Kirsten Livermore (Capricornia, Australian Labor Party, Shadow Parliamentary Secretary for Education) Share this | Hansard source

I am pleased to have this opportunity to contribute to the debate on the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007. There is no doubt that initiatives to secure the long-term viability of our education system are long overdue. This government has neglected education year after year and budget after budget. It is the Labor Party that brought education to the forefront of the political debate by emphasising education’s fundamental importance to Australia’s future economic security—and of course we have done that throughout this year with the advocacy of our education revolution. Thus, this initiative has only come about as a result of the ALP’s education revolution policy and leadership forcing the government to act.

The Higher Education Endowment Fund Bill gives effect to the centrepiece of the government’s 2007-08 budget promise to create a permanent fund for the provision of capital works and research facilities to higher education institutions. The Higher Education Endowment Fund (Consequential Amendments) Bill provides for the implementation of the HEEF within the framework of the Future Fund Act 2006 and the Income Tax Assessment Act 1997. There are a couple of other changes to the management of the Higher Education Endowment Fund and the Future Fund, which I will return to later.

The ALP support these bills because we are dedicated to improving Australia’s education system and because we have long argued in this place for increased expenditure on higher education. The benefits of a perpetual fund with adequate assets to provide an estimated $308 million for needy projects each year must be supported. At first glance, these bills provide a strong commitment by the government to higher education funding; however, when considered in the context of 11 long years of Howard government cuts, this initiative is too little too late. The provision of a $6 billion fund will not adequately make up for the significant cuts to higher education funding during the Howard government years. In fact, one Howard government minister even confided in the Sydney Morning Herald on 12 May this year, prior to the budget, that if Rudd and Labor won the election: ‘My one consolation is that he would at least salvage the universities.’ Professor Richard Larkins, the Chair-elect of Universities Australia, said on behalf of Universities Australia and the Group of Eight universities that the sector was very grateful for the initiative. Professor Larkins said this to the Senate Standing Committee on Employment, Workplace Relations and Education during its discussion on the proposed funds. The words ‘very grateful’ indicate the extent to which years of neglect have brought our higher education institutions to their knees and what a shameful record this government has.

Australian universities have suffered a cumulative cut of six per cent in the years 1997 to 2000, which was valued by the Group of Eight as having cost the industry $850 million in funding shortfalls over that period. Obviously, this public expenditure hole has had serious long-term consequences for the sector. In fact, the Department of Education, Science and Training made a submission to the report of the Productivity Commission on science and innovation in 2006 that the backlog of deferred maintenance expenditure had reached an estimated $1.5 billion for the university sector—and this is the sector that we need to be driving innovation to keep us competitive and prosperous into the future. The Group of Eight extended that cost in their submission to the Senate inquiry into this bill, valuing their members’ maintenance liabilities alone at $1.53 billion. This fund will provide future assistance, but the shortfalls of the last 11 years will take some years to correct and we can never truly make up for lost opportunities during that period. The emergence of the Higher Education Endowment Fund does nothing to allay fears that the Howard government are determined to destroy our proud tradition of publicly funded universities. The spending on capital works and research facilities was proposed only after terrible polling results for the government and Labor’s constructive approach to educating our nation. So it is not a genuine commitment to the higher education sector; it is the usual Howard government response to bad polls, which seem to be the only things that motivate them these days.

In the past few years the government has repeatedly told us that working families in Australia have never been better off, yet higher education and training are becoming more and more difficult for the average Australia family to afford. That is not an idle statement. In August this year, the Centre for the Study of Higher Education at the University of Melbourne released a report into Australian university student finances in 2006. The report was commissioned by the Australian Vice-Chancellors Committee, which is now Universities Australia. It found that 71 per cent of full-time undergraduate students work an average of 14.8 hours per week throughout the semester and 40 per cent of those students believe that paid work adversely impacts on their studies. Students are not working those kinds of hours because they want to but because they have no choice, even when they know that it is impacting on their results and on their future opportunities. The report also showed that one in eight tertiary students regularly go without food or other necessities and, for Indigenous students, this figure rises to one in four.

