 194 Several submissions argue that a deregulated fee environment heightens the need to address equity issues. For example:
195 Is there a case for a scholarship scheme to assist disadvantaged students? indexation issues196 Earlier in this paper the pressures facing higher education institutions as a result of current indexation arrangements were discussed. In his submission to the Review, Karmel (Submission 14, p14) recommends that:
197 The Wage Cost Index (WCI) aims to measure changes in the wage and salary cost of a representative ‘basket’ of jobs. Although it does not reflect wage movements for that part of the labour market that directly competes with universities for labour, it does reflect overall wage movements in the market. Some argue that it may be a more appropriate measure in respect of university salary costs. 198 Several other submissions also point to the need for revised indexation arrangements, including full wage indexation. However, this may remove any incentive within the sector to seek genuine enterprise based agreements and identify individual organisational priorities and productivity trade-offs. Nevertheless this issue raises legitimate questions. Is there a need to make any discount to full wage indexation explicit and a known parameter? In terms of ensuring that future financing arrangements are sustainable and stable, should the relativities between components be known and maintained? 199 Should indexation arrangements differ between a deregulated system and a non-deregulated system? some possible responses200 A number of possible options have been raised in relation to the issues covered in this chapter. While not an exhaustive list, these questions have been included for consideration and discussion:
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