Nickolas Varvaris (Barton, Liberal Party) Share this | Link to this | Hansard source

I thank the House for the opportunity to speak on the Higher Education and Research Reform Amendment Bill 2014.

This bill is imperative to the future sustainability and success of Australia's higher education institutions. This bill is crucial for our current and future generations of bright minds because it allows key reforms to be made so that we can expand opportunities and encourage individuals to make the best choice possible for their further studies. This government is committed to ensuring that our universities are not trailing behind those around the world, that they are given the resources needed to compete internationally and to provide outstanding education experiences for students so that graduates can be leaders in their fields.

We are in an unprecedented knowledge economy like never before and it is critical that as a First World nation we have the First World education facilities to match those of our competitors. For decades, Australian universities have produced graduates who are innovative and vital to our nation. But in this time, whilst Australia has retained the status quo for excellent achievements, the standards of education and research have also been gaining momentum amongst our competitors. If we are to retain our intellectual capital and our economic standing we cannot afford to be complacent with our education and investment standards. That would be detrimental to our reputation and to the economy. Now is the time to be asking ourselves and our universities: how can we better ourselves to benefit our students and in turn increase Australia's competitive advantage?

This bill seeks to address the crucial elements of much-needed higher education and research reforms that will pave the way to success for graduates and universities alike. Rather than a centralised system, this government believes that universities should be free to decide on the appropriate level of course fees that best reflect the market value in which the fees the students pay are more realistic to their potential future earnings. We must strengthen our higher education system for all students in a way that is sustainable for the taxpayers of Australia and for the universities, and that will allow generations of students to continue to benefit from appropriate levels of funding for their higher education.

The coalition believes that reforms must be systematically achieved in four ways. Firstly, deregulating university fees so that institutions can set their own fees according to student and market demand and extending funding to include degrees, diplomas and associate degrees at public, private universities and non-university higher education providers. Secondly, adjusting the interest rate on student HELP loans from the CPI to a more sustainable rate of a 10-year government bond rate with a maximum rate of six per cent is vital to the sustainability of the taxpayer contribution scheme. Thirdly, improving accessibility of higher education to more Australians, including those from disadvantaged backgrounds, by setting up a Commonwealth Scholarship Scheme. Finally, this bill allows amendments to the Australian Research Council Act 2001, which will provide for additional investment in research through the Future Fellowships program and will secure Australia's place at the forefront of research with funding towards key programs.

These key measures are fundamental to ensuring all students have access to opportunities for higher education, whether they are city or regional students, whether they wish to obtain a bachelor degree or a diploma, whilst universities and other higher education providers are given the chance to effectively position themselves and compete for students. The coalition is a firm believer in the transformative power of higher education and is committed to ongoing investment in the higher education sector. More importantly, higher education is one of the best investments an individual can make and the dividends far exceed the monetary gain of a salary or a wage.

Australia has a proud tradition of high education standards and a certain quota per year is set for university entries based on merit. Both sides of government believe in investing in our best and brightest to ensure brilliant minds are cultivated in our institutions so that will increase our national competitiveness.

However, government funding directly comes from working contributions of Australians, and whilst our higher education institutions have had unfettered taxpayer support in terms of funding, this is not feasible in the long run. The privilege to be able to attend university and divert the cost of the degree are the striking benefits of a system that is focused on students investing in their futures, bound by notions of hope, reward and opportunity.

At the same time, as our population increases and demand for higher education both from domestic and international students escalates, we owe it to both universities and students alike to maintain a system that is resilient to changing demands and shifting trends. In order for future generations to enjoy higher education standards like their predecessors, we must allow for this sector to reform in ways that are suitable and viable. The provisions in this bill are measured and reasonable.

All changes anticipated as part of the reform package will result in more university places offered by 2018—some 80,000 additional students—through expansion of opportunities to degrees, diplomas and associated degrees. There will be increased opportunities for students from disadvantaged backgrounds who show potential to truly shine, being given a free education through the Commonwealth Scholarship Scheme—the biggest in our nation's history. Furthermore, students can still choose to divert the entire cost of their courses through the Higher Education Loan Program and will only need to repay their loans once they earn over $50,000 per year. Most importantly, these provisions allow universities to focus on the necessary changes they need to remain competitive in the world, whilst offering quality education that is prudent to the needs of students and the labour market. When universities and colleges compete, the students are the ultimate winners.

I would also like to take this opportunity to confirm that the coalition will be investing in higher education through increased funding. The budget papers show that there will be increased and ongoing funding for higher education and higher education research. The coalition will invest $11 billion over four years in university research and this will include funding to attract and retain some of the world's top researchers in Australia. This will help to ensure that our universities remain relevant and competitive amongst the First World economies. In addition, we will be delivering $150 million towards the National Collaborative Research Infrastructure Strategy, which supports and encourages collaboration between the research sector, industry and government within Australia to conduct world-class research. This ensures Australian research will be pertinent and competitive on an international level.

The coalition will also fund 100 new research positions per year under the Future Fellowships scheme at a cost of $139.5 million. The scheme enables four-year fellowships to outstanding mid-career researchers to strengthen our national research capacity. There will also be no less than $42 million injected into the Australian Institute of Tropical Health and Medicine at James Cook University to support research and training in tropical diseases such as dengue fever and elephantiasis. The coalition will also be providing $24 million to the Antarctic Gateway Partnership in Tasmania to strengthen their position on Antarctic research. The current budget also delivers $3.3 million to enable the Australian Institute of Aboriginal and Torres Strait Islander Studies to continue to preserve important Indigenous cultural items in digital form as a research resource to share domestically and internationally. Australia has always engaged in world-class research, as history indicates, and the coalition government are committed to ensuring that this continues.

As discussed previously, our higher education system both for academic and research purposes must reflect the changing needs of students and market demands. Our knowledge economy means that an estimated 40 per cent of our young population will obtain a degree, thus it is imperative that we examine whether our current system is apt. We cannot sit on the existing higher education status quo to the detriment of innovation. The above structural reforms I have discussed are crucial to changing the way we operate our fourth largest export industry, so that it best serves the needs of students and our nation.

Some may deem the changes as radical, but I firmly believe that these changes are measured and absolutely necessary. If no changes are made to the cost of degrees then, in essence, the value of degrees is eroding. Similarly, if funding for university models does not alter, then some degrees may face extinction due to declining funding and demand, whilst others face unconstrained popularity that dilute their real value.

Whilst we have seen a deregulation in student numbers, which translates to more students enrolling in universities, the fee and funding model to serve these students has remain unchanged. This is not sustainable for the higher education institutions and will erode the value of Australia's universities compared to those of our competitors.

The expansion of a demand-driven Commonwealth funding system to enable more opportunities for students studying for diplomas and in non-university higher education institutions will cost taxpayers more than $821 million over the next three years. This funding is indicative of how serious this government is about preserving the standards of our higher education sector, whilst enabling increased opportunities for more students to pursue studies.

Australian graduates who continue to receive Australian taxpayer support through their higher education studies are the beneficiaries of this system, earning on average 75 per cent more over their lifetime than those who only complete year 12. Therefore, this is a reciprocal obligation for students in the courses they choose. Moreover, the Higher Education Loans Program will remain to ensure that students do not experience any financial burden until they can repay the loan. This is equitable funding and a reasonable expectation for what is considered a lifetime investment.

It is the government's role to ensure our higher education sector is relevant to the student and remains tenable in the market. Our universities cannot remain ahead of our competitors if they do not have the required funding. The provisions in this bill are fundamental to ensuring our current and future generations of graduates are equipped with the knowledge and skills they need to bring to their chosen careers.

Our research institutions must also have the appropriate funding level and skill sets to ensure that Australia is at the forefront of exploration. This bill will pave the way for Australia's future. I commend the bill to the House.

Tim Watts (Gellibrand, Australian Labor Party) Share this | Link to this | Hansard source

The bill under consideration before us today, the Higher Education and Research Reform Amendment Bill 2014, is one of the most insidious attacks of the Abbott government on the Australian way of life. It is an ideological attack on the values that underpin our society, motivated by a commitment to elitism and exclusivity and a contempt for egalitarianism and equality of opportunity.

On the ABC's Insiders program, the education minister, Christopher Pyne, told Australians that 'Students will always be the winners' from the changes in this bill. If that is the case, if students will always be the winners, I have a simple question for the minister: 'Why didn't he tell students about these changes before the last election?' Why, before the last election, did the coalition tell the Australian public, in their Real Solutions policy pamphlet:

We will ensure the continuation of the current arrangements of university funding.

When asked last November if he was considering raising university fees, why did Christopher Pyne, again, at that point say:

… I am not even considering it because we promised that we wouldn't and Tony Abbott made it very clear before the election that we would keep our promises.

In the bill under consideration before us today we see these promises broken. We see funding for Commonwealth supported places for undergraduate degrees slashed by an average of 20 per cent. For some courses, this rises to almost 40 per cent. We see fees introduced for PhDs. We see the HECS indexation rate moved from CPI to a real rate of interest—the 10-year bond rate, capped at six per cent. This is a promise broken not only to current students but to all former students who have a HECS debt.

Finally, we see changes to the indexation of university funding, from 2016, which will result in a $2.5 billion shortfall in university funding in 10 years time, according to the Parliamentary Budget Office—a shocking surprise for the Australian public from a government that promised no surprises, no excuses.

After also calamitously and infamously breaking his promise to run a 'unity ticket' on schools funding, this minister has not a shred of political credibility left to his name. He is very lucky to have the environment minister in cabinet with him, to share his political bankruptcy.

Regardless of the merits of the legislation, and I will come to them shortly, this is no way to undertake major reform. There has been much discussion recently about the 'end of the reform era' in Australia and about how a new turbo-charged media cycle, powerful vested interests and hyperpartisanship is derailing reform in this country. There has been less discussion about how reform processes have been managed by our political leaders.

In this instance, it is not the media, the internet, the unions or the opposition which have torpedoed the prospects of this reform. It is the minister himself, who has delivered one of the most ham-fisted displays of reform management in living memory by breaking an election promise by dropping plans for the biggest changes to the higher education sector in this country for 40 years as just a couple of lines in a budget speech. No green paper; no white paper; no inquiries; no reviews; no round table; no summit; no electoral mandate; no attempt to engage with stakeholders to build a consensus on the need for reform; and no attempt to seek input and canvass options or potential alternatives. From an opposition that promised to govern like adults, this is kindergarten stuff.

When parliament recoils and it seems as though the education minister will not be able to get his way, instead of dropping these poisonous reforms and listening to the Australian people, instead of seeking compromise or consensus in this parliament, he throws a tantrum like a child, threatening to cut research funding if he does not get his way. The Australian people do not buy this. They only become angrier at the fact that their representatives are now subject to threats and blackmail from the education minister. Process aside, this broken promise is also bad policy.

It is going to hurt students and their families and make Australia a less prosperous and less fair society. These reforms will, over time, have the effect of making higher education something for the few, not the many, and an institution for the narrow elite, not the egalitarian many. As the architect of the HECS scheme, Professor Bruce Chapman, recently noted:

Past changes to HECS didn't deter students, but now that there will be a real rate of interest on the debt we are in uncharted waters.

It is worth contrasting the shambles before the House with the Dawkins revolution ushered in by the Hawke-Keating government. The Labor approach to reform of our higher education system has always been the result of careful, detailed public consultation. But, most importantly, it embedded the values of equality and fairness in everything that the government did. These values are stamped all over the Dawkins reforms. Twenty years ago, when John Dawkins was introducing the last major reforms of our university sector, at that point our university sector faced significant challenges, including the spiralling costs of the university sector in an era of tight budgets and global economic instability. The then Labor government was in the process of successfully increasing the high school retention rate in this country, from three in 10 students to seven in 10 students, dramatically increasing the pool of potential university students.

