Sharon Claydon (Newcastle, Australian Labor Party) Share this | Link to this | Hansard source

At the time same as insisting that Australian women carry the personal burden of higher costs, higher debt and higher interest rates for their education, this government refuses to give up on the Prime Minister's unaffordable rolled-gold Paid Parental Leave scheme at a cost of $5 billion to the nation—but we cannot afford to help women pursue higher education! The government's hypocrisy is truly astounding. The effect on students is just one side of the debate on this higher education reform. There is also the effect on universities and regional communities.

My electorate of Newcastle is proudly home to Australia's best university under the age of 50, with a standing in the top three per cent in the world. One of the top 10 universities in Australia for research funding and teacher quality is the University of Newcastle. At the University of Newcastle, excellence is always coupled with equity, not in spite of it. Excellence and equity are two sides of the one coin at the University of Newcastle, as it should be. That is something this government consistently fails to understand.

The student body is representative of the broader region, with students who are of lower than average socioeconomic status and are often the first university students from their family. Nearly a quarter of enrolled students are from low-socioeconomic backgrounds, which is well above the national average. Compared with the two Group of Eight universities in New South Wales, the University of Newcastle does considerably much more of the heavy lifting in terms of ensuring access, equity and opportunity for all.

Twenty-four per cent of students admitted to the University of Newcastle come from low-SES backgrounds, while the University of New South Wales and the University of Sydney—at about 8.5 per cent and about seven per cent, respectively—are well behind. The University of Newcastle has the highest number of Indigenous students in Australia and the highest rate of students beginning study through enabling programs rather than through the traditional pathways. They are students like the woman that I mentioned earlier, who is now reconsidering her options with this government's insidious reforms.

Despite the assertions from members opposite, like the member for Bass, regional universities will not benefit from these reforms; they are likely to suffer, as will their students and the regions they so richly contribute to. For research-intensive regional universities—like the University of Newcastle, with world-class research in high-cost disciplinary areas like engineering, medicine and health—adequate funding is vital to ensure their continuing excellence. Without adequate Commonwealth funding, funds will have to be sourced from the student body. While this bill would allow that to happen through deregulation, few students would be able to meet the cost without enduring lifelong, massive debt.

As already noted, the University of Newcastle's student body is drawn from lower-SES regions. The ability to recoup lost Commonwealth funds from students will be near impossible, even with deregulation of fees. Regional students simply will not be able to afford to study in high-cost disciplines and it will be difficult for research standards to be maintained with the loss of overall funding. I fear that these students may be lost to higher education altogether. Any proposal to reduce Commonwealth funding will also result in significant increases to the cost of highly technical disciplines, like teaching and nursing. These professions are critical to Australia's future. They are professions that are, however, low paid. There is higher debt and lower pay—you do the math. It would be a lifelong debt sentence with little reward.

Opportunity in education is a pact between generations and a pact we must keep. Funding universities properly is an investment in Australia's future and it is an investment in our people. This reform does not achieve that. The Liberals opposite can vote for $100,000 degrees and for the doubling and tripling of fees, but Labor will vote on the side of students. We will always be on the side of families and we will always be on the side of those who dream of better opportunities for their children and those who come after. We will stand up for young Australians and give them a voice in the national political debate about the future of this nation. We will stand up for equitable access for women, Indigenous students and students from low-SES backgrounds. We will stand up for mature Australians who have been dislocated by economic change. We will stand up for regional universities, who are the drivers of our regional economies. (Time expired)

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

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

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

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

Professor Gareth Evans and Ian Young of the ANU said:

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

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

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

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

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

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

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

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

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

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

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

Professor Scott Johnson said:

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

Professor Andrew Young of the ANU said:

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

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

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

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

The changes the government has announced tonight—

the night of the budget—

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

Navitas, in their press release, said:

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

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

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

That is what the experts at the coalface are saying.

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

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

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

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

Jim Chalmers (Rankin, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition) Share this | Link to this | Hansard source

I am also rising to speak on the Higher Education and Research Reform Amendment Bill 2014. My contribution is motivated by a visit I made to Griffith University Logan campus in the week after the budget. I am very fortunate to have been a graduate of Griffith University and particularly fortunate to be able to represent the Logan campus in this place. A lot of what I want to say today is motivated by the year 12 kids that I spoke to on that day as part of Griffith's Uni-Reach program, which gets a whole bunch of year 12 students into a room and talks to them about what it is like at university: what sorts of challenges there are and all of that sort of thing. I went along on 19 May. There were a whole range of schools there, but from my electorate there were kids from Marsden High, Mabel Park and also Springwood High. We spoke about how they arrange their studies and how they arrange their lives to be successful students at university. It was a great opportunity. I congratulate Griffith University for providing that kind of opportunity to kids. When I was thinking about speaking on this bill today, I was thinking: what kind of country and what kind of government would make those kids—some of them from quite disadvantaged areas—choose between going to university and other important life choices like a mortgage, starting a family or even starting a small business?

I will be forever in debt to the teachers and administrators at Griffith University for the education I got. Unfortunately, this bill and its mean-spirited changes will put kids forever in debt in a whole different way, to the Abbott government.

Not every young person wants to go to university, and we need to afford them a whole range of training opportunities, but we also need to make sure that we do not limit their choices. We do not want kids who get the right marks and qualify for university to decide not to go to university on the basis that they cannot afford it or that they do not want to spend 20, 30 or 40 years repaying debts for their degrees of $100,000 or more. We want to make sure that kids have that option. Unfortunately, this bill limits people's options and choices.

There is a very famous economist called Amartya Sen. Sen says that if you want to tackle inequality in a society you need to provide the ability to choose lives of value. You need to give people the capacity to succeed. I like to think of it as: you need to give people the tools of success so that they can work hard and get ahead in a modern market economy. I was thinking about Amartya Sen because what this bill does is to let some people but not others choose lives of values. I think that is unforgiveable in a modern, wealthy, first-world country like ours.

Just as individuals have choices, countries have choices too. Like I said, a wealthy country like ours does have to choose its priorities. I can think of no more important priority than making sure that university education is affordable and that kids from low-SES areas like mine are not priced out of the market—like this bill does. We need to make those kinds of choices. As the Leader of the Opposition said yesterday in a very good speech in this debate, he said, 'Our country has a choice between becoming smarter and becoming poorer.' That really does get to the nub of this issue.

We hear people on both sides of this House talk about how important it is for us to build productivity, and that is a crucial objective for our country and our economy. If we are serious about building productivity, we need to establish broad and deep pools of human capital. That means not excluding people on the basis of their socioeconomic status, it means not excluding kids from regional areas, it means not making it harder for women who want to go to university—not pricing them out of the market by making them contemplate paying back a university degree for all of their working life and jacking up the cost of degrees to $100,000 or more. We have to choose whether we are going to become smarter or poorer, whether we want bigger or smaller pools of human capital and whether we want a more inclusive economy or a less inclusive economy. These are the choices that nations have to make. The appalling thing about this bill is that it makes all the wrong choices when it comes to those crucial questions. And probably the most crucial question when it comes to higher education is: do you want the opportunities to flow to the many or do you want the opportunities to flow just to the few? Unfortunately, this government—true to form, I have to say—have chosen the latter, and they are doing it in a range of ways, including with superannuation. They have chosen the latter, disastrous path.

When Labor were in government and we thought about reforming the university sector—under great education ministers like Julia Gillard, Kim Carr and others who worked in this crucial area—we wanted to broaden and deepen the pool of human capital in our country. That is why we increased real revenue per student to universities by 10 per cent. There was an extra $1,700 for universities to spend on quality teaching for every single student. And that is why we lifted investment in universities, from $8 billion when we came to office to $14 billion by the time we left. If we had kept the model that existed under the Howard government, universities today would be worse off to the tune of $3 billion. So we do have a very proud record, and probably the proudest part of that record—certainly the part that I am proudest of, having played a peripheral role in some of the discussions—is what we did to make university more accessible to more people. Whether it was the student start-up scholarships, the relocation scholarships or the increased funding for regional universities, we did a great deal to make university more accessible. That is why one in every four of the 750,000 students at university today are the result of some of our measures. We have 190,000 more students on campus, we boosted Indigenous student numbers by 26 per cent, we boosted regional student numbers by 30 per cent, and there are more than 36,000 extra students from low-income families in universities now compared to 2007. On top of that, we have almost $4.5 billion in world-class research and teaching funding. These are things that we are very, very proud of. They are the choices we made.

Unfortunately, this bill chooses another path. It denies our economy and our community the creativity, the dynamism and the verve that flow from including more people in the remarkable opportunities that a first-world wealthy country like ours should be providing to not just to some of our young people but all of our young people if they have the talent, if they put in the work and if they qualify for university.

The rest of the region is investing heavily in education. They get it, they understand it, they know what is going on. They know that the future will be won by the countries who win when it comes to human capital. Other countries in our region know this; it beggars belief that our country is heading in a different direction. I could spend a long time, but I won't, going through all of the atrocities in this bill. I have already mentioned the degrees costing $100,000 or more and what those higher fees and higher interest rates mean for women, low-SES youngsters and regional kids who want to access university.

Let us boil down what this bill does. It allows unis to set much higher fees, which lead to substantial increases. It introduces a real interest rate of up to 6 per cent on HECS-HELP debt which, when it comes to CPI, is much more than what it currently is. These are the sorts of changes they are making to the fee structure.

What is making some universities support some of these changes is the really dramatic cuts that the government is making to the sector more broadly. Some $5.8 billion will be cut from higher education—$3.2 billion from HECS-HELP; $1.1 billion from Commonwealth supported places; $87 million from the HECS-HELP benefit; $120 million from Higher Education Reward funding; the scrapping of the Higher Education Participation and Partnerships program; $200 million from grants; and $504 million from the Student Start-up Scholarship program. The list goes on and on and on. These are serious cuts that are being made to the university system. Any one of those decisions would be a backwards step. But in combination they are devastating for a country like ours that rightly aspires to have the best educated people, the best educated workforce in the region and in the world.

I want to touch very briefly on an issue that is very close to my heart within this series of issues because of the very good New Zealand born population that I have in my electorate. I want to refer to schedule 10. I have had a lot of people contact me about the measures that the government is introducing in this space. We support theses measures. We actually announced them. My predecessor in Rankin, the great Craig Emerson, actually came up with this policy, and part of it is in this bill. I want to tell my great New Zealand born constituents that we want the government to introduce separate legislation for that part of the bill. Senator Kim Carr, who understands these issues, has put out a press release saying that we want to see HECS-HELP eligibility extended to New Zealand born citizens. We announced that before the last Labor budget. We consider this to be a very important measure. I know from so many conversations with people in my area how important this measure is. We will do our best to pass it. If the government will not split the bill, we will move a private member's bill. I look forward to being part of that process if the government does not see the sense in affording to New Zealand born kids the same opportunities that are afforded to Australian kids in my community and in south-east Queensland in particular. We will be keeping an eye on that issue. I assure my constituents of that.

One thing that really rubs salt into the wound when it comes to the changes that have been announced by the government is the breaking of various promises that are central to this. There are so many of them, I would need a couple of hours to run through them all. The Real Solutions policy document says, 'We'll ensure the continuation of the current arrangements.' On 1 September last year the Prime Minister, then Leader of the Opposition, gave people an absolute assurance that there would be no cuts to education. On 17 November Chris Pyne said, 'We're not going to raise fees.' But they have. Chris Pyne said in a media release in August 2012, 'We have no plans to increase fees, cap places, of course.' But that is exactly what they had plans to do.

Another thing that really offends people when they contemplate what the government is trying to do to them in the higher education system is that so many of the coalition frontbench—and our frontbench too—have benefited from either free education or affordable HECS. I mentioned earlier that I had the good fortune to go to Griffith University under an affordable HECS scheme. It was a great investment and it was a great time to learn from some quality educators. A punter in my area put a comment on my Facebook page the other day that 'the government have climbed the ladder and then pulled it up behind them'. I could not say it better myself. It is as though they have gone through the doorway and closed the door behind them.

When we see the education minister jump up and say he is making these changes, it is offensive to think that so many members of the government benefited from far more accommodating arrangements when it came to their own degrees—in the education minister's case, a law degree from the University of Adelaide. What he wants to do to kids studying law at the University of Adelaide—in my colleague's electorate—is appalling. When you contemplate the advantages the minister got from his own affordable degree, what he now wants to do to those law students in Adelaide and to all university students around the country, including in my electorate, is even more appalling. They have a real failure on that side of the House to understand the lives of others. It is not just the Treasury talking about poor people not driving cars. It is really a more fundamental problem with understanding that there are some kids, such as the ones I mentioned before at that Uni-Reach day the week after the budget, who are trying to work out whether they can go to university. They will have to make that choice and they will be priced out of the market by this.

