Julian Hill (Bruce, Australian Labor Party) Share this | Hansard source

I withdraw it without qualification. That is why we oppose this bill and hope it dies in the Senate or wherever in the parliament the government sends this kind of rubbish to rot.

I want to make a few remarks about HELP debt levels and repayment. The government is concerned about growth in unpaid student debt. Overall, student debts are increasing significantly due to the growth of higher education, the government's own higher fees, extension of HELP to non-Commonwealth-supported places and so on. Over four years, we now have 2.5 million students—up from 1.7 million students—holding a debt. The amount of debt has gone up from $25 billion to about $49 billion. On current estimates, 23 per cent of those students are not expected to repay anything at all. Unpaid debt is largely with people who haven't earned above the income threshold long enough, and the debt is written off at their death.

On pages 8 to 10 of the Bills Digest is an interesting discussion on the options around this issue. One option is to just accept that this is part of the scheme—an equity measure, if you like—and a percentage won't be repaid. You can take the government's premise that we need to recoup more of this debt—fair enough, that's an argument. But there are two broad arguments. You can do what the government wants to do—lower repayment thresholds to, in effect, push young people into a poverty trap, which is the option the government has chosen—or you could take the interesting but politically much more difficult option of exploring requirements to recoup debts from certain estates.

The Bills Digest notes that many people who die without repaying debts are actually from very wealthy households with wealthy estates. The family arrangements are such that they have never declared enough income to repay their full debt, but they may pass away with significant wealth, whether through superannuation, housing or other assets. This is politically difficult because, if anyone suggests that, the other side may say, 'Oh, it's a death tax, it's a death tax!' which is clearly nonsense. There is a case to look more closely at this. The Bills Digest notes analysis that requiring HELP debts to be repaid, just like tax or social security debts, from estates over $100,000 in value would save $2.83 billion over three years.

Obviously, you'd need to craft such a policy carefully. I think most people would think a higher threshold would be reasonable, as well as appropriate exemptions or delayed payment provisions to protect people like families where a parent dies young or for people with surviving partners and cash flow issues. I understand this is not my party's policy and it's not the government's policy. It was in the discussion paper, to their credit, but there does seem to be a policy case to look at this option further. If difficult choices have to be made, that kind of approach is far less regressive and far less unfair to young people than the government's policy.

In terms of the impact on universities: at a time when Australia should be investing in our universities, this bill would enshrine $3.8 billion of bottom-line cuts. Teaching, student programs, research and university facilities will suffer. You have to admit that the minister is doing his best to earn himself an honorary degree from university in media manipulation and spin. He's all over the shop suggesting to people, 'Oh, this is just a temporary efficiency dividend. There's nothing to worry about. It's just a couple of years. It's just the universities doing their bit for fiscal consolidation and a bit of budget savings. Nothing to see here. Oh, look over there, let's pick on some migrants. Let's have a quiz about other people's relationships. Let's beat up on vulnerable people who rely on welfare to eat and live—that's a good idea. That'll distract everyone while we hack away at education, won't it?'

There are two main measures that comprise the cut when you stop being distracted and look at this bill. Firstly, the efficiency dividend is 2½ per cent in 2018 and again in 2019. From that the universities suffer a direct cut of $384 million in just two years. Monash University, on the border of my electorate—my old university—suffers the largest cut of any Australian university of $104 million over the forward estimates. I don't see the member for Chisholm listed to speak on this. I would suspect she is far too ashamed, given that it's technically in her electorate.

The minister pretends this is a one-off, but it is effectively a great, big, locked-in permanent cut, because when funding eventually gets reindexed it's from the level after the cut. You can't pretend this won't have an effect on teaching quality, and the resultant cuts will damage Australia's research effort. Higher education in Australia is a little bit weird by the world's standards. It's an accepted part of our system that there is a cross subsidy and that you make a bit of a profit off teaching students to fund your research, which is what keeps you in the rankings. That's bad enough, but a further 7.5 per cent is then taken out for performance funding.

We support the principle of performance funding, indeed, we proposed it, but the government is going about it the wrong way. Ripping another 7.5 per cent off universities for a yet-to-be-determined performance-based funding pool is, in prudent budgeting terms, a further cut because there is no detail in the legislation or from the government about how this scheme will operate.

I will quote Monash University Vice-Chancellor Professor, Margaret Gardner, who said:

A university budgets principally on the basis of the number of students enrolled and the average amount of money each student will bring…If 7.5% of each student's funding will not follow the student, but will flow depending on the minister's assessment of whether a university has met benchmarks determined on a changing set of education indicators, then this money cannot prudently be included in the budget.

Universities Australia has said the policy amounted to performance funding at ministerial discretion without any clarity as to the problem to be solved. All this means is that in prudent budgeting terms universities will have to plan for a 10 per cent cut in 2018 and a 10 per cent cut in 2019. We will not write a blank cheque which will force this 10 per cent cut and so future ministers can do what they want or cut that funding completely.

Finally, with regard to the extension of CSP to sub-bachelor courses: I understand this has been supported in principle for years, since the Bradley review in 2008, but that is almost 10 years ago. I have serious concerns about this measure and its impact on TAFE. There's no detail from the government. The landscape has changed a lot in this area. TAFE is under enormous pressure. You've got changes to the VET FEE-HELP loans, which have capped loans and fees. This measure has the potential to seriously erode TAFE revenues further, to make the provision of critical, high-quality TAFE unviable in more areas and to confuse students.

I note that while universities would be given access to CSPs for sub-bachelor places, TAFE does not have access to CSPs for higher education. Personally, I think this move is premature and that it's dangerous to support it at this time. Time doesn't permit me to go into the plans to sneak in massive changes to how postgraduate places are allocated, or the wedge for privatisation, the little gem in there that some other body may allocate these scholarships or the anti-New Zealander, anti-migrant measures. But suffice it to say that there are a lot of very good reasons for why this bill should be opposed. There are a few sensible things in there, and the government could well pull them out and put them in another bit of legislation that we would support and wave through tomorrow, while these other things go to die, as zombies, as they should.

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