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

As I mentioned last night in my remarks about the Higher Education and Research Reform Amendment Bill 2014, $37 billion in funding will be committed to higher education by the government over the next four financial years.

Our institutions are not just competing domestically. We should always remember this: they are competing increasingly internationally, with some of the highly-recognised universities and higher education institutions around the world—whether they be Yale, Harvard or Oxford. We are competing with these universities as well. Increasingly here in Australia we see excellent examples of universities that are offering online courses—be those at Swinburne or at Deakin University. I will talk in a little more detail about the University of Tasmania later, because it is an important institution in my state of Tasmania.

But more generally, huge opportunities exist for regional universities. Deregulation enables universities to position themselves much more effectively and attractively. For example, a regional university might appeal to students from the urban areas of Australia—the cities of Australia—to say, 'Come and do a high-quality degree with us. We have high student satisfaction, good employment outcomes and a great quality of life at a fee that is terribly good value for money.' I can assure you that in terms of quality of lifestyle there is no better in the country than the University of Tasmania.

Placing values on courses makes sense. It is what happens every day in our normal life, in everything we do in commerce. The Commonwealth scholarships fund can provide flexibility for universities to offer a range of different packages for students. It might be packages for support with living costs for disadvantaged students or it might include advantages for students who are coming from regional areas of our country: designing packages to suit the market, to suit the needs of students.

Much has been said about fees. Ultimately, the market will decide. Some fees will be low, it stands to reason, but of course some fees will be higher. If a law degree or an engineering degree at Melbourne university, for example, is priced out of the market people will simply go elsewhere. It is a fact of life; it is how markets work.

The Commonwealth scholarship fund will give students from low-SES—the brightest students from around our country—20 per cent of any fee increases that apply. One dollar in every five will go into a scholarship fund to support students from low-socioeconomic backgrounds, students who are disadvantaged. By freeing up universities to set their own fees to compete for students quality will be enhanced and make providers more responsive to the needs of students but also more responsive to the needs of the labour market.

Let us talk a little bit more about students. We have focused very much on institutions until now, and I would like to talk a little bit more about students. The single biggest reform for students is the uncapping of access for those students who do diplomas, advanced diplomas or subdegree courses. This is particularly important for regional universities. Many students go to regional universities in states like Tasmania and in regional areas of Australia, from families who have never had anybody attend university, and the first experience they have with universities is through sub-bachelor or diploma courses. Extending HECS or the Higher Education Loan Program to allow 80,000 more students over four years to access the support is indeed reformist and something that I truly support. It is estimated that the cost of diplomas and associate degrees will cost the Commonwealth an additional $371.5 million over the next three years. Funding for higher education, including the total of Commonwealth Grant Scheme funding for student places and regional loading, is actually going up—there will be $37 billion for higher education over the forward estimates.

We want to support more people to go on to university and other higher education. We want choice in the marketplace. This is, as Australia should be, about equality of opportunity. We cannot deliver in this nation equality of outcomes we can and should as a nation, as a government, be allowing every student from any background, from any socioeconomic circumstance, to access higher education, to get them to the starting line with opportunity equal to that of people from more-privileged backgrounds. Currently, taxpayers pay 60 per cent of students' fees and students pay 40 per cent. Our proposal with these reforms is to ask students, I think quite fairly, to pay 50 per cent and ask the taxpayers of Australia to pay the other 50 per cent.

It will ultimately be up to higher education institutions to decide the fees they will charge. The market will play a very important part in what they can and cannot charge. Some courses will have higher fees and some courses will have lower fees, remembering that, regardless of the student, up-front fees will be zero. From whatever background a student comes their up-front fees to go to university will be zero. On the scare campaign about what students may or may not be paying, repaying their HECS debt—this is about choice—only begins when they start earning more than $50,000. All they are obliged to pay at $50,000 is two per cent of their salary. Even when their salary goes to $100,000, the most the government will ask them to repay is a maximum of eight per cent of their salary. It is more than fair. It is more than equitable. We know also that graduates earn more over their lifetime, roughly 75 per cent more, or a million dollars, on average, over their lifetime. It is reasonable for them to make a contribution. In this case we are asking for 50 per cent. We know that graduates have access to more jobs.

With these reforms, including access to the Trades Support Loan Program which is within the industry portfolio, removing FEE-HELP and VET FEE-HELP loan fees, we are making accessibility for students, from whatever background they come from, fairer. Regional Australia and regional communities can be the big winners here by offering more courses and by competing to attract more students. Expanding diplomas and associate degrees will benefit regional institutions.

I truly believe that this reform will be good for the University of Tasmania. The University of Tasmania is one of Australia's leading research and teaching universities, ranking in the top two per cent of universities worldwide. It is renowned for the quality of its research training program. UTAS is one of the founding universities of Australia. Its long history and strength in research sees it ranked as one of the top 10 universities in Australia. Last year it was ranked, peer reviewed, as the No. 1 teaching university in the country. UTAS ranks in the top 100 universities in the world for the international diversity of its staff and students, and ranks in the top 200 universities for industry income and innovation. The university was assessed in the top 21 of disciplines rated for excellence in research after being proved to have internationally leading strengths in the disciplines of the sciences, law, history and the humanities.

Over 90,000 students have graduated from UTAS during its long and distinguished history. There are 106 Rhodes Scholars from the University of Tasmania. The University of Tasmania works with universities around the world to offer students an international experience specialising in Antarctic and Southern Ocean studies; population and community studies; national and state development in agriculture, forestry, mining and tourism; and national environment and wilderness programs. It is well regarded for law and medicine. It is important to the communities of Hobart, Launceston and Burnie. The expansion of diplomas and sub-bachelor degrees will help communities like Launceston and Burnie.

We need to allow students to choose. We need to encourage competition. 'How good is my course against the quality indicators of learning and teaching? How good are my teachers? What employment prospects will I have when I finish university?' We can lead as a nation but only if we allow our universities and higher education institutions to compete domestically, globally and online. It is a great opportunity for students, as it is for the institutions. (Time expired)

Andrew Giles (Scullin, Australian Labor Party) Share this | Link to this | Hansard source

This should be a debate about realising the Australia's potential and giving every Australian every chance to realise that potential. It is that simple and it is that important. What sort of country do we want to be? The choice is stark and the implications, the consequences, of that choice are frightening if this government's ideological vision for higher education and research in Australia is realised.

I acknowledge the sentiments sincerely expressed by the member for Lyons, the previous speaker, about equity and the transformative power of higher education. It is just disappointing, in fact, more than disappointing, it is tragic that they sit so uncomfortably with the legislation and the reform package that is before this House. This government proposes to constrain our future through this legislation and to boost inequality in Australia. It puts before us, once more, a broken promise which is also an agenda that is against our national interest and which would engineer a stark and deep social divide. So, I join with other Labor members in speaking in opposition to the Higher Education and Research Reform Amendment Bill.

As the Leader of the Opposition said yesterday, Labor stands proudly for affordable, accessible higher education for all Australians. We stand here committed to fighting for the future and for the vital principle that quality of education must not depend on a person's capacity to pay. Furthermore, that equity and quality, in fact, go hand in hand. We know this. What is morally just, that demonstrated capacity should guide access to university courses, also ensures the best outcomes for individuals and for our nation. This is an inconvenient truth for those opposite, but it is a touchstone for Labor—it is part of the social compact we have built.

The Leader of the Opposition yesterday asked members opposite to put themselves in the shoes of the people these decisions will affect, to attempt to understand the barriers to participation in higher education, to attempt to understand the impact. This is an important challenge but one not likely to be taken up by members of this cynical government, especially in the context of this insidious so-called reform agenda. Yesterday evening the member for Gellibrand set out effectively the process—or lack thereof—that took the Abbott government to this point. It is an ambush, not a considered, informed approach—not the methodical and calm approach they spoke of before the election—to a sector so critical to Australia's economy and our society. Once again, it is policy on the run; prejudice and ideology triumphing over method, debate and consultation.

I do hope that members opposite seek to understand the reaction of the community. I have learnt so much by listening. This debate is about more than the technicalities of the bill before us, and indeed it is about more than the cuts contained within the legislation. We must seek to do justice to the concerns and the aspirations of the millions of people affected by the decision of this House. Since this government flagged wide-ranging and regressive reform along with deep cuts to higher education amounting to nearly $6 billion, I have been inundated with correspondence from constituents expressing apprehension and anger. At street stalls, too, people right across the Scullin electorate have made it clear to me that this is a major concern for them.

With the local impact of the Napthine government's TAFE cuts, people are right to see the future cost of life choices cut off so early as something that we must fight against with all of our strength. I have visited the Bundoora campus of RMIT, in my electorate, and the Bundoora campus of La Trobe, just outside. I met with staff and with students, and I listened. I have also visited Federation University in Ballarat, with the member for Ballarat—I am pleased she is in the House, along with the member for Gippsland, who also has a campus of that university in his electorate—and the University of Melbourne in Parkville so that I can come to this debate in this place with a broad perspective of the impacts. I heard many stories from people affected, and there was one common theme: don’t—don't push ahead with this regressive, ideological and divisive agenda; don't rip up the architecture of a fairer and more productive Australia. I was proud to be in the House yesterday as the Leader of the Opposition gave his passionate account of Labor's position on this bill, but most importantly he outlined Labor values in higher education—the values of fairness and opportunity; values that this legislation would cast aside.

This bill seeks to implement the government's budget announcements on higher education, namely to introduced unrestrained student fees, or fee deregulation; to impose a 20 per cent cut to the Commonwealth Grant Scheme for teaching; to make changes to the HECS repayment indexation rate and thresholds; to effect the cessation of the HECS-HELP benefit from next year; to charge fees for higher degrees by research students through the HECS system for the first time; and to change the indexation of university funding back to CPI from a rate that genuinely reflected the costs of institutions, introduced by the Labor government. These are radical changes unsupported by evidence, paving the way for huge fee increases—$100,000 degrees have been much spoken of and are a real concern, but of course some degrees such as medicine at sandstone universities could cost considerably more. This is compounded by the prospect of the introduction of real interest rates, accompanied by huge cuts to the public funding of courses.

It is important to reflect on the disingenuous if not downright dishonest second reading speech delivered by the Minister for Education. I want to take up a number of the falsehoods contained in that speech. The first is the allegation that this bill will spread opportunities to students. Thanks to changes Labor made, in particular during the Hawke-Keating and Rudd-Gillard governments, students now have unprecedented access to university education. Students from communities across Australia have made the most of this access in record numbers. This is essential if we want to move towards a high-skilled knowledge economy and give a diverse range of people effective access to university education. In that regard I think of all the first-in-family students I have met in the Scullin electorate who have benefited from the most recent expansion of higher education.

I ask one question of the minister: can the government point to any evidence that these changes will increase participation? He has had numerous opportunities, and unsurprisingly he has been unable to do so. The only opportunity this bill offers for students is a debt sentence, a lifetime of debt, crippling burdens and a huge disincentive to involvement in higher education.

The minister claimed that regional students and regional higher education institutions will benefit significantly from these changes, and, further, that many regional institutions have warmly welcomed this opportunity. I noted with interest that the minister cited Federation University in Ballarat in this regard. I visited Federation University a couple of weeks ago, with the local member, where we heard first-hand from university management, academic staff and students about what the proposed changes would mean to them, and it is difficult to overstate their concerns—what it means for Ballarat the city, as well as the institution. Staff see this as a huge threat to the important work they are doing and indeed to the very ethos and nature of the university they work in. Students, likewise, are more than apprehensive. Many I spoke with spoke quite movingly about the opportunities that have been opened up to them being denied to others in the future who have shared their circumstances. So many of these people simply could not have travelled to Melbourne to further their education, for financial reasons or sometimes for familial reasons.

The second falsehood the minister cites is that this bill supports equity and access. What a cynical statement from that most cynical of politicians. It is easy to see in this light how he can justify to himself how he fought for free education, when it was in his interest as a student politician, and now takes the opposite tack without blinking. Because this bill does the opposite. By burdening students with crippling debt and then pretending that a few scholarships—which would not be needed if it were not for the government's policy—will deal with concerns of access and equity, the minister is taking us back to his, or perhaps former Prime Minister John Howard's, rose-tinted, imagined Menzies era.

How does this support equity or access? The policy is like robbing something and replacing the stolen items with a scratchie, and, if they are lucky, their numbers will come up. But the fundamental point is that they would not need to be lucky if it were not for this government carving away opportunities. Getting into university should not be based on happenstance or parental wealth. It should be based on merit. This government is robbing students of previously equitable arrangements and replacing them with huge barriers to entry.

It is worth touching a little bit more on the scholarship proposal, because this is a pea and thimble trick. There is no Commonwealth money allocated for these scholarship funds, which means they will be funded on the basis of additional fees charged on students. In the kind of perverse bifurcation this government seems fond of, students will be paying for these scholarships.

Federation University's vice-chancellor, David Battersby, has belled the cat on this, particularly from a regional university standpoint, noting that major universities, the 'sandstone group of eight', will be able to charge higher fees, meaning regional universities are disadvantaged in competition. In other words, this scholarship fund will entrench existing positions in market power. So much for meaningful competition.

The third falsehood was the minister claiming that cutting funding to universities was equipping universities for change. He leaps from this proposition to cite universities in places like China, Hong Kong and Taiwan as rising through the rankings system. In seeking to draw these together, I ask of the minister and members opposite: where is the evidence that these brutal cuts will somehow equip universities from the challenges of the future? Where is the evidence they will equip universities for anything other than further entrenching their market position, and to give some universities the capacity to greatly increase their fees.

The fourth falsehood—no surprise here—is the claim for consultation. The minister has name-dropped Universities Australia in this regard, but Universities Australia chair, Professor Sandra Harding, warned that the changes were being rushed, saying:

There are grave risks here. Universities are being asked to set fees in an unprecedented market environment.

Previous Labor speakers have made clear the shoddiness of the process here. Going to the consultation, I note that the government has done no consultation whatever with staff at the universities, or their associations. There has been no consultation with the community, none with students and none with staff. The National Tertiary Education Union, which represents the interests of about 28,000 academic, professional and general staff, has done some important research into the government's proposed changes, as I am sure the member for Gippsland would be well aware. If the funding cuts went through and you cost shifted to students, the cost of some degrees would be more than $100,000. The move to a market interest rate would escalate student debts and they would be repaying them for years longer. The debt would run further out of control if the graduate were not earning above the repayment threshold. This scenario is particularly chilling for prospective women students as they realise that they could still be paying their student debt in their 50s, Just as their children want to go to university.

Make no mistake: there will be a deleterious impact on university staff, who are already under pressure from insecure work arrangements. Academics, who are the custodians of our future talent, are unsupported by this government in this endeavour. I think it is pretty obvious why the government has only chosen to ask a select few to speak to a select few in this regard. It is only interested in hearing from those who support its position. This is not consultation; this is policymaking by ambush.

Of course, the government went to the last election promising that there would be no cuts to education. I think we all remember that. And some of us also remember the 'Real Solutions' policy document. I think some copies may be found somewhere. It stated:

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

Indeed, after the election, the minister stated, 'We're not going to raise fees.' What a joke! The public could be forgiven for thinking that there would be no cuts to education and no rise in fees. That was what the government said and now the government, as with other broken promises, is relying on sophistry to claim disingenuously that it is not directly raising fees. Instead it is looking to blame the universities for this.

But this is not the sort of dissembling that has any currency with the Australian people. People in my community in Scullin and around Australia regard this count as a broken promise, because it is. Let us not forget that this government has cut all levels of education from early childhood all the way through to higher education. So much for the clever country! The government has made vicious cuts to universities—$5.8 billion to teaching, learning and research.

I spoke yesterday about the concerns of Nick from Mill Park, who expressed his concerns about being able to pursue his PhD in immunology. He said:

Cuts to education would mean that instead of educating the best and brightest here in Australia, they may either go overseas and never return or, they are discouraged from higher education, meaning they may never reach their full potential, or are prevented from contributing significantly to Australian society.

These cuts, in effect, would stop me from being the best that I could be, not for myself, but for Australia.

These cuts don't just deny or discourage students entry, they deny and discourage students following on with their studies. They deny Australia the full use of these students' capacities and talents.

Let's not forget that this is not solely about barriers to accessing higher education in the first place; it also impacts on what our best and brightest do next. Labor has a proud record on higher education, from Whitlam, who opened the universities to the general population, to Dawkins, who turbocharged this, and to the Rudd and Gillard governments, who completed the process by removing the cap on places. Labor opened up higher education and Labor continues to stand for affordable, accessible and quality education for all.