On the basis of those hardships faced by students and documented in this report, it is no wonder that they are turning away from higher education. In 1997 the proportion of the year 12 cohort that enrolled in higher education was 40 per cent. By 2004, the throughput from schools was down to 32 per cent. This is in an age of acknowledged skills shortages. It is time to increase the participation of young people in education. When you look at the ratio of students to staff, you see that that ratio has risen considerably over the last 11 years, in tandem with the cost of HECS increasing by an average of 100 per cent over the last 10 years. So it does seem as though students are getting far less value for their money. There are HECS increases and the optional fee top-ups on the HECS rate—and of course we know that there is nothing optional about those fee top-ups. Just about every university in Australia has taken the opportunity given to them by the government to increase HECS fees; of course, they have had no other choice because of the government’s underfunding of the sector. So students are getting slugged with those fee top-ups on their HECS rates. Student poverty is becoming the norm and there is an enormous disincentive for young people and potential mature age students to take up higher education.

The percentage of public investment in higher education has fallen. It is now so low in Australia that, amongst the OECD countries, only the United States, Japan and South Korea contribute less. Meanwhile, many of our international competitors have been increasing their commitment to providing world-class higher education institutions. Surely that is sending a message to the government about where their priorities should be when they are looking out for the future of this country.

It is a terrible indictment of the Howard government that, in this era of so-called economic prosperity, so little has been committed to improving education infrastructure, including broadband. The Labor Party and the higher education sector have been raising this with government for 10 years. Glyn Davis, the Vice-Chancellor of the University of Melbourne, summed up the feeling after this year’s budget announcement. He said:

I was genuinely shocked. One of the reasons I was so pleasantly surprised is higher education has not featured in national policy for some time.

What an extraordinary situation that is, when we see the kind of spending and commitment that competing nations have shown towards higher education. It is plain that over the last 11 years this government has not been investing in higher education. It is not investing in our people and it is not investing in our future.

Going to the technical side of how this endowment fund is to operate, the Treasurer has assured us that it will not replace existing Commonwealth schemes which directly and indirectly support capital and research investment. It is absolutely incumbent upon us in the Labor Party to hold the government to this commitment. Any future Labor government will ensure that this remains the case. We do not want this endowment fund to be the cover for simply taking more money from other sources out of the higher education sector.

The Minister for Education, Science and Training, in her second reading speech, said that the endowment fund investment is in addition to existing programs. However, in media comments following the budget, the minister stated that she would like to see the funding streamlined and that the endowment fund would have much broader guidelines and much greater flexibility than existing mechanisms, such as the Capital Development Pool. When we hear the minister using the word ‘streamlined’ it raises alarm bells for us. We believe that questions remain about the relationship between the endowment fund and other sources of funding for universities. So we will be watching all of that very carefully to make sure that this is not cover for taking money away from universities in some other form.

The Higher Education Endowment Fund (Consequential Amendments) Bill 2007 allows for the implementation of the Higher Education Endowment Fund through the amendment of the existing Future Fund Act 2006. Proposed section 49 of this bill provides that in the event of a poor year where the fund returns little or no income the fund will release no money. The Department of Education, Science and Training reiterated in their submission to the Senate inquiry into these bills that this will be the case. Their submissions states:

... only accumulated returns are made available each year for payment to higher education institutions.

The returns available for distribution to the sector will be linked to the performance of the HEEF—

that is, the endowment fund—

and in turn the market ... in the short-term there may be some volatility.

Therefore, it is vital that multiple avenues for capital works and research infrastructure funding remain available to universities, as the projected income from the endowment fund is reliant on strong market returns. Thus it will be difficult for tertiary institutions to depend on this pool alone for infrastructure development. That is especially the case given the shortfall over the last 11 years. We really are coming from behind when it comes to the maintenance and development of infrastructure at universities.

