Matt Thistlethwaite (Kingsford Smith, Australian Labor Party, Shadow Parliamentary Secretary for Foreign Affairs) Share this | Hansard source

I am vehemently opposed to this bill, the Higher Education and Research Reform Amendment Bill 2014. It is another broken election promise from the Abbott government. This bill, which seeks to increase the cost of university fees and impose more debt on students, is grossly unfair and it undermines the educational opportunities of young Australians.

On 1 September 2013 the Prime Minister, Tony Abbott, on the Insiders program said this:

… I want to give people this absolute assurance, no cuts to education …

The Liberal Party's policy document for the last election, Real solutions, states on page 41:

On 17 November 2013 the shadow education minister, Christopher Pyne, said on Sky News:

… we want university students to make their contribution. But we're not going to raise fees …

They are the commitments that the Abbott government gave the young people of Australia prior to the last election. In this bill, in this proposal before the parliament today, they blow those commitments out of the water. They are lies. They have lied to the Australian public about this dastardly reform. It introduces an outdated principle into higher education in Australia, and that principle is the capacity to pay—access to education based not on merit but on your family's bank balance.

Cuts to university funding, deregulation of fees and the application of higher interest rates to student debt are the most despicable betrayal of the interests of young people in Australia in my lifetime. The Prime Minister lied to thousands of young Australians when he said that there would be no cuts to education. The cuts themselves are unconscionable, but to mislead young Australians regarding their access to education is unforgivable.

If members opposite believe that I am embellishing the truth in my views on this, they only need to look at some of the emails that I have received from constituents to see their anger about what this government is doing. On 26 August this year I got an email from Karen Privat in my electorate, who wrote:

As someone who grew up in the USA and had to go through the process of paying back university fees, e.g. my small university charged approximately US $26,000 in intuition, room and board per year … one of the things that has struck me about living in Australia is the accessibility of higher education to all students who have the marks to qualify.

She went on to state:

My family, my fellow colleagues who work with me here at UNSW, and my friends who have an interest in Australia's ability to grow, develop, and compete on an international level both economically and creatively, join with me in supporting you to vote against this proposed legislation when it comes before you in parliament.

On 28 August this year Rabeya Akter from my electorate wrote:

I am very disappointed about the proposed changes to higher education announced in the Federal Budget. Allowing universities to set their own fees will burden future generations of students with significantly increased debts … Young people have been told to earn or learn and yet the Government is making it harder to get a quality education. Access to universities should be based on merit, not on the size of your bank balance.

I could not agree more. These are the views of the people of my electorate. These are the views of the people of Australia regarding this dastardly reform that the government seeks to introduce in the parliament today. These are the people who know that their opportunity and their kids' opportunity to learn, to better themselves, is being whittled away by the Abbott government.

In terms of the elements of this bill, the bill will allow universities to charge what they like for courses. It deregulates university fees, which are currently capped at the maximum student contribution. This will increase the cost of a university degree—no doubt.

At the moment the average cost of a law degree at a public universities is about $30,000. At private universities such as Bond University the cost of a law degree is $127,000, four times the cost of that of a public university. This is what universities will be allowed to charge in a free market. Universities Australia have done some modelling on the expected costs and increases to university fees which will come about as a result of this reform. They find 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 will repay it over a period of 20 to 25 years. This is compared with $46,701 to $49,284 debt and 14 to 18 years repayment time under the existing arrangements. A nursing graduate working under a medium fee scenario, who works part time for six years, would pay off a debt of $51,620 over 20 years, compared to a current HELP debt of $24,666. That gives you an example of the additional costs of education for young people in Australia just to get a degree, if this reform is introduced.