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

I thank the member for Scullin. I will just remind the member for Gippsland of his comment in the corridor a minute ago, before he starts!

Darren Chester (Gippsland, National Party, Parliamentary Secretary to the Minister for Defence) Share this | Link to this | Hansard source

Thank you Mr Deputy Speaker Mitchell, and it is terrific to have you in the chair. I respect the authority that you bring to that commanding position!

I rise to speak in relation to the Higher Education and Research Reform Amendment Bill 2014. I have spoken in the House many times over the past six years in relation to access to university and higher education. I do find it somewhat bizarre to listen to those opposite lecture the government on issues of equity and access after the way the previous Labor government botched the reforms to youth allowance.

For many regional MPs, the issue of youth allowance remains an issue of some great concern and a matter of unfinished business. I know it is not directly part of this bill, but it is associated in terms of the access issues. I continue to receive correspondence from my electorate in relation to the issue of youth allowance and the overall concerns about student income support. It remains a weeping sore for many regional communities, which do not necessarily have a local university that their children can attend and where parents are forced to pay upwards of $15,000 per year in accommodation and living-away-from-home costs. These are up-front costs and as a matter of fairness and a matter of equity, it is an area where I will continue to lobby cabinet ministers and seek the support of those opposite to address in the future.

I accept and understand that we have inherited a significant budgetary problem and that it will require diligence from the Treasurer, the finance minister and others to bring the nation's books back into order, but the issue of student income support remains a significant matter of concern. It is National Party policy to support an overhaul of that system. That was endorsed again on the weekend at National Party federal council here in Canberra, with the federal council calling on the federal government to implement reforms to increase financial support for students in a way that improves mobility and provides opportunities for regional students, communities and universities. Personally, I have advocated for a tertiary access allowance in the order of $10,000 per year to assist regional families with their living away from home costs. It is a public policy debate which flows out of today's discussion, which I am keen to continue to pursue with the relevant ministers and I will seek support from regional members.

Having said that, I recognise that today is a pivotal moment for Australia's higher education sector. This parliament has before it a bill that presents new opportunities for Australian students and particularly for Australia's regional students. The parliament has an opportunity today to introduce measures that will increase access to higher education and make our tertiary education system sustainable for the longer term while also making our institutions more competitive on the world stage. But it will also take courage—courage from those on this side and courage from those opposite—to look beyond the scare campaigns, to look beyond the shock and horror tactics of the student union movement and the efforts by those opposite to whip up hysteria without closely considering the facts. I congratulate the minister and the government for having that courage and the vision to take on a task that has been in the too-hard basket for way too long.

I reject the suggestion that was made many times during the contributions of those opposite that we have not consulted with the sector or with our communities. The consultation has been extensive at a local level and a national level. I have had the opportunity to meet with the Regional Universities Network and individual vice-chancellors on several occasions, and I also meet with students in my electorate. Quite recently I was invited to participate in a debate at the Gippsland Grammar School where the VCE students were keen to discuss higher education reforms. Obviously the students have a keen interest in the reforms because the students themselves will be among the first to study in the new deregulated environment, if indeed this legislation successfully passes the House and the other place. The students were aware of the scare campaigns and they were keen to get the real information and the real story on what this education reform would mean to them. Within a short time of the discussion beginning the tone changed dramatically as students came to understand that very little was going to change in terms of the up-front costs for them attending university—in fact, access to the loan system would continue to apply for them. They were reassured that the fundamental aims of these reforms, to encourage more students to go on and achieve their full potential, would benefit them in the longer term. I stand here proudly as a member of a regional community saying that I want more young regional people having the opportunity to achieve their full potential, whether that be going to university or TAFE or pursuing some other study after they finish high school.

One of the most compelling arguments for the legislation and the reforms put forward by the minister is that by 2018 we will provide an extra 80,000 higher education places supported by government subsidies. It surprises me that those opposite, who like to claim they support higher education, who like to claim they support regional students, are opposed to providing access for more students into the future. Those opposite are mistaken in thinking that there is nothing wrong with the system as it stands today, particularly from a regional perspective. The fact is that university participation rates are low in Gippsland as they are low in every other regional area. Only about 17 per cent of 17- to 22-year-olds in Gippsland go to university. The government's higher education reforms will make it easier for students from the country to get a tertiary education if that is the path they choose to follow, because they will have more choice and more options available to them. I fully support the minister in his endeavours to create new pathways and better pathways and exciting opportunities for students in Gippsland, and I will be looking forward to working with him on these issues in particular but also on the broader issue of access and equity when it comes to student income support.

It is a bit rich for those opposite to lecture the government when they left us with a legacy of debt and deficit to repay. It is all very well to say education should be free, as if no-one actually pays for this free education. Free education simply means one taxpayer paying for another person's education. The opposition left this government with a legacy of $1 billion per month in debt to repay—every month, month after month, until we get on top of the mess they left behind.

If we are going to talk about fairness we should really talk about whether it is fair for the former government to run the nation's books in so appalling manner as to leave us with a legacy of debt and deficit to repay and then stand in the way as we try to clean up the mess. It has become apparent that the current system is no longer sustainable. To ignore that fact would be entirely irresponsible, so I congratulate the minister and the government for taking the hard decisions and moving towards a more sustainable system.

The taxpayer currently pays for about 60 per cent of a student's education. We are asking students in the future to pay in the order of 50 per cent. Those opposite say they would like free education. I have heard it said many times. In an ideal world, perhaps, we would be able to pay for it all, and we would be inundated with students going to university with some taxpayers somewhere in this mythical Labor land picking up the tab. What about those who do not go to university? Why should they be picking up the tab for those students who do go to university?

Mr Champion interjecting—

I take up the comments from the member opposite that they might be a doctor, and that is why the government is prepared to meet—

Mr Champion interjecting—

If the member wants to interject—that is fine—I will take his interjection, but he does not need to keep rambling on incoherently, as he tends to do. I say to him in relation to support for someone becoming a doctor:, yes, we would support them, in the order of 50 per cent. The government is prepared to pay in the order of 50 per cent of that person's fees to go to university and would expect the student to make a contribution themselves. It must be noted, on the upfront costs, that students will still have access to the HECS system that has existed in the past. In fact, upfront costs are not going to be a barrier to people's attending university.

Through the program of reforms that the government has announced we recognise the particular challenges that face regional university students and people from low-socioeconomic backgrounds. The scholarship initiative contained in the reforms will see universities required to allocate $1 in every $5 for additional revenue to the scholarship scheme. I support that reform in the sense that it will allow more students from lower socioeconomic backgrounds, which obviously includes regional, rural and remote students, the opportunity to participate in the course of their choice.

The other point that is often made in relation to the opposition's complaints, or whinge sessions, about these reforms relates to the aspect of when a student has to start repaying their HECS debt. The simple fact of the matter, and the research supports me in making this claim, is that students who attend university, who go on to achieve a qualification, will earn more in their working life. It is not until they earn in the order of $50,000 a year that they will start paying back their HECS debt. It is a system that the Labor Party has endorsed in the past. It baffles me to hear the comments from those opposite over the last 24 hours, as they seem to be backtracking from a position that has had bipartisan support for many years.

In conclusion, I will reflect more specifically on the reforms and how they will affect the Gippsland region, in particular the new Federation University in Gippsland. Just as these reforms are a pivotal moment for the nation, they are pivotal for the seat of Gippsland because they will open more doors for regional students. The legislation before the House recognises the evolution of Federation University, which now has a campus in my electorate, in the town of Churchill. It is noteworthy that the Minister for education, in his second-reading speech on the legislation, singled out Federation University. He commended the merger of the University of Ballarat and the previous Monash University Gippsland campus as an example of regional institutions embracing innovation to meet the needs of their communities and create a learning experience that a student cannot get anywhere else. These higher education reforms will remove restrictions on our education institutions to allow them to come up with more creative solutions into the future, just as Federation University has done.

I make that point because to suggest that there is nothing wrong with the current system, when only 17 per cent of Gippsland students go on to university, is complete folly. We do need reform. We do need to find ways to encourage regional students—in my case, students from Gippsland—to go on and achieve their full potential. This bill also makes official the change in the name of the University of Ballarat to Federation University Australia. Those opposite who may follow social media—they may follow me on social media—would note that I am often promoting Federation University by wearing my Federation University T-shirt in various locations around my electorate and also on the USS Ronald Reagan during the parliamentary exchange program. It is a bit of fun, but it helps to promote the brand. I encourage Gippsland students who are looking to continue their studies after year 12 to consider the options available to them at Federation University, at the Churchill campus or at other campuses in regional Victoria. I am proud to have this institution in Gippsland, which gives a world-class education to young people in my electorate. Federation University has about 24,000 students and offers a wide spread of programs from certificates to PhDs, and it delivers its services across campuses right across western Victoria and Gippsland.

There are a couple of significant points about Federation University that I want to put on the public record. About one-quarter of its students come from low socioeconomic backgrounds, low-SES backgrounds. Interestingly, more than three-quarters of those students are the first in their families to attend university. That is an important point. Federation University, in its former guise as Ballarat University, has been successful in raising aspirations among families where children may not necessarily have thought, in the past, that university was a place that they could attend. I congratulate the university for its success in the past, and I look forward to working with it in the future to make sure that our regional areas grow stronger and capitalises on all the opportunities that exist in Gippsland to provide courses, locally as much as possible, or, when students are forced to travel or move away from home, to provide them with an enjoyable educational experience wherever it may be.

Interestingly, about 80 per cent of Federation University students find work within three months of graduating, which is the most successful rate for any university like it in Victoria. About 70 per cent of its students take up a job in a regional area—these are our future regional leaders—and that is an important point. We know that, if we can get regional students to university, if we can get them in the doors, if we can provide that access for them, they are more likely to come back and provide those services, those skills, in a regional environment. We know that, if we can give a country kid the opportunity to study medicine, law, accountancy or engineering, there is a very good chance that they will come back and make a contribution to the regional community into the future.

I strongly endorse every effort made by this government to improve access for regional students in terms of achieving their full potential. I reject the argument by some members opposite who have suggested that regional universities are at risk of becoming second-rate universities. That is not a 'glass half empty' argument, that is a 'we do not have a glass' argument. We need to be more optimistic and look for ways to be part of innovation in creating new opportunities for regional universities through these reforms.

As I said, I have met with the Regional Universities Network, I have met with the Vice Chancellor of Federation University David Battersby. I have discussed with him some of his comments in relation to the need for a regional adjustment package and I recognise that there are special circumstances that regional universities face. I believe his arguments have a great deal of merit. I am keen to keep working with the government and the minister to ensure that regional universities, like Federation University, have the opportunity to prosper under these reforms. Even more importantly, I want to work with the government and those opposite to make sure that regional students have the opportunity to achieve their full potential by pursuing university education, if that is their choice.

Alannah Mactiernan (Perth, Australian Labor Party) Share this | Link to this | Hansard source

There is little doubt that the new university fee and loan repayment structures will see debt levels for students doubling, or trebling, putting the quest for higher education out of reach for many. I have no doubt that this is no great worry to the Prime Minister and to Minister Pyne who, at their heart, believe that education is a positional good and, just as when you make a lot of money you get to buy the Maserati or the Alfa, so too, an elite education should be the preserve of those, fundamentally, who have had the opportunity to do well financially. They are not motivated, and I think that has been recently described by Maxine McKew, in her new book on education, as the view that education is a positional good, which is a view embraced by Minister Pyne. This is not, of course, an egalitarian spirit, but these are not people who are motivated, fundamentally, by the quest for a quality of opportunity, but rather they are hankering after the hierarchies of the old world.

On any analysis, whether we are talking about universities from the Group of Eight—the elite universities—to the National Tertiary Education Union, there is agreement that fees will need to go up by around 30 per cent, just to make up for the cuts made in this budget to the universities, and particularly the massive per capita cuts to the Commonwealth supported places. So the per capita payment that currently is made to each student is going to be significantly cut. That figure, for some degrees—again, this is just the increase that will be necessary to cover the cut in the Commonwealth supported place per capita payment—is going to be closer to 60 per cent. Take a look at some of the areas. In engineering, an area where we should be encouraging our young people, we have seen the Commonwealth contribution cut by 28 per cent, increasing student fees by 54 per cent. In nursing, an area where we are importing vast numbers of people because we do not have enough nurses, the Commonwealth is cutting their contribution by 8.5 per cent per annum and increasing student fees by 18.5 per cent. With agriculture, they are going to a great extent to try to encourage people to get into it because it is recognised that there is a chronic shortage of professionals in this area that is hampering the ability of the agricultural sector to seize the opportunities that are being presented by emerging new markets. But, bizarrely, in agriculture we are seeing the contribution of the Commonwealth being cut by 15 per cent and an increase in student fees of 37 per cent. Yet at the same time we are acknowledging that we need to attract more people into this sector, because it has traditionally not been a well-paid sector.

Interestingly, in the performing arts my electorate arguably has the best performing arts academy in Australia. We see cuts being made there of 23 per cent and an increase in student fees of 45 per cent. I think the visual and performing arts will increasingly become something that can be engaged in only by people who have wealthy parents.

The universities will now receive less for every student. To cover that we have fee deregulation. It is interesting that the minister makes much of the support for fee deregulation that comes from the Group of Eight universities. It is true that in the current funding environment, with $6 billion worth of cuts to higher education, there are universities that believe they need to be able to charge more to build their reputation. But we know that this way of doing it, through deregulation, will come at the expense of the rest of the sector and at the expense of the principle of merit-based access. This is a betrayal of the very notion that underpins what it is to be Australian: the notion that your ability and your effort, and not your birth, determine your ability to succeed.

Not everyone from the Group of Eight universities is blind to this. To quote Professor Kwong Lee Dow, former vice-chancellor of the University of Melbourne: 'Most universities will raise fees, at least to offset their loss of income from government subsidies. Many will go further to boost the total level of income they receive to above 2014 levels. Either way, higher education loan program debts will balloon.' The vice-chancellor of the University of Sydney, Professor Michael Spence, warned that fee deregulation risked pricing the middle-class families out of tertiary education. He said, 'It's the ordinary Australians that I think aren't getting enough of a guernsey in this conversation.'

But not even the Group of Eight universities, who are supporting deregulation, support the restructuring of the loan repayment system. Let me quote a few here. The vice-chancellor of the University of Adelaide, Warren Beddington, said, 'Aspects of the change are unworkable and unduly harsh. The compounding interest here means that we might deliver debts to students of $70,000, $80,000 or $100,000, and no-one here wanted that.' Likewise, the University of Queensland's Vice-Chancellor, Professor Peter Hoj, revealing that the budget would cost his university at least $60 million and hurt students, 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 the Government funding for students sting more than we had anticipated.

So not even his friends in the Group of Eight will come out and support this massively unfair way in which the loan repayment system has been restructured.

Let us talk about this. There are three prongs to this restructuring: firstly, the reduction in the repayment threshold from $53,000 down to $50,000; secondly, and more importantly, the move from CPI indexation to a bond-rate indexation—this is capped at six per cent but the modelling shows that the most likely outcome over the long term is around five per cent; and, thirdly, the introduction of compounding interest. If we look at those three brought together, and the impact of higher fees and then the restructure, we see that the total interest obligations could increase by between 300 per cent and 700 per cent, and we could see overall debt levels double.

Universities Australia have modelled various scenarios that compare existing HECS obligations with those which will be experienced by students from next year on. Let us take a medium-fee scenario. We will take a nurse, so we are taking a pretty standard sort of scenario here. Under the current regime, with the CPI funding and current fee levels, a graduate nurse would expect to be paying, over the course of her loan, less than $4,000 in interest. Under this new regime—and taking a pretty modest scenario of a nurse who continues to work full time until such time as her HECS debt has been completed—that nurse will be paying now, in interest alone, between $14,000 and $26,000, depending on the actual bond rate. So, even with a bond rate of four per cent, that is a 300 per cent increase just on the interest charges. That is for a graduate nurse. If we see this compounding—particularly for women, who, in most instances, will take time out to have a family—in the case of that same nurse, if she works for six years full time and then goes on to part-time work, that increase in the interest rate will be 400 per cent: it will go up to $20,000. So the interest for her would go from less than $4,000 to $20,000 or, indeed, with a bond rate of five per cent, around $30,000. So, again, the interest charged will be more than doubling the debt. Likewise, an engineering graduate who is lucky enough to get a job will see their interest charges go from around $9,000 to between $37,000 and $78,000. And that is on, as I say, a modest fee trajectory.