The difference between the two sides of the chamber is that our side fans the flames of ambition and opportunity in every young person but their side wants to extinguish them—not for everyone, but for some. That is unacceptable in a wealthy First World country like ours. We have got a big chance in this country to set ourselves up for the future. If we can get the human capital right, if we can get inclusive economic growth, if we give every person the opportunity to succeed so that everyone gets a stake in our prosperity, we have got a big chance to go to the front of the line in our region and around the world. This bill does the opposite. That is unacceptable in our country and that is why we oppose it so vehemently.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

As I make my contribution to the debate on the Higher Education and Research Reform Amendment Bill 2014 I am very pleased to see students from Griffith East Public School present in the gallery. This legislation is going to affect them. It is going to give them a more sustainable higher education system that they will benefit from. Griffith has a special place in my heart. My daughter, Georgina, teaches at Griffith High School. She is certainly helping to churn out some very good students who hopefully will go on to tertiary degrees. If they choose to get a trade certificate, they will also benefit from some of the reforms that this government is bringing in to help kids who choose not to go on to higher education but to go a different pathway and into a trade.

Certainly as far as higher education is concerned and certainly for the kids from Griffith East Public School, I am sure that the reforms we are hoping to get through the parliament will make a significant change to their lives, for the better. I am pleased that the member for Hunter has also taken the time and trouble to join me in the chamber, as he promised earlier, because he is a good man and he keeps his word I am sure on most things. I would like to tell the member for Hunter that by placing university funding on a sustainable footing, expanding opportunities for more students and freeing universities to compete, the government is securing the future of higher education in Australia. Labor cut more than $3 billion from higher education in just their last year of office, including Labor cuts to higher education—

Ms Kate Ellis interjecting—

I hear the member for Adelaide. She will agree with me that they are now blocking in the Senate and now they are vowing to stand in the way of higher education reforms which higher education leaders overwhelmingly believe are necessary. The Leader of the Opposition and member for Maribyrnong, Labor and the unions are not only hypocrites but they are blocking supported access to higher education for 80,000 more Australians, but they have no plan for tertiary education. Meanwhile the government, this side, is getting on with the job of giving Australia the very best higher education system in the world. We have to because it is one of our highest export earners.

This bill will deliver the fundamental and historical reforms to change the higher education sector for the better. This is the biggest reform in higher education for well over 40 years and it is reform called for by the tertiary education sector. There are many elements within this reform bill which will bring significant benefits to universities and to students right across the country, including to Griffith East Public School. However, I would like to contribute to this debate by discussing the impact of this bill, particularly in rural and regional communities such as those in my electorate of the Riverina. Arguably, rural and regional Australians have the most to gain from the government's higher education reforms. Under this government, funding for higher education is increasing, including the total Commonwealth Grant Scheme funding for student places and regional loadings.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

This is rubbish!

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

You had your go; now listen to me! Deregulation of the higher education sector will encourage competition and will enable all universities, in particular, regional based universities—

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

The students have gone.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

They have to go to the War Memorial. They have to go to other places.

Joel Fitzgibbon (Hunter, Australian Labor Party, Shadow Minister for Agriculture) Share this | Link to this | Hansard source

They've had enough.

Michael McCormack (Riverina, National Party, Parliamentary Secretary to the Minister for Finance) Share this | Link to this | Hansard source

They are probably going to fill in their university acceptance forms for 10 years hence—to position and market themselves based on their disciplinary specialities, a competitive price structure and improved quality of life for students. From a National Party perspective, these reforms will have a significant impact in the regions and will benefit regional students, regional universities, business and industry and the community more generally. These reforms will encourage competition, provide greater choice for students and ensure that Australia is innovative and competitive on a global scale. It is important for the nation that regional Australia can fully participate in the modern economy and drive upwards the value of higher education in this country and internationally. The first step in working to achieve this is to address the disparity between those who have a degree in regional Australia compared to those in metropolitan cities.

The statistics which compare regional students to their city counterparts and their uptake of tertiary education pathways are quite disturbing. The majority of regional young people do not go into higher education. This is due to a variety of factors, but the financial barriers which regional families face to enable their sons and daughters to move away from home to pursue a tertiary education pathway are significant. It is an impediment on many, which surely means they do not get to pursue their dreams.

The figures are concerning in that just 17 per cent of 25- to 34-year-olds from regional areas have a bachelor degree or above, compared with 36 per cent from the same age group who live in the cities. In remote areas the figure is even lower at 15.4 per cent. There is a lot of hard work that needs to be done to bridge the gap between regional and city based students. We, as the government, have an obligation to do what we can to facilitate an increase in regional student participation rates in higher education. That is why The Nationals in government with the Liberals are committed to supporting regional students and why these reforms will change higher education for the better.

The major proportion of the 80,000 additional students who will benefit as a result of the government opening up the higher education system will be from lower socioeconomic and disadvantaged families. For regional students, the new Commonwealth Scholarships Scheme will create major opportunities to enable them to attend university. This is the largest Commonwealth scholarship fund in Australia's history and will require universities and higher education institutions to provide dedicated support to disadvantaged students. Our best and brightest students from the most disadvantaged backgrounds will have greater opportunities to pathways in tertiary education and will be provided with financial supported to assist with living their costs. They will no longer be held back by financial barriers.

This bill will help to bridge the divide between rural, regional and metropolitan students and will increase participation for low socioeconomic students and regional students. A highlight of these higher education reforms is that we have expanded the Higher Education Loan Program to encompass an uncapped number of diplomas, advanced diplomas and associate degrees as a pathway to get into undergraduate degrees. Regional students will be big beneficiaries of this historic reform—and it is historic. These subdegree pathways are opportunities which our regional young people are more likely to take and are a proactive way of addressing trade and skills shortages in the regions. Consequently, regional universities will be able to offer more of these types of study options, attracting more students and therefore becoming more competitive within the tertiary education sector. Also, by setting their own fees from 2016, regional universities will be able to successfully compete to attract more students and the students will directly benefit from the greater competition between universities.

There is no doubt that under these reforms, the HELP loan scheme remains the very best loan available to an individual in the country. It is a great deal for students—a low interest loan, no upfront costs, the Commonwealth acts as a guarantor and not a cent is required to be paid back until they are receiving a decent income, $50,000, upon graduation as a result of their education.

I listened very carefully to your excellent contribution, Member for Hughes, when you said that the interest rate will be at the 10-year bond rate which, as you pointed out, is 3.36 per cent—compared to a personal loan of 12 to 13 per cent, credit cards of 17 to 20 per cent, small business loans around 10 per cent or housing loans around six per cent. As you said, Deputy Speaker Kelly, in your contribution, sticking up for the students in your electorate of Hughes, that is the very best loan that they will ever get in their lives. What a great deal. There are significant benefits for regional communities in attracting students from across the country to undertake study in a regional setting. By studying at a regional university, students will experience a better quality of life—I believe that it is a better quality of life in Wagga Wagga than in Adelaide, the seat of the shadow minister at the table, but that is just my opinion—and bring significant benefits into local communities.

I would like to point out that the majority of students who study in the regions are more likely to remain in regional and rural areas. In fact, estimates show that those who are from the regions and study in the regions are around 70 per cent more likely to stay there. Therefore, if a greater amount of regional students have a tertiary qualification, as they will under these reforms, we will be increasing human capital and thereby enhancing the value and capacity of the regions and the local communities. We want regional students to realise, to be able to reach, their full potential. By providing new pathways under these reforms, our students will be able to be experts in specialist fields and leaders on the national and global stages.

For the very first time, regional universities will be able to compete on price with their city counterparts. This government has committed $274 million in regional loading over the next four years to support regional universities. The government listened to the concerns of regional universities while constructing these crucial reforms. In July, the Minister for Education, Christopher Pyne, toured regional Australia, visiting universities in towns from Mildura to Dubbo, Lismore, Mackay and Rockhampton—and in Wagga Wagga, Charles Sturt University, in my own electorate. Throughout this tour, the minister saw firsthand the specialisation and type of education which makes the experience of studying at a regional university distinctly different from the educational experience in a metropolitan area. Regional universities have a lot to offer in a competitive, deregulated higher education sector.

James Cook University in northern Queensland is world renowned when it comes to marine science and biology. At La Trobe University in Bendigo, Victoria, they are experts in the field of water management efficiency, with direct relation to the Murray-Darling Basin of which I am so fond. La Trobe also run a renowned pharmacy program; indeed, I note that the national Pharmacy Student of the Year 2013 was a pharmacy student from La Trobe, Bendigo. The University of New England in Armidale is the leading Australian university in distance and online education. It is the third largest and has the equal highest course satisfaction rate and high graduate salaries. UNE are leaders nationally and internationally in research, with an emphasis on interdisciplinary research on tackling complex problems in rural and regional Australia. Former Prime Minister and Leader of the Country Party Sir Earle Page was the first chancellor of the then University of Sydney Armidale campus, and a residential college was named after him, as it should be, in his honour.

Charles Sturt University, which has a campus at Wagga Wagga, is a great example, with each of its regional campuses having a specific disciplinary focus and specialist area. Orange is renowned for dentistry, pharmacy and agriculture and viticultural science. Bathurst has well-regarded degrees in journalism and communications, teaching and business. CSU Albury are specialists in physio. In my own electorate, at CSU Wagga Wagga, the education, nursing and veterinary programs are highly regarded. CSU Wagga Wagga are internationally accredited leaders in animal research, and the current veterinary school is named after my predecessor as the member for Riverina, the wonderful Kay Hull.

I have had numerous conversations with CSU Wagga Wagga Vice-Chancellor Professor Andrew Vann about the government's higher education reforms. In fact, I sat with the professor at dinner on both 22 July and 21 August. Professor Vann and I have had our differences in relation to the government's reforms; I acknowledge that. I also acknowledge the professor's concerns about the affordability of higher education and tuition fees for regional students. But I would like to assure Professor Vann that affordability and support for students is something that my colleagues and I in the National Party are aware of and are certainly talking about.

At The Nationals Federal Council last weekend, right here in Canberra, the council endorsed a motion expressing support for university fee deregulation. The motion also encapsulated the intent to call for greater weighting of scholarships to regional universities on a needs basis, due to the greater capacity of larger, city based universities to allocate funds from their higher fees to offer more scholarships. The minister has established working groups to work through the detail of how we might structure Commonwealth scholarships to ensure they meet our goal of greater equity in accessing higher education so that students from regional and rural Australia will no longer be held back by financial barriers.

The disciplinary fields in which regional universities excel will drive domestic competition, build Australia's reputation in the education and research sector, and result in regional unis becoming global leaders. I am quite sure of that. By diversifying and expanding our tertiary education sector, regional universities will be less vulnerable and more competitive with metropolitan based universities. Given a third of the country's population lives in regional Australia, it is critically important that greater emphasis be placed on regional education.

By investing in our regional unis, we are investing in regional Australia's future, and that is so very important. In doing so, we are building national productivity growth, creating diversity and competiveness in the regions, building a platform for becoming global leaders and innovators, creating an insurance policy for regional Australia's future and ensuring that regional students can reach their full potential. Our regional universities can be world class. These reforms will give them the best chance, to date, of competing at the top.

I commend Senator Bridget McKenzie from The Nationals for her extensive and proactive work within higher education; she has engaged comprehensively with education providers and the wider tertiary sector, and is Chair of the Senate Education and Employment Legislation Committee. In fact, only yesterday afternoon, Senator McKenzie met with the Regional Universities Network here in parliament. The network supports reform of the higher education sector, and Chair Professor Peter Lee has said:

We are particularly pleased that the Government has decided to keep the demand driven system for bachelor places and extended it to sub-bachelor places. This will assist in providing pathways and lift participation in higher education in regional Australia for less well prepared students …

I commend the bill to the House.

Kate Ellis (Adelaide, Australian Labor Party, Shadow Minister for Education) Share this | Link to this | Hansard source

I rise to place on the record my staunch opposition to the Higher Education and Research Reform Amendment Bill, which is currently before the House. I am disgusted that this piece of legislation would even come before the House but I am even more appalled that those opposite have the gall to sign up to and come into this House to try to sell this piece of legislation to the parliament and to the communities that each and every one of them went out of their way to deceive at the last election. Now, we are not short of examples of where the government have broken very clear election commitments—where they have made a clear promise to the Australian public and then turfed it aside the moment they got on the government benches—but I do not know that there are many examples that are clearer than this piece of legislation before us in the parliament.

Let us just be very, very clear about what the Australian public were told before the election. Before the election, the Prime Minister said: 'I want to give people this absolute assurance: no cuts to education,' he said, on 1 September. The now education minister went further when he said: 'We're not going to raise fees.' He said: 'We have no plans to increase fees.' If you have listened to the Prime Minister, he says that if you want to make sure that he really means what he says, you have to make sure you get it in writing. Well, we have it in writing—in the Liberal policy document which spelt out for Australians exactly what those opposite would do if they were elected to government. What they told the Australian public before the election, in their own Liberal policy document, was:

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

That is from the Real solutions document. I am going to repeat that, just so that those opposite can be reminded of their treachery—of their utter deception and betrayal of the communities that they are meant to come in here and represent. This is what they said before the election:

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

Well, don't we hear a different story from them now! The previous speaker from the government side, rather than saying that they 'will ensure the continuation of the current arrangements', was bragging about how 'the bill we have before the House is the biggest reform in over 40 years to the higher education sector'. There was no talk about that before the election. There was no talk about the sustainability that is required in the higher education system. In fact, on every single thing that those opposite told the Australian communities—that there would be no change; there would be no increase in fees; there would be no higher education reforms—haven't they shown just the extent of their dishonesty, yet again, in this appalling piece of legislation.