Our university sector required significant reform to tackle this challenge and produce the highly skilled graduates needed to power Australia's future in a newly globalised, competitive world. But John Dawkins ensured that these reforms were tackled in a way that did not offend Labor's guiding principles of equality of opportunity and fairness. Labor chose to fund a massive expansion of university places by instituting a groundbreaking deferred payment, income-contingent student loan scheme—our HECS scheme.

The indexation of HECS loans, the 'real interest' subsidy, was a key part of ensuring this equality was preserved throughout the system. The architect of the HECS policy, Professor Bruce Chapman, has talked about the real interest subsidy. He said:

The interest rate subsidy is there for protection.

A lot of people, particularly women, will spend time out of the labour force, child-rearing, or people will have accidents and have bad luck and end up in poor jobs.

When you think Hecs you've got to think about insurance all the time. That's what it is – it insures you against bad luck. Once you put a real interest rate on that, that's gone.

In this way, while an enormous source of new university funding was tapped by the Hawke-Keating government, this was not at the price of disadvantaged students who dreamed of studying at university. This approach resulted in a system which has been described by Nobel Laureate Joseph Stiglitz as 'the envy of the world. It is why every student in Australia can dream of being a scientist, an engineer, a doctor or a lawyer without worrying about a lack of means trumping their merit.

On the other hand, the reforms contained in the bill under consideration are about exclusivity, not equality; elitism, not opportunity. The bill is focused exclusively at the top without any regard for the needs of the vast majority of Australians. It is a system designed to increase the quality of our most elite institutions at the cost of all other stakeholders in the higher education system. It is a system designed to make our universities even more elite, where universities will be encouraged to maximise prices for students to protect the exclusivity of their brand. We have seen this occur in the United Kingdom where fees were deregulated in 2012—while I was studying in that country—but a cap was placed on increases in fees at 9,000 pounds.

Once the reforms were introduced, we saw what economists call 'signalling'. Universities who initially charged less than the 9,000 pounds were considered to be inferior based not on their quality but on their price. In order to avoid students making this ignominious judgement, in the 2015-16 academic year only two universities out of 123 had fees that were below this 9,000-pound cap. This price signalling can even be seen in Australia's higher education system today. The Howard government introduced partially deregulated university fees in 2003. They allowed universities to charge anything up to the current maximum rate of student contribution. The Howard government boasted that this would create more options for our students. The then education minister Brendan Nelson said, 'Some course costs would rise, some would drop and others would stay the same, according to demand.' Yet, once the reforms were introduced, every university increased its fees to the maximum student contribution, and this was without the 20 per cent cut in funding that we are currently seeing from the Abbott government.

What does this mean for university students? What is beyond dispute by anyone except 'Pollyanna Pyne', the education minister, is that university fees will go up and they will go up significantly. As Bruce Chapman put it:

The idea fees will go down anywhere is frankly fantasy land …

Thanks to the cuts to CSP funding, universities will be forced to raise fees just to cover costs. This will lead to a rise in fees by at least 30 per cent and, in some cases, up to 60 per cent—a pain that will not be shared equally. Universities Australia estimates that courses needed to build Australia's future, such as engineering and science, will rise by 58 per cent, just to make up for the cuts to funding. We will see nursing degrees go up by at least 24 per cent, education degrees by at least 20 per cent, agriculture degrees by at least 43 per cent, and environmental studies fees will be forced to increase by 110 per cent. Not even Charlie Sheen would be addled enough to think that these students were 'winning'.

When these increases in fees are combined with the rise in interest for HECS debt, the result will cripple our graduates for a longer period of time. Modelling suggests that our graduates will be burdened by larger amounts of debt for longer periods. It is particularly seen in the work of Universities Australia, tracking the increased costs of engineering and nursing degrees under this deregulated system. Universities Australia modelling found that, taking a conservative prediction of a medium increase in fees and a four per cent interest rate, engineering graduates would face a HECS debt of between $98,000 and $113,000—an increase of over $50,000 to what they could expect today. This would take them an extra seven years to repay the current cost of a degree—a period of up to 25 years. The cost of these debts will be borne by families and will force them to choose between study and a mortgage or study and children. Nursing graduates will see their fees double from $25,000 to $50,000, taking them over 20 years to pay off the HECS debt.

It is absurd to think that these massive increases in fees will not have an impact on the decisions of potential students looking to undertake higher education. That is why these higher education changes have been condemned so widely, not only by the students forced to pay the increased fees but also by the experts who know how to best run the higher education system. Bruce Chapman, the architect of HECS, has been bleak in his assessment, noting: 'Fees will go up and they will go up quite significantly.' Universities Australia has been frank about the increase in fees that university students will be facing. Even the leaders of our universities, those who would benefit most from the ability to increase fees, have voiced grave concerns about the proposed reforms. Peter Dawkins, Vice-Chancellor of Victoria University in my electorate, has stated:

Unless there are some changes to the plan as outlined in the budget, these risks look too high.

Vice-Chancellor of the University of Adelaide, Professor Warren Bebbington, has suggested that the student debt burden in Australia could be 'worse than the United States'. For the benefit of the House, I inform those present that, in the United States, student debt is currently larger than credit card debt. Speaking of these inflated debt levels, Professor Warren Bebbington noted, 'No-one here wanted that.'

The area that the university leaders show most concern for is the bright students from disadvantaged families looking to undertake further study. It is these students, the first in their families to consider higher education, whom this government seems to have forgotten. There is a special pride in being the first member of your family to attend university. It is an emotion I see often in my electorate when talking to families in Melbourne's west. Under the new system, however, these students will be unable to separate their future study options from the exorbitant price tag attached to them—a price tag that says to them that a university degree is a luxury only for those who can afford it. Students who do not have the freedom to take on these large debts and study the course will be the students who are turned away from improving themselves. Australia, along with them, will pay the true price of these university reforms. It is a concern that has been echoed by Vice-Chancellor Dawkins from Victoria University, a university that sees many students attending their university as the first in their family to receive a degree. He recently noted:

It is the likely equity effects of the reforms that are most concerning and while these policies are aimed at expanding tertiary education, they would be counter‐productive if they discourage disadvantaged students from participating in their preferred course of study … This is a real risk.

What these reforms then lead to is a society where university is for the rich, not the smart. We have seen this sort of unequal society flow from a broken higher education system before, in the United States. It is an observation pointed out by Joseph Stiglitz, the Nobel laureate I mentioned earlier, who noted:

America's failed financial model for higher education is one of the reasons that, among the advanced countries, America now has the least equality of opportunity, with the life prospects of a young American even more dependent on his or her parents' income and education than in other advanced countries.

In the words of Joseph Stiglitz, it would be 'a crime for Australia to follow the United States towards a higher education system that breeds exclusivity and discourages the brightest of our students from succeeding'. It would be a crime to pass the reforms of a man who shrugs off legitimate criticism of his botched reform package with derisive comments such as: 'It's not like we're asking someone for their left kidney.'

Replacing equality of opportunity with purchasing power is anathema to the Australian way of life. It is against everything that Labor stands for. The Leader of the Opposition, Bill Shorten, in his budget-in-reply speech, could not have been clearer on this—and I fully endorse his views. He stated:

Only through education will Australia fully develop our economic potential, our scientific potential, our artistic potential—our people's potential. Labor will vote against these cuts to university funding and student support. Labor will not support a system of higher fees, bigger student debt, reduced access and greater inequality. We will never tell Australians that the quality of their education depends on their capacity to pay.

Labor will never stop fighting the efforts that threaten this fundamental tenet of Australian life. We oppose this bill and all efforts by this government to threaten the bright futures of students and their families around the country. The Australian people did not vote for these reforms and they do not want them. The Australian Labor Party will fight these reforms in this chamber, in the other place and in communities across our country. We will fight them until this government is defeated.

Andrew Broad (Mallee, National Party) Share this | Link to this | Hansard source

I normally associate myself with the words of the member for Gellibrand but on this occasion I will not. I have thought long and hard about higher education reform. I take my role as an elected member very seriously and I understand the importance of education within my electorate. Education has an incubator role, a role of potentially diversifying our rural economy—and we do need to invest in capacity. When I started as a member of parliament one of the first things we did was develop a strategic plan for our development. Our strategic plan was this: 'To build wealth by building capacity and to build community by building interaction.' There is no doubt that, when you invest in people, it translates to building their capacity—and that creates innovation, opportunity and wealth.

I have a vision for rural Australia, and that is that it will not just be a service industry to agriculture. Our towns will not just be retirement villages and tourism. We need a diversified economy. And there are challenges for our regional students. No student in my electorate can live at their home and catch a tram to university. There is a reason for that. It is because in my whole electorate, which is a third of the state, we do not have a tram. In fact, we only have one passenger train station. So you can start to understand that, when we think about these university reforms, it is important that they work.

We recently had a visit to Mildura from Minister Pyne. It was a very worthwhile time. I am a strong believer that 'to jaw-jaw is always better than to war-war'—a great quote from Winston Churchill. Rather than fight, you should talk; and, rather than talk, you should listen. One of the people at a forum where the minister spoke and listened was the father of a first generation university graduate. It was a great pride to him that his son had a business card. That is something that everyone in this chamber takes for granted. We all have business cards. We have exchanged so many business cards that we are sick of them. Also raised with the minister was the story of a woman who for cultural reasons would never be able to travel to Melbourne to study and thus needed to study at a regional campus.

So why change? Why make these changes—and can we make it better? The challenge is that we have lifted the cap on placements without giving an incentive to our universities to innovate. The system currently is not working. In my electorate, 28 per cent of people who finish year 12 go on to university. This is too low. It is for a combination of reasons—aspirations, affordability and distance. In what we are trying to do with these changes, you cannot just look at it as university funding in isolation. We are actually broadening opportunities—opportunities for loans for those who are going to do apprenticeships, which will certainly help mature-age apprentices; opportunities through VET courses; and opportunities through diplomas. Not everyone is going to do university.

It is inappropriate that, in my electorate, at least 50 per cent of people are inadvertently subsidising those who are going to university and creating opportunities for themselves. And it is important that, if they choose not to go to university, there are also opportunities in other forms of education. This is one of the key parts of the reform that is getting lost in the debate. We subsidise our university students to the tune of 60 per cent of their course cost. It is anticipated that, through these changes, we will be subsidising them to the tune of 50 per cent of their course cost. In real terms, that does add more than an additional 10 per cent to the cost of their university degree; it is more likely to add 25 to 30 per cent to their university fees. We need to have a look at the figures because I think there is a lot of scaremongering going on. The average fee for an undergraduate university course in Victoria is about $16,800. Taking that to $22,000 is a long way short of the $100,000 that Bill Shorten was talking about this morning.

So are these changes evil? Is this an insidious attack on our society? I think the answer to that is no. There is great danger in creating fear among the parents of young students who at this time of year are considering whether they will go to university. There is always hyperbole in politics, there is always overemphasis to make a point. But as we talk about getting these reforms right we need to be very careful that we are not scaring our students, particularly those from poorer families who are considering whether going to university is worthwhile.

I want to state very clearly that it is not going to cost you $100,000 to do a course—unless you are going to be there for eight years, have a whale of a time and keep on going back and back. To do an undergraduate course is not going to blow out to a disproportionate amount. It is still a good investment. I can say to the parents in my electorate and to the students who are considering going on to higher education, 'Look at the long-term investment that this will offer you. Please, do not be scared off by the hyperbole of politics, because it is very important that at this time you make the right choice for you and are not scared by the Leader of the Opposition.'

I commend the minister because he is listening. I think there are things that we can do to enhance these reforms to allow regional students to have greater opportunities. The higher education participation program is a very important part of how we fund our universities now. I think there is a significant justification for increased funding for the higher education participation reform and weighting that across some of our regional campuses which have low socioeconomic status students. That is in line with creating opportunity right across Australia and that is something I hope the minister will enhance.