We already see that banks and lending institutions are beginning to ask applicants for housing loans about their HECS debt. That indicates that students are going to have to really be considering very seriously the amount of debt that they are accruing.

Not as well known as the impact this is going to have on new students is the impact of the elevated and compounding interest rate that will apply retrospectively to over a million Australians and, indeed, to nearly 110,000 Western Australians with massive HECS debts, be they current or former students. So this is not just going to apply to students now and going into the future, from next year on; in fact this applies to over 110,000 Western Australians who entered into their degrees thinking that they were signing up to a regime of a CPI indexation. About half of those Western Australians have debts of $30,000 or more.

I had a letter from a young Western Australian, Georgina Ker, a 32-year-old, in my electorate. She has been out of the workforce for five years raising a family and is now going back in. She has short-term contracts and, indeed, an income level just above the repayment threshold. She is now facing a vast escalation of her liabilities because of this change of regime—a regime that she had no reason to expect would happen. It is a travesty. As consumer law specialist Dr Jeannie Marie Paterson said, 'It's akin to banks forcing mortgagees onto a flexible interest rate.' So here we have 110,000 Western Australians, over a million Australians, who suddenly have seen not just the goal posts shifted but, in many cases, just cut out from under them.

There has been this profound change in the way of the repayment regime that is applying retrospectively. We know Minister Pyne does not think that is right. He told the parliament in 2010:

… it is a fundamental principle of law and regulation that if someone relies on the laws and regulations at the time, they should be able to rely on those laws into the future. They should not have the goalposts changed on them in the middle of that reliance.

I want to make a brief reference to the provision just to publicly owned or not-for-profit institutions to the provision of for-profit private providers. Professor. Greg Craven said today:

Everyone knows that this gravy train will end up pulling into the Ma and Pa Kettle business academy and that non-universities that have nothing like the funding requirements of Australia's national intellectual powerhouses.

And he calls on the government to defer it, ditch it or discombobulate it and take the opportunity to reduce the cuts where they matter.

So we are taking money out of established Australian universities to fund the Ma and Pa Kettle business academy. How on earth can we justify that as part of making our higher education system stronger and more capable? We do need to be really focused on this. What we are doing is going to have profound impact on the future of higher education in Australia, on the future of our community. Can we at least call upon the Minister for Education to read the words today of Vice-Chancellor Craven and ditch the funding to these for-profit organisations who will be fundamentally driven by preserving shareholder value, who will not be driven by furthering the interests of Australia or by ensuring that we have a highly educated population?

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Amendment Bill 2014. We can all identify with the story of the old farm axe: it is as good as new—it has just had six handles and two new heads in its life. I come off a farm and I have seen a lot of axes in my time which did not actually get the new handle. In fact, I have seen axe handles held together with duct tape, bailing string, hose clamps and, even in desperate times, the farmer's friend—a bit of fencing wire. Unfortunately, that is the state of our higher education system at the moment in Australia. It has just sort of evolved as local and specialised programs are being formed to counter trouble and new challenges. Duct tape, string, hose clamps and wire are being applied to keep the show on the road. But the final product is no longer fit for purpose in the modern world to deal with the quickly evolving challenges that face our higher education sector and, in fact, our nation as a whole.

We have taken it for granted for so long that Australia has some of the best universities in the world and that the world will progressively beat a path to our door. But we are being challenged by other countries in our region. We currently have eight universities in the top 200 in the world. China has five and soon will have more along with India, Korea, Japan and the other growing economies of Asia.

The world as we know it is changing quickly. The growth in Asia is not just confined to manufacturing industries. In the higher education and school sectors, these countries are quickly expanding their capacity and the quality of their institutions. However, there are some in Australia—unfortunately quite a few on the opposition benches—who just wish the world would go back to normal, that change would leave us alone, that the things that we have done for the last 20 or 40 years will be good enough to keep delivering for the future. But unfortunately they are not because our neighbours will not continue to view Australia as one of the small number of countries that will provide a top-class tertiary education. It is not a given and it is seriously under challenge now.

Tertiary education and access to quality tertiary education for country students was one of the things which really sharpened my interest in politics. I had always been interested but trying to find the resources to allow my own children to gain good quality degrees presented a number of challenges. There are some side issues here about the accessibility of quality education for country students. For most of us that put our kids through school and then universities far off, we have to face a large cost of living penalty that those that live in the city do not. It is not the time to explore all those problems at the moment but I will flag that that was the thing that really got me going and thinking, 'We must do better. We must deliver better for country students.'

I was pleased in the previous parliament—the one before—to sit on the relevant House standing committees on education and, in the last parliament, on education and employment. Last year, I was asked to sit on the coalition's task force examining the role of online degrees and opening up the university sector to new customers, competition, innovation and opportunity. That task force proved to me that nothing will remain the same; that our education process is constantly changing and that every institution will be affected.

The key to success will be the ability for the institutions we have to adapt and to adapt quickly. Those who choose to invest in and to defend the status quo will be the losers. And that is not a result of government policy; that is as inevitable the tide coming in. There is change all around us and we must adapt. So this government is faced with a tertiary education sector that has learnt to adapt to a decline in government support on a per capita basis over a long period. There has been increasing total funding on the tertiary education sector, but on a per capita basis it has been decreasing for 30 or 40 years.

The previous government, for instance, despite its protestations at the moment about the treatment of this sector, removed $6.6 billion over the time they were in office. The uncapping of places in the sector has prompted universities to chase numbers, to bulk up courses and to increase income, and that puts downward pressure on the resulting quality of the courses on offer. Most universities are trying to be everything to everyone just to chase numbers, and that is not a good place for our premium institutions to be, it is not a good place for any of our universities to be and it is not a good place for our higher education sector generally to be. We need our higher education institutions to concentrate on what they do best. It is no different to any other industry in Australia. We have to concentrate on our natural advantages—we have to concentrate on what we do best—and universities are exactly the same.

The higher education reform bill will be seen in the future as a marker: the time when government recognised the problems and challenges of the sector and decided to act before the world came crashing down. Under the reforms, the higher education sector will be opened up to much more competition. The Commonwealth will provide support where it has not previously existed; diploma, advanced diploma and associate degrees students will be able to access a higher education loans program for the first time. The government will invest an extra $371 million over the forward estimates. Students will be asked for no up-front fees and will instead be able to borrow the entire contribution to their degree and that will rise to around 50 per cent of the actual cost of delivering that degree from 40 per cent, where it currently sits.

Yes, there is a real rate of interest. But the government will lend to students at exactly the same rate that the Commonwealth is able to borrow the money in order to lend it to the students and that is currently less than four per cent. In any case, it will be capped at six per cent. This will be the cheapest loan that a person will ever take out in their life. I understand that the Group of Eight universities at least, while generally supportive of the reforms, are not supportive of that particular move by the government. It may well be that we will look at reconsidering the way that interest rate is charged. But it is not as those who would decry these changes would put it. In fact, that is the best loan that anyone is ever likely to take out in their life.

If we could get a housing loan or, from my point of view, a farm loan, or a loan to buy a prawn trawler on the same kind of basis, I would be there with my ears back. Why on earth would someone not borrow money on that basis to fund what would be the best investment of their life? We know that someone who attains a university education is likely to earn 75 per cent more in their working life than those who do not. It is the best investment they can make.

Having said that, they will not start paying back that loan until they reach an income level of $50,000 a year and then, should they earn $50,000 a year, only two per cent—that is $1,000—is paid per year. That can rise to eight per cent when they reach $100,000. Of course, if they go over $100,000 that is a flat rate at that stage. It is a pretty good deal. And to those who say that students will not take those loans out, that they will be scared of taking those loans out: students have been facing loans for the last 30 years in higher education in Australia. From time to time they have been adjusted—the student contribution has always been adjusted upwards. At no time have we ever seen significant market resistance from students taking that higher role and a little bit more of the strain of their education costs. So those who try to run the scare campaign at the moment are really just doing that: they are running a scare campaign for political purposes.

Of course, as the member who represents a large slice of regional South Australia—my electorate covers over 90 per cent of the state—I am particularly interested in how these changes to higher education may affect country students. South Australia, unfortunately, has no regional universities as such, but we do have some regional campuses. The biggest are two regional campuses run by the University of South Australia, which have linkages between Mt Gambier and Whyalla. I state an interest in this in that I am currently chair of the Whyalla UniSA centre for regional engagement. We consider many things about the way that particular university campus engages with country students and how we attract people onto the campus. It is pretty hard work, I must say! At the moment we have been facing some reorganisation issues by UniSA, which have seen some of the power of management withdrawn back into Adelaide. UniSA are telling us that they are very interested in expanding the campus and expanding the number of courses on offer there.

One of the things the reforms in this bill will do is establish the biggest Commonwealth Scholarship Scheme that Australia has ever seen. It will be funded by a portion of the increase in fees should universities be able to obtain them. Really importantly, I do not think there is a lot of scope to lift university fees in a campus like Whyalla; but I do believe that UniSA will be able to lift their fees in other places and then they can make a decision about where they want to attract students. There are good reasons for attracting students to country campuses. Even more importantly, what they will be able to do is fashion Commonwealth scholarships to suit the environment and the people who live in that area. Remember, there will be regulations around these scholarships to make sure that they are targeted at the lowest socioeconomic groups, those who need the assistance the most and they will be aimed at the best and brightest students in that category. That is absolutely a good thing. That will allow a campus like Whyalla to say, 'Rather than reducing university fees here, because of course you can borrow to fund fees, you can get HELP loan assistance to do that, we will provide an accommodation package. We will provide a transport package. We will meet some of the costs of your investment in books and literature that you need. We might be able to help you fund a laptop computer, for instance.' That is the kind of flexibility that universities will be given.

Another university, the University of Adelaide, for instance—one of the 'sandstones', one of the Group of Eight around Australia—may well decide to use it as a way of reducing their fees for those best and brightest students from wherever to bring them to the best courses that Australia has to offer. Both of those things are good outcomes for education. We should not be shy about this. This is enabling universities to compete in the modern world.

Another one of the big winners, as far as I can see, are TAFEs, which play a very important role in rural living and their ability to deliver courses. They have been squeezed right around Australia. Unfortunately, in the last parliament we only had the chance to just begin the investigation, but we were looking at the role of TAFE and other providers of education into rural and regional areas and for industry. Students who attend a TAFE and in the case of diplomas, advanced diplomas et cetera, courses that will enable them to enter into a university where in fact they might not have the qualifications at this stage, will now be able to borrow that money. People coming from a lower socioeconomic group might say, 'I'm a bit concerned about borrowing money.' They need to remember that unless they earn $50,000, they will never be asked for it. (Time expired)

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

The member's time has expired.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

You're joking. I only just got started.

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

I have enormous respect for the member for Grey and I cannot work out quite whether he really believes what he is telling the House or whether he is just picking up the government's spin on this subject. But I will give him the benefit of the doubt and come to the conclusion that he really believes the things he just said. I only recommend to him that he has a closer at the subject and to give it more thought because I really do believe what he just said about the impact of these reforms on the university sector is just wrong—in particular, his failure to grasp the impact on regional universities, including the campuses he was just referring to.

Indeed, on few occasions have I watched a debate in this place so closely—this debate on the Higher Education and Research Reform Amendment Bill 2014—and I have watched with some bewilderment as rural and regional members from the other side have got to their feet in defence of what I think is an indefensible policy. The member for Riverina was amongst them not that long ago.

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

I haven't spoken yet, Joel—

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

I thought you did. I apologise to the member for Riverina.

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

but I will.

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

The member for Riverina has indicated that he certainly will be speaking on this bill and I assume, in doing so, he is indicating that he will be speaking with enthusiastic support of the bill—

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

You will have to wait and see.

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

Although he is now indicating that we should wait and see. So I look forward to member for Riverina getting to his feet in this place and giving a genuine and honest critique of the bill before this place. It is amazing how the member for Eden-Monaro, and I am not sure whether the member for Page has got to his feet on this issue yet, but certainly the members for Braddon, Lyons, Bass and others have got to their feet, and consistently made very similar contributions in defence, again, of what I think is the indefensible. I look forward to the member for Indi making a contribution. As a member who represents both rural and regional areas, she will make a different contribution. People in this place would appreciate that she does understand the impact of these changes on regional Australia, and I think people watching and following both the people in the coalition and in the Labor Party making their contributions can look to her contribution as a truly independent and objective one. I recommended people take note of what she has to say.

Firstly, I want to make a disclosure. All of my children have had the benefit of attending regional universities and I want their children to have the same opportunity, and a chance to attend a high-quality and affordable university in the region which they have been able to do.

There has been a lot of debate and discussion about the minister's higher education reforms but within all that there is one fact, whether or not those opposite like it, and that is that fees will go up. Christopher Pyne has acknowledged that himself by saying that he thinks it is fairer that students make a 50 per cent contribution to their higher education learning rather than a 40 per cent contribution. By any definition, that is a fee increase for students. It can mean nothing else. So fees will go up and students will be carrying greater debt for a longer period. These things are just a given. Again, the minister himself has not contested that point by explaining his main objective and that is to make students make a greater contribution.

While I disagree with both the Prime Minister and his minister, I understand that there will be some people in our electorates that won't. There will be some who do believe, particularly those who have not themselves had an opportunity to secure a university degree, that the taxpayer should pay less. I respect that and I understand that, but to them I make four points.

The first point is that education demand is of course price sensitive. That is, many students either cannot afford to pay more or will not see the value in paying more. For example, the Australian Veterinarian Association modelling suggests that a young person contemplating life as a vet will face a final debt fee of around $250,000. Given the average annual wage for a vet in Australia is some $76,984, a young person—and I am thinking particularly about a young person living in rural and regional Australia—might not see that as a good financial investment and might, therefore, make another choice.

The second point is that we need rural and regional Australia to be doing well to come to the conclusion that Australia is also doing well. Therefore, we want regional universities to thrive. This is where the minister's free-market approach really starts to run into trouble. Make no mistake: the government's plan for our universities will hit regional universities the hardest. Therefore, it will hurt the aspirations of rural and regional communities and all those around them the most.

The minister expects universities to replace the billions of dollars that he is cutting from their budgets by increasing student fees. But, unlike the sandstone universities in our capital cities, the capacity to put up fees is limited by the capacity of students to pay. This is a basic fact. Let me expand. The Australian National University—the alma mater of the shadow minister sitting next to me—has 7,832 undergraduate students, of which 273, or 3.5 per cent, are in the lowest socioeconomic status band. In other words, to use the Australian vernacular, they are the poorer students. There are just 3.5 per cent of them.

For the universities of Sydney and Melbourne, the figures for students in the low-SES band are 7.3 per cent and 8.4 per cent respectively. By contrast, Central Queensland University is at 35.5 per cent; Southern Cross University, 26.4 per cent; and the University of New England, 24.7 per cent. Of course that university is in the electorate of the Minister for Agriculture. I bet the fact that convention in this place dictates that he does not get to make a contribution in this place is welcomed by him. Also, the University of Newcastle, in my own region, 24.3 per cent; Charles Sturt University, 24.1 per cent; and Ballarat university, 23.9 per cent. And the list goes on and on in regional Australia. So to state the obvious those city-based elite universities are in a much better position to recover money lost by the billions of dollars being ripped out of them by the government as a result of this proposition.

The third point is that those tempted to think that students should pay more should think about the greater good. Our regional universities are key drivers of local economies. They are major employers, but they are more than that. Regional universities are part of the social fabric of regional communities in which they are located.

I am most familiar with the University of Newcastle, particularly in more recent years, which of course is critical to the Hunter's economy, but you have to travel to places like Bathurst and Armidale—and many areas in Victoria, Tasmania and elsewhere—to fully appreciate what a university town looks like and feels like. You cannot go to these places without sensing the critical role that the local university plays in the vibrancy, the economic wellbeing and indeed the social wellbeing of that town. If anyone in this place has not done that, I recommend they do it, particularly those in this place who live in and represent capital cities.

My fourth point is that regional universities also play a vital role in driving national innovation, productivity and development. That is just a fact. They tend to focus their research on areas such as agriculture, which are so important to rural and regional communities. Sadly, I make this prediction: if the minister secures passage of this bill through the parliament and all the unfair changes within it, it will not be long before we have a two-tiered university system in Australia. I have made the point that, to an extent, we already have that when you separate the G8, the sandstone or elite universities, from the others. But we will have a real two-tier system. The divide will be between those elite universities and the rest, but there will be another divide. That divide will be between those universities which both teach and undertake research and those which only teach. Have a think about that. It would be a massive change in the nature of our higher education system in this country. I also make this prediction: those so-called teach-only universities are not going to be much of a magnet for those PhD students and other academics who are really looking forward to opportunities to undertake research.