So let us have a look at what they are instead proposing to do. Now we have before us a proposal which we know will hurt future students but also former students, current students, Australia's economy and our future prosperity. In front of us, rather than sticking with their pre-election commitments—of the current arrangements of our higher education sector, of no cuts to education, of no increases to university fees—what we see is a 20 per cent cut to university funding, a cut of $5.8 billion from universities, including slashing funding for undergraduate places by up to 37 per cent. That certainly looks like a cut to education to me, and to anyone else who has a look at this bill.

We have in front of us legislation to deregulate fees, allowing universities to charge what they like, so that students may face degrees costing over $100,000, with absolutely no limit on what they can be charged. So much can fees increase that the education minister himself has conceded that he cannot tell the Australian public just how much fees will increase—that he simply does not know. But the one thing that we all know is that he cannot keep and not a single member from the government benches opposite can keep the commitment that they made to their communities that fees would not increase, because they will. We know that up to $3,900 per year for higher research degrees such as PhD and Masters programs can be charged.

We know that this bill introduces a compounding, real interest rate for all HECS-HELP debts, both future and existing, so that it will be indexed by the 10-year government bond rate rather than at the consumer price index, and that what we will see is fees just continuing to increase and increase further. In fact, the lower the income that you are on when you graduate from university, or the greater the amount of time that you have out of the workforce, the more you will pay for your degree, because that is the way that this government operates. It is the poorest, the lowest income earners, who will pay the most for their education, because this government does not know the meaning of the word fairness.

We also know that they are cutting almost $174 million from the Research Training Scheme. That scheme supports training of Australia's research students, the scientists and academics of tomorrow.

I am proud to stand here and oppose this, because I know that $324½ million will be cut from South Australian universities, all of which have campuses in the electorate of Adelaide which I represent: Flinders University—$85.9 million cut; Adelaide University—$114.3 million cut; the University of South Australia—$124.3 million cut.

These changes are asking students to make an impossible choice. What this piece of legislation is doing is asking students to have to choose between pursuing their education or perhaps getting a mortgage and buying a house; between pursuing their dreams of an education or starting the family that they would like to have.

This piece of legislation is not only a very clear demonstration of a broken promise by each and every one of those opposite to the communities they are meant to come here and represent but also a betrayal of every student who hopes to one day go on and get an education. There is no way that massively inflated student fees will not deter those from disadvantaged backgrounds from deciding that they are just not willing to take on more debt—more debt than their family have ever shouldered in their lifetime—in order to go and get an education, and take the risk that they will get a job at the end of that education which will allow them to pay it back. And, by deregulating fees, universities will be able to charge as much as they like. This will, no doubt, lead to higher fees for students as universities look to prove their value by charging more. Recent research shows that degrees could skyrocket to over $100,000.

Nowhere in the world has deregulation of university fees led to price competition and lower fees for students. So those opposite who come in here spreading this nonsense about what a great deal students are getting out of this should look at every single piece of international research about what has happened elsewhere.

In the UK, fees were deregulated in 2012, with a cap of £9,000—unlike here, where this government will not put any such cap in place—but, for the 2015-16 academic year, there will only be two universities out of 123 that will not be charging the maximum £9,000. We see there, as we have seen everywhere else around the world, what the real impact of deregulation is, and the real impact of deregulation is slugging students and then slugging students again.

In the United States—the system that our education minister seems so keen for us to emulate, for some reason—university fee rises are out of control, to the extent that student debt now exceeds credit card debt. That is quite a vision for the Australian higher education sector—after telling the Australian public there would be no changes to the university sector.

We know that the higher interest rate of debt will mean those who earn less once they graduate, or who take time off to look after children, will be hit hardest, as their debt accumulates substantial interest. But it is not just every potential future university student that will be hit and hit hard by these changes. It is quite clear that these changes will hurt future students—it will burden them with a choking debt, or deter them from going to university at all—but what many may not know is that the legislation that is currently before the House will hit every current student, and past students too.

There are currently around 1.2 million Australians with a HECS-HELP debt who entered university with the understanding that that debt would attract CPI interest. This legislation increases the interest up to a massive six per cent. These students did not agree to this. This was not part of the deal that they signed up for when they went about getting their university education. This government is proposing to change the rules on them after the event. The contract has been ripped up. It is simply deceitful and it is simply unfair.

The Minister for Education has been particularly devious, deceitful and malicious in trying to get support for these incredibly unpopular changes. After months of everybody jumping up and down—talking about what an absolute betrayal these proposals are, talking about the immense damage that these proposals will do to our education system—the education minister has a new tactic for trying to win this debate.

He says: 'Backed by legislation, let me slash education funding to our higher education institutions—sure, we'll let them make it up, by deregulating fees and slugging students—because if you don't, I will slash Australian universities' research budgets.' This is the only way he can try and win the argument. Isn't that a way to win a debate, a debate that never should have come to this House! This debate is built on the deceit of every one of those opposite at the last election—blackmailing every university, blackmailing our future research. This extortion is the best argument that their minister can put forward. It just shows what an absolute disgrace this bill is.

We know that the higher compounding interest on HECS-HELP debts will mean that those who take more time out of the workforce to raise children or those in lower paid jobs will be much worse off and these students statistically are commonly female. Debts of students studying nursing, teaching, early education and similar degrees could actually end up being far greater than the debts of those studying the higher paying careers of engineering, law and medicine, because those who are on low or middle incomes will again be hit by these changes and be hit by the changes to interest rates. Those people who are on low and middle incomes who take time out of the workforce to raise their children will be hit by their debt compounding each and every year that they stay out of the workforce. We know that the debt will just keep racking up because those opposite have the gall to come in here and propose to do exactly the opposite of what they told the Australian public before the election.

The impact of this legislation—coupled with this government's $1 billion in cuts already announced to our childcare sector—will have severe impacts on women's workforce participation. We know that many of the university vice chancellors have spoken out and spoken out strongly. But I want to use the remainder of my time here today to tell you about some of the views of the people that I represent, the people of Adelaide, who I have been absolutely upfront with. Unlike every one of those opposite, who has deceived their own constituents, I have said all along that I will always fight in this place for greater access to education, for improvements to equality around our education system; I will not shut the door and make it harder for the generations that come after us.

One of my constituents, Jane, wrote to me saying:

Education is the key for keeping a sense of equality and the way to make us a clever country.

Why cut funding to Universities? Hearing Vice Chancellors ask how can they keep up the status quo let alone advance without increasing fees. I am appalled.

Another, Chloe, said:

I fear that younger generations may not have the freedom to pursue their passions because they will be restricted to choosing a course which has reduced subsidies and will guarantee them a job. This is not what university is about.

Mia wrote, saying:

I don't think I'll be affected by University fee deregulation, but how will younger members of my family ever hope to pay off their degrees? As I know you know, we struggle enough.

And Tom said:

These measures would discourage young people such as myself from seeking further education, potentially resulting in a lack of skilled labour in the country. What I find particularly distasteful is the idea of applying this interest rate to existing debts which were entered into in good faith, often by relatively naive teenagers straight from school. This includes people like me.

This legislation is thoroughly unpopular; not just because it is an appalling proposal but because it absolutely epitomises the pure dishonesty of the Prime Minister and the Minister for Education. Members opposite have put their names on the speaking list and dared to tell their constituents before the last election that there would be no cuts to education, no changes to our university fees system. And now they come in here proposing all of a sudden: 'Surprise! We're going to introduce these radical and backwards reforms.' I oppose this legislation and I am very proud to do so.

Paul Fletcher (Bradfield, Liberal Party, Parliamentary Secretary to the Minister for Communications) Share this | Link to this | Hansard source

I am very pleased to rise to speak on the Higher Education and Research Reform Amendment Bill 2014—a bill which will amend the Higher Education Support Act to implement the measures contained in the 2014-15 budget dealing with higher education. This is an important bill which will expand opportunities for students and ensure that Australia has a world-class tertiary education system. In the time available to me this afternoon, I want to make three arguments: firstly, that universities are critical to our national economic performance; secondly, that Australian universities are seriously constrained in the way that they operate today; and, thirdly, that the government's changes will free up universities to be more competitive and flexible and, hence, to be higher performing.

Let me turn firstly to the point that universities are critical to our national economic performance. I want to touch on some indicators of the economic importance and significance of universities. There is evidence that improved investment in education delivers economic returns. For example, the OECD has estimated a net present value of around $104,000 per man and $71,000 per woman who are university educated, attributed mainly to the higher lifetime taxes paid by a university graduate in excess of the direct costs of funding the additional university place. Secondly, universities play a very important role as an employer. According to a policy note released by the Group of Eight universities, in 2012 there were 112,699 full-time equivalent employees in the public higher education system, and that system generated around $25 billion of revenue.

Another important argument is the return on investment in research and development. The Universities Australia pre-budget submission in 2014 looked at a large number of studies conducted in a wide range of countries over a 30-year period to the mid-nineties which consistently found that the rate of return on investment in research and development is high. Equally importantly, of course, is the fact that innovation from research and development—in which universities play a key role—is a key driver of per capita income growth, increasing productivity and living standards.

I think we can cast some further light on this subject of the importance of universities to economic performance by considering the experience of the United States—a country which is widely recognised as having the best research universities in the world. I would like to refer to a very interesting book written by Jonathan Cole, the former provost of Columbia University, entitled The Great American University: Its Rise to Preeminence, Its Indispensable National Role, Why It Must Be Protected. In his book, Dr Cole notes that as at 2009 40 of the top 50 universities in the world were in the United States, according to a research based assessment from the Shanghai Jiao Tong University. Since the 1930s, roughly 60 per cent of all Nobel prizes have gone to Americans, and a very high proportion of leading new industries in the United States—perhaps as many as 80 per cent—are derived from discoveries at US universities. He cites the laser, FM radio, the Google Search algorithm, GPS, DNA and fingerprinting, to name just a few. Dr Cole puts it this way:

… universities have evolved into creative machines unlike any other that we have known in our history—cranking out information and discoveries in a society increasingly dependent on knowledge as the source for its growth.

I think there are some important lessons for the Australian higher education sector in the observations made in his book regarding the importance of higher education in contributing to national economic competitiveness.

Indeed, my views in this area were confirmed or strengthened when I had the good fortune to visit Silicon Valley at the start of the year. Amongst other things, I attended a presentation given by Coursera—the well-known although relatively new company established by two Stanford University computer science professors. Coursera operates MOOCs, Massive Online Open Courses. Coursera's courses are now allowing millions of students to take courses online from well-known academics at Stanford and other prestigious universities around the world, including Melbourne University, the University of New South Wales and the University of Western Australia. These are exciting developments for these universities involved, but they mean also that every university needs to think very carefully about its competitiveness, including its competitiveness internationally, what its position in the market is and how it sustains that position.

The other important and interesting lesson to draw from the US experience is the importance of private funding as part of the overall funding mix in the United States system. According to the 2013 document issued by the OECD, Indicators: Education at a Glance, US expenditure on tertiary education as a percentage of GDP is significantly higher than the OECD average, but a significant proportion of that expenditure comes from private sources as opposed to government funding.    In Australia, our total expenditure on tertiary education as a percentage of GDP is much lower than in the US.    If we can get more funding into our system from private sources, we can increase total funding into the university system, we can make our university system stronger and we can make it a more important contributor than it already is to economic performance and innovation—something which is so critical in the modern knowledge economy.

The other trend which clearly emerges is that there is a substantial level of private funding at the tertiary level across most OECD countries and that over time that is growing. That is not something that is surprise, because the capacity of all governments to continue to fund without limit their tertiary education system when they face many other demands on the public purse is not endless. So governments around the world are facing many of the same issues as the Australian government.

That bring me to my second point, which is that universities in Australia today are seriously constrained in how they operate. Under the previous Labor government we saw an uncapping of Commonwealth supported places. That was a sensible thing to do—as far as it went—and this government is maintaining the demand-driven system. But in the deregulation of student numbers, the previous Labor government did only half the job—they failed to deregulate the setting of fees. In other words, they deregulated quantity but not price—a half-hearted attempt at deregulation. The consequences of this are significant. Today, universities have little scope to differentiate or, should they be able to, to capture a premium for being able to offer a premium product.

At the other end of the spectrum, the current system discourages universities from choosing to discount or compete on price. As a corollary of the current arrangements, there is very heavy reliance on international student fees as the principal area where universities are relatively free in their price setting. Ian Young, the vice-chancellor of the Australian National University and chair of the Group of Eight universities, had this to say recently in remarks which I think sum up the position very well:

We have universities that enrol large numbers of students, teach them as cheaply as possible, and then use the income to cover both education costs and meet the shortfall in research funding.

He went on to say:

This is why our major research universities typically have student populations of more than 40,000 students. Compare that to Stanford with 15,000 students, Cambridge with 18,000, Tokyo with 28,000, ETH Zurich with 18,000 and the outstanding Caltech with only 2200 students.

As the G8 universities have pointed out in a recent research paper, much of the problem we face goes back to Gough Whitlam. Whitlam set an expectation that the costs of those who benefit personally from higher education be paid substantially by those who do not. In doing that, he markedly changed the principle which had for a long time previously applied to higher education in Australia—namely, that because students derive very substantial private benefit from having a degree due to their increased earning power, it is fair that they contribute towards the cost of the degree. We are left today with a system which continues to be in large measure a legacy of Gough Whitlam in which by far the largest source of funding for universities is government. This creates significant constraints on universities at a time when they face ever more intense global competition, and we should be concerned that many top-ranking Australian universities are slipping in international ranks year-on-year.