What is the Minister for Education's response to this? The education minister says that that is fine because students can just take out a loan and over the lifetime of their earning capacity they will be able to pay it off—no problem. That is the way it works in the United States of America. Now you are making it even harder to get a loan. Not only are university fees increasing but also the debt associated with taking out a loan is increasing. Currently HECS or HELP debt is indexed to the consumer price index which is sitting at about 2.6 per cent. Under this proposal, student debt would be indexed to the government bond rate, capped at six per cent. The government bond rate at the moment is quite low at 3½ per cent. There is an immediate one per cent increase in the cost of debt. This reform will not only in the future; it will apply retrospectively. So anyone who currently has a HECS debt will immediately face that debt going up—affecting 1.2 million.

So a degree will cost more and it will take longer to pay off. This will have a disproportionate effect on low-income people in Australia and, importantly, on people who take time out of the workforce to raise a family—as we know, they are predominantly women. These people will bear the greater burden of this reform. The longer it takes to pay off the HECS or HELP debt, the more you will pay because the interest on the loan is compounding.

Those opposite have no concern for families who have the great aspiration of seeing their kids do better than they have done by getting a better education. For struggling families in my electorate who are just scraping by and making ends meet, that makes it harder for the kids to get a higher education. In that respect this reform must be condemned.

It will also affect the quality of courses offered at universities. What will develop under this scenario is a two-tiered university system in Australia, much the same as in the United States. For courses which are in high demand, typically at the Group of Eight universities, the sandstone universities such as Monash and the University of Queensland where there are courses such as medicine, engineering and economics in high demand, universities will be able to charge what they wish. They will be able to charge whatever they like because the demand is there. Subsequently, those universities will raise more revenue. That is where the good academics will wish to go and that is where the research and development dollars in Australia will go.

What will happen to second-tier universities? What will happen to universities in rural and regional areas throughout Australia? I will tell you what will happen. The dollars will flow out of them, the academics will flow out of them, the research and development will flow out of them and they will become second-rate universities throughout this country.

So rather than a system that promotes equality, rather than a system which promotes access particularly to kids in rural and regional areas to a decent degree, it will make it harder for kids to stay in those areas and, importantly, for some of the courses which are not in high demand to attract students. They typically are very important degrees—teaching, early childhood development, sociology—degrees which have an emotional element attached to them and which we have undervalued in Australia. It will also ensure that universities are encouraged to push low-cost degrees. When you have a free market such as this, universities will seek to reduce the cost of offerings to the public to make more revenue. So courses that are popular but do not cost as much will be the ones that universities and private providers will be pushing. The more expensive and more important courses such as science, languages and engineering, which are very important to Australia's economic development, will not be encouraged because universities will not be up to make the same buck out of they will under the low-cost scenario.

So these reforms not only push up the cost of university education in this country but they will also reduce the quality of courses that are offered, particularly in rural and regional areas. But do you see anyone from the National Party over there standing up for kids in their communities? Do you see anyone from those rural and regional electorates over there standing up to what the Minister for Education and the Prime Minister are attempting to do in this reform? No, you do not. Once again, they have gone silent. They have destroyed the interests of young people in their communities.

I thought that this reform had some redeeming features when I saw that there is a requirement for university education providers with more than 500 students to offer Commonwealth scholarships under the Commonwealth Scholarship scheme, to support disadvantaged students. But, when you read the fine print, again they have duped the Australian public on this reform, because there is no additional Commonwealth funding going into support this program. The government are not putting any money into these Commonwealth scholarships at all. Guess where the money is coming from. It is coming from the pockets of students who seek to do degrees, because they are funding it through the increase in university fees. It is effectively an additional tax on students that will fund the scholarships that the government are attempting to introduce. And they are promoting this under the banner of doing their bit for disadvantaged students and promoting a new Commonwealth Scholarship scheme. Well, blow me over; again, the duplicity and the misleading nature of the government are absolutely spellbinding—duping the Australian young people into paying more tax so that they can fund the scholarships.

This bill represents a despicable betrayal of Australia's young people and their educational aspirations. It is unfair. It affects low-income families to a much greater degree. It is unbalanced because it introduces a two-tier education system into Australia. And it is based on a lie and a broken promise. That is why this bill must be defeated.

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