My real concern is that this is not an unintended consequence of this bill. I suspect this is the minister's objective. This is ideologically driven and this is the minister's objective. We all know that, for example, those who are likely to practise medicine in rural and regional Australia are those who are from rural and regional Australia and in particular have had an opportunity to study medicine in rural and regional Australia. These are issues the Adelaide based minister simply does not understand. I am amazed at the consistency of those who sit opposite—the way in which they have been prepared to come in here, toe the party line and insist that these are good changes for rural and regional Australia, because they are not. I thought some of those sitting on the other side were more courageous than that. I would have thought they would have been more willing to even subtly make a more honest contribution, a more objective contribution, and bell the cat on the impact these changes will have, not only on students and their capacity to secure an undergraduate degree, and hopefully go beyond that in some cases, but also on the institutions and therefore the impact on the local rural communities.

This bill is like all the others that seek to implement the measures announced in this government's first budget. Like all the other measures, on health or fuel taxes or whatever, these measures fall disproportionately on rural and regional Australia. The silence on the other side is deafening. There must be people right around rural and regional Australia today—some of them even listening to this debate—simply shaking their heads and asking themselves what their representatives in this place are thinking to allow such massive changes.

Going back just a little bit, I meant to make this point: the idea of the scholarships is just ridiculous. The member for Grey reminded us that the scholarships will come from the increased fees. The government is mandating that, with all the increased fees, you need to hive some of that money off for scholarships. This is not the government funding scholarships; this is the greatest ruse I have seen in this place. They are running around the country saying, 'Don't worry. There will be higher fees, but there will be more scholarships,' but the scholarships are being paid for by the students. I will make another prediction: the city universities, the elite universities, who themselves will choose who the scholarships go to, will be cherry-picking around rural and regional Australia, taking our best students out of rural and regional communities, or indeed out of Western Sydney, for example, dragging them into the elite universities, subsidised by increased fees paid by rural and regional students. That is what will happen. So, let's dispense with this crazy idea that there is a new scholarship scheme coming into place to help students. That is just rubbish. The Prime Minister and his minister should apologise for misleading the Australian community in that way. That is another example of how this bill will fall disproportionately and adversely on people living in rural and regional Australia.

I am glad the member for Riverina pointed out that he had not made his contribution yet. I apologise for that. I thought he had. I say to him again that I look forward to it very much and I look forward to a very objective contribution from him.

Jane Prentice (Ryan, Liberal Party) Share this | Link to this | Hansard source

I rise today to speak on what is the largest reform to higher education we have seen in a generation. I have asked the Minister for Education about these reforms a number of times during question time. The answer is a resounding win for students. The University of Queensland is within my electorate of Ryan and many students have contacted my office about these reforms. While some are slightly concerned about potential fee changes, although they understand it will not be as high as those opposite postulate, they do know that they will be receiving higher quality education, especially on the research front, and that they will be able to borrow every cent of the cost of their degree from the taxpayer through the Higher Education Loan Program.

The coalition government's reforms to higher education will see Australia's university sector become truly competitive on the world stage into the future. Right now our universities face a constant struggle to maintain their superiority. Our higher education sector is currently our third largest export after iron ore and coal; it just recently overtook gold. Under Labor, international education went backwards. Export income dropped from $19 billion to $15 billion from its 2009-10 peak because of Labor's neglect and lack of backbone to make proper policy action. The number of international student enrolments fell by 130,000 between 2009 and 2012.

When Labor was in office they cut $6.6 billion in funding to higher education, including more than $4 billion in their last year in office alone. Labor cut $2.8 billion of funding to universities and students and capped self-education expenses, which would have left thousands of Australian nurses, teachers and other professionals out of pocket. Labor's legacy was a complicated and unwieldy mess, with large increases in regulation, compliance, reporting, unnecessary red tape and regulatory duplication applying to universities. This meant universities spent an estimated $280 million a year on compliance and reporting. Labor's poor track record is evidenced by the two independent reviews of regulation and reporting in 2013 to which the previous Labor government failed to respond.

Action needs to be taken to ensure that our education sector is not left to crumble as a result of Labor's neglect and the growing competition in neighbouring countries. In November 2013, the government appointed Dr David Kemp and Mr Andrew Norton to review the demand-driven system. More than 80 submissions were received and other significant consultation was undertaken. These reforms are not a result of rash, back-of-the-drink-coaster policymaking. They have been carefully devised with full consultation over a long period of time.

Earlier this year, Universities Australia launched a campaign urging that Australian universities must not be left behind in the face of intensifying global competition. Minister Pyne made it clear that he was in full agreement and that one of the core goals of higher education reforms is to ensure that Australia is not left behind as universities around the world, especially in Asia, rise in standing.

The Shanghai Jiao Tong index, released a few weeks ago, lists eight Australian universities in the world's elite 200. Universities in China, Hong Kong, Taiwan and Singapore are rising strongly through the ranks. Five years ago there were no Chinese universities in the top 200. Now there are six in just five years. We need to make sure our universities are not left behind.

In the lead-up to the budget, many calls for reform—including for fee deregulation—were made by several vice-chancellors across Australia. On the night of the budget, the government announced that two working parties were being appointed to advise on key aspects of implementation of higher education reforms. I would like to point out that out of all the vice-chancellors of Australian universities there is only one who is completely opposed to these reforms—just one, and on an ideological basis, not a practical basis. All the others, in one way, or another, support the reforms.

These reforms are indeed enormous so we do need to have complete agreement by all parties on the whole package. To have wide ranging support for the majority of these reforms is obviously quite difficult; so to have such broad support is testament to the calibre and necessity of this reform package. Just yesterday, in The Australian, there was an article stating that David Gonski backs the coalition's plan to deregulate higher education fees.

These are good reforms; they are the reforms our higher education sector needs. The University of Queensland in my electorate of Ryan is a member of the Group of Eight universities and is one of Australia's top universities. In fact, the University of Queensland is ranked in the top 50 worldwide, as are the ANU, Monash and a number of other Australian universities. Yet not one of those is ranked in the top 20. I think this is a shame. I believe in our higher education sector, and I share in the minister's passion and vision to give our Australian universities the potential to be in the top 20 and to one day compete with the likes of Oxford and Harvard. These reforms make such dreams possible.

I know the minister has worked hard and has done a very good job of communicating what these reforms involve. There are 10 key points to the higher education reform package. The first is expanding the demand-driven Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees, costing $371.5 million over three years. The second is extending Commonwealth funding to all Australian higher education students in non-university higher education institutions studying bachelor courses, costing $449.9 million over three years. The third point is that more than 80,000 students each year will be provided with additional support by 2018, including an estimated 48,000 students in diploma, advanced diploma and associate degree courses, and 35,000 additional students undertaking bachelor courses. Fourth, there will be more opportunities for students from low socioeconomic status backgrounds through new Commonwealth scholarships, the greatest scholarship scheme in Australia's history, effectively meaning free education for the brightest students from the most disadvantaged backgrounds. The fifth point is that it will allow universities to set their own fees and compete for students. Competition will enhance quality and make higher education providers more responsible to the needs of students and the labour market. When universities and colleges compete, students are the winners.

The sixth point is that it strengthens the higher Education Loan Program, which sees the taxpayer support all students' tuition fees up-front and ensures that students repay their loans only once they are earning a reasonable income—more than $52,000 per annum. No one needs to pay a cent up-front. Seventh, it will remove all FEE-HELP and VET FEE-HELP loan fees, which are currently imposed on some students undertaking higher education and vocational education and training. Eighth, it secures Australia's place at the forefront of research, with $150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy, $139.5 million to deliver 100 new four-year research positions per year under the Future Fellowships Scheme, $26 million to accelerate research in dementia, $42 million to support new research in tropical disease, and $24 million to support the Antarctic Gateway Partnership.

The ninth point is that it will reduce the Commonwealth Grants Scheme by 20 per cent. Currently taxpayers fund more than 60 per cent of a student's degree. We believe that it is fair to ask students to pay for half of their degree—especially when people with a tertiary education earn significantly more over their lifetime. And do not forget that this 50 per cent can be completely borrowed on HELP—previously known as HECS—regardless of the student's background. Tenth, it adjusts the interest rate on student HELP loans. This is the money that the taxpayers lend to students up-front for the student's tuition. It will be adjusted to the 10-year government bond rate, with a capped maximum of 6 per cent, away from the current interest rate which is CPI. Taxpayers borrow the funds at the bond rate so it is reasonable that students should also borrow at the same rate. Remember that this is possibly the best value loan that students, or anyone, will ever get in their lives.

These reforms mean more competition and more choice for students. And, as a result of these reforms, there will be more courses. Universities will receive government support to offer more courses to more students. These qualifications will provide career opportunities and pathways to further qualifications.

There are some objections to these reforms on the basis that they do not help those in regional and low socioeconomic areas. However, diploma courses provide crucial opportunities to higher education for less-prepared students, giving them the opportunity to develop the skills needed for further higher education study. Expanding Commonwealth subsidies to these courses will ensure our students have the best chances of success. This is especially important in regional and low socioeconomic areas where students are less likely to enter into higher education compared to students living in metropolitan areas. These reforms mean more choice for students.

Universities will be empowered to set their own fees for their courses, which will generate more competition for students between a greater number of providers. More competition between higher education providers is good for students as they will now have a greater array of choices when it comes to course offerings and prices. Competition will drive quality and encourage providers to be more responsive to the educational needs of students. This will see many other students paying less than they do now for their education as the government supports more higher education options.

Many TAFEs and private colleges already work in partnership with universities. Those universities have been seeking funding for pathway and other diploma courses that help less prepared students succeed at university. The coalition government will now fund pathway and other diploma courses through universities and colleges, enabling many more people in Australia to get qualifications that can be used outright or towards a university degree.

Teaching and learning quality is a large part of these reforms. A competitive market requires an informed consumer. The coalition is responding accordingly. New information provided through the Quality Indicators for Learning and Teaching will put the performance of each higher education institution—private as well as public—in the public eye. This will ensure that all those involved in the market have all the information they need to make the right choices and that no one party is advantaged at the expense of another. Students and their families will be able to access information about the quality of the courses and institutions they are considering. There will be better information about how successful previous graduates have been at finding jobs and what other students and employers think about the course. This information will also help Australian institutions compare their performance with other countries, assisting them to continue to improve. A new website presenting this and other information will be online later this year, with full implementation by August 2015.

I would like to reiterate that there are no up-front costs for students studying pathways which lead to a career with higher earnings. The government will maintain the HELP loan scheme so that no student need pay a cent up front for their higher education until they have graduated and are earning an income of more than $50,000 per year. Australian university graduates, on average, earn up to 75 per cent more than those who do not go on to higher education after secondary school. Over their lifetime, graduates may earn approximately $1 million more than if they had not gone to university. Given this, it is only reasonable that students contribute fairly to the cost of their education.

There has been a determined scare campaign regarding the future for fee paying students. Let me be clear. The current debate about these reforms has led to some inflated claims about the likely fee levels and repayment requirements of students. These claims should be treated with caution. Students enrolled before the budget will continue to be charged under existing arrangements. The government is not increasing fees. It is up to universities to choose what they charge, and for students to choose to pay.

Higher education providers will have to compete for students, and when there is competition for students, the students are the winners. Universities will have more to say about their own fee arrangements in due course. However, the wild speculation those opposite are using to scare the public away from the greatest higher education reforms we have seen in a lifetime are vastly incorrect and have no founding in reality. Some university fees will go up and some will go down. Students can choose a university that is best for them. They can choose the courses they want at the fees they want. Students will have the chance to go to universities that truly compete on the world stage and will set them in good stead to reach their full potential. These reforms mean that students win. Australian universities are dropping in world standing, but we cannot afford for them to be left behind.

I urge all those in this House to support this bill. To stand in the way of these reforms is to stand in the way of our children and their potential. I commend this bill to the House.

Cathy McGowan (Indi, Independent) Share this | Link to this | Hansard source

I acknowledge the member for Ryan and thank her for her contribution. To the young people who are listening to this debate, what we are talking about today has direct relevance to your futures and I encourage you to have some discussion about it. There are three things that I am going to talk about in my speech today. I want to talk about the impact of these reforms on the people of Indi. I want to talk about why some aspects are problematic and I want to make some suggestions for future consideration.

I acknowledge the comments of the member for Ryan and, in many areas, we have total agreement. But the fundamental difference that I would like to bring to this debate is that I believe we have already got market failure in rural and regional Australia. This is not the case in the cities. So my contention is that the government has to do something about market failure and one size does not fit everybody. In May this year, following the budget, in Indi we undertook what we called the Indi Budget Impact Tour. We had widespread consultation with my electorate—730 people in one week—and copies of our report are available from my office. Generally speaking, people supported the budget and, importantly, the role of the government in making the changes they thought fit. However, within the whole budget, there are a number of issues which caused particular concern. None was stronger than the reaction we got to the so-called reform in the education sector.

There were a number of specific issues that people raised with me—the impact of changes to interest rates on HELP loans; the deregulation of the university fee system; cuts in funding; the scholarship system; increase in costs for postgraduate degrees; reliance on the market to drive changes; and the separation of teaching from research. I would like to read into the Hansard a summary of the major comments people made:

The possibility of increased university fees is overwhelmingly and emotively opposed. The proposed changes to university fee arrangements will benefit the well off and further exclude the disadvantaged and country students. The expense of university study and living away from home is already too great for country students; it should be reduced, not increased. We are creating an academic underclass when we don't support rural kids to do higher education. HECS/HELP debt is already a stress; increasing it will result in less people doing higher education. Private school bias is squeezing public schools and the Gonski proposal is to redress disadvantage should be implemented. TAFEs and universities need to receive funding. Education is our future, paying of the national debt is not as urgent.

Many more comments were included.

From my perspective, a number of things in this legislation are problematic. I would like to outline to the House why I think there has been such a strong negative reaction. I have to say that the people of Indi, by their nature, are doers. Typically, they are resilient, independent and creative people who cope with change. Like most people in this House, they value education. They see it as a fundamentally important part of our social, economic and cultural infrastructure. They see education as the answer. They see it as the solution to continuing to be a profitable, prosperous, sustainable and creative community which is alive with opportunities for everybody. They know that the rural economy is changing. They see globalisation of our economy and through their agriculture and related businesses many are active players in this internationalisation. They know that education, especially formal education, is an absolutely essential ingredient of our ability to compete in world markets. I know these sentiments are shared by members of this House.

So what makes for such a strong, negative reaction to this legislation from the people of Indi? I believe they understand that the assumption underpinning the legislation—that the market will deliver—is flawed. Two recently released reports highlight the significance of regional universities in local communities: Regional Universities Network: engaging with regions, building a stronger nation and Aspirations and destinations of young people: a study of four towns and their communities and schools in Central Hume, Victoria, University of Ballarat, December 2012. In these reports some very revealing statistics are presented. For the Hume region, which includes half of my electorate of Indi and half of the electorate of Murray in north eastern and central Victoria, the percentage of graduating secondary students who enrol in a bachelors degree is for females in Hume 31 per cent, for males 26 per cent, the lowest percentage of non-metropolitan region. Interestingly, in Melbourne it is 59.6 per cent. So we have a comparison between Hume of 31 per cent and Melbourne of almost 60 per cent. The percentage of the Hume population aged between 25 and 35 with a bachelors degree or higher is 17.35 per cent; the state average is 30 per cent. The estimated percentage of Hume students who have been offered university places but have deferred is 30 per cent and all my career teachers tell me that that is growing.

Clearly, the current system is not working. Clearly change is needed. The question I put to this House is, where you have no competition, where you have limited service provision and what is currently being provided is not working, will a market based economy work? My argument is not. I believe we have market failure in Indi and the answer is more government intervention, not less. Market failure is considered by economists to be the rightful role of government to correct. Obviously, classic economic theory believes there is a large role for government to play in the economy.

I would like to read some of the preconditions for markets that are necessary if they are going to achieve efficiency. Clearly I believe these do not exist in my electorate. There needs to be perfect competition, there needs to be perfect information. We need to have perfect mobility of resources. We need to have no economies of scale and we need to have not critically large transaction costs. It is stated that when many of these conditions fail to be met, it is termed a market failure and it is considered by economists the rightful role of government to correct for these market failures. Obviously, classic theory leaves a large role for government to play. This is the crux of my argument today. There is a role for government to play in the provision of education, particularly in rural and regional Australia, because there is a difference between public goods and other goods, because there is a difference between the country and the city, because education is an investment as well as an expense and because politically we all know that one size does not fit all and if we, as politicians, refuse to accept this, we will pay the cost for our decisions.

