Craig Kelly (Hughes, Liberal Party) Share this | Hansard source

I am very pleased to rise on the Higher Education and Research Reform Amendment Bill 2014. In the time I have, I would first like to set out why there is need for reform. Firstly, our universities—like every business in today's economy—face a changing environment and a more competitive environment. Our universities, in particular, face greater competitiveness from universities in Asia, especially in China. If our universities are just standing still, then they are going backwards. This is most important, because our education export industry is actually our third largest export industry. It is only behind coal and iron ore. This is an industry that must continue to look to reform to reach world's best practice and to make sure that it maintains a source of investment, prosperity and growth for all Australians.

Professor Paul Johnson, the Vice-Chancellor of the University of Western Australia, said of the need for change:

The status quo is not feasible as it will over time erode the quality of our education and research activities—not a good position to be in when our nearest Asian competitors are investing so heavily in these areas.

Professor Gareth Evans and Ian Young of the ANU said:

The bottom line is that if Australia is to develop universities which can truly compete internationally, that can provide an excellent educational experience for students and produce really outstanding graduates of the kind that are so vital to our nation's future, we have to not only allow, but encourage, diversity by removing the constraints that prevent innovation.

The other reason there is need for reform is that in so many areas we need to clean up the mess that has been left behind by the previous, Labor government.

I will mention just a few of the messes that need to be cleaned up. This Labor government that comes in here and talks about the importance of education actually cut $6.6 billion in funding to higher education when they were in office. In fact, in their last year of office it was a $3 billion cut. The previous, Labor government also put a cap on tax deductibility for self-education expenses, limiting it to $2,000. When many people spend a lot more than that on self-education, how can you seriously talk about the need for people to invest and for this country to invest in education and then set a $2,000 cap on tax deductibility? Under the Labor government we also saw large increases in red tape and regulation, as they did in almost every particular area. But what was most disturbing was that, under Labor, our international education exports actually went backwards. Our export income from education fell. These are the reasons reform is needed and these things need to be reversed.

We also need to create more opportunities for students from all backgrounds to go to university. We need to create more places, and that requires more funding, but we have to deal with the current funding environment we have. The previous government left us in a pile of debt, with deficits as far as the eye can see. Our question is: How can we fund it? How can we put more money into universities? How can we deal with the current budgetary mess and achieve those two things? During the debates today we have heard speakers from the Labor government. They seem to think that there is some type of magic pudding—just like Bill Barnacle and Bunyip Bluegum in that famous story where they had the pudding and they could eat it and it always reformed itself, and they could eat it again and again and again. That is how members of the opposition think the budget works. But you can only spend the money once. You cannot keep borrowing and borrowing and borrowing as they have done. All that does is condemn our children and our grandchildren to paying high levels of taxes and having fewer government services.

What is in the bill now? Many of my colleagues have covered this in great detail. Firstly, we deregulate fees. In relation to deregulating fees I would like to quote someone called Andrew Leigh, who I believe is now the member for Fraser. This is what he used to say when he was a free thinker, before he became one of those mindless sheep, those unquestioning foot soldiers for the political wing of the trade union movement. This is what he previously wrote, and I agree with him thoroughly. He said that Australian universities 'should be free to set student fees according to the market value of their degrees' and that universities will have a 'strong incentive to compete on price and quality and meet various requirements of the different segments of the student market'. He goes on to say:

Much-needed additional funding will be available to universities that capitalise on their strengths and develop compelling educational offerings. The result will be a better funded, more dynamic and competitive education sector.

Hear, hear! I agree with that Andrew Leigh, and I would only hope and pray that it is the same gentleman who sits on the other side of the chamber.

The other thing we are doing is extending Commonwealth funding to sub-bachelor degrees. So you will see a lot of other higher education facilities, such as diplomas, advanced diplomas and associate diplomas. People will now be able to get into those courses and start those courses without paying a single cent up-front. The biggest beneficiaries of that will be students of low-SES backgrounds, because they will not be held up by the income that they have or by the wealth of their parents. They will be able to get into that course without paying one cent up-front. That will see an extra 48,000 students get into higher education. There will also be an extra 35,000 students doing bachelor degrees, so there will be 35,000 students who would have missed out if these reforms had not been made and who are desperately waiting for these reforms to go through.