I want to commend John Dewar on his guidance as he looked at the Higher Education Loan Program. He has put out options to give consideration to changes to interest on the loans, particularly for someone who is not earning as much. I also want to say that it is not entirely bad policy to say to a student, 'We will loan you the money by using the total equity of the Australian Commonwealth so you can get a low-interest loan.' The reason that I say this is not necessarily bad policy is that I think of my own experience of not going to university and trying to get a loan to get started in business. I had to borrow at seven per cent to get my earning capacity. What we are saying to you as a student is, 'We will essentially be the guarantor for your loan.' But there are arguments, as John Dewar has put forward, for allowing for that threshold in interest to be a little lower, perhaps for people who are earning under $40,000 or $50,000.

I think the Commonwealth scholarships are fantastic idea. There needs to be some definition around 'disadvantage' and 'regionality'. Scholarships that target, invest and partner with regional schools may be something we need to look at. If we think of the AFL, when they look at their drafting—we do need to look at the AFL because often what happens in sport is a great diagram for how it should happen in life—if they are drafting players, they also invest in the club. If we have strong universities, it is not unreasonable for them to invest in the school. That is something that the scholarship fund has some freedom around, and in doing that we have the potential to start to lift aspiration.

Even with the current system, I still do not concede that 28 per cent completion of university in my electorate is necessarily completely built on economic disadvantage. It is also partly built on aspiration. We need to lift people's eyes. A partnership between universities and our year 12 level schools in our regional areas could go a long way to allowing people to see that they can aspire to greater things than where they are.

The other part, that is not part of this package but sits under a different portfolio, is that we need to look at assistance for country kids who have to move to go to college. I do not quite know how we put the framework around the definition of that, but there is no doubt that there is a disadvantage that comes with distance. There is no doubt that it costs more for a student to move away, where they have to live under another roof—whether it is in a unit, on campus or with a group of friends—than to live at home. As I have outlined before, there is no tram in the electorate of Mallee. There is only one train station in the electorate of Mallee. The opportunity for country kids to be able to stay at home and go to university is limited. There is a strong argument for diversifying our economy and for spreading wealth and opportunity across Australia when we look at how we can provide additional assistance for students who have to shift from a regional area to a city to study. It could be in the form of additional money or supported accommodation so that the student can have similar opportunities to what a lot of our city based kids have.

My concern at the end of these reforms, and I believe we will get it right, is that we are scaring people who have aspirations and dreams, and we should not do that. The Leader of the Opposition has made comments saying that a university course is going to cost $100,000 and students are going to be saddled with debt. To a 16-year-old or a 17-year-old who is considering their future, that seems like a lot of money—when in fact it is not going to be anywhere near that. We need to be responsible. Once these reforms are through this parliament there will be a need to ensure that there is a well-funded package to promote, educate and inform parents and students of just what these changes mean to them. Then they can make informed decisions and not base them on what is essentially hyperbole that comes from the opposition seeking political points.

We cannot stay as we are. We must change. I commend the minister for having the guts to make great reforms. All reforms at the time look difficult. I am sure every major reform that has ever gone through this place has been controversial. But with good discussion and less debate I think we can get this right and the students of Australia will be the beneficiaries of good policy.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

I rise—and this probably will not surprise the House—to speak against the Higher Education and Research Reform Amendment Bill 2014. The previous speaker, the member for Mallee, said that he is concerned that people are being frightened by the sort of money that is being talked about by the opposition and that they have no reason to be. I would very much caution him about going out to his electorate and making assurances that people will not be facing the potential costs of university in those sorts of figures, because the very point of deregulating is that you cannot make those guarantees, you cannot make those commitments to the electorate, and that is exactly the concern that the opposition has.

The bill seeks to implement the government's unfair budget changes to higher education. There are two aspects that are particularly a problem for the opposition in dealing with the proposal put in the budget. The first was that yes, this is massive change and reform in the higher education sector, and there has been no lead-up to it whatsoever. There was nothing about these proposals before the election. There was no conversation with the community more broadly about what the government was proposing to do in the university sector. For a government that in opposition regularly scaremongered about what reforms meant and how they should appropriately be introduced, this government is completely contradicting every benchmark it has set for any government in this place. It did not put the reforms before the population before the election. It did not engage in an extended and detailed conversation with the community about them.

One year ago, before the election, the Prime Minister—the then opposition leader—actually promised the Australian people that there would be no cuts to education. He said:

I want to give people this absolute assurance, no cuts to education, no cuts to health, no changes to pensions and no changes to the GST.

I acknowledge that the last point might be a contentious one for those opposite today. The Liberal Party policy document was Real Solutions. What did it say? It said:

We will ensure the continuation of the current arrangements of university funding.

After the election, in November last year, Minister Pyne further reinforced the government's promise from before the election. He said:

We want university students to make their contribution but we're not going to raise fees.

When asked at the time, 'Why not?' he replied 'because we promised we wouldn't before the election'.

And then, in the Liberal government's first budget, they broke these promises. It was a triple whammy of higher education changes. Course funding was cut, fees were deregulated and, to add the final hit, compounding interest was introduced. These changes reflect the government's twisted priorities. We need to be investing in education—exactly the point that the previous speaker, the member for Mallee, raised—and in particular in regional and rural Australia. We need to be investing to create a future workforce where we can ensure that the demands of our modern economy will be met and, most importantly, that our children are able to receive the education, skills and training that they need in order to start a pathway to their lifetime career. This bill seeks to deregulate university fees. So, as I said, the previous speaker and many of those on the other side cannot, despite their claims to the contrary, make any guarantees about what will happen with university fees. In fact, universities holding O weeks for students across the country at the moment cannot make guarantees to students as they seek to get them to enrol for the beginning of next year on what their fee structure will be before they finish their courses.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

How do you know it is going to be $100,000?

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

Well, let me take the member through that. Let us talk first of all about the fact that current undergraduate degrees have had a funding cut of, on average, 20 per cent. At the moment, what the Commonwealth funds towards the cost of running a course has been cut, on average, by 20 per cent. The figures produced by University Australia indicates that some of those will be up to 67 per cent.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

'Indicates'—oh, 'indicates'!

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

If the member has any evidence—and I am sure he will speak after me—any evidence at all that courses will go down in cost, I am waiting breathlessly to hear it, because we have challenged those on the other side to give us one piece of evidence, one piece of international research, one piece of domestic research that says that the cost of university courses will go down or indeed stay the same, and they have produced no evidence. We have relied on the work that has been done by people like Universities Australia.

Mr Nikolic interjecting—

The member laughs at them.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Where is your data and evidence?

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

Universities Australia have produced research on what the impacts will be, if the member wants to look at that. He could also look, for example, at the cost structures that are put in place under deregulation for international students and the sorts of costs that are there. There is plenty of evidence available. Currently the government proposes, first of all, to decrease the amount the Commonwealth pays towards the cost of courses. Then, of course, universities have their fees deregulated. So, what they will seek to do—and most universities will have to do this—is at least increase the fee to cover the cut in the amount that is Commonwealth-supported funding. So, for students who are looking at those courses, their share will increase, at minimum, by the amount that the Commonwealth funding for that course has been cut so that universities are not actually going backwards.

Then, of course, the government touts its Commonwealth Scholarships Program. Well, how are the scholarships funded? It is not Commonwealth government money. What actually happens is that universities, once they have covered the cost of the cut to the subsidy for the course, can then charge whatever they like. So, if they decide to charge additional, above and beyond making up that cut, they then are required to use $1 in every $5 to create a scholarship. To give an example, I and my colleague the member for Melbourne Ports are at university and we are enrolled in a class.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

What a class it would be!

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

It would be a class of great quality. The member for Melbourne Ports is paying his fees, so the university thinks, 'Well, we'll charge an extra 20 per cent to the member for Melbourne Ports.'

Michael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I'll drop out.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

And with the poor old member for Cunningham, the university thinks, 'We'll be charitable to her and give her one of these Commonwealth scholarships.' The member for Melbourne Ports is actually paying for that scholarship. The reality is that those students who will be paying additional costs for their courses will be funding people who will be sitting with them in the classroom but who will have a scholarship. So let us be honest: this is not a Commonwealth scholarship; students will be funding their colleague students through the increased costs that they will be paying for their education. This is what is going on here.

Then of course added to the deregulation is the introduction of interest that compounds over time. Much information has been produced which shows that this particularly impacts on women who take breaks from the workforce. I also want to point out that it will also impact on those who get professional qualifications but who may want to work in the more charitable based sectors of our economy. I am talking here about people like doctors who might want to work for some of the Indigenous health services or lawyers who might want to do community based legal work, where they will get a much lower income. They will probably still earn enough to be required to pay their HECS debt back, but they will be paying it back at a much lower rate because they will be earning much lower incomes. The real pressure is going to be on them to say, 'I've got this debt and it is actually accumulating compound interest, and so can I really afford to take time out in my earning life to do the sort of work where I am going to earn a very low income and accumulate interest on my debt at a faster rate than if I took a high-paying or more lucrative job?' So it will not only be women who will take a period of time out of the workforce who will be impacted by the pressure of accumulating interest; it will also impact on people who have high-level professional qualifications but who want to do low paid community based work—work that I hope we would all want to encourage. So there are some real inequities and there is some real unfairness in the way that this bill will impact on people.

The other point that I want to draw to the attention of the House is the significant impact that this legislation will have on universities in regional and rural Australia. It is certainly the case in my own area that the University of Wollongong is looking at a significant cut to its funding. The amount by which that funding is potentially being reduced is around $98 million over the period of this reform. The University of Wollongong is in an area of high youth unemployment. I have to say that it is a university that a lot young people from regional and rural New South Wales attend. I regularly go out and meet with the student body over there, and young people from all around New South Wales come to Wollongong university. So the reality is that, with the best will in the world, universities that may not want to put up their fees will not be able to avoid doing that.

An important point for people to understand is that there is a retrospective aspect to this bill. Recently, I was talking to a young lady who I know. She graduated in 2008 from the University of Wollongong, with a bachelor of arts in human geography and sociology. Then she went to the University of Sydney and did a masters in public policy. Her total HECS debt is approximately $35,000. She has recently purchased a house with her fiance, and they plan to get married next year. She was stunned that the government could change the terms and conditions of her existing HECS debt and that she could now be liable to pay interest of up to six per cent per annum. She said to me that, when she looked at the announcements initially, she had no understanding that this was going to apply not just to current university or potential or prospective university students but also to people who have graduated and, indeed, who graduated many years ago. If they carry forward a HECS debt, the change from the CPI indexation to an interest rate being charged will affect them as well. So for many young people who are starting out, who are relatively recent university graduates, undertaking mortgages and starting families and so forth, it is going to be a bit of an unpleasant shock when they discover that this bill actually means that the conditions of the loan that they entered into—thinking that they understood how it was going to operate over time—has actually been changed by the bill that is before us.

I think many people are aware of this. Belinda Robinson, who is the Chief Executive of Universities Australia, recently said:

... if we're not careful, what we will start to see is a situation where students are being deterred not only from participating in university study but from in fact taking time out of the workforce to do things like raise children, because it will be such a financial burden for them once they re-enter the workforce.

These changes will have a very detrimental effect on women and young families who are trying to get a start on life, such as getting a mortgage. This legislation creates a particular concern in terms of it being a disincentive to young people.

As I indicated, the so-called 'sweetener' is a scholarship program. I make the point again that it is not a Commonwealth scholarship; it is a scholarship funded by other students, who are paying higher amounts of money in order to provide that scholarship. It is also not accurate to say, as the minister constantly does, that at the moment people pay 40 per cent of the university costs and now we are only asking them to pay 50 per cent—as if that is not a significant change when the cost of a course has gone up significantly to start with and then there is compound interest on top of that. I think that is a misleading way to indicate how the impacts will be felt.

At the end of the day I think those opposite who get up to speak in support of this package will find that it creates quite a bit of grief in their electorates. I do not think it is a fair proposal to put before the electorate. I would suggest that, if those opposite really think it is such a great policy reform, they should hold off and take it to the next election. See how well it goes then. Put in your newsletters and your election campaigning material that this is what you want to do. See how well it goes down.