So what is it about country living that makes for these special circumstances? My proposition is that distance is the key characteristic that needs to be accounted for and the consequential impact that it has on population density, demographic profiles, workforce composition and skill. These, coupled with the extra costs incurred in overcoming the tyranny of distance—the cost of money, the cost of time, the cost of resources and particularly the cost of effort—have huge impacts for us. People in my electorate are already playing huge costs for education, costs that are not accounted for through HELP, through government—the costs of travel, accommodation, living away from home, community disruption—and the extra costs imposed by this legislation will have a major multiplying effect on the individuals concerned. It will have a multiplier effect on the families. It will have a multiplying effect on the communities and, I believe, on my whole electorate. The impacts will be that even fewer people will take up the options of post secondary education. I do not think as a country we can afford that.

The fact that even fewer people are undertaking education will flow right through my community, adding to the disadvantage we already experience. For example, this education I am talking about is not about doctors and lawyers, it is not about excellence; it is about the basic provision of skilled professionals in my community. It is about nurses, it is about teachers, it is about social workers, it is about child-care workers, it is about people who do not do these jobs for maximum income. They want enough and they want a job to which they can reasonably travel from home to contribute to their community. These are not grabbing people, these are not people who want to rip off the system; they want to be able to serve their communities, to earn enough income and to live in their communities. Without this local provision we will lose that infrastructure.

The second thing is that because we do not have enough relevant education available locally, we have a huge export of our young people to the cities and very few of them choose to return—that brain drain. There is an opportunity cost for my community of having to pay for loans and the money goes out of our community. Instead of being invested in businesses and in mortgages locally, it goes off into some fund which then gets redistributed in the nether land. I have already spoken in this House about my particular concern for the impact on agricultural education, so I will not go into it today. What I would like to talk about in the next section of my speech is what can be done.

We have a failure of market. We have a role for government to intervene and we are not part of the city answer. I can totally understand when members of parliament say it is going to work for them; it does not mean to say it is going to work for us. Like the people in my electorate, I am a doer, and I know the importance of outlining solutions to the problem. When I talked to the community that I represent about what can be done, they said: 'It is not just what we do; it is how we do it. Giving us a big hunk of money won't solve this problem. You need to talk with us. You need to engage with us. Government needs to trust us to be part of the solution. You need to build on what is already working. We need to think and plan for the long term, beginning with the end in mind. Most importantly, we need to measure, count, analyse and recalibrate. It is how we do things that will deliver success. Throwing money at the problem is rarely the answer, and it won't be the answer for us. It is how the money is used that will make a difference.'

Suggestions from my community include: rather than limit scholarships to the profit base of universities, which clearly works to the disadvantage of rural and regional universities, have a process to consolidate scholarship funds and make them available to everybody equally. Have a process for tendering; award best practice. Rural and regional Australia needs to be engaged in the process of developing solutions. I am so disappointed that this legislation was not informed by a white or green paper or a consultation process.

In my community we know that the future is not some place we are going to; it is one we are creating. We know the paths to it are not found but made and we know that the making of those pathways changes both the maker and the destination. We know that, by working together with government, community and stakeholders, we can come up with better solutions. Government, come and talk to us. Invest the time in consulting with your communities and working together to come up with solutions that will work. We know what will work. We have some excellent practice in our communities.

In Indi specifically, we have an excellent campus of La Trobe University at Wodonga, doing fantastic work and delivering, against all odds, to raise those statistics that I mentioned before. In Wangaratta we have some fantastic work happening between GOTAFE and CSU, delivering agricultural education. We have excellent work happening. We have models that deliver. We know what works. We know how to engage. Give us more, not less.

Begin with an end in mind, government, and plan for the long term. When I look at this legislation, I do not see a plan. I do not see how this model will address the real concerns of businesses for a skilled and experienced locally based workforce. I do not see the concerns of families who want educational opportunities locally available and at all stages of the life cycle. I do not see a plan for rural and regional Australia where there is excellence. Excellence is going to be located in the cities. Where will that take us? I do not see a plan to enable all communities to reach their potential without exporting their young people and I do not see a plan that enables a nation—a nation that is both urban and regional—to truly reach its potential.

In closing, I call on the government and all my colleagues opposite who represent electorates outside the cities: in voting for this legislation, take responsibility for your decisions and start counting. Continue to count, and report back to this place on where the success is and how we actually have delivered for rural and regional Australia.

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

I rise to talk on the Higher Education and Research Reform Amendment Bill 2014. This is a significant bill. This is a significant piece of legislation. This bill before us today is not about so-called reforms; this bill is about real reforms. It is about real reforms to the higher education system, which is a significant contributor to our society, a significant contributor to our gross national product and a significant income earner. Education is our fourth-largest export. Our higher education system now operates in a globalised world. Making sure that it can operate in that globalised world is vital. Already, we are seeing other countries competing with our higher education system. If we do not allow our higher education system to compete with other universities, whether they be in New Zealand, Asia, the US, the UK or anywhere else, then we are tying our higher education system down; we are shackling our higher education system. In doing that, we are shackling the future of our children.

These reforms are important, and they are especially important because of the situation that we have been left with, the situation that we face coming into government. As Paul Kelly so brilliantly articulated, Labor made a cart when it came to higher education but they did not provide a horse. I will just say that again, because it is important: the Labor Party made the cart but they did not provide the horse. So what did they do? They said, 'We're going to have demand-driven places in our universities, so universities can open themselves up. And we will make the system of how they bring students in demand driven.' But they did not deregulate the fee base. They said, 'We want you to take all these students, but we're not going to give you the ability to fund it.' As a matter of fact, not only did the Labor Party go to a demand-driven system but they actually took money out of the higher education system as well. So they shackled the higher education system. What the Minister for Education and the government faced was a system which did not have the ability to innovate and compete. These reforms are about giving our higher education system that ability to innovate and compete.

I am happy to place on the record here my belief that this is the true reforming part of our budget. This is the most significant reforming element of our budget, without doubt. What we are doing here to our higher education system will set it up for the decades to come—will give it the ability to compete in a globalised world against other countries.

To those opposite I say: look around you and look at the examples. We already have universities in New Zealand that are coming to Australia and advertising to take our students so that they will go to New Zealand to study. They are there saying, 'Come and get educated in our universities; it will cost you less and you will get a better education.' We are not giving our universities the ability to go to New Zealand and do exactly the same to them, and we should.

I would like to touch on one thing that the member for Indi said about what this will mean for universities in regional and rural Australia. What it means for our regional and rural universities is: for the first time, they can compete on cost. They can offer degrees, on a basis competitive with those being offered in the large capital cities, to attract students to regional and rural areas. They can do it on the price of the degree. They can also do it on the cost of living in those areas. So they will have two advantages over those capital city universities to attract students to their campuses. This is a game-changer.

At the moment, if you look at, for example, my electorate, where I have a Deakin University campus, that Deakin University campus in Warrnambool has to offer degrees at exactly the same price as the campus that they have in Geelong and the campus they have in Melbourne. There is no ability for that university to differentiate between campuses on the price of a degree. If they were able to, and if they were able to provide that at a cheaper price—and the cost of living there, we all know, is a lot cheaper—then we could attract more students to that regional campus rather than fewer, because at the moment there is no ability for that campus to compete. So these reforms, for regional and rural Australia, offer a significant advantage to our regional and rural campuses, and I think that this is one of the big, big wins from these reforms.

There are other issues which this bill deals with. For the first time, we are offering HECS or HELP to those people who want to get a tertiary degree. This is also significant because, once again, especially in regional and rural Australia, there are students who want to make sure that they can afford to get a tertiary degree. And why shouldn't we give them the same opportunities as we give to those who want to get a higher education degree? Once again, common sense—practical solutions to problems, which I know, in my electorate, and in other electorates in regional and rural areas, will be extremely well regarded.

It is interesting to see what those opposite have said on this issue. I have a transcript here of the former Minister for Employment Participation—Minister Ellis, as she then was—in an interview with Linda Mottram on Monday, 16 April 2012. She was being asked about HECS-style loans for TAFE students, and she had this to say:

Oh look, I'm incredibly excited about this. I know that upfront fees have meant that it has acted as a barrier to some people being able to take up their skills, their trades training and that this HECS-style scheme will ensure that everybody has the opportunity to access this form of education and training, like others.

So I am hoping that the former minister for employment will be incredibly excited about the reforms that we have brought before this House here today.

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

I doubt it!

Dan Tehan (Wannon, Liberal Party) Share this | Link to this | Hansard source

Highly unlikely—because they are very good at saying one thing before an election and another thing after an election, but it would be good to see a little bit of consistency in approach, and it would be good to see that incredible excitement about what we are offering, because it is very, very important for our young people.

As we have seen recently, youth unemployment in this nation is an issue that we need to address. It is over 13 per cent; it is more than double the national average. It is an issue that we need to focus in on and target. What we are doing with these reforms—and, in particular, what we are doing when it comes to providing HECS and HELP into the tertiary sector—is a significant development in helping us address that youth unemployment problem.

As we know, if we can have our young people either earning or learning then that is the best way that we can ensure future paths into proper employment which will give them the type of start in life that they need to make sure that they can lead fulfilling lives—and this is what these reforms will do.

These reforms will also help those students from regional and rural areas and those from low-socioeconomic areas by giving them the chance to be able to afford to go to university. So the scholarship system which has been set up has been deliberately set up to mean that those students from low-socioeconomic areas and from regional and rural areas can afford to go to higher education—another significant aspect of these reforms.

I will also take a moment to note here that the government is going to look, when it comes to rural and regional students in particular, at dealing with the costs associated with having to move to take up a higher education place. Both the Minister for Employment and the Minister for Education have had a working group, chaired by Senator McKenzie, that has been grappling with this issue. The Labor Party made draconian changes to the independent youth allowance. Fortunately, after a lot of community unease and protest about those changes, that draconian decision was overturned, but they still did not go far enough in fixing and addressing this issue.

The Minister for Employment and the Minister for Education have committed to looking at this issue—how parents deal with the costs of sending students to get an education in rural and regional areas—which is so vital to rural and regional students. That is a major development and I look forward to the task force that has been set up in this area reporting back with options that the government can take forward and which will be another component of these important reforms that are here before the House this morning.

In conclusion, I just want to reiterate once again how important the higher education system is to the social wellbeing of our nation and to the economic wellbeing of our nation. I want to reiterate that our higher education system in Australia no longer operates in a vacuum; it operates in a globalised world. It must compete. It must innovate. It must do everything it can to attract students. It must do everything it can to make sure that the degrees that they are offering are the best in the world; if they do not, Australia will be all the poorer for it.

What we inherited was a system which was broken. It was a demand-driven system that did not deregulate the fee base. You cannot have a demand-driven system where government is cutting funding out of the system—and that is what the previous Labor government did—because all you do is cripple your higher education system. We want to unshackle it. We want to free it. We want to give it the opportunity to be the best higher education system in the world. This will enable us in rural and regional areas to expand the higher education presence and the higher education footprint around the country. If you compare our higher education system to that of the US and the UK, ours is predominantly based in capital cities while those in other countries are spread right across those countries, and in rural and regional areas in particular.

Shayne Neumann (Blair, Australian Labor Party, Shadow Minister for Indigenous Affairs) Share this | Link to this | Hansard source

I rise to speak against the Higher Education and Research Reform Amendment Bill 2014. I am amazed that the coalition has members from rural and regional areas actually speaking on this bill. If I were in their tactics squadron, I would be recommending that none of them speak on it, because they are arguing that this will make it harder for the children of people living in rural and regional areas to go to university. That is exactly what they are doing. Yet they are up here criticising our system.

They allege the higher education system was broken—the member for Wannon said. But I will give you a few facts, because I have heard speech after speech from coalition members. When we were in government, we commissioned the Bradley review on higher education and we responded to it. We increased the revenue funding per student by 10 per cent to $1,700 during the time we were in government. We increased government investment in universities from $8 billion, which we inherited in 2007, to $14 billion by 2013. If that funding had been maintained, by 2017 we would have seen $17 billion contributed by the federal government to the higher education sector.

But what are they doing? They are cutting $5.8 billion from it and making it harder for young people in rural and regional areas such as mine to get to university. And yet they are coming in here and lauding this as a historic reform. What they are doing is looking at the prospect of those universities charging far more for young people to become nurses, doctors, teachers and engineers—or even to work in the farming sector. We have rural and regional members here from the coalition lauding this yet we are seeing cuts to agricultural science, cuts to those people who actually want to better their farming skills, people who want to work on their farms and make their farms more competitive.

Where is the National Party? I think I am starting to agree with Bob Katter: the National Party does not really exist in this chamber anymore; they just roll out to the Liberals and the free marketeers and buccaneers of the right wing ideologues of the Liberal Party. And this legislation is typical of that.

When Labor was in power, we boosted funding to regional universities by 56 per cent. So we made it easier for young people to study. Our student start-up scholarships helped more than 427,000 Australians with the costs of study; our relocation scholarships helped 76,000 people with the cost of moving from home to study. We put 190,000 more students on campuses across the country. We boosted Indigenous student numbers by 26 per cent. We boosted regional student numbers by 30 per cent. And we have more than 36,000 extra students from low-income families in universities, compared to 2007.

In my area in Ipswich, the University of Southern Queensland in Springfield is hitting its Bradley review commitment in terms of young people from low-socioeconomic backgrounds getting access to university degrees.

Lest anyone say that we did not invest in world-class research and teaching facilities, we invested $4.35 billion from the Education Investment Fund and we earmarked $500 million for regional Australia. Let me give you an illustration of the kind of thing that that has done. Lest anyone in the gallery or listening think that Labor did not invest in the university sector, let me give you one illustration—the University of Southern Queensland's Springfield Education Gateways Building. It is a digitally connected learning environment, including simulated learning and laboratory spaces, allied health and nursing, engineering and construction and education. If any members want to go there they will actually see the construction taking place at the University of Southern Queensland's Springfield campus in the southern parts of Ipswich.

This bill is about cutting Commonwealth funding for university courses by an average of 20 per cent, leaving universities with no alternative but to raise fees to cover costs. It deregulates university fees and it will see the cost of university degrees skyrocket. Young people in regional and rural areas will have to make a choice between a car loan, a home loan or a university education—and the crippling interest rate on HECS-HELP student loans will burden students with years of crippling debt. It is a price signal. Those opposite are happy with price signals—because they want to put a $7 GP tax on people. They are boasting that this is the biggest Commonwealth scholarship fund in Australia's history. It is a sham. It is funded entirely by students paying higher fees. It introduces fees for PhD students—stifling innovation. But this is a government that does not believe in innovation. It got rid of the funding for the innovation precincts and they do not even have a science minister.

This bill does nothing to improve affordability, nothing to improve accessibility and nothing to improve availability of higher education. Name a country in the world where the deregulation of higher education led to lower fees. The minister could not name one when asked that question. This bill will force capable students to consider whether they can afford to go to university and put the burden of debt on them in the future. It is particularly harsh on students from low-income backgrounds, students who graduate into relatively low-paying jobs, graduates who take time out of the workforce to raise a family, mature age students who seek to upgrade their qualifications and those in remote and rural Australia. Put simply: we are seeing today through this particular legislation the Americanisation of our higher education system. It is a plan for $100,000 university degrees. It is a plan for a higher education of haves and have-nots. It fails the national interest test and it fails the test of equity and fairness.

Before the election, the now Prime Minister and the now Minister for Education promised no cuts to education. In September 2012 the now Minister for Education said:

While we welcome debate over the quality and standards in our universities, we have no plans to increase fees or cap places.

On election eve, the now Prime Minister said:

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

That blue book, Real Solutions, which they put underneath their chin all the time—and you saw candidates for the Liberal Party parading around the Real Solutions book as if it was the solution to everything—gave an old-fashioned, rock solid guarantee about university funding. Real Solutions, the Liberal Party's manifesto at the last election, said:

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

That is what it said: 'We will ensure the continuation of the current arrangements of university funding.' Well, the book is in the shredder. Real Solutions is in the shredder. They do not want to know about Real Solutions.

That did not take long—but it took a bit longer than I thought. In November 2013, the Minister for Education told Sky News: 'We want university students to make their contribution, but we're not going to raise fees.' So the Damascus Road conversion experience in reverse—the good minister for education becoming the bad minister for education—took a little while. In November 2013 he had not yet submitted himself to the finance minister and the Treasurer—they had not cut it yet. When asked why the government would not raise fees, the Minister for Education replied: 'Because we promised we wouldn't before the election.' Well, that did not last long did it? The budget in May broke that promise.

