Stephen Smith (Perth, Australian Labor Party, Shadow Minister for Education and Training) Share this | Hansard source

The Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007 amends the Higher Education Support Act 2003 to provide for the government’s 2007-08 budget commitments, indexation increases and other technical adjustments for the years 2008-10 and adds maximum grant amounts up to the year 2011. The bill includes the higher education measures announced in the budget other than the Higher Education Endowment Fund. The bill covers a range of areas, including reducing the number of Commonwealth Grant Scheme funding clusters; changing CGS funding levels across disciplines; specifying a revised maximum student HECS contribution for commerce, economics and accounting courses; introducing three-year CGS funding arrangements to commence from 2009; lifting the 35 per cent cap limiting the proportion of full-fee domestic undergraduate places and limiting the 25 per cent cap for medical places; increasing the total number of Commonwealth supported places; increasing the number of Commonwealth scholarships from 8,500 to 12,000 per year and allowing them to be paid by the Commonwealth directly to students; introducing an Indigenous scholarship classification for up to 1,000 higher education Indigenous students; providing additional funding to universities to improve teacher education programs; creating a new Diversity and Structural Adjustment Fund for universities through the appropriation of an additional $67 million; and providing additional funding to the Australian Research Council for the period 1 July 2007 to 30 June 2011. In that context, the bill also amends the Australian Research Council Act 2001 to update caps on funding for 2007 and 2008 and adds the financial years starting 1 July 2009 and 1 July 2010. Labor supports these measures and, with a couple of notable exceptions that I will come to in the course of my contribution and make clear by way of second reading and detailed committee stage amendments, supports the bill.

What a surprise that the government’s budget contains measures favourable and positive for education. What a surprise, after 11 long years of neglect and complacency and of deliberate underinvestment in our higher education and university sector. What a surprise, three, four or five months before an election, after Labor has made education and higher education a front and centre policy and political issue for the course of this year. What a surprise that, at the last minute, the government might decide cynically and politically to do something about education. There is only one reason for that occurring—that is, the government is much more interested in trying to save its political neck than it is in a long-term, enduring commitment to education and higher education.

While there is much relating to education in the budget and in this bill, which, as I have indicated, we welcome, it comes after 11 long years of neglect by the Howard government of the education and training of our nation—neglect in building the skills and capacity of our workforce today for the challenges of tomorrow. The essential case against the government when it comes to higher education is that, over the period of its term in office, the government has underinvested in higher education and in our universities. When the government first came to office, it cut funding to higher education by $100 million a year. The government cut funding to technical and further education in TAFE by 13 per cent in its first term of office and increased it by only one per cent in its second term—an effective real cut from the 1995-96 figures. Up until this year’s budget the government actually reduced funding to universities by six per cent per student place between 1995 and 2003. These are facts and analyses that the government would prefer the community to gloss over at this point in the political cycle.

So, given this track record, we should take the budget and this bill with a grain of salt, or perhaps a large dose of cynicism. I think that is how these measures and the budget generally have been met in the community. A lot of the feedback I have had from the community is essentially: ‘These look like reasonable measures. How come it took them 11 long years to get there? Oh, we know. We are three, four, five, six months before an election, and the government is much more interested in saving its political skin than in a long-term, enduring commitment to education and to higher education.’ For the Liberal Party, for the Howard government, for the coalition, if they win the next election that will be the end of education so far as they are concerned because the objective is a political end, a political objective. It is not a long-term, enduring commitment to increasing investment in education at every level. It is not a long-term enduring commitment to raising the standards of the outcome. It is not a long-term, enduring commitment to ensuring that in education at every level we make much greater investments to make ourselves internationally competitive. That is the mark against which we need now to judge ourselves—not the investments we have made in the past, not the investments that might be made state by state or state by territory, but how our investments compare with those of the nations in our region and in the world.

The forward estimates in the budget show that, despite the government’s measures in the budget and in this bill, Commonwealth spending on education as a proportion of GDP is forecast to decline. Commonwealth expenditure on education as a proportion of total government expenditure is forecast, according to the government’s own figures, to decline over the next four years from 7.7 per cent in 2005-06 to 7.4 per cent in 2010-11.