I quoted earlier the Shanghai Jiao Tong University index that shows there are four Australian universities in the top 100. Again, I draw the contrast between that and the number I cited earlier of 40 American universities in the top 50 in 2009.

The changes contained in the package before the House this afternoon will improve the flexibility and competitiveness of our universities and lead to a higher-performing university system. Deregulation is the logical next step in an ongoing reform process. It will give universities more autonomy and flexibility and they will be free to compete on price and course offerings. Ian Young, ANU Vice-Chancellor said, 'Deregulation will enable universities to differentiate, to play to their strengths.'

The measures contained in the legislation before the House this afternoon are consistent with the course of higher education policy development in Australia over the last 30 years. They arise from a path of incremental steps that have been taken over time to improve responsiveness to changing education policy. I do want to emphasise that, despite some of the rhetoric from the other side of the House, the package contains a number of very important equity and fairness measures. The government has committed to maintaining the HELP loan scheme so that no student need pay a cent up-front for their higher education until they graduate and are earning a decent income over $50,000 a year as a result of their education. Additionally, the Commonwealth will require new Commonwealth scholarship schemes to support access to higher education. Universities will be required to spend $1 in $5 of additional revenue on scholarships for disadvantaged students.

Vice-Chancellor of the Australian Catholic University, Greg Craven, in an article in The Australian addressed some of the over stated and overblown claims that have been made about the equity impacts of the measures in the bill before the House today. He said:

… Pyne has retained and extended Labor's great initiative: open university entry for every qualified person, under the de-mand-driven system. In real equity terms, it is much more important the kid from Panania gets their chance than the price of decorative arts law at Sydney stays steady.

Third, in a scarcely remarked move, Pyne has moved decisively to protect students entering lowly paid but socially vital professions.

Yes, public support for students will decrease overall, but the cut to nurses and teachers, for example, will be noticeably less, recognising their relatively limited earning opportunities, as well as the comparatively low cost of providing their degrees.

That is an important recognition from the Vice-Chancellor of a university, which, as he notes in his article, educates quite a number of Australia's nurses and teachers. That is important recognition of the equity aspects of the package before the House this afternoon and highlights the point that some of the criticisms that have been made of the equity implications of the package are very much overblown.

A key priority for a coalition government always is to consider the impact of any set of measures on regional Australia and, in this case, on regional universities. An important aspect of this package is that the government will also continue to support regional higher education directly through $274 million in regional loading over the next four years in recognition of the higher costs of regional campuses.

There has also been a lot of overblown speculation about the impact on fees if universities are free to set prices as they judge appropriate. Much of that overblown commentary tends to ignore the reality that the universities will be operating in a competitive market; they will face a market discipline. It will not be open to a university to set fees which are conspicuously above those charged by its competitors. They will be subject to the same market disciplines as anybody operating in a market.

The package before the House this afternoon is a very important package because what it does is continue a reform direction in education that has been under way for some time. It recognises the importance of our universities being high performing. It recognises the importance of universities being free to chart their own course and gives them much greater freedom to do that than they have had under the previous heavily regulated arrangements. That is important for universities, that is important for students but, most of all, it is important for our national economic performance because universities are such a critical part of our economy. As we become more and more a knowledge economy, that will only increase.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

the Higher Education Research and Reform Amendment Bill 2014 is bad legislation from a bad government that has total disrespect for Australia's future.

The legislation is another broken promise from a government that said one thing before the election and another thing after the election. It is an attack on universities. It is an attack on students. It is an attack on research. And it is an attack on Australia's future. It was very interesting to hear the previous speaker, the member for Bradfield, talk about Australia's economic future. I do not think there is any piece of legislation that we have discussed in this parliament in recent times that has the potential to be a greater attack on Australia's economic future as a 'Knowledge Nation'.

Unfortunately, the Abbott government, and previously the Howard government, have always believed that university education should only be enjoyed by those in our society who they consider are the right type of people: people who are wealthy, people who have the money to pay. It has no commitment to a fair go. It has always been committed to some form of social engineering whereby it ensures that those people who they deem are the right kind of people to undertake a university education are the ones who do so. It is the Liberal way.

When Brendan Nelson, the former member for Bradfield, was the Minister for Education, he made very, very telling comments. In one newspaper—and I am paraphrasing his words—the former education minister said that introducing fee flexibility would mean some courses would rise, some courses would drop and some would stay the same according to demand. He also said that some courses may increase their tuition fees in some disciplines, some institutions intended to reduce their fees and some university vice-chancellors had always said that they would not charge their HECS charges, and that it was quite wrong for critics to say that every HECS charge will go up by 30 per cent. Does that sound familiar? That is exactly what Christopher Pyne is saying when he talks about this legislation and those statements that Brendan Nelson made at the time were proven wrong.

This legislation is opposed by most of the people who I represent in this parliament. This government is committed to the $200,000 degrees, which will come from fee deregulation. We on this side of the parliament are opposed to cutting public funding. We are opposed to the Americanisation of our world-class university system. Every step along the way and every piece of legislation that this government introduces in the parliament is taking us towards the Americanisation of universities and health, and the government has no consideration whatsoever for the overall value that universities and health play in our society.

The opposition values the role of universities. We value this role not only in the way it helps to educate individuals but also in its contribution to communities—communities like the community I come from, where the University of Newcastle plays a vital role. I must put on the record that that university has some very serious concerns about the impact of this legislation. It does oppose, I believe, any scenario which would reduce funding either to the Commonwealth Grants Scheme or to research allocations to universities. Unfortunately, this legislation has the potential to do that.

Research-intensive universities located in regions, such as the University of Newcastle, are uniquely vulnerable to the proposed cuts. Newcastle university conducts world-class research, so it is not only the increase in the cost of a degree but it is the impact that it will have on research. Newcastle university understands that fee deregulation will impact on students attending the university and the university itself.

I have read through literature that shows when fees were deregulated in the UK it led to an increase in the cost of university education. Education at universities in the US is practically unaffordable. Every single university over there really makes it very difficult for students actually to attend.

It seems to me that this is the vision that this government has for universities. It is pretty much what the Minister for Education has to say about deregulation. We heard about what Brendan Nelson said previously and those words are mimicked by Christopher Pyne when he talks about full fee deregulation. Every single university will end up having a 20 per cent cut to funding and that will put enormous stress upon the universities.

I do value the role of universities and, coming from the area that I do, I acknowledge that it has only been by government supporting universities that the Newcastle university has grown to the position it is in at the moment. It is one of the top universities in Australia and it is respected worldwide. It is only because of the support that has been given to universities such as Newcastle, which are located in disadvantaged areas, that they can continue to deliver world-class research and innovation in their communities. In a deregulated market it is going to be very difficult for that to continue. The University of Newcastle is ranked in the top three per cent of universities in the world, in the top 10 universities in Australia for research and for quality teaching, and is the top university in Australia under 50 years of age. Not a bad performing university.

The Shortland electorate has a fairly low median income. The median weekly income is $1,287, compared to some Liberal electorates like Wentworth where the median income is $2,643 or even the member Sturt electorate where it is over $1,500 a week. I notice the member for Dobell is sitting in the chamber. I know that people living on the Central Coast have a low-median weekly income and she acknowledges that. There have been enormous problems with students on the Central Coast being able to access university and the retention rate at schools is very low. We need every incentive possible to enable those students to attend university.

This legislation before us today will make it harder for those students. When those students are faced with the thought of having to repay loans, that is one of the major blocks to them undertaking university. We should be encouraging and facilitating all those young people who want to go to university to go to university, but this legislation has so many blocks in place—blocks to research and the development of that side of university and blocks to encouraging disadvantaged students to attend university.

Another feature of Newcastle university is that more than 60 per cent of the undergraduate students are considered non-school leavers. I attended Newcastle university. When I left school, I decided I needed time off before I went to university. I could have gone straight to university, but I did not. When I did decide to go to university, there was absolutely no way I would have considered going if I had been confronted with the possibility of incurring a debt, the kind of debt that students will incur going to university under this legislation and debt that will attract a real rate of interest.

This will discourage mature-age people from going to university. I am sure there are some on the other side of this House who would prefer that I had not gone back to university. I feel that our community has really benefited enormously from mature-age students. I have a number of friends who went to university as their children got older and did the Open Foundation and became teachers and nurses. This is something that Newcastle university nurtures. I believe that this legislation is anti-student, anti-university, anti-research and anti-Australian. Deregulation has not made university fees any cheaper overseas. In fact, it has led to universities charging higher fees. When the real interest rates are put in place on HECS loans, we know they will go up and go up substantially. These loans are really a hidden subsidy. The indexing of HECS-HELP loans at CPI is a core part of the scheme's original design. The architect of HECS, Bruce Chapman, described it as having insurance. Now to apply real interest rates to HECS is regressive. Everybody to whom I have spoken to oppose this. I have met with a number of parents and with students, and they are very worried about this.

Under the current proposal for the Commonwealth Scholarship Scheme, the wealthier students and the higher-charging courses will end up with more money to give to those scholarships. It is very unfair in the way it will work. One in $5 of the additional revenue universities raise above their per student capita will go towards this scheme. That will entrench even further an unfair system, a system that is going to attack our universities, attack our students. It will mean that the already privileged universities will be able to use the money for other students and regional universities will have to choose between raising fees to offer scholarships.

This will work against universities in regions like Newcastle. Newcastle university is strong under every single criteria. It is a great university for research. It is very innovative. It has done a lot to welcome and encourage students from low-socioeconomic backgrounds as well as providing very high-quality courses. I strongly oppose this legislation. It is bad legislation on every possible front and the government needs to go back to the drawing board and come up with something that is fair and equitable.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

The member for Shortland and I do not agree on much, but one thing we do agree on is how outstanding Newcastle university is. I rise to support this government's higher education reforms proposed by the Higher Education and Research Reform Amendment Bill 2014. They give effect to providing opportunity to more students, including those from disadvantaged backgrounds and rural and regional areas. The bill introduces, inter alia, a range of measures to place Australia on the global map as a provider of world-leading university education. The reforms proposed within this bill expand opportunities for students by supporting more courses, which will provide greater diversity and higher skills to meet shifting job skills demand; increasing support for disadvantaged rural and regional students through Australia's greatest scholarship scheme; and ensuring Australian universities are not left behind at a time of rising performance by growing international university systems within our region and worldwide.

This bill also guarantees that our higher education system is sustainable into the future and that our third largest export, the $15 billion international education market, is protected and that growth is encouraged. These reforms are necessary to prevent Australian education institutions from being left behind. Our current system is outdated and if the status quo remains we will see Australian universities become uncompetitive with international institutions. Unfortunately, we are now seeing Australian universities declining in world rankings. In 2014, The Times higher education reputation rankings listed only five Australian universities in the world's top 100, compared to six the previous year. Five years ago there were no Chinese universities ranked in the world's top 200 universities. Today there are six. Higher education institutions require the flexibility to respond appropriately to increasing challenges, including student mobility, technological advancement and rapid innovation.

Many institutions have been frustrated by the restriction of regulation, stifling the development of creative means to compete with international providers. To secure the sustainability of our future workforce, Australia needs a diverse economy capable of adapting to global competition. These reforms will see our tertiary institutions afforded new incentives and opportunities to develop partnerships and encourage innovative courses which will deliver the skills and capabilities as demanded by local employers and industry.

Higher education has a vital role in our society as a catalyst of economic growth through educating and upskilling our future and current workforce, in addition to producing quality research. These reforms expand choice and opportunity and will strengthen this vital section of our economy.

Jill Hall (Shortland, Australian Labor Party) Share this | Link to this | Hansard source

Mr Deputy Speaker, I seek to intervene. I would like to ask the member a question.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

Is the member for Dobell willing to give way?

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

No, I am not taking it, Mr Deputy Speaker.

Don Randall (Canning, Liberal Party) Share this | Link to this | Hansard source

The intervention is not accepted.

Karen McNamara (Dobell, Liberal Party) Share this | Link to this | Hansard source

This bill will enable, by 2018, an additional 80,000 higher education students per year to gain access to government subsidies. For the first time ever students will receive Commonwealth support to undertake and complete diplomas, advanced diploma and associate degrees. All Australian undergraduate students in registered higher education institutions will be supported for all accredited courses.

This bill enhances opportunity. For an electorate such as Dobell, this measure will see more people afforded the opportunity to engage in higher education, in addition to attracting quality jobs as a result of a highly educated labour market. By extending Commonwealth support to diploma courses, we are providing an important pathway to higher education for those students seeking later admission to university studies.

Providing students the opportunity to develop the skills required to successfully undertake higher education, ensures that they have the best chance of attending university and attaining a tertiary qualification. This is especially important in regional and low-socioeconomic areas where students are currently afforded less opportunity to enter into higher education, as compared to students living in metropolitan areas.

In Dobell, only 50 per cent of students attain year 12 qualifications. Students who do not complete their Higher School Certificate are often denied the opportunity to attend university. On the Central Coast, only 16 per cent of residents possess a tertiary qualification. It is my aim to see that number increase.

By extending student access to the HELP scheme, we will open the door to people who were previously unable to meet the up-front costs of a diploma pathway course, which allows more people to participate in undergraduate studies at university.