Michael Danby (Melbourne Ports, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

Do as John Howard did with the GST.

Sharon Bird (Cunningham, Australian Labor Party, Shadow Minister for Vocational Education) Share this | Link to this | Hansard source

As my colleague said: do as John Howard did with the GST. Run it by your electorate. Try and convince them of the arguments that you are putting to this House and let us see if they endorse the package. I profoundly believe that they will not, because it is fundamentally unfair at its heart. It makes university access based on your wallet not on your capacity, and that is never going to be acceptable.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

I appreciate the opportunity to make a contribution to this second reading debate on the Higher Education and Research Reform Amendment Bill. Having listened to the opposition leader's speech and those of his colleagues to date on this bill, I am keen to make that contribution because there is a lot to correct. What is most disappointing is that we are seeing yet more of the politics of envy and division—the politics of the Rudd, Gillard and now Shorten era where we talk about the rich and the poor and no-one in between. It is frustrating to hear that every day, but even more frustrating to hear appalling scare campaigns and claims that students will not be able to afford tuition costs.

It is audacious for the opposition leader to talk about a 'debt sentence' when it comes to university education. He was at the heart of Labor-Greens decision making over the last six years, which started when the Howard government left office with big surpluses, money in the bank, a Future Fund and a Higher Education Endowment Fund. Consider what the Labor government left us. The member for Batman smiles about that. If you want to hear about a debt sentence, member for Batman, I will tell you about a debt sentence: $191 billion of achieved deficit, and $123 billion of deficit forecast in the forward estimates dead on its way to $667 billion. We borrow $1 billion every month just to pay the interest on that debt, and, if we do nothing, paying our interest rises to $3 billion every month. So you can laugh about that and think that is really funny. You can think about your leaders talking about a debt sentence. The only debt sentence we have in Australia today comes as a legacy of your government and your reckless spending over the last six years.

Like a thief in the night, Labor has made a conscious choice to steal the prosperity from future years by living unsustainably today and leaving future taxpayers to mop up the mess. There was no thought about the quality of life for taxpayers. Mr Rudd, Ms Gillard and Mr Shorten thought only of the daily media news cycle, the next announceable—let the next generation worry about the mess that they are left. I ask the Leader of the Opposition to spare us the glib lines about a 'debt sentence' when it comes to higher education, because Mr Shorten and the Labor Treasurers have bestowed an appalling debt legacy on our country.

The previous speaker, the member for Cunningham, talked about selling the higher education reforms, and that is exactly what I have been doing with my colleagues, every day reinforcing the strategic nature of the government's higher education reforms. One such occasion was on 21 August—almost a fortnight ago—at a forum which was coordinated at Launceston College in my home town. The member for Kingston, shadow assistant minister for higher education Amanda Rishworth, flew in from Adelaide and joined me on the panel. We also had Senator Peter Whish-Wilson on the panel, telling us that Greens Party policy was to give everyone free university degrees. That demonstrated once again that the Greens have dealt themselves out of the rational debate, whether it is on higher education policy or a range of other policy areas. As Group of Eight universities have recently pointed out, the total additional funding required to provide a free university education in the next 15 years would be almost $133 billion. What an irresponsible and reckless statement from Senator Peter Whish-Wilson and the Greens!

When it came time for the member for Kingston to respond, she ran the same Labor lines that she and the Leader of the Opposition ran earlier today in this debate. She claimed, as other Labor members have, that university fees would double and triple, with many above $100,000, but she provided not one skerrick of evidence. It would not have escaped the member for Kingston's attention on 21 August that the legislation at that point had not even entered the parliament and that not one university in Australia had yet set its fees. Yet, Ms Rishworth, Mr Shorten and their colleagues falsely claim to know what the fees are going to be. 'They will double and triple,' they say, but they do not present a scintilla of evidence to back up that ridiculous claim.

The Provost of the University of Tasmania also joined us on the panel that day at Launceston College. We only have one university in Tasmania, and the provost was a voice of relative reason when it came to some of these claims. On fees he said:

Any change to our fees can't be predicted at this point in time. There is no legislation, we have no details.

He went on to say:

We'll make changes that are very responsible and ones that we hope don't put you off a university career.

He was talking to the people in the audience, the year 11 and 12 students, who are being scared senseless by this mendacious claim run by this mendacious opposition. He was saying to them, 'Yes, there is scope for some fees to rise and some to fall. But the scare campaign about a doubling, tripling, quadrupling of fees is frankly malicious.' The government, by the way, is not increasing fees or telling universities what they can charge because that would be inconsistent with deregulation. What the universities charge is up to them and what students choose to pay. The member for Fraser, Labor's shadow Assistant Treasurer, has backed deregulation. He said on page 106 of his book Imagining Australia: Ideas for our future:

Australian universities (should) be free to set student fees according to the market value of their degrees. A deregulated or market-based HECS will make the student contribution system fairer …

He is absolutely right, and members opposite should look to their own shadow Assistant Treasurer when it comes to policy in this area. They should read Dr Andrew Leigh's book. It has some common sense in it. He makes the point that no rational university will price itself out of the market, otherwise it will lose students to other institutions. This is particularly the case when it is confronted by the competitive pressure of 40 universities and 140 new entrants into the system who will be providing pre-degree courses. Instead of scare campaigns, I would encourage those opposite to look at more considered analysis. The member for Fraser went on to say in his book:

Universities will have a strong incentive to compete on price and quality.

He said that any concerns about fees are 'readily alleviated.' This is a member of Labor's own frontbench. Professor Ian Young, the Vice-Chancellor of ANU, said:

The deregulation debate here has resulted in what I think are highly unlikely claims of enormous fees that will saddle students with debt for life.

Professor Scott Bowman, the Vice-Chancellor and President of Central Queensland University, said on 2 July 2014:

If premium universities now do start to lift their fees substantially, then the regional universities and UNE in particular, if it holds its prices, might find that it can compete on price and retain its student load.

These learned gentlemen and the Provost of the University of Tasmania know, as does the member for Kingston, deep in her heart, and her Labor colleagues that those universities who raise their fees too high will have no students. It fails the common-sense test that fees would double, triple or quadruple. It is a ridiculous scare campaign with no evidence behind it. The member for Kingston also stated in her speech earlier today that these higher education changes will 'abolish opportunity' and 'quarantine university only to those who can afford to pay'. She said that low-SES students will be dissuaded from doing a degree. What an appalling addition to her scare campaign.

The Provost of the University of Tasmania said to that crowd of year 11 and 12 students at our forum, 'We are not going to change what we do for students and I hope you are not discouraged from engaging with us by the present debate.' In other words, do not be scared from going to university by these mendacious claims. In fact, the provost said this to his audience about the beneficial impacts of tertiary study: 'You will be happier. You will earn more income, the vast majority of university graduates are in the top 40 per cent of income earners in the country and you'll live longer. There's a big incentive for you.' He is right.

The member for Fraser, Labor's shadow Assistant Treasurer, has written on this subject as well, stating that under a deregulated income 'there is no reason to think that it will adversely affect poorer students'. That is from Labor's own frontbench. The member for Kingston, both at the Launceston forum and in her speech in the second-reading debate, also tried to draw a parallel between our system and the US system, knowing full well that she is not comparing apples with apples. Unlike the US system, Australian students remain protected by the HECS or HELP scheme, under which no Australian student needs to pay a cent up front to go to university. That is the fact of the matter. By contrast there is no HECS in the United States.

The member for Fraser, my doctor of choice, said, 'Under HECS, every Australian, regardless of financial circumstances, can invest in a university education.' The member for Fraser is right. Students here can borrow their full share of the cost of their education through HELP and do not need to repay anything until they earn in excess of $53,345 a year, and then only at two per cent at that level of income. If they are earning below $53,345 they pay nothing. If their income dips below that level—for example, if they are working part-time or are on maternity leave—then their repayments pause until their income again exceeds the $53,345 threshold. Those opposite also know that students only pay 40 per cent of their degree, with taxpayers paying the rest, and that all these reforms ask is that the cost of a degree is shared fifty-fifty between students and taxpayers. What a remarkable gift that is from the taxpayer—particularly the 60 per cent of taxpayers who do not do a university degree and subsidise those who do.

Another prescient observation from the member for Fraser, who said on p. 103 of his book: 'Government alone cannot provide all the additional funding necessary for our universities … More money is required from all sources, including students.' Professor Ian Young, Vice-Chancellor of the Australian National University has said:

Through HECS we can ensure that academic ability, not financial background, is the only barrier to university entry.

The member for Kingston and her colleagues also falsely claim that funding for higher education has been cut, yet the budget papers show that funding for higher education has increased under the Abbott government, opening up thousands of higher education opportunities for Tasmanian students. Contrary to Labor's claims, higher education funding goes up from $8.97 billion in 2013-14 to $9.465 billion in 2017-18. I am not sure how they get 'cut' from something that goes up by that amount. The budget papers also show that under Labor funding of higher education and research was cut by $6.65 billion. That is a clear example of Labor's duplicity.

So hang your head in shame, Leader of the Opposition, member for Kingston and your colleagues, because your fraud is revealed for all of Australia to see. Hang your head in shame, Senator Helen Polley, for your cruel and deceptive campaign in northern Tasmania to mislead our senior people that pensions and pensioner concessions have been cut and for your attempt to scare current and future higher education students. Pensions and pensioner concessions have not been cut. Higher education funding has not been cut. The government's Higher Education and Research Reform Amendment Bill 2014 will provide education opportunities for thousands more young Tasmanians through access to HELP for undergraduate, diploma and trade courses. It is time that Ms Rishworth, Senator Polley and their colleagues looked to their consciences and stopped using the vulnerable and the young as political pawns to try and score cheap political points.

The truth is that, for the first time, expansion of the HECS-HELP scheme to those doing pre-degree courses—diplomas and associate diplomas—will give opportunity to 18,000 additional students by 2018. My university, the University of Tasmania, has previously applied for hundreds of diploma places, which the government was not able to give them. This higher education reform package now makes it possible for them to have all of the diploma and other undergraduate places that they want.

I believe in the transformational power of higher education—it transformed my life. I came from a disadvantaged background. I did not start studying at university until eight years after I had entered the workforce. This higher education reform package not only spreads opportunity for students but also ensures that no Australian student is left behind and that Australia is not left behind in an increasingly significant global competition. That is why we are expanding the demand-driven system; that is why we are raising funding for universities and that is why this parliament should get behind this bill.

Stephen Jones (Throsby, Australian Labor Party, Shadow Parliamentary Secretary for Regional Development and Infrastructure) Share this | Link to this | Hansard source

When the subject matter of these bills first came before the House, I said some rather unfair things in the context of the budget debate. I characterised the minister responsible, the member for Sturt, as a person who—when he looks at the graduation halls and sees them full of shabby students from the suburbs and regions—sees not the operation of an equity program, but universities that have lowered their standards, because they are undermining the elitism that he thinks should be the feature of the Australian university system. That was a bit unfair because, whilst there is the truth in that statement, it runs the risk of trivialising what in effect is a very serious set of reforms. Make no mistake about it: the legislation which is before the House today is going to have the effect of transforming a sector of our economy, which is one of our greatest exports and one of our most important assets. It is going to be the only driver of productivity for our workforce into the future it and it is that sector of the community which we rely on to produce educated and productive citizens.

I will make a harsh criticism of the minister by saying this: normally you would expect some of the most intelligent contributions in a debate to be made by the minister who is responsible for a particular set of bills. That is not the case in the course of this debate. I had the benefit of being in the chamber earlier today and listening to the contribution of the member for Pearce. I will have a few observations to make about his contribution. I note that he has been in the news quite a bit today. Apparently, he had a spat with the Treasurer in the party room and apparently the Treasurer came off second best. But that is not the force of my argument. The point I want to make is this: an intelligent contribution can be made but we have not heard it from the minister and we did not hear it from the member for Bass just now. I will also have something to say about his contribution and some of the things he did not say. I fundamentally disagree with the points that have been made by the member for Pearce but they do need to be joined.