They broke that promise and every other promise that they made about education—$30 billion in cuts to education. The Gonski unit ticket went. It is gone. It did not last long, either—it did not last at all. Despite repeated promises that this government would be a government of no surprises, they delivered this shocking budget in May and we are now dealing with the consequences. There was $5.8 billion cut from the higher education sector alone. There were cuts in terms of the HECS-HELP benefit program and the Higher Education Reward Funding. The Higher Education Participation and Partnerships Program was scrapped. There were cuts through changes to indexation for higher education. There were cuts to the Student Start-Up Scholarship Program, cuts to the Relocation Scholarship Assistance Program, cuts to the Research Training Scheme, cuts to the Tertiary Education Quality and Standards Agency and cuts to the Australian Research Council through an efficiency dividend. They are the cuts those opposite made. So much for the party that want to support higher education—cut, cut, cut!

This bill before us today includes two massive cuts that will punish students. But members opposite from rural and regional Australia are lauding the bill—as if it is somehow great to cut $5.8 billion from the higher education sector. This will harm students in regional and rural areas; yet they are saying that it is fantastic. This bill cuts $3.2 billion through changes to the HECS-HELP repayment threshold and will increase rates for HECS-HELP debts. There is also a $1.1 billion cut through cutting funding for student support places.

The government argue that this is the only pathway forward. I tell you what it is a pathway towards: it is a pathway to a system where universities are a place that only privileged can go to, where only the sons and daughters of the rich can afford to go to. Those from the middle class and those from poor backgrounds will have this cost imposed and this obstacle in front of them that will make them question: 'Can I really afford to do it?'

This is not essential for the future prosperity of the nation as the minister said; this is about a class driven approach to university funding. We have not quite seen this. Even John Howard, the Prime Minister that imposed protocols and Work Choices in the higher education sector, would not go down this road because he knew it was too dangerous.

We have seen the sector rebel against this. We saw Stephen Parker, the Vice-Chancellor of the University of Canberra, hit the nail on the head when he questioned if this plan was essential for the future prosperity of the nation, as the minister had claimed repeatedly. Mr Parker said one wonders why it was not mentioned in the federal election campaign last September. The answer of course is the coalition knew they could not take the plan in this bill today to the election in September last year. Who, thinking about taking time off from their work as a mature-age student with a young family going back to university, would not think about the cost? Who, as a mum or dad of tertiary aged kids that are finishing high school in places like Ipswich, Logan, Rockhampton, Gladstone, Townsville and Cairns would not have thought, 'Can we really afford it?'

This is about a price signal. This is what this mob opposite are going to do. They knew that Australians would not vote for a $7 GP tax nor for young people under 25 years of age who are just entering the workforce to lose $100,000 on their superannuation, as all those opposite yesterday voted for. Australians would not have voted for an increase in the petrol tax. They knew Australians would not vote for $80 billion in cuts to health and education, hospitals and schools. They knew Australians would not vote for cuts to the age pension or for cuts to the dementia and severe behaviours supplement. They would not mention those before the election.

Those opposite have abandoned needs based funding for schools and now we have before this chamber today another bill which shows that the Liberal Party are always on the side of the affluent and have a hard right wing ideological bent when it comes to education and the economy. This is a terrible troika on Australian students. It cuts funding for Commonwealth supported places, it deregulates university fees and it increases the interest charged on HECS-HELP student debts. It is worth considering each one of those.

I want those opposite to go back to what they call their listening post or their mobile offices and put a banner in front of them that says 'I voted to cut $5.8 billion from the higher education sector' and see what their constituents say. Or put on the banner 'I am going to make it harder and more expensive for your children to go to university' and see what their constituents say. I am amazed that we have seen some members in marginal seats in rural and regional areas actually have the temerity to come in here. Let them send out press releases today saying 'I voted to make it harder for your sons and daughters or for you yourself to go to university.' I dare them to do it. I guarantee they will not do it. They will be really courageous here but when they go back to their constituents in their marginal seats in rural and regional areas, they will not have the fortitude to tell people how they voted. This is important legislation they say. But, in fact, what they are doing is Americanising the system and making it harder for young people to go to university. It is a shame, a disgrace and they will rue the day.

Angus Taylor (Hume, Liberal Party) Share this | Link to this | Hansard source

I rise to speak in support of the Higher Education and Research Reform Amendment Bill 2014. It gives me great pleasure to speak on this bill because education, particularly higher education, has transformed my life and has transformed my wife's life. Between us, we have five degrees. She was the first person in her family to ever go to university. We have both taught at a range of different universities on the east coast of Australia over many years, her law and myself business and strategy. I have been and remain on the council of one of the residential colleges at Sydney University that takes a large number of regional students and helps them to get a higher education at Sydney University. So I am deeply passionate about this issue; I know a lot about it and I care about it a great deal. I take great offence at the comments from those opposite about what we are seeking to do and what will be achieved through these reforms. In particular, I think the fundamental issue here is that those opposite do not understand what is happening in higher education.

Since 1986 I have been involved in this sector and I have seen extraordinary changes, so let me describe some of those changes. We now face ferocious global competition that those opposite do not understand. That competition is for students, particularly post graduate students. But, increasingly, undergraduate students are making choices about where they go to university between Australia and other countries in the world. For years we have been facing brain drain from our universities to global universities as students find the best place to do research and find the best place to teach. We are competing with universities around the world.

We face competition in our businesses. If we cannot attract and educate the best students here in Australia, we will fail. In this incredibly competitive global environment, we face competition which few of those opposite have ever had to deal with. We see that competition emerging very rapidly. China, for instance, if you go back only five years, had no universities in the top 200 in the world. They now have six. There are more students studying in China at universities, in higher education, than the whole of the Australian population. This is global competition in higher education in action.

There is a second major change I have seen in my time in universities—that is, how technology is transforming the sector. Many students now undertake their higher education using technology-intensive tools. We have heard in this chamber about how MOOCs are changing the nature of higher education. But, at a far more practical level, in regional Australia and in my electorate we see a large number of students watching lectures online using technology and doing tutorials through technology, which is changing the face of higher education. The notion that all degrees are going to go up in cost, when we are seeing these massive technological changes, is just absolute rot.

This reform bill is designed to help our universities to be competitive in this global environment and with these technological changes that we are seeing in the education sector. It has three key objectives: to increase access to quality higher education, to increase the diversity of courses offered and to contribute to repairing the budget and making sure that higher education is sustainable into the future. I think it is fair to say that in this chamber, on both sides of politics, there is some agreement that Australia's current higher education system does face challenges if we do not make reforms. This bill is about making important changes to strengthen that system.

As the member for Hume, with an electorate that spans from Picton and Wilton on the fringe of south-western Sydney, to Young and Cootamundra in the west, my comments on this reform bill focus on the benefits—the benefits—for rural and regional Australia. Regional Australia accounts for almost 40 per cent of our nation's population and the majority of our Indigenous population. However, young people aged from 15 to 24 who are from rural and regional Australia are almost half as likely to be attending university as young people from metropolitan areas. I saw that with my wife's family. She was, as I said earlier, the first in that family to go to university. She is from central western New South Wales.

In my electorate, higher education participation rates for young people aged 17 to 22 is about 16 per cent, this compares with 25 per cent in the ACT and as high as 45 per cent and 49 per cent in some capital city electorates. Clearly, there are barriers to regional and rural students accessing higher education. In 2009, the Senate Rural and Regional Affairs and Transport Committee conducted an inquiry into rural and regional access to secondary and tertiary education opportunities. Submissions discussed some of these barriers.

The submission from Charles Sturt University—a university headquartered in Bathurst in central-western New South Wales, and operating campuses in inland New South Wales, the ACT and Victoria—noted that distance from a higher education institution does influence a young person's decision to attend university. I have seen that myself in my role at one of the residential colleges at Sydney university.

Charles Sturt University looked at the effect of the physical presence of a university campus in rural and regional areas on student participation, finding that the total number of students enrolled in a university increased with proximity. Participation also increased where the university offered a broad range of courses compared to a single course. Another study referenced in the Charles Sturt submission and titled, 'TAFE, university or work?' looked at the attitudes of high school students towards university, TAFE or work as post-school options. It found that student preferences for TAFE or work increased as their distance from major cities or university locations increased. Universities located in rural and regional areas have many benefits, such as bringing that knowledge economy to regional areas, providing educational opportunities for regional populations, providing opportunities for employment and so on.

Currently, only students studying bachelor-level courses at university are guaranteed access to government subsidies for their education. This reform bill extends this opportunity to students studying a wider range of courses at TAFE, at private universities and at private higher education institutions, and for students studying higher education diplomas, advanced diplomas and associate degrees. It is expected that the reforms will see more than 80,000 additional students each year accessing government subsidies for their education. Many of these students will come from rural and regional Australia and disadvantaged backgrounds. Students studying for jobs in child care, aged care, computer engineering and students studying qualifications that will lead them into university studies. There are clear opportunities for regional universities to expand into this area, offering these qualifications to local young people to develop their skills and retaining graduates in the community.

Tertiary education institutions, particularly those in regional areas, will also have new incentives and opportunities to work together to develop customised courses that produce graduates with the skills and knowledge required by local employers. Regional students will benefit from courses that enable them to study in more places and in more ways, including of course online.

The reform bill also provides for the deregulation of fees for Commonwealth supported students and removes the current maximum student contribution amounts. I have received a number of emails from concerned parents and grandparents about this measure, specifically about the potential for significant increases in course fees. I acknowledge these concerns; however, through the HELP loan scheme, no student will have to pay any money upfront for their course, and students are still able to defer the entire cost of their degree. And we know that technology will provide lower-cost options for tertiary education.

I am going to pause a moment and now quote a man we cannot quote often enough in this chamber—none other than the shadow assistant treasurer and member for Fraser.

Some of my colleagues have also alluded to his co-authored book, inspiringly named Imagining Australia: ideas for our future, published by Allen & Unwin in 2004, in which the member for Fraser lays out his vision for an Australia where universities are free to set student fees according to the market value of their degrees. With great pleasure, I quote directly from the text:

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

He continues, 'Market based HECS will also help to improve our higher education system by making universities even more responsive to student needs and educational outcomes. Universities will have a strong incentive to compete on price and quality and meet the various requirements of the different segments of the student market.

We could not have said that more eloquently if we had tried. He joins the chorus of vice chancellors from universities, including Greg Craven today in The Australian, who echo those views.

Fee deregulation is also an opportunity for regional higher education institutions and the way they may choose to position themselves in the market. To attract students to regional campuses, some institutions may offer their courses at a lower cost than capital city counterparts. If towns and cities get behind this, we could see students choosing a regional location to study over a capital city location and this would significantly benefit regional economies—specifically employment and providing a strong rental market and services.

Linked to fee deregulation, the reform bill introduces a new Commonwealth Scholarship Scheme to support students from disadvantaged backgrounds, including from regional Australia. I cannot say enough about how positive this scheme is. Higher education institutions with 500 or more equivalent full-time supported students will be required to allocate one dollar in every five of additional revenue to this scheme.

For many families in rural and regional areas, the strain on family finances to send a young person to study away from home is a huge challenge. This financial burden is significant, particularly when they are ineligible for Youth Allowance. Cost is often identified as a significant factor in the decision making of rural and regional students—whether to go to university and which university they attend.

The study I mentioned earlier, 'TAFE, university or work?', commented that rural students who need to leave home to attend university are particularly concerned about the additional costs of accommodation and living in a city. Charles Sturt University in its submission to the Senate inquiry noted that annual living costs for a rural and regional young person studying away from home is between $15,000 and $20,000, plus start-up costs of about $3,000 to $6,000. For many rural and regional students and their families, there is no choice but to pay those additional costs. This Scholarship Scheme will help with these costs. I can assure you that the residential colleges of the universities around Australia are looking at how they can make sure they use this effectively for the most disadvantaged rural and regional students. It will provide assistance with tuition, accommodation, travel and other living costs that are barriers to further study. It is a great initiative which will assist many. As I have mentioned, the key aspects of this legislation are about expanding opportunities for students, including the scholarship program that I talked about. In a world of growing international competition, we do not want Australian universities to get left behind.

I would like to make a few comments about the changes to the indexation of HELP loans. These changes are about ensuring the higher education system remains fair and equitable for all Australians, particularly for those who do not benefit from higher education and are being asked to make a contribution. I have many of those in my electorate and I have great sympathy with the fact that many of those people express the view that they should not be paying excessive amounts for students to go university and then go on to earn far more than they ever could.

In conclusion, I again quote the member for Fraser—one of our greatest allies:

Deregulating university fees will mean 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. We agree wholeheartedly with the shadow assistant Treasurer.

The reform bill before the House will ensure that government funding for education will continue to grow by around $5.7 billion over the next four years. This includes higher education and research funding that will grow by over $950 million over the same period, in contrast to the cuts the last government instituted which were roundly condemned by David Gonski, the architect of their secondary education reforms. The measures in this legislation will ensure that our higher education system is sustainable into the future. Our universities will be protected and they will continue to grow. They will continue to be competitive internationally in a tough international environment. I commend this bill to the House.

Pat Conroy (Charlton, Australian Labor Party) Share this | Link to this | Hansard source

I proudly rise to speak in opposition to the Higher Education and Research Reform Amendment Bill 2014. I am another MP representing a regional electorate, as the member for Hume purports to do. Unlike him, I am representing the best interests of regional families. This bill is an attack on the opportunity for regional families to send their kids to universities. This bill is all about advancing the interests of a few sandstone universities to compete internationally at the cost of students from low- and middle-income families, who will be forced to compete for the crumbs of a few scholarships. The last speaker liked to quote from a certain book. I will return the favour and quote from a coalition pamphlet, laughingly entitled 'Our plan: real solutions for all Australians'. Anyone listening to this debate might remember this pamphlet. This was the great shield for the Prime Minister. For two years before the election whenever he had a tough question or was asked about his complete lack of policy details, he hid behind this pamphlet, saying: 'This explains all. These are our policies. Unlike anything else I have ever said in my life, this is in writing so you can believe it.' Let me quote from it:

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

That is just a broken promise outright. That is a blatant lie. It has deceived the families of Australia.

This government's proposals do three key things: they allow universities to set higher fees for students, they dramatically increase student debt by changing the interest rate on student loans and they drastically cut public funding for university courses. And the Minister for Education has the arrogance and audacity to have stated in this House on at least two occasions that students will benefit most from these changes. Crippling students with enormous debt or deterring them from study is not benefiting them and he should be ashamed of making such an absurd assertion.

Labor's values on higher education are fundamentally different to the Liberal Party's. We believe in fair access and fair funding, and we delivered this when we were in government. The Liberals want to Americanise the university sector, as they want to do in so many areas of Australian life. Education is the great enabler. Like many speakers in this debate, I am proud to be the first on my mother's side of the family to go to university. Not only is education a private good, benefiting the individual; it is a public good, enriching our economy and society. The changes contained in this legislation impoverish our society through their myopic focus on penny-pinching.

Before drawing to the attention of the House the many flaws in this bill, I want to briefly respond to the outrageous claims from the last speaker—in fact, every coalition speaker—about Labor's legacy on higher education. Here are a few facts. On our watch, government investment in universities increased from $8 billion in $2007 to $14 billion in 2013. For the innumerate over the other side, that is almost a doubling of federal funding for higher education in six years. We saw 750,000 students at Australian universities—one in every four of them there because of Labor's increased funding. Through the Education Investment Fund, $4.35 billion was invested in modern teaching and research facilities.

In the regional context, Labor increased funding for regional universities by 56 per cent and boosted regional student numbers by 30 per cent. This was incredibly significant for my area and for the University of Newcastle, which is in the region I represent. It was Labor which made these record investments in our university sector and it is a record which is in stark contrast to the reforms proposed by the Liberal Party.

The truth is that the government's plan for higher education constitutes an extensive cut in funding and support to the sector. The Liberals are attempting to cut $5.8 billion from higher education teaching, learning and research.

This bill provides for $3.9 billion in cuts as follows: funding through the Commonwealth supported places in undergraduate degrees will be cut by an average of 20 per cent and for some courses this will be as high as 37 per cent; almost $174 million will be cut from the Research Training Scheme; and interest rates for student loans will move from CPI to the 10-year bond rate, which is a grossly unfair change.