We are also extending Commonwealth support to enable private universities and non-university higher education institutions to compete for students. By doing so, we acknowledge the role played by private institutions in contributing to the diversity of Australian higher education. By extending support to private institutions we are welcoming and encouraging them to play a greater role in providing higher education.

Again, this will benefit regional communities where non-traditional providers can meet the demand for higher education services. This is a significant reform for regional communities such as the Central Coast.

The University of Newcastle has demonstrated a commitment to the Central Coast, with the establishment of its Ourimbah campus, which is currently celebrating its 25th anniversary. The Ourimbah campus offers 16 undergraduate degrees, four of them exclusively, and sees a partnership with TAFE that provides diverse educational opportunities.

The Ourimbah campus partnership with TAFE will benefit from funding for pathway and other diploma courses, which will see more people provided the opportunity to succeed at university. Unfortunately, despite the outstanding work of the University of Newcastle, many local students have no option but to travel to Sydney or Newcastle to study their chosen course.

Unfortunately, once qualified, few return to the Central Coast to undertake employment, settle down and raise families. So this is seeing us exporting our best and brightest to metropolitan areas. Figures released by Wyong Shire Council have estimated a shortfall of 7,600 university places within the Central Coast and the Hunter Valley.

Based on forecasted population growth it is expected that this number will increase to 8,600 by 2031. Our growth plan for the Central Coast recognised this shortfall and included a commitment to facilitate the approval process for university development in our region. This commitment is forged from the understanding that universities play a crucial role in driving development in regional areas through job creation and educating the community.

I am proud to be working with Wyong Shire Council, as they develop a master plan for a new university precinct at Warnervale. On the back of these reforms is a vision that this precinct will be home to a diverse range of education providers, including a university, a TAFE and other private education institutions.

Private institutions and non-university higher education providers will be encouraged to establish themselves in regions such as the Central Coast as they will now be able to offer Commonwealth subsidised courses to a market in which courses are currently not available. For the people of Dobell, this is critically important in ensuring that they have access to world-class education facilities that will unlock the prosperity of our region for years to come.

This reform package also empowers universities to determine the appropriate fees for their courses, which will generate a competitive market for students between a greater range of providers. Currently, higher education institutions have little means to distinguish themselves within the market and demonstrate the true monetary value of their courses. It is fair to say that universities have been operating with one arm tied behind their back.

Despite the government not being in a positon to know the true cost for a university to deliver a course, it had been imposing upon universities how much they can charge their students. This is unique within the Australian economy and has undoubtedly restricted the growth of university standards when compared to foreign universities. Competition between higher education providers will benefit students as they will now have a greater array of choice when it comes to course offerings and prices. Fees will be set on the basis of supply and demand in a competitive market. This competition will drive quality and encourage providers to be more responsive to the needs of their students and the needs of business and industry. Ultimately, all providers will be required to compete on price and quality, meaning more flexibility and choice for students.

As previously highlighted, the Central Coast has a below average number of people completing secondary education, undertaking tertiary education or possessing a tertiary qualification. The contributing factors include but are not limited to: a shortfall in available local university courses; costs associated with transport or relocation to metropolitan areas; and below average education attainment rates. This government is determined to assist people who find themselves in these difficult situations. This is why this government will establish the new Commonwealth scholarship scheme. These scholarships will deliver major new support for regional students to attend university.

Under the proposed higher education system, we will require universities and other higher education providers to spend $1 in every $5 of additional revenue raised on scholarships for disadvantaged students. Universities and higher education institutions will be able to provide tailored, individualised support to students of a low socioeconomic status. This may include needs based scholarships to help meet the costs of living, fee exceptions or tutorial support. For a Dobell school leaver unable to afford to relocate to Sydney, such assistance can result in them having the opportunity to attend university and achieve a sustained path of employment and investment in their future. These scholarships will be of enormous benefit to students from regions, including the Central Coast.

I struggle to understand why members opposite are so committed in their opposition to these reforms. It is one thing to oppose these measures in parliament on ideological grounds, but to see members opposite parading around university campuses and blatantly peddling lies to scare students away from higher education is shameful. This government is not—I repeat not—increasing fees. Fees will be set by universities who will determine what to charge. Competition between higher education providers will ensure universities are reasonable when setting their fees. Higher education providers will compete for students. The truth is that, under these reforms, more students will have the opportunity to attend university and they will not face any up-front costs.

The government is maintaining the Higher Education Loan Program scheme, meaning no student will pay a cent up-front for their higher education until they have graduated and are earning a reasonable income of over $50,000. As a government, we believe that it is fair that students contribute equitably to the cost of their education. We are asking students to pay for 50 per cent of their higher education costs. The Australian taxpayer will pay the other 50 per cent. Under the current system, the Australian taxpayer is meeting 60 per cent of the cost, with students paying the other 40 per cent. It is folly to suggest that somehow these reforms are delivering a cut to education funding.

This government's expenditure on higher education increases each year. Compared with Labor's 2013-14 budget, where total education funding was $8.97 billion, our budget shows higher education funding growing to $9.47 billion by 2017-18. We are supporting more access for people to attend university and other higher education institutions. Members opposite would have you think that there is no support for these reforms. Vice-chancellors across Australia overwhelmingly support this government's reform package, with Professors Gareth Evans and Ian Young of the Australian National University stating:

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

I look forward to the unlocked potential these reforms will deliver, in particular for regions such as the Central Coast. We will see renewed investment from higher education providers and greater opportunity for local students. We will see higher paid jobs as a result of industry and business being attracted to regional areas through the provision of a better educated workforce.

Students need not fear these reforms. Students should embrace the endless opportunities afforded to them by this nation's great universal education system and have the confidence to say, 'I can follow my dreams and there are no barriers to prevent me from reaching my full potential.' The possibilities are truly endless. I commend this legislation to the House.

Justine Elliot (Richmond, Australian Labor Party) Share this | Link to this | Hansard source

I, like many on this side of the House, rise tonight to speak in opposition to the government's Higher Education and Research Reform Amendment Bill 2014. Listening to the previous speaker, the member for Dobell, outlining her support for this bill was truly amazing. I challenge her to go to the people of Dobell and read that speech to young families who are concerned about their children's future and how they will ever be able to access university. This bill will be detrimental to the families of Dobell and it will mean that people from regional areas like Dobell will not be able to attend university, and she should tell them that.

This bill is another broken promise. It is an unfair plan which will result in an increase in the cost of degrees—up to $100,000. It will also result in crippling debt and vicious cuts to university course funding. The bill is a fundamental attack on one of the most basic rights, and that is the right to access a decent education. It is particularly hard for those people who live in regional and rural areas. In terms of regional areas, such as my electorate of Richmond, I have pointed out many times in this House that there are vast differences between members of the Labor Party and members of the National Party, who often represent other regional areas. The difference in relation to this issue is a massive one. It really goes to the core of what value you place on education. Whilst Labor is absolutely committed to making sure that everyone is able to access a decent education, wherever they may live, it is the National Party who are selling out regional Australia by supporting this legislation. It is an absolute disgrace and it is an issue that we will fight the Nationals on, every day up until the next election.

Locals on the North Coast in my electorate are already under attack by this government's cruel and unfair budget. We have already seen the government's plans for bringing in the $7 doctor tax, for cutting pensions, for the petrol tax, and now they want to bring in extreme university fees. Make no mistake: the families on the North Coast will hold the National Party responsible for their plans to take away the ability of regional students to access university. Make absolutely no mistake about that. The Nationals will be taking away the opportunity for students from our rural and regional areas to access the skills and the education to advance their careers and to have opportunities into the future.

It is the Nationals who will be held responsible for the fact that young people will not be able to go to university and mature age students will not be able to get into university. Those from struggling families will not be able to get in, women will not be able to get in, and all those people from rural and regional areas will not be able to get in to university, and they will hold the National Party to account.

My message tonight is very specific to the National Party. You cannot hide out on this one. When you come into the chamber and you vote in support of this unfair legislation, you are abandoning the people of regional and rural Australia and you will be held to account. Not only do these measures make it more difficult for those from regional areas to attend university; they also make it more difficult for regional universities to compete with larger, city-based institutions and to remain viable in the face of some of these changes.

This bill has a range of harsh measures which will result in increases in university fees—including, firstly, the unrestrained student fees or the fee deregulation. This essentially removes the price controls for students' contributions to the cost of their degrees and allows universities to set much higher fees. Labor totally opposes this measure, as the removal of price controls means that university degrees will in fact dramatically increase—in some cases to $100,000. Currently the fees are capped on what the student is studying. By removing the cap the prices will soar. That is the reality and it is the reality we have seen in many examples overseas when similar deregulation has occurred. People are very much aware of this. Many locals have told me that this is one of their primary concerns.

Secondly, the bill also includes cuts to public funding for university courses by up to 37 per cent. This part of the legislation cuts 20 per cent from Commonwealth Grant Scheme funding. An average reduction of 20 per cent in funding for Commonwealth-supported places means that universities will be forced to increase their fees by as much as 60 per cent for some degrees, just to cover the funding cut. The government's own figures reveal that the cuts to the subsidy the Commonwealth offers for the teaching of courses will rip $1.9 billion from universities. That is a huge amount. Thirdly, the bill also includes changes to the HECS repayment indexation rate and thresholds, which will place huge financial burdens on students.

This government has broken so many promises to the Australian people and this is certainly the case when it comes to education. I would like to remind the House of the Prime Minister's promise to the Australian people and to Australian students a little over a year ago. On 28 August 2013, in the last week before the election, the Prime Minister told the Australian people that there would be 'no cuts to education'. Indeed, in my area we had all the National Party candidates running around saying, 'No cuts to education, none of that will be happening here—no cuts at all'. Look what has happened. The Prime Minister has broken his promise, the Liberal Party have broken their promise and the National Party have broken their promise yet again.

Have no doubt: this bill before the House represents the single biggest assault on students and their families by any government. It is appalling. This attack represents a plan by this government to essentially make massive cuts to higher education funding and to shift the shortfall of debt onto students. The attack on students and families involves an unfair move to deregulate university fees and to heighten in real terms the interest rate payable on student loans by changes to the indexation and the 20 per cent cut to overall Commonwealth funding.

The changes to the indexation in HECS debts is particularly cruel. This change will effectively mean that university students and graduates with existing HECS debts—currently is about 1.2 million people—will be hit by thousands of dollars extra in interest on their loans. This is fundamentally unfair as the goal posts have now changed for those who do have HECS debts. Those who are planning and organising their lives will now have a massive increase in those.

Both existing and new HECS debts will feel the impact of this Liberal-National Party government's changes to interest rates from the current rate of CPI indexation, presently at two per cent, to what they are putting it to—the government bond rate, which is capped at six per cent. That will make a huge difference. We are talking about a massive amount of debt. The current outstanding HECS debt was estimated at $26 billion in the 2013-14 budget papers. By the end of the current forward estimates, the debt is projected to grow to $42 billion. That is without factoring in the Abbott government's changes. It is not a stretch to calculate how compound interest on these sums will run into the billions—all of which the Prime Minister and his government will impose on students. It creates a very unfair burden for young adults starting out in their lives to have these massive debts burdening them, particularly for people from regional and rural areas. They sometimes might go away to study but they want to come back the regional areas. It will be a lot more difficult for them if they are carrying these massive debts.

The fact is that the fee deregulation will mean that students and families in my electorate will pay so much more for the degrees they have to get. It means that the reality for families and young people is that they just cannot go to university. Families have told me that it is just not on their radar. They cannot afford it. It will not be an option for their families. Quite honestly, I find it sickening and appalling that this government would so harshly slug Australia's youth with such huge prices for degrees and such massive debts.

In terms of these changes to the funding of our universities, there has been widespread criticism. In fact, many respected academics and, indeed, former government advisors have criticised the Liberal and National Party's attempt to Americanise our university sector. One in particular is Professor Kwong Lee Dow, former Vice-Chancellor of the University of Melbourne, who said:

In poorer communities, including regional and rural communities, families will not be able to meet these higher fees, so the institutions will have less funding and so become less competitive over time.

This totally refutes the claims we have heard from across the chamber that the government's regulatory framework will bring freedom, lower fees and competiveness. In reality, their changes will harm regional universities. Another academic, Professor Linda Kristjanson, said that 'deregulation will inevitably lead to much higher fees for our students'. That is a reality. It is a plain fact that, in particular, women, students from low-income backgrounds and students from regional Australia will be hardest hit by the higher fees and higher interest rates on student loans. These are the people who will be impacted most. I know many people in Richmond who already struggle enough under current fee and repayment arrangements. So to impose increased unfair changes will simply mean that fewer people from regional communities will get a chance to get a higher education. It is fundamentally cruel to deny those from regional and rural areas the opportunity to attain greater skills and greater employment prospects.

These reforms are also going to hurt regional universities and their students. Southern Cross University is a great university on the north coast of New South Wales. They do an outstanding job. Many students live and work in the Richmond electorate. Following the government's planned cuts and deregulation the Vice-Chancellor of Southern Cross University, Professor Peter Lee, expressed concern for the higher education sector and, in particular, regional universities. He said: 'Southern Cross University, as a smaller regional university, has no capacity to absorb this 20 per cent cut without fee deregulation. Indeed, the thin markets and student demographics of many regional universities mean it may be harder for us to break even, given the market dominance of many larger city based universities.'