The measures before the house are a part of a series of reforms in the education space. In part, they relate to the dishonouring of the commitment made by the now government before the 2013 election to match Labor's commitment to implement the Gonski school education reforms. That is the first part a three-pronged education reform by the government. The second part is the streaming of students, in which the government is effectively saying: 'We see a university sector which is there for elite students; and we see a vocational education system for those who are not the elite students and we think it is the role of government to somehow stream and encourage those who would otherwise go to university to go to the VET sector.' That is the proposition that I fundamentally reject. Both sectors have an important part to play, but one should not be given primacy over the other.

The bill before the House does three important things—all of them very dangerous. It takes the cap off student fees, and I will have something to say that the consequence of this. They reduce the Commonwealth per capita funding to universities, via the Commonwealth grants for undergraduate places, by an average of 20 to 30 per cent. This is a point I would make in response to the contribution from the member for Bass: this becomes the baseline for the increase in fees that university students will have visited upon them from next year—this 20 per cent cut in funding becomes the baseline. This must be increased by next year if universities are going to have a chance in hell of keeping their heads above water—a 20 per cent increase to make up to the 20 per cent cut that this government is imposing. The third change is the change in the HECS payment indexation rate and the threshold at you start repaying your HECS debt. The bill changes HECS from the current CPI indexation, which is approximately 2 per cent to the government bond rate capped at six per cent. What this effectively means is a tripling of the interest payments on the ever increasing HECS loan.

These are dangerous propositions and they will serve to put more obstacles in the way of students—particularly students from regional Australia. I have personal experience in this: I attended a regional university; I have the benefit of having put myself through two university degrees by working part-time through both of them. There is no way that I would have attended a university if there was not a first-class regional university in my town to provide me with that first step into higher education. It is going to hit hard in regional Australia—we know that for a fact. The cost of university courses is going to go up, and the vice-chancellors themselves are saying that the cost of fees will go up. My own vice-chancellor—the vice-chancellor of the university of Wollongong, Paul Wellings—says that international student fees will become the yardstick for what our domestic students might pay. He has some experience of a deregulated market, because previously he was the vice-chancellor of Lancaster university when the UK government brought in changes that allowed university fees to be tripled. On deregulation, Professor Wellings has this to say: 'We should expect to see fee hikes across the country. It means the level of HECS debts will rise and I am sure that will be a concern for students and their families.'

I put that to the member for Bass, who has said there is no evidence, and no university vice-chancellor around the country is saying, that fees are going up. Well, there is the evidence, straight from the horse's mouth, from the vice-chancellor of my university. I am sure other universities are saying the same—why on earth would they be arguing for deregulation of university fees and the uncapping of university fees if they did not intend that university fees would go up? It just does not make sense.

We have heard it said that we are scaremongering when we contemplate the prospect of $100,000 university degrees. Leaving aside the examples of the United Kingdom and the United States, there is already a domestic benchmark. Look at the price of a law degree, looking at my own profession, at Bond University. It is the only university in the country that is currently providing a law degree on a full fee-for-service basis to domestic students. It is $127,000 for a law degree from Bond University. You do not need to look overseas; we can look to our own country to see where some of the benchmarks might be. As I have said, we know what the floor on increases in university fees is going to be. The floor on the increase of university fees is going to be 20 to 30 per cent—which is the slashing of funding that we have seen as a result of this bill and as a result of this government's rotten budget—on per capita funding to each university in the country.

The member for Bass had a bit to say about a higher education forum that he attended when the shadow assistant minister for education was in Tasmania recently. I have got to say I was very surprised that he stood in this place and made reference to that forum, because I understand he copped a bit of heat at that forum. In response to the heat and the anger that he received from university students in that forum, he undertook to come back to this place and to lobby his own side—the government—to scrap their proposal to introduce changed interest rates on the HECS loan and to try and moderate other aspects of the package. I ask the member for Bass how he has gone on that score. He made a big promise when he was in his electorate. He was a lion in his electorate but a lamb when he came to Canberra. It is not as if there was not a bit of argument going on in the government party room today! I understand the member for Pearce got up and he had a bit to say to defend his state. Where was the member for Bass? He promised his electorate that he was going to get up and speak about this and there was not a word of it. No doubt he will come back and correct the record on his failure. He will maybe come back in here and explain why he failed either to take it up with the minister, as he promised to do, or deliver for his state.

I said I was going to address some of the claims made by the member for Pearce. I thought he made an intelligent contribution, albeit one that I disagree with. He made an intelligent contribution, which was much more intelligent than the contribution from the minister responsible. He referred to a paper entitled Social justice in Australian higher education policy, authored by Gale and Tranter. It is a good read and I commend it to all of you on that side of the House. Unfortunately, he quoted selectively from the paper. The crux of the member for Pearce's argument was this: we have tried for 100 years to introduce price-based equity measures into the higher education system, but those measures have failed because there is a complete inelasticity of demand when it comes to the demand for higher education services in this country. Put in layman's terms, the member for Pearce's argument is simply this: we have tried equity measures by providing some regulation on price; that did not work and in fact it does not matter how much you charge, as people still demand and pay for a university degree and the HECS scheme introduced by Labor is helping to offset any inequities in the scheme.

I did read the paper with great interest. The claim that we have not seen any improvement in equity is simply not true. The authors themselves have said that we have seen great advances in improving the equity outcomes for higher education over the last 50 years, as a result of successive government policies. That is, I have got to say, a tribute to the Menzies government—who had a commitment to higher education in this country, to building new universities and to expanding access, so I pay tribute to those on the other side for that—but it is also a tribute to the Whitlam government, who had a vision for opening up access to educational institutions in this country, and to the reforms of the Hawke-Keating and Rudd-Gillard governments.

The member for Pearce said that the equity measures introduced in relation to higher education had had no impact on demand or the entry of people from low-SES backgrounds into the university system. Although he did give an intelligent contribution, he did not quote the observation from the authors that our failure to improve the participation of people from low-SES backgrounds in our higher education system did not have as much to do with our higher education pricing policy as what we were doing at the primary and secondary school level. Effectively, what the authors are saying here is that if you invest in school education, you will see more people from modest backgrounds finding their way into university.

I return to where I started. You need to have a joined-up policy when it comes to education. There are the Gonskis that these guys like and the Gonskis that these guys do not like. Actually, Gonski had a vision for the entire education system. He said, 'Invest in school education and you will see a greater improvement and a greater participation of people from low-SES backgrounds into the higher education system.' He is right. This is a message to those on the other side, including the member for Bass. (Time expired)

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I wish to make a personal explanation.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Does the honourable member claim to have been misrepresented?

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

I do.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

The honourable member may proceed.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

The member for Throsby just made a number of incorrect claims in relation to a forum on 21 August in Launceston. The incorrect claims were that this was a university forum. There were no university students at the forum.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, I rise on a point of order. There is a time and a place for the type of intervention that the member is trying to undertake. There is no provision for this under the standing orders, and he is not permitted to do this.

Luke Hartsuyker (Cowper, National Party, Assistant Minister for Employment) Share this | Link to this | Hansard source

Mr Deputy Speaker, the good member sought your indulgence, and members opposite did not object

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

The honourable member may proceed, and he should be succinct.

Andrew Nikolic (Bass, Liberal Party) Share this | Link to this | Hansard source

The member for Throsby made a number of incorrect statements in relation to a forum that was conducted at Launceston College on 21 August. He said that there were university students at this forum. That is incorrect—they were year 11 and 12 students. He said that there was 'heat' from the floor of the forum. That is not correct—it was a very civil forum with questions from the floor and panellists responding. He has also obviously missed my comments in the media where I have been advocating for a better deal for my constituents with the education minister. The matter he is referring to has been reported in newspapers in my electorate, so I am not sure what he is talking about with there being a line here or whatever he said there. The fact is that he has been caught out misrepresenting me.

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

To put some context on that charade, the member for Throsby clearly asked the member for Bass to explain himself, and the member for Bass has eloquently explained himself. There is no need to interrupt him, member for Throsby. You called for it, you asked for it, and you got it. You got the facts straight up from the member for Bass.

It is a privilege to rise tonight on this very important set of education reforms from a competent reforming education minister, Christopher Pyne. It is pertinent to note that at the time of his recent birthday we saw some student protests around the country. I think it is emblematic of the case against these generation-breaking reforms—these leading reforms that are going to be once-in-a-generation according to the Go8—that the protesters protesting against his birthday could not even burn an effigy of the Minister for Education effectively. It is emblematic of the case against these measures because the Labor Party know in their hearts that these reforms are absolutely correct. While the member for Throsby says 'Go and read the social justice paper', we are too busy reading Dr Andrew Leigh's Imagining Australia book. It is a book I would recommend to you—it is a good read. I have a signed copy in my office, signed Dr Andrew Leigh himself, and he said:

A deregulated or market-based HECS will make the student contribution system fairer because the fees students pay will more closely approximate the value they receive through future earnings.

I have to say to the Labor Party that I could not have expressed that better myself than the shadow Assistant Treasurer, Dr Andrew Leigh, who says that a deregulated or market-based HECS will make the student contribution system fairer. That is the whole point of the government's reforms. It is important to note at the start of this debate that the government is increasing access to higher education opportunities. We are increasing those opportunities to tens of thousands more Australians. These education reforms are needed. They are necessary. They are necessary because the Labor Party started the process of deregulation. To anybody who is listening, to understand this debate we are having today we have to understand that Labor deregulated student numbers at universities. Once you have deregulated student numbers at universities, you have to deregulate the fees—you cannot simply deregulate student numbers without having a mechanism to fund those numbers of students. This is the exact position of the Group of Eight chairman and ANU Vice-Chancellor, Ian Young, who said:

We have created a perverse incentive that rewards universities for enrolling as many students as possible and teaching them as cheaply as possible.

Deregulation is a game-changer, as he describes it. It is a game-changer because you cannot deregulate the numbers attending university without having a finance mechanism for governing those numbers at university, which of course is the competition between universities. The competition will bring great benefits. There will not be $100,000 degrees in Australia until that is appropriate in the market. There will be fees set by universities according to the demand, and, to address the concerns of the member for Throsby, regional universities will be right in the competitive space. As many of the vice-chancellors have acknowledged and publicly said, regional universities can now compete on cost to maintain numbers as a competitive advantage. So this is going to not be bad for regional universities, as you would think from listening to some of those opposite—it is going to be good for regional universities. It is going to be a winner because they can compete on things that the big universities cannot compete on. I know that is the case from speaking to the UWS—the University of Western Sydney—one of the most competitive, innovative, modern universities in the country. It competes on cost, it competes on facilities and services and it competes on degrees. I think this reform will allow UWS to compete with the bigger universities—the University of Sydney and the University of New South Wales in Sydney—in a way they are unable to currently.

There is nothing to fear here, because the government is preserving equality of access. Anybody who is considering this package of reforms has to understand that unless equality of access is preserved—that is, no-one will pay anything for a degree up-front if they do not want to; nobody pays a cent up-front for a degree if they do not choose to—then you have no equity access issues because, as per the current system, you are making a contribution to your own education. I have to say, without speaking out of class, that every single member in this chamber agrees with that. Every single member in this chamber agrees that a student ought to contribute to his or her own education. There is no such thing as a free education. The taxpayer has to foot the bill and at the moment we know, as the minister has put very eloquently, that 40 per cent of contributions is made by the student and 60 per cent is made by the taxpayer. We are changing those arrangements under these proposals to a fifty-fifty arrangement. Given we know that university educated people who successfully graduated on average earn more over a lifetime—

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

Order! The time being 8 pm, I interrupt proceedings. Earlier today the honourable member for Throsby drew the attention of the Speaker to the state of the House. In accordance with standing order 55(c), I will count the House if the member so desires. The member for Throsby not being present the matter lapses.