There are clear economic arguments against the government's proposals. If fewer people obtain university degrees because degrees become more unaffordable, this will impact on Australia's productivity and economic performance.

Deregulation will inevitably result in significantly higher course fees and this will have two significant impacts: students will be faced with huge debt and those considering tertiary education, particularly in regional areas like those I represent, will be deterred from pursuing a university degree.

It is not just the Labor Party which make these points. It is telling to identify some important contributions from the sector on these unfair reforms. Professor Stephen Parker, Vice-Chancellor of the University of Canberra, stated:

… these changes, taken together, are; unfair, unethical, reckless, poor economic policy, contrary to the international evidence and being woefully explained, raising suspicions about how much thought has actually gone into them.

That is a damning quote. And let us point to Belinda Robinson, Chief Executive of Universities Australia, the peak body for this sector—hardly a Labor friend, if you look at their quotes in the past—who stated:

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

These are damning quotes. Look at what Professor Bruce Chapman, the father of the HECS scheme, has said. He is of the view that the government's model is bad economics. It is also important to consider the impact regarding fair access to tertiary education. It is abundantly clear that the Liberal's proposed reforms are fundamentally unfair, as well as disastrous economically.

Again, it is not just the Labor Party saying this; the Vice-Chancellor of Swinburne University, Linda Kristjanson, has criticised the reforms and wrote to her staff, stating:

… deregulation will inevitably lead to much higher fees for our students.

And further:

Over time, full fee deregulation will lead to a higher education system characterised by the "haves" and the "have nots".

And it is not just vice-chancellors who are of this view. I previously referred to a year 11 student, Jacqueline, who attends Callaghan College in my area. Jacqueline wants to study primary teaching at the University of Newcastle. She emailed me and told me how angry she was that, because of these changes, the cost of a teaching degree will now cost around twice as much as it currently does. She also has significant concerns about the interest repayments on her student loan, particularly if she wants to have time away from work for family reasons.

The government has achieved something quite unique with these reforms. The unfairness and inequity of these reforms is clearly identified by a broad spectrum of our society, ranging from university vice-chancellors to prospective university students. It is regional areas such as the Hunter region and the electorate of Charlton, which I represent, which will be hit the worst. A significant number of university graduates in Charlton are teachers and nurses. Around 13,000 people in Charlton have a university degree and, of these, four out of five have studied in education or nursing.

According to Universities Australia—again, the peak body—the cost of a nursing course will increase by 24 per cent and the cost of an education course will increase by 20 per cent. These are incredibly significant increases for professions where wages are only moderate. And that is before you even look at the impact of higher interest rates on these debts.

NATSEM modelling, the modelling organisation that the Prime Minister, when in opposition, said was the premier economic modelling body in this country, predicts that the cost of an education degree will increase from $31,400 to $87,560. That is a huge increase in anyone's books. Universities Australia's modelling is even more dire.

Charlton has a very significant number of nursing graduates and the country will need more nurses as people age and the healthcare sector expands. According to Universities Australia, a female nurse, who works part time for six years in order to have kids—a scenario I am very familiar with personally—will face a debt of $97,680 to have a nursing degree. What those on the other side do not understand is that, when they take time off to have a family, they will not be paying the HECS—or HELP, as it is now called—but because of the jacked-up interest rates their debt compounds very significantly. So a nurse who wants to work part time for six years while they get their kids up to school age will face a debt of $97,000. They will also be paying off this debt to age 46. Despite the protestations of our Minister for Education, nurses and teachers do not earn $1 million more than non-university graduates. They make a great contribution to this country and it is completely unfair, inequitable and contrary to good economic policy to weigh them down with a $100,000 debt.

Teaching and nursing degrees are often the first degrees obtained in families. My wife is a nurse and was the first in her family to finish university. My grandfather was the first in his family to go to university and obtained a teaching degree. These are typically the first degrees that working-class kids are able to engage in to join the professional sector. The government is making that possibility so much harder.

These increases are not just for these degrees. Let us look at engineering, a profession where we face a dire skills shortage. According to Universities Australia, an engineer will face a debt of over $200,000 and will not pay it off until they are 53. This is an incredible impact on both skills shortage areas and it is also going to have a disproportionate impact on women. This is a government that purports to be trying to increase workforce participation through its laughable Paid Parental Leave scheme, a scheme that will reward mothers in north Sydney with $50,000, while women in my electorate will get less than $20,000. But this scheme will do nothing to increase workforce participation, especially when you counteract it with these very regressive changes to higher education.

The impacts on regional universities will be quite massive. The University of Newcastle, which has been ranked the best university in Australia under 50 years of age, has a very high proportion of students from low-socioeconomic backgrounds. Over a quarter of the students going to this uni have this background, and these students will be the real victims of these changes.

This is part of a broader attack by this government on education. We have seen them cutting over $1 billion from child care, taking crucial dollars away from early childhood education, which has a marked impact on the quality of people's lives and their chances of succeeding in life. In addition to that, we have seen a $30 billion cut in school funding through the government's abandonment of their commitment to the Gonski funding model. This is a government that have breached every single promise they have made on education. They promised not to change university funding arrangements. They did. They said they were on a unity ticket on Gonski. Well, they could not wait to break that promise and strip $30 billion from school funding. This is a government that will stand condemned for their changes to the education sector. They will have a massive impact across all of Australia but especially regional areas like the one I represent.

Labor opposes the Higher Education and Research Reform Amendment Bill because these changes do not meet the fairness test. They are fundamentally unfair and, if the reforms are enacted, they will have a profoundly negative impact on our economy and our society. As the Leader of the Opposition stated earlier in this debate, opportunity in education is a pact between generations. This government is yet again failing the next generation, as it has on climate change, investment in industries of the future and a sustainable healthcare system. This government will stand condemned as Australia's worst government when it comes to supporting future generations.

In contrast, Labor have a proud tradition of investment and broadening access to tertiary education. We will never accept changes that Americanise our tertiary sector, cut funding and make it harder for Australian students to obtain a university qualification. I would like to finish by quoting Labor's leader:

Labor believes in equality of education. Labor believes in affordable, accessible higher education for all Australians. That is why we will vote against $100,000 degrees. We will vote against the doubling and tripling of university fees. We will vote against a real and compounding interest rate on student debt. We will vote time and time again against this government's cuts to university research. We will never consign the next generation of Australians to a 'debt sentence'. We will not support a system where the cost of university degrees rises faster than the capacity of society to pay for them. We will never tell Australians that the quality of their education depends upon their capacity to pay.

This is a debate about economics and equity. On both counts, this government fails. We will hear speakers from the other side talk about needing to reduce debt. Governing is about choices, but why would you choose to cut $5.8 billion from higher education while wasting over $21 billion in a ridiculous Paid Parental Leave scheme that rewards rich women for having a baby and pays a paltry less than $20,000 to the majority of my electorate.

Governing is about choices. This is a poor choice that will close the door on a generation of working class kids getting to uni. This is a poor choice that will mean we have fewer nursing and teaching graduates and vital services for our future. It is a poor choice that will move Australia's economy backwards and make society a less fair place. In the end, it must be opposed for these reasons.

Warren Entsch (Leichhardt, Liberal Party) Share this | Link to this | Hansard source

I am very pleased to have the opportunity to speak on this bill today. When you talk about the value of higher education, it is all too easy to just think in dollars and cents and the cost of an education. But it is vital that we look much broader than that and consider the opportunities that higher education presents to students, from developing critical thinking and becoming active participants in our society to forging lifelong relationships with peers and making valuable contacts in relevant industries. It is also about the future of research and innovation in our institutions and whether we want Australia to be at the forefront of learning and industry, providing intellectual and moral education, nurturing teaching and general and professional education.

There is no doubt that these proposed changes to higher education and research in Australia are revolutionary. This reform package is fair and balanced. It will spread opportunity for students and ensure Australia is not left behind in global competition.

Coming from a regional area where residents suffer from the tyranny of distance in so many ways, I am pleased to see that these reforms will help strengthen higher education for students and institutions in my area. Firstly, for the first time ever, all Australian undergraduate students in registered higher education institutions will be supported for accredited courses, from diplomas through to bachelor degrees. I have seen how diploma courses can be an important pathway to higher education for less-prepared students, giving them the opportunity to develop the skills they need for further study.

The government is investing $371.5 million to deliver this initiative. Expanding Commonwealth subsidies to these courses will make sure that our students have the best chance for success. This is especially important in regional and low-socioeconomic areas where students are less likely to enter into higher education compared to students living in our metropolitan cities. This means that over 80,000 students each year will be provided additional support by 2018. As the budget papers show, government investment in higher education is going to continue to increase each and every year—totalling $37 billion in funding to higher education institutions over the next four financial years. That certainly puts paid to the previous speaker's assumptions. There is more money, but it has to cover more students getting access to higher education subsidies, which is why the per-student rate is coming down.

Secondly, there will be more opportunities for students from low-socioeconomic backgrounds through new Commonwealth scholarships. We will require that universities and other higher education providers spend $1 in every $5 of additional revenue raised on scholarships for disadvantaged students. We have been listening to students in regional Australia and what they have been saying about up-front costs in accessing higher education study. These Commonwealth scholarships will be of enormous benefit to students from regional Australia and to others.

Thirdly, we are freeing up universities to set their own fees and compete for students. More competition between higher education providers is good for students, giving them more choices when it comes to course offerings and prices. Competition will drive quality and encourage providers to be more responsive to the educational needs of students. Universities will be empowered to set their own fees for their courses. This will generate more competition for students between a greater number of providers. The fees charged to students will ultimately be up to the institutions to decide but could see many regional students paying less than they are now for their education as this government supports more higher education options.

In addition, many TAFEs and private colleges already work in partnership with universities. These universities have been seeking funding for pathway and other diploma courses that help less-prepared students succeed at university. This was evident at the launch of Queensland's first dual sector university, created by a merger of the Central Queensland University and the Central Queensland Institute of TAFE. At the time, our education minister said:

They will be able to compete with the sandstone universities, not just on living conditions … they will also be able to compete on price if those other universities exponentially raise their fees.

He said:

Universities like CQU will pitch their fees to the market that they represent and that means they will be able to keep their market share or in fact grow it.

CQU Vice-Chancellor Scott Bowman saw a lot of potential in the changes. He said:

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

He met the changes with a great deal of enthusiasm. That was further reflected recently when he announced that CQU are looking for a site to house a campus in the Cairns CBD; so they are expanding from where they are. We certainly welcome the opportunity to have CQU as a second university in our regional city.

Fourthly, we are strengthening the Higher Education Loans Program, or HELP, which will see the taxpayer support all student tuition fees up-front. With the debt and deficit burden that we have been left by Labor, everyone has to pay their share. Students are going to be asked to pay 50 per cent of the cost of their education. They are currently paying 40 per cent, with the taxpayer bearing the other 60 per cent. We are asking them to increase their contribution by 10 per cent.    I think a 50-50 split sounds like a fair deal, especially when higher education students can borrow all of that money from the taxpayer at a low interest rate and not start paying it back until they are earning over $50,000 a year, and then only two per cent of their income can be taken to start paying back those fees. Remember too that Australian university graduates on average earn up to 75 per cent more than those who do not go on to higher education after school. Given this fact, it is only fair that students contribute fairly to the cost of their education.

Fifthly, we will grow regional education providers to build stronger communities. As I mentioned earlier, for the first time regional education providers will have the opportunity to offer more courses and be able to compete to attract more students. We will continue to support regional higher education directly through the regional loading that is provided to universities in recognition of the higher cost of operating in regional campuses—a total of $274 million over the next four years.

All these reforms tie in with two of my key focuses: developing northern Australia and getting rid of the burden of excessive red tape.

In my work as the Chair of the Joint Select Committee on Northern Australia, I have seen that there is huge potential to position educational and research institutions in the region as the keepers of tropical expertise. Overall, however, Australian universities are dropping in world rankings, and we cannot afford to be left behind. Through these reforms, we are securing Australia's place at the forefront of research with more than $400 million in investment. This includes $42 million to support new research in tropical disease through the Australian Institute of Tropical Health and Medicine based in Cairns, Townsville, Mackay and the Torres Strait—a project that I have strongly advocated for quite some time.

Labor has left a complicated and expensive mess, with large increases in regulation, compliance, reporting and unnecessary red tape applying to universities. This has meant universities spend around $280 million a year on compliance and reporting—what a waste that is! It makes sense that higher education institutions, not governments, are the best judge of how they can maintain and promote a world-class higher education system.

From 2016, institutions will be responsible for setting their own levels of student contributions, freeing them from bureaucratic restrictions. The response from industry to this proposed reform package has been mainly positive. I note that in his contribution to the debate the member for Charlton, the previous speaker, made frequent references to Universities Australia, and he quoted negative comments. This is rather interesting, because I have had discussions with Professor Sandra Harding, who is not only the Vice-Chancellor and President of James Cook University but the Chair of Universities Australia, and she has called on parliamentarians to support fee deregulation, describing it as:

… an important and a very timely innovation reform for higher education.

She states:

Fee deregulation will allow JCU to potentially be a price setter within the market in those courses for which we are renowned globally and where there is a value added experience.

Even though JCU has outstanding assets, such as the Orpheus Island Research Station, the Daintree Rainforest Observatory, and the 'James Kirby' (the biggest vessel of any University in the country), which enhance our teaching and research, currently JCU receives the same funding per science student as another university that offers a largely laboratory-based science program with some field trips.

We should be able to put a premium price on these courses to reflect the cost—but also the value presented.

Professor Harding cautioned, however, that some improvements need to be made to the package to ensure affordability for students, including moderating the size of the proposed 20 per cent cut in the federal government contribution to tuition fees and maintaining the interest rate applied to HECS-HELP student loans at CPI. Professor Harding further states:

A support package should also be provided to universities, to address possible market failure—especially for institutions that serve disadvantaged and regional communities.

Other industry sectors such as sugar and forestry, which have experienced major change as a result of changes to public policy, have had access to a support packages.

At this stage, it is difficult to foreshadow what impact the changes will have and therefore what, if anything, JCU might be looking for.

TAFE Queensland also supports extending opportunities for students, including disadvantaged students, to access higher education qualifications though reform of funding arrangements. TAFE Queensland cautions that, to ensure equity and achieve the policy objectives intended, it will be important that any fee deregulation arrangements treat government owned TAFEs and universities equally. This recognises the public good delivered through these organisations.

In the Leichhardt electorate, 21 per cent of publically funded VET students at the TAFE Queensland North Cairns campus are Indigenous, in comparison to an average of 4.8 per cent of publically funded VET students and 1.4 per cent of university students. Extension of Commonwealth supported higher education funding will allow TAFE Queensland to offer niche market qualifications and increase opportunities for students, including disadvantaged students, to access employment-focused higher education in Leichardt.

There has been a lot of comment from the community, but here I have to condemn the Labor Party for their careless and provocative scaremongering. The current debate about these changes has led to some inflated claims about likely fee levels and repayments for students. These claims should be treated with a great deal of caution. I can state unequivocally that the government is not increasing fees. Fees will be up to what universities choose to charge and students choose to pay. In addition, students who accept a Commonwealth supported place at higher education institutions after 13 May 2014 will fall under the existing arrangements until 1 January 2016, when they will move to the new system. For existing students there will be no change in fees.

There is no doubt that we live in a time of great change. The international economy is evolving and the employment market is changing. Global competition for higher education is intensifying, especially when there are world-class universities emerging on our doorstep in Asia and new technology driving the growth of online education. We must make sure that Australia's higher education providers are able to meet these demands in the 21st century, and we have a game-changing opportunity to do that now. I embrace this challenge and I call on the Senate crossbenchers to join with us. We can work together to create a better higher education system and a world-class system for our country.

Andrew Leigh (Fraser, Australian Labor Party, Shadow Assistant Treasurer) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Amendment Bill 2014 on the back of 16 years in universities—six years at the University of Sydney, four years at Harvard and six years teaching at the great Australian National University. It is with deep concern that I rise to speak on this bill, put forward by a political party with a very poor track record in education.

When the Howard government first came to office its immediate decision on higher education was to cut the higher education budget by five per cent. None of that was announced before the election—something of a pattern for the coalition—but the result was that direct public payments to tertiary institutions showed no real growth from 1995 to 2005. Per capita funding for universities fell by nine per cent. The Howard government brought in voluntary student unionism, reliving their student politics days, and they stripped the funding from campus services. That was the situation in which Labor found the university sector when we came to office in 2007.