However, the government wrongly claims it can overcome this blatant regional disadvantage by requiring universities to establish a scholarship fund from 20 per cent of additional revenue. This appears in schedule 2 of this bill. The government argues this will protect regional students from the negative effects of fee increases. I totally dispute that claim by the government. Firstly, no Commonwealth money is allocated to these funds. These funds will be on the basis of additional fees charged to students. Secondly, as Professor Lee said, regional universities are concerned that the capacity of major universities to charge higher fees will mean regional universities are disadvantaged by comparison. It is so unfair to regional universities. In other words, the scholarship funds will be used to entrench market position and market power. The modelling suggests that the big universities will have the capacity to raise millions of dollars in the first year of operation. On the other hand, Labor has been told by one regional university that they will raise perhaps only $200,000 in the first year. You can see the massive difference.

These cuts to universities and higher education, through changing the indexation of loan repayments and fee deregulation, will hurt regional universities and the people in my electorate who rely on them. We on this side of the House will fight to protect future students and their families. We do not want students to carry around a 'debt sentence' their whole life. We think that is incredibly unfair.

Labor believes in the benefits of an accessible and affordable education regardless of where you live or how much your family earns. We think people should have the right to access a decent education and have all the opportunities in life to follow the career paths they have the capacity for. We have always believed in that, and we always will. We will always fight for it. Indeed, that is why we are opposing this legislation today. At the heart of it, we believe that a person's intellectual capacity and commitment should be the basis for determining their ability to get into university, not how much money they have to buy their way in. That is what Labor has always believed.

The fact is that Australian students cannot afford these degrees—in particular, they cannot afford $100,000 degrees. It is quite simply unfair. It is more than unfair. It is cruel, heartless and nasty. I find it very difficult to understand how members opposite, particularly those from regional areas, will be able to explain to their electorates exactly what they are supporting and voting for. Members from the National Party represent some of the most disadvantaged areas of this country in terms of the struggling nature of many of the lower socioeconomic areas in our regional and rural areas. They will have to go back and face people there and explain to them that they are essentially voting to stop their children from ever going to university, to stop people from entering university as mature-age students and to stop disadvantaged people from going to university. That is what they are doing. We will certainly be making sure that we are telling everyone that. That is precisely what the National Party is doing in those regional areas, and it is truly shameful. People should be able to access universities.

This bill is another bad policy from a bad government. We have seen it on so many occasions, particularly in terms of broken promises. Before the election, everyone from Prime Minister to candidate was running around saying, 'There'll be no cuts to education, no cuts to health, no cuts to pensions.' Well, we have seen all of that in place—all equally cruel and equally harsh. In terms of some of those long-term propositions, the education cuts are incredibly harsh. In my community, people are very much aware of it. They are very angry. They know that the opportunities for their children and their grandchildren are being severely limited because this government has broken its promise when it comes to education.

This bill is bad policy from a bad government. We will be opposing this legislation in the strongest possible terms. I am very proud to be opposing this legislation. I stand with my community and with the Labor Party in opposing this legislation and fighting for the right of young people from regional areas to access university as they rightly should be able to do.

Nola Marino (Forrest, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Amendment Bill 2014. I will focus my remarks on three areas, one of which I believe is one of the reasons that reform is needed, secondly is the importance of the uncapped number of diplomas, advanced diplomas and associate degrees, and finally, the government's investment in research. For those in this House—I see Parliamentary Secretary Fletcher at the table—we certainly understand that the university and higher education sector in Australia is facing a number of challenges. Universities have made this particularly clear. Reform and flexibility are absolutely necessary. Universities themselves acknowledge that reform and flexibility are necessary for several reasons. Australian universities are competing in a global education market and they literally cannot afford to stand still. The 'business-as-usual' model is not an option for them. Our universities are not only competing with the constantly improving performances by universities around the world for both international and domestic students but they also have to deal with major changes in the way higher education is being delivered to students of all ages, driven by the internet. This is one reason I believe flexibility for our university and higher education sector is so important.

We are seeing increasingly sophisticated, constantly evolving new digital technologies delivering not just online courses but complete online degrees. I am not just talking about MOOCS—the Massive Open Online Courses—mostly provided by Cousera, edX and Udacity. We all know that the most prestigious universities in the world—for instance, Harvard, Stanford and MIT—are offering completely free online courses. We also know that millions of people around the world are taking up this opportunity. They are often mature aged students who have to be flexible in how, when and where they learn. Pure online courses in Australia are growing at 19 per cent per annum. I understand that 60 per cent of American higher education institutions are now offering complete online programs.

Improvements in this sector are absolutely guaranteed to the delivery of online degrees by prestigious international universities. That makes the environment in which our universities are competing even tougher. In time, as we know, we may well see some of the best courses in this space coming out of India and China, I suspect partly through demand and opportunity and partly through necessity. Given their vast populations, this will provide potentially millions of students of all ages with access to courses at the same time. Almost every Australian university is already providing some online courses. As well, several of our regional universities have built on their traditional distance education models to provide strong online platforms.

As I said, the market has changed and it will continue to change and there are viable challenges to traditional university models. They are coming in all forms. Standing still is not an option. By the same token, changes and challenges are providing opportunities for our Australian universities. Many of our higher education institutions are moving to take advantage of this. They are very well aware that they need to be able to respond to constant change, both in the domestic and international market, which is why this reform bill has been supported by the higher education sector. They know that a 'business as usual' policy is simply not an option. As Professors Gareth Evans and Ian Young of the ANU said:

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

It is a very clear statement which reaffirms the need for the very reforms contained in this legislation. The second issue I want to cover is that this bill will give a new cohort of students the support they so badly need, particularly those from low SES backgrounds and those from regional areas who find it much more difficult to get to university. I see this all the time, as you do Deputy Speaker Randall. I saw graphically in my electorate—and have heard some interesting comments made in this chamber by members of the other side—the effects of changes the previous government made to access to independent youth allowance, the profound impact on young people and their families, the changes they had to make to their education decisions, their plans and dreams and the absolute despair in families having to decide which one of their children they could afford to send to university in Perth.

I strongly support expansion of the demand driven system to over 80,000 students each year by 2018 who will be provided additional federal government support. Through the measures in this bill, an estimated 48,000 students in diploma, advanced diploma and associate degree courses and 35,000 additional students in bachelor courses will be supported. I want to see regional education providers and regional students taking advantage of this. That is exactly what we need to see in regional areas.

What an opportunity for our great young Australians and for students of all ages who need to or have to use a variety of pathways to get achieve their higher education. They will now get that opportunity and they will be supported. This support will improve their access, expand their choices and, most of all, expand the opportunities for students in the higher education sector. The Regional Universities Network also said:

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, would 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.

Like other university students, none of this new category of Commonwealth supported students will have to pay their tuition fees up-front—none—and no student will have to repay their HECS-HELP loan until they are out in the workforce and they are earning over $50,000 a year.

As well, the government is removing all FEE-HELP and VET FEE-HELP loan fees. I hope this offers opportunities to students in the South West Institute of Technology in Bunbury. I also must mention Busselton, where I have been working for several years with a higher education task force—a community and stakeholder working group that has been looking at options to offer higher education in Busselton. We have been working on a potential dual-delivery model with the proposed new SWIT Busselton campus. I see the reforms that are contained in this bill as being very useful in that process, offering more opportunity to young people—and people of all ages, not just young people—in my region. Education is a lifetime opportunity.

I also want to briefly touch on our commitment to securing Australia's position at the forefront of research, through—and this is significant—$150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy and $139.5 million for 100 new four-year research positions a year under the Future Fellowships scheme. Then there is $26 million to accelerate research in dementia. What an extremely worthwhile cause that is. There would be very few people in this place whose families have not been affected by dementia in some form. There is also $42 million to support new research in tropical disease and $24 million to support the Antarctic Gateway partnership.

This bill is the main piece of legislation providing funding for higher education in Australia. Through it, the government seeks to expand opportunity and choice in higher education in Australia. The safety net is protected. The HECS-HELP scheme in Australia is the safety net that allows all tertiary students to defer their HECS-HELP debt and pay it off once they join the workforce. This allows all Australian students the opportunity to study.

The Commonwealth subsidy for places at non-university higher education providers will be discounted to recognise the unique responsibilities of universities, while still ensuring that providers receive sufficient funding to compete with universities. These changes put alternative higher education options back in reach for all Australian students by supporting equitable treatment of students, regardless of where they choose to study. The Australian Council for Private Education and Training said:

The government's higher education reforms are a major milestone, and deliver equity and fairness for the growing number of higher education students choosing to undertake their degree or sub-degree program at a non-university institution. Currently students outside the university system are significantly disadvantaged with additional administrative costs on top of their income contingent loans and they are currently ruled out from receiving any government support.

They went on to say:

In what is clearly a difficult budget environment, the government is to be commended for its commitment to significant reforms to the tertiary sector to provide more support to more students and enhance Australia’s productivity.

The one thing that we cannot ignore—and I am very interested to hear the speakers on the opposite side recognise this—is that it is, as that last quote said, a very difficult situation that we inherited. I am sure all the members on this side understand the issue of $1 billion a month in interest that this country has been left with by the previous government—$12 billion a year. That is the type of funding that could have many applications. We have to deal with the reality of what we have been left with, and that is exactly what we are doing. I am supporting the Higher Education and Research Reform Amendment Bill 2014.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

I too would like to make a contribution in respect of the Higher Education and Research Reform Amendment Bill 2014. I am one of those on this side of the House who are very, very concerned about the passage of this legislation. These amendments are not only destructive for the future of young people looking to pursue a tertiary qualification but, to any of us who have any understanding of economics, they are destructive to the long-term economic and social development of our nation.

Higher education is an issue very near and dear to the hearts of many parents and students in my electorate, as I would expect would be the case for any member here in the House of Representatives. I know that parents in my electorate place particularly high importance on a university education for their children, as they see that a tertiary qualification is important to succeed in a society like Australia's. Part of that probably comes from the fact that it is a very multicultural community, but it is probably more entrenched because mine is also a community that has significant pockets of disadvantage.

I ask members here to recall that, before the last election, Tony Abbott promised that a Liberal government would not make any cuts to education. Just let me quote from what the Prime Minister said. He said this: 'I want to give the people an absolute assurance: no cuts to education, no cuts to health, no changes to pensions, and no changes to the GST.' In that very short list there are probably not many promises that have not been broken so far. But, for the purposes of this debate, I want to concentrate on that promise that he made on education.

Now, a year on from the election, we see this conga line of broken promises and, as to education, a $5.8 billion cut to the higher education sector. We see the slashing of funds from the Commonwealth supported places in undergraduate degrees by 20 per cent, the reduction in indexation arrangements for university funding to the consumer price index, the cutting of almost $174 million from the Research Training Scheme, and the introduction of PhD fees. But one of the things that really concerns a lot of people in my electorate, just judging by the phone calls and emails I have had of late, is the introduction of the real rate of interest for HECS debt.

We have seen education come under attack from this government time and time again. We have seen the government backflip on school based education. Those opposite do not have to take Labor members' views on this; they only have to make contact with New South Wales Minister for Education Adrian Piccoli, who will probably confirm for them that Gonski is gone—that the whole basis for an education revolution in this country, the whole basis of giving this country the opportunity to compete with the best and smartest minds in the world, has been undermined by this government. They should stop to think of what the impact of these so-called reforms is going to amount to—but, particularly for this debate, they would not need to go any further than thinking about what they are proposing to do to students striving to gain a tertiary qualification. I am not just talking about young people graduating from high school and going to university. You yourself, Mr Deputy Speaker Mitchell, raised, in question time the other day, the issue of a mature-age student, a father of four, in your electorate, who was holding down a part-time job—

Rob Mitchell (McEwen, Australian Labor Party) Share this | Link to this | Hansard source

A full-time job.

Chris Hayes (Fowler, Australian Labor Party) Share this | Link to this | Hansard source

sorry; a full-time job—and still trying to secure a university qualification. You saw how that commentary was derided by those opposite, when a person in that position should have received every bit of assistance possible—but that was just indicative of the approach that this government is taking to the education debate.

What is particularly scary for students is what is to come into effect on 1 January 2016—the deregulation of university fees. And students are scared for very good reason, I would suggest.

Whilst my electorate of Fowler, sadly, does not boast university campuses within its boundaries, the University of Western Sydney, nevertheless, operates campuses in both Campbelltown and Parramatta, which many of the students in my electorate attend. While Campbelltown—an area near where I live—may not be the largest campus in Australia, I acknowledge the significant role that it plays in providing education, particularly for culturally and linguistically diverse communities, who very much predominantly reside in south-west Sydney. Universities such as UWS have not gone out there and campaigned on the inadequacy of the current fee structure to conduct their programs, and universities like UWS are not part of this gang of eight—the sandstone universities, as they are referred to—that are so totally fixated on the dollar and also very much on the business model of attracting foreign students into their universities. The universities operating in south-west Sydney like UWS are there to provide an opportunity for young people—an opportunity to get a university qualification and so to get an opportunity in life. With the proposed higher education reforms looming, universities like UWS will have no choice but to increase their fees—the suggestion is, by around 30 per cent—to account for the direct cuts that this government is making through the slashing of the Commonwealth's financial support.