Ed Husic (Chifley, Australian Labor Party, Shadow Parliamentary Secretary to the Shadow Treasurer) Share this | Link to this | Hansard source

Mr Deputy Speaker, I draw your attention to the state of the House.

(Quorum formed)

Alex Hawke (Mitchell, Liberal Party) Share this | Link to this | Hansard source

I thank the member for Chifley for bringing into the House the Minister for Education, the sponsor of these important reforms, because Paul Kelly, one of the most respected and trusted journalists in the country, describes these reforms as 'a game changer'. He knows that higher education reform is absolutely necessary in this country and this government and this minister are delivering those reforms for the benefit of students around Australia. Thank you member for Chifley because these members here know that higher education reform is absolutely vital—that is, your government deregulated student numbers; we now need to deregulate the fees. That of course will ensure greater opportunities for access and also greater opportunities to have a world-class education sector.

It is fantastic to see so many enthusiastic supporters here of these reforms. There are almost as many people here tonight as those who attended the student protest against Christopher Pyne at Sydney university when I was there—almost as many and they are almost as fervent. Watching the student protest against the minister and the government is almost like watching a throw-back to the 1970s—railing against the machine, raging against the machine, protesting against protesting. What are they protesting about? They do not even know because many of these students are professional left-wing students on campus at small gatherings inspired by former compulsory unionism, sent out by the Labor Party against these reforms, which are absolutely necessary and vital. I know most young people in this country will go forth and ask, 'What are the benefits to me of these reforms?' They will understand that they can make a rational choice about what is best for them in their higher education field—that is, they will consider, 'What is the cost of my degree and how much can I afford to pay?' When earning $50,000 you are only paying two per cent of your income in repayments. That is a very small amount for the taxpayer to ask back from $50,000. It is a reasonable amount. It is a practical amount. It exists in arrangements almost similarly at the moment. It is not a question of changing the system. The Labor Party agrees that there should be a contribution to students' education made by students. We are saying it should be 50-50, not 60-40.

It is not the outrageous attack on education that the Labor Party wants to make this. They know that, as most of the vice-chancellors know, as most of all of the education experts in this country, including David Gonski, understand. I think the member for Chifley in particular well remembers David Gonski. I remember his orange 'I give a Gonski' T-shirts, which the member for Chifley proudly supported all through the last election. Well give a Gonski, member for Chifley! Give a Gonski and understand that these higher education reforms are absolutely necessary! If I could borrow your T-shirt, I would be happy to wear it for you and to make sure that you understand these reforms are supported by David Gonski. He understands they are necessary. He understands that they are the next evolution of education reform in this country, that reform is not something we should always instantly fear and run away from but something we can and should embrace.

We have seen the Labor Party unwilling to even have a discussion about higher education reform, even though they deregulated student numbers. So they have created an incentive. They introduced HECS. They introduced co-payments. We have the shadow assistant Treasurer talking about how the deregulation of HECS fees will be of great benefit and will be—let us use the magic work—'fairer'. The student contribution system will be fairer on deregulated market based fees. Remember 'Forward with fairness'? Remember the fairness line you have been running against this government? The shadow assistant Treasurer says a deregulated system will be fairer for students. It is fairer for students. It enables them to make rational choices. It enables them to think about what the best degree is for them, and what the cost is that they are going to have to repay over their lifetime, and make an appropriate choice. It allows universities to compete with each other and offer lower fees. It enables our university system to have the benefit of competition and, because equality of access is preserved, no student in the country, no-one from a disadvantaged background, ought to fear anything this government is doing, because equality of access is preserved for all Australians. In fact, we are massively expanding access, and that is being absolutely overlooked by the members opposite in some of the commentary.

There are many other important parts of these reforms that are essential. No student will be paying a dollar up-front, and with the HELP system they will not be paying until they are earning over $50,000.

In summary, there are many things to say about these education reforms. The scare campaign is just that—it is a purely fear-driven campaign. It is a fear-driven campaign that is not catching on.

When you look at the facts of how the system will operate under this reform package, no student will be unable to access the system. Students will be able to make rational choices about their future. They will put more thought into what degree they are going to do because there will be a cost imperative. So degrees that take longer, that are going to provide more income, will cost more—that is a logical outcome of this. All of the senior medical degrees will cost more; there is no doubt about that. But that, of course, will mean that you will have a rational decision to make about how much you are going to earn over your lifetime, and you will invest in the choice, the right choice, for your education up-front. There is nothing to fear from these reforms except fear itself.

But when you have David Gonski, and the shadow Assistant Treasurer, and the university vice-chancellors, and the Group of Eight—the peak body representing universities in Australia—saying that these are not just necessary but absolutely game-changing reforms that will produce huge improvements to the education system in this country and will not disadvantage regional campuses or regional students, then really the Labor Party is out of arguments. Their only argument is: they are in opposition and need to make some political capital to try and return to office. This will not be it.

I will make this prediction: there will be negotiations with reasonable people in the Senate; these reforms will happen. If the Labor Party manages to block them, these reforms will happen one way or the other. But I believe that the Australian parliament ought to take advantage of this minister's and this government's opportune putting forward of these very important reforms, enabling our education sector to become world-class and compete on the world stage.

Ian Goodenough (Moore, Liberal Party) Share this | Link to this | Hansard source

The question is that this bill be now read a second time. I call the honourable member for Franklin.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

I rise to speak on the government's Higher Education and Research Reform Amendment Bill 2014—I think as probably one of the very few people in this place who has never had an education at a university. As I think back on that decision that I made not to go to university, I recall my first speech in this place, where I said:

Looking back at my experiences I came to realise that access to education and information was just as big a barrier to equality as being poor was.

In fact, I went on to say that I would:

… work to ensure that all people have access to a quality education—that the barriers are removed and that quality education remains a right and not a privilege.

I went on to say that:

These barriers are more than just economic. Access to different experiences is also vital, as is providing support services enabling families and children to have choices—real choices—about their own future.

That is what really concerns me about the changes that are in this bill, because I believe that these changes will profoundly affect people in regional and rural Australia, that they will profoundly affect people from my home state of Tasmania, that they will affect people from low-income households, and that they will also profoundly affect women.

I am proud to stand in this place and talk about Labor's higher education reforms since I have been in this place and the reforms of Labor governments past. Labor has always had two things at the heart of our reforms: equal access for all, and quality of education and research at our universities. Unfortunately, I think this bill will fail these two tests.

Under Labor's reforms there was an increase nationally of children from low-SES backgrounds attending university—an increase, indeed, of 21 per cent. They also saw Indigenous students increase by 26 per cent and regional students by 30 per cent. Labor increased funding for universities in our last term in office from $8 billion in 2007 to $14 billion in 2013. It is a record that I am and should be proud of. But the changes in this bill will undo many of these achievements.

So what is the government actually doing with this bill? Well, to start with, this bill represents broken promises, because we all remember, of course, the promise of 'no cuts to education' and then of the 'continuation of current arrangement of university funding'—clearly, two promises broken with the introduction of this bill.

This legislation represents a massive funding cut to higher education in this country—in total, $5.8 billion in cuts from higher education, teaching, learning and university research. This legislation is making these cuts by slashing funding for Commonwealth supported places in undergraduate degrees by an average of 20 per cent and, for some courses, by up to 37 per cent. It is also reducing the indexation arrangements for university funding to CPI in 2016, down from the appropriate rate the previous Labor government had introduced. This means $200 million in cuts over the forward estimates period, but is a major contributor to the $2.5 billion per annum shortfall in 10 years' time, according to the Parliamentary Budget Office. There is the cutting of the Research Training Scheme, by $174 million—the scheme which supports training of Australia's research students, our scientists of tomorrow. There is also the introduction of fees for PhDs.

And of course there is the change to the interest rate on HECS, from the current CPI rate to the 10-year bond rate, up to six per cent. This highly regressive measure applies not only to existing and future students, but to anyone who will still have a HECS debt when this measure passes. So why is this so bad? Well, existing HECS- and HELP-debt students—currently about 1.2 million people in Australia—will be hit with thousands of dollars extra in interest on their loans after 2016.

Both existing and new HECS-HELP debts will feel the impact of the Abbott government's changes to interest rate indexation from CPI of two per cent to the government bond rate, capped at six per cent. This will be applied retrospectively and will not be grandfathered, so all current and former students with a HECS debt will be hit by these changes.

Then we heard a lot of kerfuffle from the other side about how deregulation will be great and will not lead to substantial fee increases. But the estimates range from 30 to 60 per cent, depending on the course and depending on who is doing the research. But whether it is the Group of Eight or the NTEU, everybody agrees that fees are on the increase.

We know from looking overseas the impact this has on students. In Britain, fees were deregulated in 2012 with a cap of 9,000 pounds. For the 2015-16 academic year, there will be only two universities, out of 123, that will not be charging 9,000 pound fees. In the United States, the system Christopher Pyne seems so keen to emulate, university fee rises are out of control and student debt now exceeds credit card debt. We do not want that here in our country. So we know that the cost of a degree will go up substantially and that this will deter students from low socioeconomic backgrounds from actually attending university.

The imposition of a real interest rate, when the implications of this set in, will also deter those who are likely to earn lower graduate salaries: teachers, nurses et cetera—and this will disproportionately affect women who undertake these courses. Bank of America Merrill Lynch chief economist Saul Eslake has warned of the consequences of higher interest rates on student loans, particularly for women:

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.

We are talking about the decisions that people make about whether or not they should get a university degree, so it will certainly be deterring people from my home state of Tasmania, where people are on low incomes.

We know that these changes will impact regional Australia. Former Vice Chancellor of the University of Melbourne and eminent higher education specialist, Professor Kwong Lee Dow, has said that the government's package means that 'students will be paying significantly more, and rural and regional students will be disproportionately affected'. Deregulation of the student contribution is unlikely to place many regional universities in an advantageous position given that price will be seen by prospective students as a proxy for quality—that is, that higher fees are associated with higher status—even though that may not be the case.

Regional universities recruit up to 75 per cent of their domestic students from the regions they serve, where students and their families tend to be financially risk-averse. The key factor for students not completing their studies usually relates to their financial situation.

I want to talk a little bit about the impact of these changes on my home state of Tasmania. We are in a unique position where we only have one university. We have had come into this chamber two other members from Tasmania, the member for Braddon and the member for Bass, to talk about these higher education reforms, and I notice the member for Lyons is in the chamber at the moment. Interestingly, the Vice Chancellor of the University of Tasmania is concerned by these changes. Indeed, he said:

The ability of the University to recoup those reductions in revenue through fee premiums may be limited by the economic circumstances of the island. …

… Those subjects that we do not teach, the research that we do not conduct, or the social programs that we do not support are unlikely to be replaced easily by other providers.

That means they will not be taught in Tasmania.

The vice chancellor has also indicated that University of Tasmania's budget will be cut by approximately $30 million to $35 million per annum—each and every year. The University of Tasmania is one of Tasmania's largest employers and we know that Tasmania has the highest unemployment rate in the country. So there are grave concerns that these changes will impact right across the state and right across the economy in Tasmania.

Indeed there is so much concern that we have had the member for Bass come out publicly and talk about his concern. We heard the member for Throsby refer to it earlier. Even the new Liberal state education minister in Tasmania is pushing for a special deal for the University of Tasmania. Just a few weeks ago he requested an urgent meeting with the federal Minister for Education to talk about how these cuts will impact the University of Tasmania. The state government is so concerned, and we know that others are so concerned, that they are talking about what Tasmania needs to compensate.

For Tasmania to require compensation means that it is actually going to hurt the state. It is going to mean that Tasmanian students will be worse off if this bill goes through. We know that Tasmanian students are already from lower socioeconomic backgrounds—higher than the national average. We know that Tasmanian students already do not have a lot of choice. We know the vice chancellor has talked about closing campuses in the state. We know that there has been a discussion about splitting the university from the research and the teaching, so that the university may be viable under these changes. There is grave concern right across the Tasmanian economy and indeed right across the Liberal Party and all the parties in Tasmania about these changes. There is concern everywhere in Tasmania.