We are also increasing the fees that students will pay, but we need to put this into some perspective. Currently, a student pays 40 per cent of the cost of their degree, but that will increase to just 50 per cent of their costs. Putting that into some context, if a student goes to university, on average they will be gifted, by the taxpayer, 50 per cent of the cost of their degree, which they will never, ever have to pay back. That is a gift from the taxpayer to the student who goes on to do that degree. They will be loaned the other 50 per cent of that money by the Commonwealth without paying one cent up-front. And they will not have to pay back that loan at say, a credit card rate of 17 per cent; or at the cost of a personal loan, currently at 13 per cent; or a small business rate, currently around 10 per cent; or even at the rate of a housing loan, currently around six per cent. They will be able to pay that loan back at the rate the government borrows it on—the 10-year bond rate, which is currently 3.36 per cent. This is the best loan and the best deal someone in high school can ever get.

It is interesting to see what some are saying about these changes. I will go through a few quotes about what some people working closest to the coalface are saying. Firstly, Vicki Thomson of the Australian Technology Network said:

Deregulating fees will provide students with increased choice and universities with flexibility. Will fees go up? Some may, but others would also decrease as we have the freedom to determine the size of our institutions and the degrees that we offer.

Professor Scott Johnson said:

… we are seeing lots of potential in these changes. We are licking our lips.

Professor Andrew Young of the ANU said:

The education reform package announced in the budget will allow the ANU to offer an education that is like no other in Australia, amongst the best in the world.

I strongly believe that the reforms announced tonight will see a great diversity of educational offerings and experiences at universities right across the nation, giving students more opportunity to do what suits them. The Group of Eight universities, in a media release, said:

The Group of Eight (Go8) unanimously supports the core elements of the Government's proposed reforms to higher education policy and financing …

These are historic reforms which reconcile access and quality and make growth affordable. The Australian Council for Private Education and Training said:

The changes the government has announced tonight—

the night of the budget—

offer all students funding support from the Commonwealth. They will support genuine student choice and competition amongst … Australia’s 173 higher education providers.

Navitas, in their press release, said:

Leading global education provider, Navitas has welcomed a suite of Government reforms to Australia’s higher education sector following the announcement of the federal budget today.

You could not get a more ringing endorsement from those at the coalface of these proposed reforms. Perhaps a by-name for education in this country is Professor Gonski. The Minister for Communications, sitting at the table, noted that Professor Gonski's name has sometimes become a verb, an adjective and a noun. Professor Gonski has given us the tick on these reforms. He said they would make universities 'even greater.' He said:

I think that the government are correct in this and I think that there is a real chance that the deregulation of fees—rather than making universities richer and so on—that they could produce further monies from doing that to be ploughed back to make them even greater … To improve the student experience, have higher teacher-student ratios, etc.

That is what the experts at the coalface are saying.

We have had some disgraceful scaremongering from members of the opposition during this debate, spreading absolute falsehoods. Why I find this so objectionable is that, by spreading these falsehoods, they are deterring students from going to university. I would ask members of the other side to have a good look at themselves in the mirror and have a good think about themselves. When they go out in their community, they should not spread these falsehoods and they should not make these false claims, because if they deter just one student from taking on a university degree because of all the false claims they talk about—the debt sentence, second mortgages for houses, doubling and tripling degrees, and phoney class wars—it verges on criminal. We have a job as members of parliament. When we go out to schools we should be spreading the message to students. We should be talking up the benefits of higher education. We should be telling those students, 'If you go to university, 50 per cent of the cost of that course, on average, will be gifted to you by the taxpayer.' Do you know what? The other 50 per cent of the cost will have to be paid off at the Commonwealth bond rate—3.36 per cent. We need to tell students, 'This is the best deal that you will ever get.' We need to let them know that, by having that degree, it gives them the opportunity over their lifetime to earn 75 per cent more, on average, than a student who leaves at year 12. Over a lifetime, there will be more than $1 million extra in wages or salary. And we have members of parliament scaremongering and talking students out of that. It is an absolutely shocking disgrace.

I would encourage all members of parliament, when they go to their electorates, to look at the report by the Grattan Institute called Graduate winners and quote this to their students:

Graduates do well out of higher education. They have attractive jobs, above-average pay and status. They take interesting courses and enjoy student life …

Benefits greatly outweigh the costs for most students and the minority of graduates who do not win through higher income never pay for their degrees as a result of the HELP scheme. In effect, today's tuition expenses redistribute income towards graduates at the expense of the general public, particular those who do not go on to university. That is the message that we should be sending out to students. We should be doing everything we can to talk up higher education and make sure we encourage high school students to go on to those degrees. That is our responsibility as members of parliament, rather than the shameful scaremongering we have seen from the other side. I commend this bill strongly to the House.

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