If anything, this has to be seen as a classic cost-shifting exercise. Normally you would see cost-shifting between the Commonwealth and the states, but this is between the Commonwealth and individual students. The shortfall in Commonwealth funding is intended to be made up by an increase in student fees, and I would submit that they are not only the people probably least able to afford these costs but also the people that we are relying on to gain those qualifications, for our very future.

Australian undergraduates are currently paying amongst the highest tuition fees in the world. According to the OECD's 2008 report, Australia ranked 23rd out of 31 OECD countries in terms of students' ability to finance their own education costs.

Due to these financial restraints, research also shows that students in the bottom income quartile are four times more likely not to graduate than those in the top income quartile. This is particularly concerning for students and young people living in my area, most of whom do not come from wealthy backgrounds.

Domestic and international experience suggests that uncapping university fees will inevitably lead to a very significant increase in university tuition fees, putting tertiary education beyond the reach of many young people—particularly those coming from low-socioeconomic backgrounds.

Regrettably, my electorate, I think, is classified as the second-lowest socioeconomic area—so this directly impacts many families that I have the honour of representing. Cost will become a very big consideration when thinking about undertaking a degree or other tertiary qualifications. I know many local residents with kids currently studying at universities across Sydney and they have told me that, without the current level of HECS support, it would be close to impossible for their kids to pursue higher education.

As I have indicated many times here, my electorate is the most multicultural community in the country. It is something we are very proud of. Regrettably, there are large pockets of disadvantage, with many families coming from low-socioeconomic backgrounds. Many of them are refugees and people who did not have the opportunity to access a higher education. For that reason, they place their children's education at the forefront of everything. They work very hard, putting in long hours to support their families. They go to great lengths to emphasise that education is very important. They strive to provide the best opportunities for their kids. They see it as important for young people to be successful in a society like Australia. They strive for a better future than theirs. In most cases their pasts were devoid of proper opportunities for higher education.

I would like to talk about one family in particular. A local resident, Mr Van Nguyen works part time in a bottleshop in Lansvale. He classifies himself as a low-income earner. He tells me he earns no more than $500 a week. His wife, Hoa Tran, works on a casual basis in the garment industry, also in my electorate. Since arriving in Australia in 1989 as refugees from Vietnam, both parents have worked tirelessly, dedicating their entire lives to the future of their children. Their daughter, Yen, was a very bright student and was admitted to study a Bachelor of Medical Science and a Bachelor of Law at the University of Technology Sydney.

These parents are very proud of their daughter and her achievements, which were on display during her graduation. Coming from a low-income household, they find it incomprehensible that Yen now has a HECS debt close to $50,000. If this is the sort of financial obligation that current students are already racking up upon graduating, what position will our future students be in? They will be looking at $100,000 degrees.

According to the 2011 census data, 6.7 per cent of my electorate's population undertakes a higher education. That is close to 10,000 people each year. For an electorate with people aspiring to a future outside of a low income, that is good and something that should be encouraged. Certainly parents are playing a role in that. It is hard to think of what will become of these future students, most of whom will be graduating with a debt equivalent to a first home mortgage. These are huge financial pressures at such a young age. I am not sure what that is going to do for our future economy either. This will have intergenerational aspects attached to it.

It is undeniable that with these reforms, our education system is heading into a direction where it is no longer based on merit but rather based on price discrimination. Equality of access will be affected, particularly combined with the restrictive aspects that are going to apply to the HELP lifetime limits. As I have stated earlier, higher education is a key factor in our economic, cultural and social development. The long-term prosperity of Australia will be influenced by the future activities of higher education graduates.

However, higher education, and university education in particular, continues to suffer at the hands of the Liberal government, who want to put it in the hands of the wealthy rather than operate it on a merit based system. If they want to tax education to that extent, they do not have the interests of our country at heart when it comes to investing in our future.

Wyatt Roy (Longman, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the higher education reform package which is contained in the legislation before us here tonight, the Higher Education and Research Reform Bill 2014. The starting point for this debate is really about the issue of almost national pride as a country. Depending on how you measure it, we are essentially a top eight economy across the globe—yet we do not have a single university in the top eight. I think when we are excelling on so many different fronts across the globe, surely it is reasonable to expect that Australian students have the right to a world-class education, particularly a world-class higher education system, in this country. Surely Australian students have a right to expect that, when they go to a university in this country, that university is competing with the world's best—whether in the United States, the United Kingdom or, particularly, within our growing region in Asia. The reforms that we are talking about here tonight will be the key that unlocks the door to that reform that allows our universities to compete in the global marketplace and ensure that Australians are studying at world-class institutions—ones that compete with our friends across the globe.

It is also important that we maintain higher education as something that we export to the world. We know that higher education was the third largest export for our nation—something that we should be proud of. But, as we have over a billion people coming into the middle class in Asia, it is right to expect that our universities maintain their high standards and reach further so that we can continue to attract students from across the globe to study here in Australia. That is something that we should be proud of and we should be seeking to expand—because, not only is that an issue of pride; it is also an important economic issue. As we face significant challenges with an intergenerational debt burden, with the potential coming off of the mining boom, it is important that we can export other things.

As I said, education was the third largest export for our nation. Under the former Labor government, a government that was too timid to reform in this place, we saw international student enrolments in Australia fall by 130,000 places—a fall of 16 per cent. It is so important that, as we look at those long-term structural economic challenges that we face, we are able to say that our neighbours do not just want to buy our minerals resources and they just want to buy our agricultural goods but they also want to buy our services and they want to learn and study here. It is something that we should not be afraid of reaching further for as a nation.

The other issue that these reforms address is putting our university system on a sustainable funding model. The former Labor government essentially deregulated student numbers to create a demand-driven model. I do not think members in this House have large contention around that. But what they did not do was deregulate the fees which actually provided the funding for a demand-driven model. Paul Kelly, in the Australian, put it quite simply: you have a system where you have a demand-driven model in terms of the student numbers, which created the cart, but, without the funding stream to do that—without the deregulation of university fees—you do not have the horse to drive the cart.

This is an incredibly important reform that we have to go through. It is the next stage of reform to ensure that our universities can reach that global standard and are accessible to Australian students regardless of their background. I note that the former speaker was sort of deriding the Group of Eight universities and saying that students in western Sydney only want to go to average universities and they do not want to go to the best universities in the world. I am the first person in my family to finish high school and the first person in my family to go to university, and I say that, in this country, regardless of your background, you have every right to expect that the university you study in is a world-leading institution.

These reforms will ensure that, regardless of where you come from, you have the ability to study in a university that can compete with the best universities across the globe. These reforms will ensure that we have an opportunity to have the best universities in the world. They will ensure that we have a market to drive more international students to come here and increase export nations as a nation and they will ensure that these universities are put onto a sustainable funding model that meets a demand-driven model for student numbers.

I think that it is important that we have a look at what people in higher education have to say about these reforms. I might go through some of them from Paul Kelly's article which I mentioned before. The peak body representing Australia’s universities says that these reforms represent a 'once in a generation opportunity' to shape a higher education system 'that is sustainable, affordable and equitable' for students and the nation. Universities Australia chief executive Belinda Robinson said that failure of the package will condemn the university system to 'inevitable decline. The Group of Eight universities told the Inquirer:

Unless there is reform we will continue to drift, we will fall behind the emerging universities of Asia and we will fall out of touch with the vital global centres of knowledge.

The current Group of Eight chairman and ANU Vice-Chancellor Ian Young said that in the current system, the unreformed system:

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

Adelaide University vice-chancellor told the Sydney Institute these reforms will more diversity, less centralisation, more choice, better value and superior teaching. If that is what those in the higher education sector are saying about these reforms, I do not think as a nation we should step back and say that we do not want to engage in something that will enable us to be world leaders in higher education.

I think it is important that we go through what this actually means for students—for people like myself who are the first people in their family to decide that they want to go to university; for everyday Australian students regardless of their background. The first point that I would make is that education has not been free in this country for a very long time. The Labor Party introduced the HECS based system—a system that essentially means that students do not pay a dollar up-front for their education and they only pay back the money that is expended on their education when they earn over $50,000. That system does not change with this legislation. You will not have to pay a dollar up-front for your university education.

Today we have about 40 per cent of Australians getting a university degree and taxpayers fund about 60 per cent of that degree. These reforms would mean that that might go to between 40 per cent and 50 per cent. Really, these reforms are saying that you are going from taxpayers paying 60 per cent of your degree to taxpayers now perhaps paying 40 per cent of your degree and you will then have a loan for the rest of your degree, and you will not pay back a dollar of that degree until you earn over $50,000. This is a really important point, because, if the impediment is the cost of the degree and you are saying that your social economic background will determine whether or not you go to university, you will not actually pay a single dollar up-front to go to university and you will not pay it back until you earn over $50,000. We know that those 40 per cent of Australians who get university degrees earn, on average, over 75 per cent more than Australians who do not have a university degree. So their ability to pay back what has been quite a generous contribution from the Commonwealth is greatly enhanced by their university degree and they are going to earn about 75 per cent more than an Australian who does not have that degree—on average, over a million dollars in extra income. It simply means that when you choose to go to a university, the degree that you study will have the best teachers, will be a part of the best institution and will enhance your ability to have a greater income later in life.

The other thing we have done in this reform package—and something that the Labor Party likes to sort of forget—is we have expanded the HECS system for the first time ever to include diplomas, advanced diplomas and the trades. I will start with the diplomas and the advanced diplomas. If you come from a background where people have not gone to university before in your family or if you come from a low-socioeconomic background, often you would not go straight into the university, you would study a diploma or an advanced diploma. For the first time ever, you do not have to pay a dollar up-front to get a diploma or an advanced diploma, which could be your great stepping stone, particularly if you are coming from a disadvantaged background, to get into university. We have made a significant change there.

We said if it is fair enough for people going to university to have this scheme, it should be fair enough for people that are getting a trade. We have said that the hardest part of getting through a trade apprenticeship is often the first few years and we have expanded the system to include trades, so you can now get a $20,000-loan up-front where you do not pay a dollar until you earn over $50,000. It is about creating greater equity for young people who are making choices about what they do with their life. Surely a person who gets a trade deserves the same opportunity as somebody who goes to university.

The other thing we have done in this reform package is radically expand the Commonwealth Scholarship Program so if universities are making greater revenue or charging more for fees because they are offering a better service, some of that money has to be re-invested back into the Commonwealth Scholarship Program, which directly assists people coming from the most disadvantaged backgrounds. We expect that there could be thousands of new scholarships created to ensure that people from the most disadvantaged backgrounds have the opportunity to go to university for the first time, to give them that financial assistance. They will be studying in world class institutions, which is the fundamental principle of this policy. When an Australian student decides to study, they should have the right to study in a world class institution.

I will go through and debunk some of the scare campaign that the Labor Party is trying to put forward.

Mr Brendan O'Connor interjecting—

I notice the shadow minister interjecting so he probably wants to listen to what we have in this funding proposal. The Labor Party likes to say that we are cutting funding. We are actually increasing funding every year for the next four years in universities. There is actually $37 billion in funding for higher education in the next four years. We are also continuing to support regional higher education directly through the regional loading, worth $274 million over the next four years, which will help those people in regional communities get into university and help those regional institutions.

We also think that universities play an important role in research. In the budget there is $150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy to ensure that we can have world-leading research taking place in our universities. The other thing we are doing is providing $139.5 million to deliver 100 new four-year research positions per year. We are putting an enormous amount of money into higher education. Anything to the contrary is factually wrong.

Let us have a look at what Labor did when they were in government. They are running a scare campaign at the moment but they like to quickly forget what they actually did. Labor cut $6.6 billion in funding for higher education. They cut $3 billion in their last year in office alone. They left the university system facing regulation compliance and reporting red tape worth $280 million a year—that is, money that could have been spent on delivering better outcomes for students or on helping students get to university but it was caught up in university bureaucracy.

What I think was the biggest shame when it comes to higher education in the last decade was the former coalition government had set up the Higher Education Endowment Fund, which had, when we left office, $6 billion in it. It was a capital fund that would grow over time. The interest from that fund would give universities sustainable funding for the long term. It was a long-term visionary project that ensured our universities had the funding they deserved. So what did the Labor Party do? They dismantled that fund. We no longer have the Higher Education Endowment Fund with a large amount of money sitting there with interest being incurred to ensure long-term sustainable funding. I think that is the greatest shame in the higher education sector in the last decade.

I think it is important that we get the facts on the table. I am proud to support these reforms because these are reforms that ensure students from the most disadvantaged backgrounds can go to world class institutions, get an education and get a degree that is as good as one that they can expect from the United States, from the United Kingdom or from universities in our region. It will ensure that our higher education system provides a significant export market, helps grow tax collections and revenues to deal with the long-term economic challenges that we face and meets a growing demand as we see over a billion people come into the middle class in Asia.

I am proud to support these reforms and I commend this bill to the House.

Brendan O'Connor (Gorton, Australian Labor Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I rise to oppose the Higher Education and Research Reform Amendment Bill 2014 and I do so for a variety of reasons, not least because this is a very significant cut to higher education in this country. Higher education is absolutely vital for our nation, for our economy and, indeed, for our people. The fact that the government wants to dress this up as an opportunity, as the previous member had suggested, for disadvantaged students, I think, is quite absurd because the evidence does not bear out that at all.

