The quality of university teaching is increasingly the subject of political rhetoric, but doubt remains about both actual performance outcomes and the role and relevance of the Australian Universities Quality Agency (AUQA). Present quality procedures are found to be inadequate, and scepticism about AUQA's capacity to achieve its aims is well justified for two reasons: the almost complete lack of recognition of the importance of incentives to motivate teachers to allocate effort towards teaching at the expense of research; and the inadequate attention to the need for more accurate indicators of teaching performance. This paper suggests ways of improving the effectiveness of AUQA in raising the quality of university teaching. Two key reforms suggested are: (a) the wide reporting of more accurate teaching performance indicators; (b) a revised university funding model in which university income is based on teaching performance indicators in the same way that research income is based on research performance indicators.
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