Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Hansard source

Knowing that the minister has had a bit of trouble with some of the detail around the higher education policy—he is not quite clear on who it will affect and when it will affect them—I thought it would be worthwhile going through the cuts that are included in the higher education budget before asking the minister some questions on one particular one. We have seen in this budget some $5.8 billion in cuts to higher education and university research: $3.2 billion in cuts, by taking the scalpel to HECS, Australia's highly successful and internationally renowned income contingent contribution system; $1.9 billion in cuts to universities by reductions in government core subsidies; $202 million in cuts by indexing university grants to CPI; $172 million in cuts to fund, promote and reward universities for enrolling low-SES students; $173 million in cuts for the training of Australia's research students, the scientists and academics of tomorrow; a $75 million cut to the Australian Research Council; and a $31 million cut to the national regulator.

The question I have is particularly about the consequences of these cuts. I want to focus on the $3.2 billion cut from HECS.

It is clear the government does not know the consequences of this most radical transformation to our higher education system in Australia for 30 years, and we heard that in the minister's non-answer to the member for Perth's question about science and engineering students. We know that the government is flying blind when it comes to the impact of its higher education package on students and on their families. We know that the peak body, Universities Australia, has asked the government to rethink the design of loan repayments and its cuts to the sector. We also know that Bank of America Merrill Lynch chief economist, Saul Eslake, has warned of the consequences of higher interest rates on student loans, particularly for women. Mr Eslake said:

The prospect or repaying university loans whilst raising a family might deter women, while many other prospective students would weigh up the costs against the benefits of education.

He stated:

It would be irrational for people not to consider the cost in relation to their working life in the same way as when you borrow to buy a house.

The changes to HECS will have a compounding effect on students paying extra in fees plus extra in HECS repayments and will start them off on their working lives with a huge debt burden hanging over their heads, a debt burden which I have absolutely no doubt will deter many people from taking up the opportunity of higher education.

Universities Australia has modelled the potential costs of engineering and nursing degrees. They found that at the medium-fee increase scenario with a four per cent interest rate, an engineering graduate working full-time faces a HELP debt of between $98,952 and $113,169 and would repay it over a period of 20 to 25 years. This is compared with $46,000 to $49,000 debt and 14 to 18 years repayment under the existing arrangements.

We know when we look at a nursing graduate that the estimates are equally frightening. The changes to HECS will force university graduates to pay more and to pay sooner. The threshold will be lowered, forcing graduates to pay sooner but will be coupled with increases on HECS bills from higher degrees and increased interest rates. Modelling done on the changes has been published in the Financial Review showing repayment amounts and times will soar, with a typical female taking up to 25 years to repay an engineering degree.

My question to the minister is: will the government provide data based on the Australian higher education system's modelling which they looked at before taking such a radical reform process? Will they provide the data on the effect of the latest fee hikes which were announced in the budget? What will the effect be on Australian students and students who will not become students as a result of these despicable measures?

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