From 2007 to 2013 Labor invested in Australia's universities. We commissioned the Bradley review, which looked at the situation of universities, and noted that we did have high-performing universities. For example, if we compare the Australian corporate sector with the Australian university sector, we have got just nine Australian companies in the Fortune Global 500, but we have 19 universities in the world's top 500 universities. I would always argue for us to aspire to do better, but we should also be proud of what Australian universities have achieved.

As a result of the Bradley review, Labor increased funding to Australian universities. One in four students at Australian universities is there today thanks to Labor. Between 2007 and 2013 we put 190,000 more students on campus; we boosted Indigenous student numbers by 26 per cent and regional student numbers by 30 per cent; and we increased the number of students from low-income families by 36,000. Labor in office increased per-student contributions by 10 per cent. That is an extra $1,700 per student. We changed the funding model. We committed to proper indexation of university funding, making universities better off to the tune of $3 billion compared to the situation if we had kept the funding model introduced by the Howard government. Real indexation was vital because university costs were rising significantly faster than CPI. If you increase university funding by the rise in prices then it is quickly outstripped by the cost of salaries and high-quality equipment, which we know that our universities need. Labor in office reformed Youth Allowance, offered the new Student Start-up Scholarship, and launched the MyUniversity website in 2012.

It is no surprise then, that when the coalition were discussing their education policies before the 2013 election, they did not reveal any of the plans that they had for universities. Why would they? They were looking at a government which had increased the per-student funding by 10 per cent, and which could claim credit for one-quarter of the students at university. In the 'Real Solutions' Liberal Party policy document—you don't see so much of 'Real Solutions' around these days, Deputy Speaker; it seems to have gone into witness protection!—on pages 40 to 41, it says: 'We will ensure the continuation of the current arrangements of university funding.' Tony Abbott said on Insiders on 1 September 2013: 'I want to give people this absolute assurance, no cuts to education'. Christopher Pyne on Sky News on 17 November 2013 said: 'We want university students to make their contribution, but we are not going to raise fees.' Pressed on Sky News—'Why not raise fees?'—the now minister responded, 'because we promised we wouldn't before the election.' In a media release on 26 August 2012, Christopher Pyne said, 'While we welcome debate over the quality and standards in our universities, we have no plans to increase fees or cap places.' All of this has been betrayed with some of the most radical plans for higher education that Australians have seen. Those opposite have described these as big changes: well, they are right—in the way that a stopped clock is right twice a day. But they are wrong if they think these are good changes for the Australian university sector.

As Bruce Chapman, architect of HECS and my former ANU colleague, has noted, these are changes which could well hurt the propensity of low-income students to attend university. And Bruce Chapman does not say that lightly: he has done research showing that the 1989 introduction of HECS did not deter low-income students from attending university. He has done research with Chris Ryan showing that the 1998 changes to the HECS bands did not deter low-income students from attending university. But this change, and in particular the introduction of a government bond rate on debts, is of great concern to Bruce Chapman. He has said in an interview with The Australian on 4 June 2014: 'Interest has been subsidised for a very good reason: to not disadvantage the people who do not do well out of the system.' He said, 'It is an ethical issue.' And he has warned that these reforms could 'lead to a situation where students are potentially charged more than the cost of the service; more than the cost of the teaching".

Indeed, modelling put together by Timothy Higgins and Bruce Chapman has concluded that poor graduates could pay 30 per cent more for a degree than their high-income counterparts. The reason for that is that, given the same starting debt, low-income graduates are hit harder by compounding interest on their debts because they spend more time out of the workforce and have lower salaries. The researchers conclude:

Using the long-term bond rate will be regressive and it is very hard to argue this is fair. HECS was designed to protect people who go to university but, because of bad luck or bad circumstances, don't get to enjoy the benefits. HECS should act as an insurance mechanism and that aspect of the scheme is being undermined.

When we talk about this as being regressive, it is a regressive reform like so much else this government is doing. This is a government which is raising superannuation taxes on those earning any less than $37,000 a year, but cutting superannuation taxes on those with more than $2 million in their accounts. This is a government that is changing Australia's fair parental leave scheme to an unfair parental leave scheme; benefiting those at the very top of the distribution, while at the very same time it is cutting away supports for low-income families—taking one tenth of their income out of the pockets of the poorest sole parents in Australia.

These changes will not only be regressive; they will disproportionately hurt women. We know that one of the great benefits of HECS—with debts indexed to inflation—is that if someone takes time out of the labour market to raise a child, then by the time they come back into the labour market, wages have grown faster than prices, and their debt, relative to wages, has become a smidgen smaller. But this government has taken a feature of HECS and turned it into a bug. The existing HECS system has debts growing at two per cent while wages grow at four per cent—so a time out of the labour market sees your debt grow more slowly than your wages. But under these proposed reforms—if we imagine prices growing at two per cent, wages at four per cent, and the government bond rate at six per cent—if someone takes time out of the labour market, their debts will grow faster than wages. Their debts will grow at six per cent—considerably faster than the four per cent that we might expect for wage growth.

It was my pleasure today, along with the member for Kingston, Senator Carr, and the Leader of the Opposition, to visit the University of Canberra. While we were there, we met researchers in the area of applied ecology who are engaged in looking at the genetics of reptiles—research which will help us better understand the world around us, and better understand human health. This research is absolutely vital research for the future of Australia. And yet the University of Canberra is vulnerable to cuts in its research budget. And we have a higher education minister who is threatening research grants—that is, threatening applied ecology; threatening medical research—if he does not get his own way. This is student politics on a national stage. We have the minister's petulance being taken out on the researchers of the future. Not only does this government not have a science minister, not only is it slashing 1,000 jobs in the CSIRO, but now they want to take out some of the best researchers from Australian universities. Those jobs at CSIRO going already. I have talked to CSIRO researchers who are losing their jobs who are specialists in eucalypt ecology. Where else in the world will we get good research on eucalypt ecology, or research on better understanding forestry management?

On top of that, as well as cutting those CSIRO jobs, as well as not having a science minister, this government is cutting into basic research. They have never met an expert they do not want to fire. When Joseph Stiglitz, a Nobel Prize winner in economics, visited Australia recently he urged the government not to go down this path. The government appears to be ignoring this advice and to be ignoring what is going on in the United States. The parallel is with climate change. In the area of climate change, under this government Australia is running backwards from the science and economics as fast as it can while Barack Obama's first priority was to put a price on carbon pollution.

In the area of higher education, this government is trying to trash Australia's great income-contingent loans system while in the United States the government is looking at how to improve that country's student loan system—how to get that country's student loan system into a place where students are not priced out of doing jobs in the community sector. An income-contingent loans system created in Australia in the late 1980s, thanks to people like Bruce Chapman and Bob Gregory and inspired indeed by work Milton Friedman did in the late 1960s, is now being taken up in countries as diverse as Britain, Germany, Israel, Thailand and Chile. But the income-contingent loans system works when debts are indexed to prices and not to the government bond rate. Not only is the government indexing debts to the government bond rate for those entering university; it is doing so for those already in university and for those who have graduated from university. One graduate who contacted Labor said:

I have been totally deceived by this and punished for helping some of the most disadvantaged kids in the state.

I have a partner, mortgage, 3 primary school kids and believe I had already been unfairly targeted in the budget. This Liberal Party (which I have never voted for) is really messing up people's lives.

How can an Australian Government allow people to make life defining decisions and then renege on an agreement? Without warning, my family has just been hit with a $14,000 debt, which will also be charged interest (but that's another story) and for reasons that are simply baseless.

As the Leader of the Opposition pointed out at this very dispatch box yesterday, putting a real interest rate onto the debts of people who have graduated from university does smack of regressivity. Those opposite are outraged whenever there is a measure before the House that looks like it might potentially be regressive, but where are they when this government is putting a real interest rate on the debts of people who have already graduated from university? Missing in action—that is where they are.

These changes are ultimately going to hurt the productive capacity of Australia. Education is not just the best economic policy we have devised—it is the best social policy we have devised. We know that if you want to close the Indigenous/non-Indigenous gaps, one of the best ways of doing that is to get more Indigenous students to university and encourage them to stay there. Just as women will be disadvantaged by these moves, so too students from low-income backgrounds and Indigenous backgrounds will be disproportionately affected. This government cannot cut its way to closing the gaps, and if these reckless changes go ahead they will, I fear, reduce the number of students who are the first in their family to attend university. I urge the government to rethink these changes and take them back to the drawing board.

Steve Irons (Swan, Liberal Party) Share this | Link to this | Hansard source

It is a pleasure to follow the member for Fraser. I did not spend a day in university, while he spent 16 years there—I was not as fortunate as him—but I did learn to read while I was getting educated and one of the things I have read, in a book called Imagining Australia, is:

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

The author was Dr Andrew Leigh. I am pleased to speak on the Higher Education and Research Reform Amendment Bill 2014, because like my coalition colleagues I believe in creating a higher education system that will provide our universities with the legislative framework they need to deliver internationally competitive courses and to ensure our students are receiving a world-class education. It has long been recognised that Australia's higher education system needs to be overhauled to ensure our students are not left behind. All members in this place would agree that we want the best for our students—the best courses, the best facilities and the best teachers. If we are to achieve this, we cannot afford to stick to the status quo.

It was only a couple of weeks ago that I had the pleasure of welcoming the Minister for Education, the member for Sturt, to my electorate of Swan to host a policy roundtable. This was the second roundtable in a series of discussions which brought together stakeholders, including academics, educators and advocates from across Australia, to inform future discussion on how to best support students with disability and learning difficulties in Australian schools—just one of many initiatives being developed as part of this government's plan to put students first. The bill before the House today is a critical part of this plan. It will amend the Higher Education Support Act 2003 and will pave the way for much needed reform to Australia's higher education system while saving an estimated $3.9 billion over the forward estimates. It is the overhaul our education providers have been calling for, and it is the overhaul our students need if they want to compete in the globally competitive employment market.

In my home state of Western Australia the state's leading university, the University of Western Australia, as recently as last week renewed their calls for the federal parliament to 'support the deregulation of Australian universities to ensure Australia retains a world-class higher education system.' The University's Vice-Chancellor, Professor Paul Johnson also stated:

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.

I could not have said it better myself.

For our universities to provide market-leading courses, it is clear that reform is needed. For our students to continue accessing higher education subsidies, reform is needed. And for loan support assistance under Australia's HELP loan scheme to be sustainable, reform is needed. That is exactly what this bill will achieve. Firstly, the bill will amend our higher education legislative framework to deregulate fees. This will remove the provision that limits the maximum amount that a Commonwealth-supported student may be charged by a provider. These changes will encourage competition between providers, with the aim being to create greater choice and a higher quality of courses for students.

This amendment has stirred much debate in the media and the community about its impact on students. I note that this debate has been largely driven by the scaremongering campaign of those opposite, despite the fact that Labor cut $6.6 billion in funding to higher education while they were in office, including more than $3 billion in their last year in office alone. While those opposite continue to criticise these reform measures, even the architect of the former government's education reforms, David Gonski, has backed the need to deregulate the education sector. In yesterday's edition of the Australian Mr Gonski called on the Labor Party to back the government's budget reforms, stating that:

… leaving the future of all of us to a few crossbenchers is sad.

Again, I could not agree more. Mr Gonski also backed the need to deregulate, stating, and I will paraphrase here, that rather than making universities richer, these additional funds could be ploughed back into the universities to make them even greater.

I was appalled by the actions of the students who recently tried to burn effigies of Minister Pyne during protests against this bill's reform measures. I am a firm believer in our democratic system and the right to protest but was dismayed by the actions of these students and by ongoing provocation in the media from those opposite. The reality of what will take place if these reform measures are passed is much less dramatic and was summed up distinctly in a recent editorial in the Australian Financial Review entitled 'Let the market work for universities', which was published on 23 May. The editorial stated that:

Feared price gouging by monopoly providers is likely to be kept in check by competition between universities and between sectors after Mr Pyne extended the higher education subsidies to TAFEs and approved private colleges. And the universities' need to attract foreign students will provide another check on what they can charge Australian students.

The editorial went on to say:

Fears that higher fees may make it harder for students from disadvantaged backgrounds to get a university education are not supported by the UK experience.

Under these changes:

Government funding was cut by 20% and universities allowed to charge up to a cap of £9,000 pounds, or $16,400. After a brief hiatus, student numbers continued to increase and the proportion of students from low-income families remained the same.

This is a far cry from the $100,000 degrees those opposite have claimed will be standard and the idea that access to participation will be reduced.

I question whether those opposite have in fact read the proposed bill, since a key measure is to expand access to higher education. We are achieving this by providing financial assistance to students studying diplomas, advanced diplomas and associate degrees and to bachelor and sub-bachelor courses offered by private providers and non-university higher education providers such as TAFE. This measure will provide Commonwealth support for more than 80,000 additional students each year by 2018 at a cost of $820 million over three years. Further expansions to the act will also allow certain New Zealand citizens who are in a special category of visa holders to be eligible for HELP assistance from 1 January 2015, and vocational education and training students will be able to borrow for those course fees. They will also no longer have to pay the 20 per cent fee that is charged to them but not to undergraduates in public universities. This will go hand-in-hand with the government's already-announced trade support loans, which provide apprentices with access to HECS-style loans of up to $20,000 for everyday costs, which they do not have to repay until they earn a decent living—just like the university students.

As a former electrical apprentice I understand the financial and transport challenges that apprentices face. My first take-home pay as an apprentice back in 1974 was $39 for one week, and most of my meagre income went on getting to work and getting home from work and on feeding myself. I am pleased that apprentices' conditions and pay have improved significantly since then, and the government's $1.9 billion investment in trade support loans will help to ease the financial burden faced by more than 5,000 apprentices currently undertaking training in the electorate of Swan.

This government is focused on increasing access to higher education. We recognise that to achieve this, scholarships currently play and will continue to play a significant role in ensuring this is attainable. That is why a key provision in this bill is that from 1 January 2016 all higher education providers with 500 or more Commonwealth-supported places will be required to direct 20 per cent, or $1 in every $5, of additional revenue from the fee deregulation to a Commonwealth scholarship scheme. Providers will use this funding to provide opportunities for disadvantaged students through assistance with tuition, accommodation, travel, learning support and other living costs that might otherwise stand in the way of success. Although these are key reform measures to provide greater access to higher education, they are a part of a tiered plan by this government to support our education sector.

Last month I had the pleasure of representing Minister Pyne at the official launch of Curtin University's AHEAD project in my electorate of Swan. This fantastic initiative received more than $3.5 million in funding under the government's higher education participation program to support and enhance higher education access for those who face greater barriers than others to participation. This project directly supports people to raise their expectations and aspire to participating in higher education and improving the life that they will have beyond their studies. It is an initiative that I will be watching with interest.

It is no secret that university students earn about 75 per cent more than non-graduates, or about $1 million more over their lifetime. What a lot of people are not aware of, however, is the actual contribution these students make to their university education. Students currently pay around 40 per cent on average towards the cost of their education, with the taxpayer paying the remaining 60 per cent. Under the proposed reform measures, this government will be asking students to pay a small amount more towards these costs. From January 2016 students will instead be required to contribute around 50 per cent of the costs. They will be required to make this contribution, but the current safeguard of HELP loans will remain. The minimum repayment threshold for HELP debts will, however, change to 90 per cent of the current income threshold.

Currently, taxpayers are not required to start paying back their HELP loans until their annual incomes reach $53,345. The new threshold at which people will start repaying debts will be $50,638 in 2016-17. New indexation arrangements will also apply to HELP debts, with the current consumer price index rate being changed to the Treasury 10-year bond rate, which is the rate at which taxpayers borrow the funds. This will balance the rate at which students and taxpayers, as the lenders, borrow these funds—a rate that is far less expensive than a commercial loan. It is, however, important to note that students enrolled before the budget will continue to be charged under existing arrangements.

The bill will also discontinue the HECS-HELP benefit, due to low student intake, and will reduce subsidies for new students at universities by an average of 20 per cent. These reform measures are necessary to ensure Australia's HELP loans program and other subsidies are sustainable in the long term, with Australia's HELP debt increasing from around $16 billion in 2008 to around $30 billion in 2013. In the last year alone, the government provided about $5 billion in HELP loans, which is expected to increase to $10 billion in 2017. Those opposite have claimed that these changes will significantly impact on low-income earners' ability to maintain an adequate standard of living and may deter them from accessing higher education. However, as the bill's compatibility with human rights notes:

This will not impact on a person’s ability to enjoy an adequate standard of living as they do not have to repay their HELP loan until they reach a minimum income threshold. Additionally, the proportion of their annual income directed towards repayments will not change under this measure. