David Coleman (Banks, Liberal Party) Share this | Hansard source

In question time today, the Prime Minister made the observation that the Leader of the Opposition has been running around the country trying to scare people about fairness or supposed unfairness. Never was a truer observation made and nowhere is it more true than in this area of higher education reform. What the opposition has sought to do is cloud the debate, provide a whole series of falsehoods about the purported impact of these reforms and, frankly, mislead the Australian people about what is actually in these reforms and what their real impact will be on Australians. Let's address directly the issue of fairness in these reforms in some detail. I then want to also touch on some broader aspects of the legislation as well.

Firstly, Under this legislation, nobody is required to pay for a university course up-front. Let's just make that very clear. Despite the obfuscation and the weasel words of those opposite, nobody, under this legislation, is required to pay for a university course up-front. The HECS system as it exists today continues, so nobody has to pay up front.

Secondly, nobody has to repay anything under their HECS obligation until they earn at least $50,000 per year. So if they are out of the workforce, if they are unemployed, if they are working part-time or if they are in a full-time job that pays less than $50,000 a year, their obligation to repay HECS in that year is zero. Nobody has to pay anything up-front and nobody has to make any repayments until they earn at least $50,000 a year. And if they only earn $50,000 a year, the payment is very modest indeed at that level and obviously rises as one's income rises. Again, we cannot emphasise this point enough on fairness.

Thirdly, nobody has to pay an interest rate higher than CPI. Just as it is now, whatever the CPI rate is, under the legislation that is before the House today, is what people will be required to pay in the future. So no payment up-front, no requirement to pay anything at all until you earn $50,000 a year and then, when you do start to make repayments, you do so with interest calculated at CPI.

Finally, if you have a child who is under the age of five and if you are not earning over $50,000 a year—probably because you are looking after that child or perhaps working part-time—not only do you not have to make any HECS payments but you do not have any interest calculated during those five years either. That is a very important point. If we want a focus on fairness, and it is entirely appropriate to consider issues of fairness, nobody is required to pay any interest whilst they have a child under the age of five if they are earning less than $50,000 a year.

It is very difficult to see how a system under which nobody has to pay anything up front, nobody has to repay anything until they are earning $50,000 year and nobody has to pay an interest rate greater than CPI can be a negative thing in terms of access to Australian universities. In terms of access, it is very important to note a couple of other provisions of this legislation. The first one is we anticipate there are about 80,000 students who currently do not receive Commonwealth support for their courses because they are sub-bachelor courses, diploma courses, associate courses and so on that do not fit the strict definitions of what gets Commonwealth support at the moment. But in the future they will. We think there will be about 80,000 people by 2018, in three years, who will have direct Commonwealth subsidies going to their course, which should have a downward impact on what they are personally required to contribute.

In addition, under this bill, we will implement the largest system scholarships in Australian history. So for disadvantaged students and for students from lower socioeconomic backgrounds, a large pool of new scholarships will come into place and that is a great thing for students from disadvantaged backgrounds.

Let's run through that list again because they are very important points: no-one has to pay up-front; no-one has to repay anything until they earn $50,000 a year; nobody has to pay interest greater than the level of CPI; anyone who has a child under the age of five who is earning less and $50,000 does not even have to pay CPI—nothing, it does not go up at all; the largest scheme of scholarships in the history of the Commonwealth; and 80,000 more students than today getting Commonwealth subsidies towards their higher education. So if the Leader of the Opposition and those opposite want to run around and talk about fairness, that is a debate we are very willing to have because this bill has some extremely important reforms in it and it is structured in such a way that it does not remove opportunity to attend university. In fact, it substantially expands it for many thousands of Australians.

One of the key provisions of the bill is the ability for universities in the future to set their own fees. This is an important bill. As you know, at present every university in the country charges exactly the same amount, generally the same amount, within bands, for different courses. So if you are at a rural university or if you are at a major metropolitan university, the amount will be precisely the same. It is important to note there is some differentiation in the system already because there are different fees within different bands. When they take on their HECS obligation, students know that there are different fee bands. Some courses have a lower HECS obligation than others. So students are already choosing the amount of HECS obligation they are willing to take on. They are fully aware that some courses have a higher HECS obligation than others.

So this notion that the current system does not involve students making any evaluation between the value of different courses is wrong, because they do. Students now say, this is a band 1 course and it will cost this much, and this is a band 3 course—and so on. They take that into account when deciding what they want to study.

So, under this scheme, students will be able to choose from the options given to them by the universities around the nation what is the course that they want to do. That means that students will be able to choose the course that they believe provides them with the best value. As a consequence, universities will be responsive to those student demands. So, if a university has a particularly strong demand for a particular course, that suggests that course is particularly important and that university will be encouraged to continue to invest in that area and perhaps specialise in that area. And that is a good thing, because universities specialising in areas in which they are particularly strong makes a lot of sense.

Once students make that decision and make that choice to take on the particular HECS obligation, it is important to note that overall across the system the relative contribution of students and government to the cost of education is about 50-50. It varies from individual to individual but across the system it is about 50-50. That is, I believe and I think the Australian people believe, a very fair mix. When you take on a university degree, you get a significant personal benefit. There is a benefit to the community as well of course, because education leads to productivity and further development of our society and economy. But there is a clear personal benefit. So it is appropriate to have a broad 50-50 mix of contribution from the student and the government. It is extremely important to note that nobody is required to pay anything upfront under these rules. Students will elect what HECS obligation they are willing to take on.

Because of the importance of these reforms and the need to set up the education system for the future, they have been the subject of widespread support. Universities Australia, which is the peak body representing Australian universities, has made it clear that it believes that fee deregulation is an important step forward that will allow Australia universities to have the sustainable funding base that they need to invest in the future.

Interestingly and tellingly, we have seen some important interventions from representatives from the Australian Labor Party. I think John Dawkins—the original architect of the HECS system and other important education reforms—made it very clear that he was disappointed in the obstructionist attitude of those opposite on these issues. We also had the former member for Bennelong calling for a less obstructionist approach. And the Business Council of Australia has pointed to the importance of university reform for productivity in the future. And the list goes on.

There is no credible alternative to these proposals. There is an absolute lack of ideas from those opposite. What we see in this space, as we see in so many others, is a sense of simply saying no; no solutions to the problem that they created, no solutions to the lack of funding that they provided to the higher education sector; and a willingness to just run around the country trying to scare people. That is not the task of reforming governments. Indeed it was not the task of previous reforming governments of those opposite. But the opposition that we find ourselves with is an obstructionist, mediocre, intellectually thin and very negative group. Simply running around the country trying to scare people is not going to work, because the Australian people are far more sophisticated than that.

The Australian people know that nobody is required to pay upfront for a university course. Nobody is required to pay anything back until they earn at least $50,000 a year. Nobody is required to pay interest at a rate higher than CPI. Nobody with a child under the age of five is required to pay any interest at all. The scholarship program is the largest in Australian history. There are about 80,000 people who are going to have access to Commonwealth funding who do not have access to Commonwealth funding today. Those points are very important. It is very clear that this is a system that is entirely fair, that provides universities with the framework they need to specialise in the areas where there is the demand.

It is important to not pretend that every university is exactly the same, because there is a differentiation across our university sector. Some universities have fantastic law schools; some universities have fantastic schools of agricultural economics. The variations across our university sector are immense. Pretending that every university is exactly the same is a system that leads to a lack of investment and to a lack of growth opportunities for the funding of the Australian university sector. These are good reforms, important reforms for the university system, and I commend them to the House.

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