It is interesting that the member for Bass talked about going to a forum on higher education reforms in Tasmania. I went to a forum there. I spoke to the students at the campus in Hobart. Jackie Lambie was there. The member for Denison was there. I was there. The state Labor member was there. But there were no Liberals in sight.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

None of us got invited.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

They did get invited, and they all turned it down. They were called by the organisers of the event, Member for Lyons.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

It was only 24 hours beforehand.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

The Tasmanian senators were given much more notice than that. They were invited to the forum, but they would not front up.

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

It was a setup.

Julie Collins (Franklin, Australian Labor Party, Shadow Minister for Regional Development and Local Government) Share this | Link to this | Hansard source

Why wouldn't they front up? Because they did not want to hear the concerns of the students at the University of Tasmania about these changes

Everybody on that panel heard the concerns of the Tasmanian students and everybody on that panel undertook to not support these higher education changes—because we know that they are bad for Tasmania. We know that they are bad for the University of Tasmania. We know that they will be bad for unemployment in Tasmania and we know that they will be bad for the Tasmanian economy.

These changes are bad across the board. We have heard from so many people that these changes are bad. Australians are against these measures. Have any of the members opposite actually talked to people in their electorates? Do they know how unpopular these changes are? Have they actually spoken to the mums, the dads, the aunts, the uncles and the grandparents about their aspirations for their children and how frightened they are about these changes? Have they actually done that? Did they do that during the parliamentary break? Did they talk to anybody in their electorates? From the way they have come in here and spoken on this bill, I would think not.

If they have actually talked to people, clearly they have not been listening because they could not then come in here and say the things that we have heard from the members opposite. They could not possible come in here and say that there is widespread support for these reforms—when we know there is not. They could not possibly come in here and say that these reforms are not going to lead to higher fees—because they will. They could not possibly come in here and talk about these reforms and how good they are, knowing that students will have higher debts. I do not understand how so many of them are willing to stand up and defend this appalling piece of legislation. I absolutely cannot understand how they are doing it.

Australians are absolutely against the measures in this bill that I have spoken about. They are against cutting public funding to undergraduate courses. They are against $100,000 degrees for their family members. They are against these things because they understand the value of an education. They understand that education should be available to everyone and that, no matter their means, no matter where they come from and no matter whether they live in an island state, they deserve the opportunity of a university education if that is their choice. I proudly stand and say that I and Labor will be opposing the measures in this legislation.

Peter Hendy (Eden-Monaro, Liberal Party) Share this | Link to this | Hansard source

I will start this speech by saying what I said in a speech earlier today in this chamber, which is that I have a question for the Leader of the Opposition, and that is: 'Where is the money coming from, Mr Shorten? Where is the money coming from to pay for all these things that you think need to be done?'

I am very happy to speak on the Higher Education and Research Reform Amendment Bill 2014 and support its second reading. This bill forms part of the significant macroeconomic reform contained in the May budget. I believe it is both necessary and vital for the Australian economy. We all know that a first-class higher education system is a necessary condition for maintaining a First World economy. It is the difference between having a wealthy and an also-ran country. Australia is a first rank economy and one of the most developed in the world. That is not a matter of luck. Many countries have abundant natural resources but have poor and weak economies because they do not possess the intellectual fire power to utilise those natural blessings.

As John Howard often said, economic reform is like participating in a running race with an ever-receding finish line. The reform task can never end if Australia is to stay in the front rank of nations. As a former chief of staff of a former minister for education, I know a little bit about this issue. At the time I was in that position during the Howard government, we tried to initiate some university reform. It was a hard task and we got a little way down the road. I wish all strength to the current Minister for Education for the hard battle he has ahead. He can be assured that members on this side of the House understand the task at hand and fully support him.

Some people point to the fact that we have 39 universities and that the higher education sector in Australia is robust. However, I note that when I lived and worked in Bahrain, in the Middle East, they also had 39 universities for a population of only 700,000 indigenous people and another 700,000 foreigners. However, that was no indicator of quality, I can assure you.

This package of reforms has a large number of key elements, and I want to catalogue them to indicate the breadth of the reform process that is going on here. The government is expanding the demand driven Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees—costing $371.5 million over three years. We are extending Commonwealth funding to all Australian higher education students in non-university higher education institutions studying bachelor courses—costing $449.9 million over three years. Over 80,000 students each year will be provided additional support by 2018. This includes an estimated 48,000 students in diploma, advanced diploma and associate degree courses and 35,000 additional students undertaking bachelor courses. This is a huge reform.

Putting a lie to the opposition's scare campaign, there will be more opportunities for students from low socioeconomic status backgrounds through new Commonwealth scholarships—the greatest scholarship scheme in Australia's history. This would effectively mean free education for the brightest students from the most disadvantaged backgrounds.

Critically, we will be freeing universities to set their own fees and compete for students. This competition will enhance quality and make higher education providers more responsive to the needs of students and the labour market. It is our firm view that, when universities and colleges compete, students win. That is backed up by historical evidence. Just ask the Labor Party members who originally introduced the fee system with the Dawkins reforms in the Hawke government. We are strengthening the Higher Education Loans Program, which sees the taxpayer support all students' tuition fees upfront and ensures that students only repay their loans once they are earning a decent income—that is, over $50,000 per annum. As the minister says, no-one needs to pay a cent upfront. Removing all FEE-HELP and VET FEE-HELP loan fees which are currently imposed on some students undertaking higher education and vocational education and training will help thousands of students.

We will secure Australia's place at the forefront of research, with $150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy; $139.5 million to deliver 100 new four-year research positions per year under the Future Fellowships scheme; $26 million to accelerate research in dementia; $42 million to support new research in tropical disease; and $24 million to support the Antarctic Gateway Partnership. These are a fantastic boost to research and will be complementing the $20 million Medical Research Fund that the government is also setting up.

Of course we also have to make some tough decisions. We will be reducing the Commonwealth Grant Scheme by 20 per cent and we will be adjusting the interest rate on student HELP loans—the money taxpayers lend students up-front for their tuition—to instead the 10-year bond rate with a capped maximum of six per cent, away from the current interest rate which is CPI. I note that taxpayers borrow the funds at the bond rate.

My electorate of Eden-Monaro is a rural and regional electorate so a lot of constituents, alarmed by the scare campaign of the ALP and Greens, asked me what the implications of the changes will be for regional areas. I can assure my constituents that the reforms are overwhelmingly positive. The government's higher education reforms offer many advantages and opportunities for regional universities and the regional communities they serve. Many will take advantage of the new-found freedom to offer funded places in higher education diplomas, advanced diplomas and associate degrees. This will advantage people in regional communities, especially those who might not have done so well at school but who deserve the chance to develop their skills and prove that they have what it takes to succeed at higher education.

In addition to providing pathways to higher degrees, many sub-bachelor qualifications provide a ticket to a job in their own right. They provide training for engineering technologists, paralegals, construction managers and aged care professionals—the kinds of skills that many regional communities need. To attract more students, some regional institutions may seek to offer their courses at a lower cost than their city counterparts. If towns and cities get behind it, this could see more students from urban areas choosing regional cities and towns to undertake study, which would be a boon for regional economies. Indeed, the Cooma-Monaro Shire Council in my electorate has been working with the ANU and the University of Canberra in just this manner. The Eurobodalla Shire and the Bega Valley Shire in my electorate have been talking to the University of Wollongong as well as the other last named two universities.

The government's higher education reforms are also likely to see a bigger higher education footprint in regional areas with non-university higher education institutions including some TAFEs and private colleges being able to offer subsidised places to students. TAFE and universities have the freedom to work together to deliver the kind of education opportunity students need. The new Commonwealth scholarship scheme will ensure that more students from regional areas have the opportunity to study at a range of universities. The scholarships will help to cover fees, living expenses and relocation costs as well as mentoring and tutorial support.

In reducing per student funding under the Commonwealth Grant Scheme, the government has taken care to ensure that the reduction does not impact regional universities disproportionately. Teaching and nursing courses, which are the mainstay of many regional universities, are particularly looked after. But you do not only have to take the government's word for this matter. There are many endorsements of our position. For example, on 13 April this year the Regional Universities Network put out a media release welcoming the release of the review of the demand-driven student funding system otherwise known as the Kemp-Norton report. The regional universities network stated:

The provision of demand-driven places to non-university providers could build on the significant partnerships or dual arrangements that already exist between regional TAFEs and regional universities. More options for higher education study including sub-bachelor pathways will be available to regional Australians including low SES students.

The reforms would be good for regional Australia. More highly skilled graduates are what our economy and communities need. Extension of the demand driven system to sub-bachelor places would allow universities to be more responsive to the needs of less academically prepared students.

The Regional Universities Network chair, Prof. Peter Lee, noted in another release on 29 April:

… given the current funding climate, RUN is open to robust discussion of fee deregulation in a broader context of university funding, including research and regional loading funding.

If there is fee deregulation, there should also be support, including scholarships, to ensure the continued growth in the participation of low SES students in higher education.

That is what they asked for and that is what we are doing. Or, as Prof. Scott Bowman, Vice Chancellor of the Central Queensland University said to The Australian newspaper on 2 July 2014:

There are two types of universities. Those that see change, wring their hands and say, 'Oh woe is me,' and then there are others that lick their lips and say, 'We are a lip-licking university.'

Prof. Jim Barber, former Vice-Chancellor of the University of New England, said on ABC radio on 19 May 2014:

If premium Universities now do start to lift their fees substantially, then the regional Universities and UNE in particular, if it holds its prices, might find that it can compete on price and retain its student load.

The good professor went on to say in an article published in the Australian Financial Review on 16 June 2014:

Taken together, these budgetary and regulatory developments should increase the range of educational options on offer in Australia providing students with genuine choice rather than Mao suits.

And Paul Wellings, Vice-Chancellor of the University of Wollongong, wrote in an article in the Australian Financial Review on 23 June 2014:

…there is a real chance that [Education Minister] Pyne's reforms will ... the sector while maintaining our ability to offer university education free at the point of delivery to all students, irrespective of their social circumstances.

That is a ringing endorsement both on the need for change and what the government is actually proposing.

The ALP has been running an unprincipled scare campaign on these necessary reforms. The genesis of this scare campaign runs deep in the ALP. Interestingly, that astute political observer, Paul Kelly—the member for Mitchell was referring to him with respect to another quote—comments in his recent book, Triumph and Demise, on the character of the Rudd-Gillard-Rudd circus of a government. On page 57 he wrote:

But Beazley—

That is Kim Beazley, the former Leader of the Opposition and when he was the ALP leader—

made a contribution that shaped Labor's thinking for more than a decade—his 2001 Knowledge Nation policy, a manifesto for office. Its central idea was that the next wave of economic reform would arise from public investment in education, skills and technology. Beazley was seeding agent for the Rudd Gillard 'education revolution'. His starting position, critically, was that the Hawke-Keating pro-market reforms were completed.

But what was Kelly's assessment of that change? He made this observation:

It implanted a false choice in Labor's head: investment in education was essential but not as the substitute for the next round of market-based economic reform.

And who in the Labor Party did not actually support what Kim Beazley was saying those many years ago? It was actually someone who is on the front bench of the Labor Party now, the shadow assistant Treasurer, the member for Fraser.

In a book entitled Imagining Australia: ideas for our future, which he co-wrote with a number of other people, he said a number of really interesting things. On page 104 he said, 'Contrary to popular opinion, HECS did not reduce the fraction of poor students attending university, giving the lie to those who say that abolishing HECS would improve educational access for students from poorest families.' He also said on page 105, 'Indeed we believe that HECS should be extended to cover those tertiary students not currently covered under the scheme, including those attending TAFE, accredited private trainers and the small number of private Australian universities,' something that we are actually doing in the Minister for Education's reforms.