At the beginning of this year the Leader of the Opposition, Mr Rudd, and I announced what became known as our Education Revolution document. That document had a central thesis to it. We all know that education is the one thing which gives the young Australian the chance to get ahead, the chance to maximise potential. In that respect, it has often been viewed as a social policy issue, a matter of equity, a matter of opportunity—and that is right. All those things remain true. Those of us in this parliament who have been the beneficiaries either of Commonwealth scholarships to university or of Whitlam free tertiary education know better than most the opportunity to maximise potential and the opportunity to get ahead that that advantage can bring. The central thesis of the Education Revolution document was that education is now the single most important economic investment that we can make, the single most important economic issue that we confront. To remain a prosperous society, to remain internationally competitive, to go to the next level of productivity, we have to make investing in the skills and education and training of the people in our workforce our highest priority. That applies whether we are talking about early childhood education, primary and secondary schools, vocational educational training, universities, or ongoing professional development. At the conclusion of my remarks I will formally move the following second reading amendment, which summarises those matters:

The second reading amendment both summarises the effect of 10 or 11 long years of Howard government presiding over higher education and also makes some remarks and analysis about the budget measures. A telling analysis is that, when the Howard government came to office, 60 per cent of our universities’ revenue effectively came from the Commonwealth—the Commonwealth government discharging its central obligation to fund higher education and universities adequately and appropriately. That has now fallen to 40 per cent and led to the reliance of universities on other contributions, private contributions—whether from individual students or families by way of a HECS contribution, from full fees paid by domestic or overseas graduates, or from contributions by private benefactors or by state government. Private contributions have increased from 40 per cent to 60 per cent. So there has to be a long-term, enduring commitment to restabilise that imbalance, to have the Commonwealth, the nation state, discharge its central obligation to adequately and appropriately fund higher education and our universities.

Moving to some of the major provisions of the bill, let me deal firstly with the changes to what have become known as the funding clusters under the Commonwealth Grant Scheme, CGS, to universities. The budget reduces from 1 January 2008 the number of clusters funded under the Commonwealth Grant Scheme from 12 to seven. The government argues that it would allow universities more flexibility to allocate places across different disciplines and respond to student and employer demand. Under the changes, the government will increase the CGS funding to the disciplines of mathematics, statistics, allied health, engineering, science, surveying, clinical psychology, education, nursing, social studies, behavioural science, medicine, dentistry and veterinary science. These changes mean that in 2008 CGS funding will deliver increases of $2,729 for maths and statistics; for allied health, $1,889; for engineering, science and surveying, $684; for clinical psychology, $2,729; for education, $109; for nursing, $109; for behavioural science and social studies, $840; and for medicine, dentistry and veterinary science, $1,081.

Labor welcomes these increases. We welcome the increased investment in our universities. It is what we have been crying out for for a long time, and it is what we have been drawing a focus on and attention to in the course of this year in particular, an election year. There is no surprise about the government’s motivation here. It is not a long-term, enduring commitment to these disciplines; it is a long-term, enduring commitment to saving its political neck.

The CGS funding for accounting, administration, economics and commerce will be reduced—or, in the language of the government’s budget papers, adjusted downwards—to the same level of Commonwealth contribution for law. This means the government is cutting CGS funding for accounting, administration, economics and commerce by $1,029 per student place per year.

The government argues that this reflects the commercial nature of these courses and the higher incomes that people who study these courses will likely receive over their working careers. For the universities, of course, it is a reduction in funding—a reduction which the government encourages and, indeed, effectively requires, in practical terms, the universities to recover by a consequential increase in the HECS or the student contribution for students doing those courses of accounting, administration, economics and commerce. That is because, at the same time as reducing the Commonwealth contribution to these courses, the budget measures and this bill move accounting, administration, economics and commerce into the same HECS band as law, medicine, dentistry and veterinary science. This will increase the maximum HECS contribution that students in accounting, administration, economics and commerce may make by $1,216 per student per year.

The government says it will leave the final decision to pass on to students the increased HECS contribution to the individual universities, but we know that, in reality, for the vast bulk of universities, if not all the universities, particularly those universities in outer metropolitan Australia or in rural and regional Australia, they will have no choice. The funding cut of $1,029 per student place in accounting, administration, economics and commerce will be met by a concurrent increase in the student HECS contribution of $1,216.

Experience shows, having regard to the last occasion that the government allowed universities to pass on HECS increases, that we can reasonably expect that the vast majority, if not all, of the universities will move quickly to pass on this increased contribution. I do not hold the universities responsible for that; I hold the government responsible. Accounting, economics and commerce students account for more than 54,000 domestic undergraduate students or approximately 14 per cent of all undergraduate places. Cutting the Commonwealth contribution by $1,029 per student place will leave a real and significant shortfall for many universities.

The government will provide transitional funding for universities in the intervening period when the increased HECS contribution takes place. The fact that the government sees fit to provide transitional funding for reducing the CGS component of accounting, economics and commerce student places while waiting for the HECS increases to cascade through the system underlines and reinforces the fact that, without it, universities would be materially worse off. It also highlights the fact that the assertion by the Minister for Education, Science and Training that the universities are not obliged to pass on the HECS increase to students to meet their funding shortfall is really just a word game and tricky language and does not reflect reality. The reality is that the government’s decision in this area will adversely affect universities and their funding arrangements and adversely affect accounting, economics and commerce students by way of an increased HECS contribution.

