Dick Adams (Lyons, Australian Labor Party) Share this | Hansard source

The provisions of the Higher Education Endowment Fund Bill 2007 have been modelled on the provisions of the Future Fund Act 2006. The bill provides the Future Fund Board of Guardians with statutory powers to manage the investments of the Higher Education Endowment Fund, the HEEF. The bill also provides that, as per the Future Fund Act, the Treasurer and the Minister for Finance and Administration are the responsible ministers. In this capacity they will issue directions to the board about the performance of its investment functions. The board is therefore accountable to the Treasurer and the finance minister for meeting its obligation to manage the HEEF in accordance with the requirements of the act and directions. The responsible ministers will make the determination to credit government contributions, initially $6 billion, to the Higher Education Endowment Fund and any future government contributions. The responsible ministers are also responsible for setting rules to determine the maximum amount available for payments from the HEEF. The HEEF advisory board will be established to provide advice to the education minister on grants. Because of the different nature and intent of the HEEF compared to the Future Fund, the education minister, not the responsible ministers, is responsible for authorising grants of financial assistance to eligible higher education institutions and for appointments to the HEEF advisory board.

Although the ALP welcomes the fact that the Future Fund and the Higher Education Endowment Fund are for investment in Australia’s long-term national interests, including the objective of meeting public sector superannuation liabilities, there are some serious concerns. Because of the government’s failure over 11 years to invest adequately in Australia’s higher education, on the government’s own analysis there exists a significant backlog of deferred infrastructure maintenance, estimated at $1.5 billion for the university sector—$1.5 billion in maintenance for our university sector is an enormous amount of money.

The Group of Eight universities estimated in 2006 that the total deferred maintenance liability was $1.53 billion across the Go8 universities alone. So we are probably looking at a lot more than $1.5 billion. The principal reason behind this backlog is the fact that, since it came to power more than 11 years ago, the government has undermined the higher education sector by cutting university operating grants, including in its 1996 federal budget cutting university operating grant funding by a cumulative six per cent over the forward estimates from 1997-2000, resulting in $850 million in cuts to the sector. As a proportion of total revenue, Commonwealth grants to universities have decreased from 57 per cent of their revenue in 1996 to 41 per cent in 2004, while university revenue derived from fees and charges has increased from 13 per cent in 1996 to 24 per cent in 2004.

There are also widespread concerns that, over time, the HEEF could be used to replace existing capital and infrastructure programs in higher education, notably the Capital Development Pool, the Institutional Grants Scheme, the Research Infrastructure (Block Grants) Scheme and the National Collaborative Research Infrastructure Scheme. Despite these belated measures, the government has not put in place a long-term plan for meeting Australia’s infrastructure needs, including a national broadband network. Instead, it has produced 18 piecemeal broadband proposals in the past 11 years.

The so-called radical plan announced recently imposed a two-tier broadband solution for Australia through the 17th and 18th broadband plans. This included an election stunt designed to delay the building of a high-speed fibre-to-the-node network in the major cities which, through the Broadband Connect Infrastructure Program, subjected millions of Australians living in regional and rural Australia to a second-class broadband network that is based on an obsolete technology and is capable only of delivering average connection speeds at twice today’s average. To add insult to injury, this government has become embroiled in legal action involving preferential dealing in the Broadband Connect Infrastructure Program after moving the funding goalposts for the program while only informing one participant.

In contrast to the government, Labor is committed to building with the private sector a national broadband network that includes a fibre-to-the-node network that will deliver minimum connection speeds of 12 megabits per second to 98 per cent of the country. The remaining two per cent will receive a standard of service which, depending on the available technology, will be as close as possible to that delivered by the fibre-to-the-node network. Therefore, the opposition’s second reading amendment includes a condemnation of the Minister for Communications, Information Technology and the Arts for hastily signing a contract worth $958 million on the Sunday afternoon after APEC, subject to ongoing legal action and possibly against Commonwealth legal advice.

Our education system is in crisis and, although the funds are desperately needed, this government has failed to target the real needs in the system. It is now quite apparent to everyone that this country has failed to ensure that there are enough people training to take on professional and trade jobs in the future. The Australian economy needs an education revolution. There is a critical link between long-term prosperity, productivity growth and human capital investment which argues that we cannot take our current prosperity for granted. Not only is productivity growth beginning to slow; resource prices are likely to unwind over the coming years, the ageing of the population will place significant pressure on public finances and will reduce workforce participation, and the global marketplace is becoming increasingly competitive as China and India continue their transformation into economic superpowers.

Australia’s future economic prosperity is tied to the skills and productivity of our workforce. For Australia to compete successfully in the global economy, we must invest in the human capital of our nation and build a highly skilled workforce that can compete with the best of our neighbours. We do not want to end up becoming China’s quarry and Japan’s beach. This is important not just for our nation’s economic future but for the future prosperity and wellbeing of Australians.

An individual’s job prospects and the income they ultimately receive are closely linked to the level of education they have attained and the personal and professional skills they hold. In a time of acute skills demand, Australia needs highly skilled and educated workers with a commitment to lifelong learning and an ability to adapt to the future demands of technology, industry and the economy. If our goal is to have the best trained and best qualified workforce in the world, then clearly we must do more in the skills and training area.

The challenge therefore is twofold: Australia needs to lift the number of students who complete senior secondary school and to increase the number of people with vocational and skilled trade qualifications. To increase productivity for the nation and to improve the likelihood of maintaining meaningful, secure employment for individuals, Australia needs to ensure our skilled workers are highly educated, with strong literacy and numeracy skills. For too long, skills and training have been seen as an alternative to education. Broad economic and social trends are changing the structure of the economy, the size and structure of our workforce, the skills needed by workers and what is required of our education and training system.

If we are to address the economic challenge of an increasing demand for skills, we must widen the range of opportunities available to students in our secondary school system. Demand for workers with vocational education and training and trade skills is rising. According to the Howard government’s own statistics, Australia will need 240,000 more skilled workers by 2016.

I do not think this government has even considered these needs with this endowment fund legislation. So, while it is pleasing to see funds allocated to education, there needs to be a radical rewrite of how they should be allocated. The opposition makes some suggestions in the second reading amendment, but a lot more work will be needed to cope with the needs of the Australian workforce in the future. I believe we will need a change of government and a federal Labor minister to do that.

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