He also said this—amazingly. How he remains on the frontbench of the Labor Party I do not know. He said on page 106, 'We propose that Australian universities be free to set student fees according to the market value of their degrees. A deregulated or market-based HECS will make the student contribution system fairer, because the fees students pay will more closely approximate the value they receive through future earnings.' Well—very good, member for Fraser. That is really what we are proposing in these reforms. I hope that he will actually cross the floor and vote for us when we get to the time of the division, which I expect will happen because of, as I said, the unprincipled scare campaign of the opposition on this matter.

In conclusion, I strongly endorse the reforms of the Minister for Education. They are far-sighted and will massively boost Australia's economic performance in years to come. I commend the bill to the House.

Lisa Chesters (Bendigo, Australian Labor Party) Share this | Link to this | Hansard source

This Higher Education and Research Reform Amendment Bill 2014 and its reforms in it speak volumes about the kind of political party that you are. And this bill and its reforms can be no greater example of the difference between Labor and the Liberals, of the difference between Labor and the Nationals and, quite frankly, of the difference between Labor and the Greens.

Labor has always stood in this place and argued that more people—people from working-class backgrounds; ordinary people—should have access to and an opportunity for tertiary education. As of the people on this side of the House have said, it did start with Whitlam when he gave working people and their children the opportunity to go to university to become teachers and nurses. It continued with Hawke and the Dawkins reforms, which gave more working people, including me and many in this House, the opportunity to go to university by creating more universities, more courses and more opportunities.

It is wrong for the government to say that this is just an extension of that original idea because the fees that they are proposing to charge will price out people like me and the next generation of ordinary people from attending university. The cost of the course becomes a barrier if it is too much. This is not the original version of the Hawke-Dawkins reforms for higher education. This is a Liberal agenda that seeks to exclude people from university, and which will have the reverse effect of encouraging people to go to university.

I note that there are a couple of other regional MPs in the House. I do not think that they understand that this bill puts regional campuses under threat. I will just explain about a few areas where I believe that my own campus in Bendigo, which is a campus of La Trobe University, as well is a number of other campuses, could be at risk, not of immediate closure but from a slow death as numbers dwindle because the cost of going to higher education will become a debt—a debt for life. It is wrong and divisive politics to say to a person that it is either a house and a mortgage or it is a university degree. That is the big difference between this side of the House and that side. We have always stood up and said that everybody should have the opportunity to go to university if there is a place at that university made possible by the former government—by the Gillard government—and if you have the pass mark and the entry score. But what the coalition is doing is saying that it now comes down to price.

The previous speaker talked about how a strong economy needs fine intellectual power. It needs to have an intellectual powerhouse. I agree, but the difference is that they are now saying you need to have a decent income, you need to have a trust fund, you need to be part of the right boys' club or you need to sign yourself up for a debt for life to have that opportunity. They have now put a price on whether you take up that opportunity.

When we talk about regional universities, they are the ones that I feel will be most at risk. At my own campus at La Trobe we recently met with a number of students and just asked them why they chose Bendigo. For a lot of them it was because it was the local campus. There are a higher proportion of first-in-family students who go to regional university campuses. There are a higher proportion of mature-age students at regional campuses, and that is because they choose to go to their local campus because that is where the kids are and because that is where they have established their lives. But these campuses are also quite small, because they have smaller townships that they support and so have fewer students who go to them.

Last week at Bendigo the students said to us that they fear with these reforms that they are not willing or not able to sign up to a debt for life. They fear that if too many students do not choose to go to this campus that this course could close and that is something that the other side will not talk about when they talk about deregulation. We have seen it happen in the TAFE system in Victoria, where it has been opened up. They have deregulated fees and they have cut funding—exactly what this government is trying to do at the university level.

What has happened to the Bendigo TAFE? They have lost a third of their courses, fees have tripled and student numbers have dropped. When you triple fees, student numbers drop because people cannot afford them. Therefore, courses face closure because the university cannot turn a profit if they cannot get enough students studying. It will be a slow death for our universities in regional areas if these reforms go through. But the other side have suggested, 'Don't worry, you can get into the space that has been vacated by TAFE.' The previous speaker suggested that we should go back even further, past Hawke and Dawkins reforms, where regional communities could deliver not university degrees but go back to diplomas, go back to training paralegals. Important, but regional universities and regional centres should not just be the provider of sub university degrees; they should have the funding and the support to provide real degrees—degrees that they are providing now.

My mother's example is probably one of the strongest examples of Labor's plan for higher education compared to the Liberal's. Mum grew up in Western Sydney in Mount Druitt. She had to leave school at 16 to get a job to help the family pay the bills. She finished her high school through night school. She had the marks to get to university but could not because her family needed her wage, so she deferred the opportunity to go to university. When I was young, my parents owned a small business. When they sold that small business and she tried to get a job, she was told she did not have the qualifications, so she took a job as a cleaner.

At the age of 43, she decided: 'My girls have left home. They are off at university. I am going to go to university.' Living in a regional area, she went to her local regional university. If these reforms go through, I doubt whether that university, the University of the Sunshine Coast, will be there in a decade. It is one of our newest universities and it will struggle to have the student numbers. So mum went to university at the age of 43. She did her undergraduate. She got top marks and then enrolled in the University of Queensland to do her honours then her PhD. Today she is in Barcelona speaking at a conference on wealth inequality and it is linked to education. She is an academic at the University of Canberra.

She has a career because she enrolled at university as a mature age student after the market said that she did not have enough skills. I asked mum, 'Would you still have gone to university if this package had gone through?' She laughed and said, 'Lisa, would the debt pass to you?' What would her debt be under this reform for, first, an undergraduate then an honours then a PhD? What would the debt be under these reforms and would she earn enough in her career to pay it off? Who does it go to? She has a HECS debt currently that she is paying back, but what would it be under these reforms? If this package had gone through under the Howard government, like the previous speaker said he tried to do in his former role, she would still be cleaning the Buderim private hospital and not contributing—and not overseas right now speaking on her research as a proud Australian.

Perhaps that is exactly the person that the government does not want to go to university—a working-class kid who gave up her chance at university who grew up in Mount Druitt who had to drop out of school to support her family. This is just one story of hundreds of thousands of stories of people who, when they had the opportunity and when the circumstances in their lives enabled them, chose to go to university. On this side of the House, we do not think that that should be defined by any age; it should be when you choose to go. On this side of the House, the Labor side, we do not believe that the size of your pay packet or your post code should decide where or when you go to university.

It is not just me speaking out about this in my electorate; it is also a number of people. Rachel from the La Trobe University says that she writes to me not only on behalf of herself and her friends but also on behalf of her brothers. She says: 'We are all aged between 18 and 22 and completely outraged by the government's proposed cuts to higher education and also the real rate of interest that they plan to attach to our debts. Most of us were really concerned about the debts of our courses as they currently are, but are now seriously thinking about dropping out because of these reforms if this appalling budget and the measures go through. We simply do not believe we can afford to pay it back and when will we pay it back?'

The government are purely in denial about the fear that people have around these debts—a nursing degree tripling in fees, a teaching degree tripling in fees. These are people who are worried about the future. They are worried because they are talking to their universities and they are already being told that this will be the cost of education if these reforms go through. The goal of any government should be to ensure that every student no matter their post code or the size of their bank balance, or their parent's, has the opportunity to go to university. Background and circumstance of their birth should not be a barrier to an excellent education and every Australian should have the opportunity to contribute to our national success.

The other side talk about being able to pull yourself up by your boot straps, yet they put barriers in place and want to restrict people by imposing this system. They are trying to engineer a new generation of university students by excluding so many who simply cannot afford to go to university under these reforms. We know that deregulation of university fees will not lead to lower fees. We know that because of what we have seen occur in the UK. Deregulation in 2012 actually had a cap of £9,000. Yet despite the cap we have still seen a drop in university students. Even in the UK, they were willing to put a cap on fees. This government has not even gone there with a cap.

One of the things that people fear the most in regional campuses is what they call the Americanisation of our education system and that is exactly what this government has done. That is another thing it does not understand; this is not what regional people want. They do not want to become a little America. What they want is a fair go and the opportunity to go to university.

In conclusion, I believe that Gamal Babiker's words expose who, as a result of these reforms, will be excluded from higher education. Sixteen years ago, he arrived in this country as a refugee from Sudan. He says that he is a happy man. But happiness does not stem from his work as a shopping centre cleaner, on the midnight shift, being paid a minimum wage. His happiness is the fact that his three children, who all arrived with him when his family fled from Sudan, then Egypt, where they were in a camp, have completed a tertiary education.

He is 59 and holds a law degree. But it is worthless here. He says, 'I had my chance at life and now I have to give the chance to my children. We sacrifice a lot to support our family.' He fears the deregulation of university fees will lock out many young people like his children from education and believes we should fight these changes. Labor will stand with him. (Time expired)

Eric Hutchinson (Lyons, Liberal Party) Share this | Link to this | Hansard source

I am really pleased to speak on this bill, the Higher Education and Research Reform Amendment Bill 2014. The member for Eden-Monaro described those lip-licking universities. However, I was going to describe it as being more like the glass half full. You can look at the world in two different ways and at the opportunities that are presented in these reforms, with a glass half empty or a glass half full. These are perhaps the only true reforms that we have seen in the 2014 budget. They are indeed challenging.

The Australian National University vice-chancellor, Ian Young, and chancellor Gareth Evans, in an article in The Australian in April this year, said:

It is time to change our one size fits all funding system and let diversity develop. Changes to the system will be controversial, but real change is required if Australia is to offer its young people a real choice in education and produce graduates to match the best in the world.

And I reckon that we as a nation are up for it and that our universities are up for it. The scare campaign that we see from the other side simply diminishes the capacity of students, whether they be students from metropolitan Melbourne or from central Tasmania. True reform is indeed difficult and sometimes controversial, but I say in the case of higher education it is needed.

Some of my comments are directed at Tasmanian senators. I will name them because some may not be aware of the Labor Party senators for the state of Tasmania. They include: Senator Polley, Senator Bilyk, Senator Singh, Senator Brown and Senator Urquhart. My comments also go to our two Tasmania Green senators: Senator Milne and Senator Whish-Wilson. Indeed, we had high hopes for Senator Whish-Wilson. We really did and how he has let us down! But this is an opportunity for you to deal yourself back into the game. It is an opportunity, because I know you truly understand that students in Tasmania and the University of Tasmania are up for competition. It has enormous capacity.

My comments are also directed at one of the new senators, Senator Lambie. Playing popular politics is short term. Here is a chance to grow a set of principles based on what is right: good policy. Why do we need reform in education? We need to make the case. Of course we do. I absolutely compliment the Minister for Education, Christopher Pyne. He has truly consulted widely. He has the support of industry, Universities Australia and indeed many on the other side who have, in the past, been reformist. The case for reform is truly compelling. For those of us who believe in markets, competition, reform and deregulation can bring enormous opportunity not only to our institutions but, most importantly, to the students who attend those institutions. Again, Ian Young and Gareth Evans, in their article on higher education, said:

… every university in the country is funded in exactly the same way for its Australian undergraduate students, regardless of the quality or type of educational experience the students receive. This fixed funding model means little diversity in the type of education offered. It means disciplines are disappearing as institutions decide they can no longer afford to offer them, creates a perverse incentive for universities to cram hundreds of students into lecture theatres, and constrains innovation. It badly needs rethinking.

It has no consideration for those courses that are in demand in respect of the employment opportunities that lie for the students undertaking those courses. Labor only did half the job of reform. In office, Labor deregulated student numbers to create a demand model, but it declined to deregulate fees to enable universities to finance the new model and drive it forward. Again, to quote Australian journalist and Editor-at-Large at TheAustralian, Paul Kelly: 'The case for reform has been made.'

The government believes in the transforming power of higher education. There is $37 billion in funding over the next four financial years. Our institutions are not just competing domestically but internationally, and they are competing online as well. (Time expired)