This is not something unfamiliar under this government—Commonwealth contribution down, HECS contribution up. Labor remains significantly concerned, as Professor Chapman put it in January this year, that we have now got to the stage with HECS that the burden is now, as Professor Chapman put it, at tipping point. If the architect of the scheme is saying that the contingent loans scheme may well be at tipping point, we may well already have got there. This is one of the reasons why Labor has looked, and continues to look, not at increases in HECS but at reductions in HECS, and particularly targeted reductions in HECS. That is what we have done with our proposal to make it more attractive for young Australians to both study and teach maths and science by reducing the HECS contribution for those students studying maths and science. If those students, upon graduation, embark upon relevant occupations, particularly teaching, there would be a 50 per cent remission for the HECS repayments that they make.

In terms of an adverse impact on our universities, the University of Western Sydney, for instance, has said that it will be made financially worse off as a result of the government’s decision in the accounting and economics area by more than $5 million per year, such is the number of students it has in those relevant disciplines. Indeed, on my most recent count, about 15 universities had already indicated they would increase the HECS contribution.

The second area of the bill that I wish to refer to is the government’s proposal to remove the full-fee cap. Currently, there is a 35 per cent existing cap applied on full-fee undergraduate domestic university places as a general cap, and there is a 25 per cent cap for medical places. The government’s argument here is that universities will still be required to offer Commonwealth funded places prior to offering domestic full-fee places. Labor opposes as a matter of principle full-fee undergraduate domestic places. That has been Labor’s longstanding policy position. In this particular budget and this bill, we also oppose the removal of the cap on domestic full-fee-paying students contained in the budget and in the bill.

There are currently around 17,000 full-fee-paying domestic students in Australia’s universities. Under the government’s decision to lift the cap on domestic full-fee places, we will surely see this number rise over time. Indeed, there are financial incentives for universities to do so. This approach places a higher premium on the size of the chequebook than on the content of the textbook. This is why Labor has made it clear that our policy approach in government will be to phase out full-fee-paying domestic places, commencing on 1 January 2009.

We will, of course, allow those students currently in courses on a full-fee-paying basis to complete those courses, and we have indicated to the universities both in the white paper published in the last quarter of last year and by my subsequent public remarks that we will compensate the universities financially for the phasing out of the full-fee-paying places commencing 1 January 2009. I am in discussions with the universities and the higher education sector about the detailed financial implications which arise from the implementation of this policy and the nature and extent of the compensation to our universities. Labor’s is a philosophical position driven by equity—wanting to give all students a fair and equal opportunity to determine their place at university on merit, not by the size of their chequebook.

When the government first introduced the full-fee-paying arrangements it and the universities indicated that they would not allow more than a five-point disparity between those students who entered a university course on a HECS or a Commonwealth supported basis and a full-fee-paying basis. Regrettably, there was no legislation that enforced that as a requirement. It was said to be a so-called gentleman’s agreement between the government and the universities. Over time we have seen that so-called five per cent gap massively stretch out. There are any number of examples in recent times. The most recent figures I have are 2006 figures. At Deakin University, for a Bachelor of Exercise and Sports Science degree, the gap between a HECS place and a full-fee place is 19.75 points; University of Adelaide, Bachelor of Engineering (Aerospace), a gap of 18 points; University of Sydney, Bachelor of Behavioural Health Science, a gap of 17 points; Deakin University, Bachelor of Nursing, a gap of nearly 15 points; University of Sydney, Bachelor of Education, nearly 15 points; University of Sydney, Bachelor of Arts, nearly 15 points; University of Adelaide, Bachelor of Laws (Combined), 12 points; University of Sydney, Bachelor of Education (Primary), 12 points. So the so-called five-point gentleman’s agreement has long been honoured in the breach. That, of course, underlines one of the equity reasons why Labor is committed to its full-fee-paying phase-out approach.

There is a combined effect in the government’s changes to the cluster funding arrangements and its proposal to remove the cap on full-fee-paying places. In Senate estimates a couple of weeks ago, on 31 May, the Department of Education, Science and Training confirmed what Labor had suspected: that the combination of the removal of the full-fee-paying cap and the changes to the cluster funding arrangements would leave universities in the position, if they so choose, of allocating all of their HECS or Commonwealth supported places to one discipline, leaving other more lucrative disciplines like law or medicine as entirely full-fee-paying places. That is the combined effect and impact of reducing the number of clusters and removing the cap on the number of full-fee degrees. Universities are now free to enrol an entire discipline as a full-fee domestic course use by shifting the number of Commonwealth supported places to other disciplines within that cluster. I think it is very instructive to read and listen to the exchange that took place between Senator Carr and DEST officials at that Senate estimates hearing. Senator Carr asked:

Is it possible for entire disciplines to be transferred to full fee paying programs?