I, like the previous speaker, was also the first person or first generation to have the opportunity to go to university in my family. That, of course, arose from the great reforms of the Whitlam government opening up opportunities for students from low-socioeconomic backgrounds to even contemplate enrolling in university. There were some limited scholarship opportunities but those reforms really did change the whole manner in which people thought of tertiary education and they did provide great opportunities for people of all walks of life in this nation to enrol in a course at a university. Of course there were many beneficiaries of those policies—many on the other side, including the Minister for Education, who wants to cut so much of the resources to universities. And those cuts are enclosed within this bill.

So there were beneficiaries. Those iconic reforms by the Whitlam government did lead to the opening up of universities and, yes, there were changes. The member for Longman mentioned the changes that occurred through the Dawkins reforms, where there was an understanding and a view that there should be a contribution made by students in order to enrol in university.

Yes, we would, in most instances, delay that cost to the student. But I think that where the previous speaker and other members on the other side have failed to convince me in relation to their arguments is their suggestion that somehow, because there were reforms introduced by a previous Labor government that provided for students to contribute to their higher education, if they just make some changes—for example, to the price of fees, to the rate of interest on those fees and to the point at which a person must commence contributing to pay back those fees—then that is not going to cause some problems.

The fact is that this bill will, of course, open up and enable universities to charge much higher fees to students if it is enacted. We will see fees at universities increasing, in some cases by 20 per cent and in some cases by a much greater rate. That is going to have a huge impact upon students, upon their capacity to pay and upon their life beyond the finalisation of degree. Further to that, it is going to influence students when they contemplate whether they are in a position to enrol at a university. It is going to make it harder for people who do not have the wherewithal and the resources to contemplate a huge impost—a massive loan—to be paid back after the completion of a course. In my view, it is going to alter the behaviour of students and alter their attitude, and we are going to see fewer people of talent taking up opportunities because of that.

The other concern I have is that this will apply to current students. You might recall that the Prime Minister and others said that this would not impact on current students, but that was untrue. There is an immediate impact. There is an impact during the life of the degrees that are currently being undertaken by undergraduates and it is going to be an impost on the students. And, of course, none of this was contemplated before the election and it is therefore a fundamental breach of faith with students and with the higher education sector to introduce such changes now.

The government says, of course, that in opening up the capacity for universities to set their own fees that they are opening up competition; and once you open up competition that competition will drive down prices. That may well be fine rhetoric but there is no evidence either here, when this was last undertaken by a previous coalition government—when Brendan Nelson was minister—or, indeed, when it was undertaken in Great Britain, when they opened up competition. There is no evidence to show that fees went down. In fact, in almost every circumstance fees not only went up but they went up significantly. This had a great adverse impact upon students and people set their sights lower as a result.

We think this is a terrible reform. Fundamentally, it is a shifting of cost from the Commonwealth to students. It is going to change the nature in which higher education will be accessible to students in this country. 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.

I made that clear in my first speech in 2002, that we should not determine those who go to university based on their money; we should be focused on people's merit, their capacity to learn and their capacity to undertake a course. But I am quite concerned that some of the degrees currently being provided by universities will be beyond the reach of students from many families, who will just be priced out of the market. That is, of course, a great concern.

Since the budget, we have seen that it is not only Labor that opposes the government's unfair and short-sighted higher education package; Australians generally oppose these measures. They oppose cutting public funding to undergraduate courses by up to 37 per cent. They oppose the $100,000 degrees that are likely to result from fee deregulation. They oppose the Americanisation of what is our world-class university system. Australians oppose these things because they understand the value of universities. I think that is something that is lost on the government and it is something that the government really needs to rethink.

The previous speaker mentioned a number of spokespeople in the higher education sector and what they think. I would like to place on the Hansard a number of comments made by very esteemed people in the universities and their views of some of these proposed reforms. Universities Australia chair, Professor Sandra Harding, warns that the changes are being rushed:

There are grave risks here.

Universities are being asked to set fees in an unprecedented market environment.

Vice-Chancellor of the University of Sydney, Professor Michael Spence, warns that fee deregulation risked pricing middle-class families out of a tertiary education and he said:

It's the ordinary Australians that I think aren't getting enough of a guernsey in this conversation.

The Vice-Chancellor of the University of Adelaide, Professor Warren Bebbington, said aspects of the changes were 'unworkable' and 'unduly harsh' and:

The compounding interest here [means] we might deliver debts to students of $70,000, $80,000, $100,000 and no-one here wanted that.

The University of Queensland Vice-Chancellor, Professor Peter Hoj, revealed that the budget would cost his university at least $60 million and will hurt students. He said:

I am generally concerned about the changes to the loan repayments. I do think that was very unexpected and I think that this is one of these things that really make the cuts to Government funding for students sting more than we had anticipated.

The HECS architect, Dr Bruce Chapman, who knows a great deal about this area of public policy warns 'the changes could lead to profiteering' and he said:

If universities have price discretion they will all take it … and could actually end up charging more than what it actually costs.

The UTS Vice-Chancellor, Ross Milburn, said:

I am genuinely concerned about the changes to the loan repayments. I do think that was very unexpected and I think that this is one of these things that really makes the cuts to Government funding for students sting more than we had anticipated.

The Swinburne University of Technology Vice-Chancellor, Linda Kristjanson, comprehensively trashed the Pyne package. In a message to Swinburne university staff on 27 May, the vice-chancellor, said:

Deregulation will inevitably lead to much higher fees for our students. Over time full fee deregulation will lead to a higher education characterised by the 'haves' and the 'have-nots'.

This is not me saying this, this is not Bill Shorten saying this, this is not members of the opposition saying this; these are quotes directly from those who are running universities in this country who are concerned about the changes that will be wrought if this bill is enacted and inflicted upon the higher education sector in this country. It is completely and utterly contrary to the so-called reasoning being proposed by those contributing to this debate from the government.

We have this strange world in which the vice-chancellors of universities have raised all of these concerns with the minister, who has clearly turned his back on them, and we have an array of government members coming to this place and of course repeating the same mantra that is fundamentally at odds with the vice-chancellors whom I have just quoted. Those experts in the field understand the consequences of this legislation. What is worse, so too do the government. Never mind what they are saying in this place—the government fully understand and indeed intend to deprive students from entering university by deregulating fees and enabling those price rises.

One after the other, university vice-chancellors and others, highly esteemed people in the sector, have raised concerns and not once has the minister acceded to the logic and concerns expressed by those whom I have quoted in this contribution tonight. So the government not only understand; the government do not care that this is the consequence of their action, because ultimately the government believe in a society where some people should get opportunities in certain universities and others should not even apply. That is their view of the world—some people should get opportunities and others should not apply.

I should take to task the member for Longman, who made an assertion about the expenditure by the previous government in higher education. Whatever cuts were made late in the piece by the previous government during its two terms, the resources we dedicated to higher education were unprecedented. We opened up opportunities for thousands and thousands of students, and ensured that fees did not rise at a rate that would price many students out of higher education. We had a demand-driven arrangement to enable students to enter great universities in this country and have opportunities that they may not have imagined without the support of government. The government has a role here and it is not about pretending that if you deregulate you are going to see a fall in prices. It has not happened anywhere else. Look at the prices and the fees at American institutions. Look at what happened when the British deregulated fees there and the increases that occurred. The fact is this is a terrible bill. We will oppose it. We will support the students, we will support their parents and we will oppose this to the bitter end. (Time expired)

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

It gives me great pleasure to rise in support of the Higher Education and Research Reform Amendment Bill 2014. This reform is good news for all Australian universities, especially those universities in my electorate of Lindsay, in particular the University of Western Sydney, of which I am an alumni.

Louise Markus (Macquarie, Liberal Party) Share this | Link to this | Hansard source

Hear, hear!

Fiona Scott (Lindsay, Liberal Party) Share this | Link to this | Hansard source

Thank you. It is good to have the member for Macquarie here, who also has a UWS campus in her electorate.

This reform is good news for the people of Lindsay, who are young and aspirational. It is good news for them because it gives them more opportunity. The opposition's scare campaign around this issue is merely hot air and has no substance. Some of the arguments from those opposite would be laughable if they were not so ridiculous.

These higher education reforms introduced by the Minister for Education are all about providing opportunity, opportunity for more Australians to access higher education and opportunity for our local universities to excel and become some of the best in the Asia-Pacific region and ultimately the world.

On budget night, the Treasurer made the following statement, and I quote:

Fellow Australians, we should have at least one university in the top 20 in the world, but we do not, and we should have more in the top 100.

I ask the Leader of the Opposition: what is wrong with Australia wanting to excel on the international stage? Why does Labor want to hold back Australia? We should strive for greatness. I am pleased that these reforms will go a long way in allowing the Australian university sector to achieve these noble goals.

Broadly speaking, these reforms will, firstly, ensure Australia's universities are not left behind at a time of rising performance by universities around the world. Secondly, they will ensure that Australia's higher education system is sustainable well into the future and that our third largest export, that of higher education—the $15 billion international education market—is protected and is able to flourish and grow. Thirdly, they will expand opportunities for students. In fact, these reforms will create an additional 80,000 university places.

Fourthly, they will offer more support for disadvantaged students through Australia's scholarship scheme. And, finally, they will support more courses, greater diversity and more skills for our workforce.

Since these reforms were presented in the federal budget by the Treasurer and then introduced by the Minister for Education, I have consulted widely with my community and, more specifically, with the University of Western Sydney. I would like to recognise and thank the chancellor of the University of Western Sydney, Peter Shergold. He was chair of the ministers' Quality, Deregulation and Information Working Group.

I understand Professor Shergold has made significant contributions to this working group and has provided assistance to the minister in the area of deregulation of higher education. While the University of Western Sydney proposed amendments to the government's higher education reforms, they do, as do most of the Australian university sector, broadly support the deregulation of the sector.

A robust discussion is critical to democracy and I thank the university for its contribution to this debate. I would also like to thank the vice-chancellor of the University of Western Sydney, Barney Glover, for his personal support and also his business comments and guidance with regard to these reforms. He has said that the sector needs stability in policy and that there appears to be a strong belief that this government is providing just that. I quote:

The University of Western Sydney, like the rest of Australia's higher education sector, needs certainty regarding the policy, funding and regulatory environment in which it operates. This is critical to ensuring we are able to compete internationally, but also pivotal to enabling us to help drive the development of Western Sydney, Australia's third-largest economy.

These reforms will provide the university with the autonomy and certainty which will allow them to thrive in a changing marketplace. I am also pleased to note the reforms in this amending legislation will better enable the

University of Western Sydney to better target their programs and courses to the specific needs of their students and those of GreaterWestern Sydney. UWS itself identifies the need for this in a briefing it supplied to Western Sydney MPs. I quote:

With in excess of $3.5 billion in government infrastructure commitments and a population set to reach three million by 2036, Western Sydney's significance to the national economy cannot be overstated. The supply of a highly skilled, productive and diverse labour force will be critical to the region's economic contribution and the success of the Commonwealth's large scale investments in the region. Increasing access to higher education is an essential part of meeting that challenge."

It continues:

Western Sydney's political representatives have the opportunity to ensure Australia's higher education sector can deliver on the Commonwealth's impressive range of policy commitments, by influencing the Budget's higher education reforms as they progress through the senate.

As UWS clearly points out, with the growth and potential of Western Sydney being realised through the reforms of this coalition government, there will be an increasing need for the local university to provide courses that also match the needs of this growing and thriving region. For this reason, UWS clearly support this reform, which creates more autonomy in our universities. As the Treasurer stated on budget night:

With greater autonomy, universities will be free to compete and improve the quality of the courses they offer.

It is the intent of this amending legislation to build a higher education sector that is more diverse, more innovative and more responsive to student needs. Deregulating and creating a demand-driven sector will allow universities to set their own fees and compete for students. This competition will enhance quality and will make higher education providers more responsive to the needs of the labour market but, more importantly, it will provide more opportunity for students. This does not mean $100,000 degrees, like the opposition would have you believe. In fact, in some cases it could mean that the cost of degrees will in fact fall.

Rather than the government regulating the cost of degrees, universities will have the flexibility to set their own

costs based on market demand. They will compete for student enrolments, based on quality and cost. When universities and colleges compete, students win. It is that simple. The current system distorts an individual's capacity to distinguish between the two different opportunities of education within the sector.

An economics degree costs virtually the same at every university. Institutions simply cannot use price to distinguish themselves in the market and offer true value. With respect to economics 101 teachers, price often acts as an indicator of quality, with a direct correlation to demand.

It simply drives behaviour. This is what we need if we are to lift the quality, deliver courses that students and employers demand and, in turn, create a truly world-class system that keeps up with other established and rising national institutions.

We need each of our universities to become accountable to the market but, more importantly, to their students and also with respect to the type and quality of courses that are offered and deliver these things accordingly. This does not mean that universities will immediately escalate their fees, as the opposition would have you believe. On the contrary, most Australian universities are acting responsibly with regard to this aspect. The University of Western Sydney, for instance, was the first university in New South Wales to freeze student fees for 2014 to ensure certainty for its students. This is a responsible move by the university and it is a strong indicator of how the sector will respond to the demand-driven—