The Future Fund Board of Guardians will have statutory responsibility for the management of the investments of the endowment fund, and the Treasurer and the Minister for Finance and Administration will be the responsible ministers. These ministers will also determine the maximum amount payable from the endowment fund. The minister for education, however, will have control over how the money is spent due to the different purpose of the endowment fund in comparison with the objectives of the Future Fund.

A number of groups raised concerns in their submissions to the Senate inquiry into these bills about the lack of direction on how the funding is to be distributed. Proposed sections 42 and 43 allow the minister to appoint the advisory board and proposed section 45 gives the minister the power to authorise grants. It is crucial that the composition of the advisory board is based on merit and expertise, and it would be better if its functions and responsibilities were incorporated into the body of this bill.

In contrast to the situation with the amendments in this bill regarding the Future Fund itself, the minister will control where the returns on the endowment fund are allocated. It is this aspect of the bill which the Group of Eight has warned could see strategic consideration of the sector’s infrastructure needs traded for political point scoring. I guess there is good reason for the Group of Eight to have those kinds of concerns, given the government’s track record in other programs. Just a couple of examples that come to mind are things to do with roads and the Regional Partnerships program, where the government allowed good programs to degenerate into pork-barrelling exercises. We need to make sure that the returns from this endowment fund are wisely spent for good, strategic reasons. The Federation of Australian Scientific and Technological Societies went a step further, labelling the system for grants ‘a significant slush fund for ministerial pork-barrelling’. It is crucial to the success of our universities that political considerations remain outside the allocation of these funds.

Turning briefly to my own electorate, I note that there are some concerns about regional and smaller campuses being able to gain any of the funds allocated by the advisory board. It would be difficult for universities such as Central Queensland University to compete with the Group of Eight for funds. For example, Ian Chubb, the Vice-Chancellor of the Australian National University, has indicated that the elite universities will lobby to ensure that the returns on the endowment fund are not smeared across the sector. I will be making sure that Central Queensland University, which is an important regional university and a very important contributor to our local community, will be getting its fair share—not just for the sake of it but to meet the aims of the university and to develop projects that are important for the university and for the future development of our region.

Moving away from the endowment fund itself, proposed sections 18(a) and 8(1)(a) amend the Future Fund Act to legislate that the responsible ministers cannot direct the Future Fund Board of Guardians to invest in a particular asset. This is intended, according to the Minister for Finance and Administration, to:

... stop the Labor Party robbing future generations by raiding the Future Fund, taking its annual earnings and dictating to the board that it should invest its money in advancing Labor’s political interests.

This brand of negative politics is merely scaremongering. Labor has been committed to the objectives of the Future Fund and has assured the public that it will meet public sector superannuation liabilities as well as provide an investment for the future through its national broadband network.

I would like to record my support for the amendment moved by my colleague the shadow minister for education and training condemning the lack of investment in higher education and the shocking range of consequences this starvation of funds has brought upon students, staff and facilities at our institutions. It is also important to note that the Labor Party holds grave concerns about the lack of transparency in the allocation of funds, which I have outlined previously.

In addition, it is clear that the Labor plan for a national broadband network is far superior to the 18 piecemeal broadband proposals we have had from the Howard government over the last 11 years. It is an important piece of infrastructure for the future success of our higher education sector. The government has been caught out trying to provide a marginal electorate targeted upgrade, which has embroiled the government in legal action.

It is clear that the Australian higher education sector and institutions need this money desperately, following more than a decade of miserly government contributions to the skilling of this nation. Our universities have suffered under this government, through underfunding and neglect. Universities are paying the price for that neglect; so are researchers and students, as they pay higher and higher costs for their degrees. Ultimately, it is Australia that loses out. Without a skilled population and the innovation that universities foster, our country cannot keep up with the rest of the world. Labor recognise this and we are committed to putting education at the centre of our vision for a fair and prosperous Australia.

See this speech in context