DEST:

It will be possible under the new arrangements for a university to offer a particular course only on a full fee paying basis, provided, as we said earlier, that it offers all of those places that it has been allocated in the broad discipline cluster as Commonwealth supported places first. That rule will continue to apply. Within that, the current rule that applies course by course will no longer apply.

Senator CARR—

... But because the clusters are so broad, is it not possible to transfer places in that cluster, say, from law to economics and then offer the law course at a full fee paying rate?

DEST official:

Theoretically, if it is in the same cluster, yes. ...

So, for example, when you look at the cluster funding arrangements which this bill implements, law and accounting, administration, economics and commerce are now in the same funding cluster and the Commonwealth contribution to those disciplines is $1,674. As I have earlier indicated, we have seen a reduction in the Commonwealth contribution to accounting, administration, economics and commerce places. It is now entirely open to a university, if it so chooses, to allocate all of its law and accounting, economics and commerce places to accounting, economics and commerce, leaving all its law places to be entirely full-fee paying. The same applies in clusters where maths, education and health are combined, and where medicine, dentistry, vet science and agriculture are combined. It is entirely open for a university in some of these lucrative professional areas to leave open all of its places in the lucrative area to full-fee-paying places only.

As I say, combined with the lifting of the cap on full-fee domestic undergraduate places, this now means that a university can utilise all of its HECS undergraduate places allocated to a particular cluster for a single discipline, leaving the university to have entirely full-fee courses in attractive or lucrative courses like law or medicine. This means under the new funding cluster arrangements it will be possible, for example, for a law course to become entirely full-fee-paying if Commonwealth funded places are transferred to commerce or economics, which would also attract a higher Commonwealth contribution. In the long term this is nothing more and nothing less than the government pursuing its longstanding ideological approach of pushing university students onto full-fee-paying courses.

Let me move to student income support. Labor welcomes the government’s decision to increase student income support measures to postgraduate students. Labor welcomes the additional Commonwealth scholarships for low-income students to assist with the education and accommodation costs of attending university. Labor believes that the fact that 2,000 of the new scholarships will be offered to students to study two-year associate degrees as a pathway to full fee degrees is sensible, as is the decision to aim the scholarships at students from regional and rural areas. Offering the scholarships to students at the same time as they are offered a place will mean that the often hard decision of weighing up whether to accept the university place while considering the financial implications of such a decision should be easier. Labor also supports the extension of rental assistance to Austudy recipients aged 25 and over to make it consistent with youth allowance, and Labor supports extending student income support to students enrolled in approved coursework masters programs that lead to professional qualifications.

While Labor welcomes these measures and supports them, it continues to be concerned that not enough is being done for students in the student income support area. The reality is that these measures outlined in the budget apply to a small number of students. It is anticipated that only about 11,000 mature-age students are likely to benefit from extending rental assistance to Austudy recipients. The vice-chancellors’ report released some months ago showed that many of our students are under increasing financial pressure, are being forced to work in any number of part-time jobs and are battling hard to make ends meet. As a consequence they are not able to devote themselves to their studies, nor can they enjoy the whole university experience. That is a serious issue and the government has failed to come to grips with it.

As a general proposition I also believe that historically, in the last quarter of a century, the Commonwealth has underutilised scholarships to assist university students and public policy. Commonwealth scholarships could be used to encourage our best and brightest to study in particular disciplines such as maths, science or engineering. They could also be used to encourage and assist our best and brightest to move from rural and regional Australia to universities that specialise in their chosen areas. Of course, Commonwealth scholarships could also be used to alleviate the financial hardship experienced by those who come from lower socioeconomic or disadvantaged family circumstances.

As I have indicated, Labor obviously welcomes and supports a range of measures in the bill. These have come as a result of the focus and political pressure applied by Labor’s commitments to invest more in education at every level, including the higher education sector. However, for Labor these measures are just the start, not the finish. Labor has a long-term and enduring commitment to investing more at every level. The problem for the Australian community if this government is re-elected is that these measures will be the end not the start, because they are about a political end and a political objective. There is more we need to do as far as universities’ recurrent income is concerned, including questions of indexation now that the cluster funding arrangements are on a three-year cycle. We also need to do much more for universities’ infrastructure, particularly research infrastructure.

As I have indicated, we need to do much more in the area of scholarships and student income support. We must also look closely at our rural and regional universities and address the additional cost and income difficulties they experience when often their less than critical mass is further away from population centres. We continue to need to invest more in student amenities and services, which are now withering and dying on the vine as a result of long-term neglect. Those remarks summarise the second reading amendment that has been circulated in my name. I now formally move the second reading amendment and commend it and the bill to the House. I move—:

·              That all words after “That” be omitted with a view to substituting the following words:

·              “whilst not declining to give the bill a second reading;

See this speech in context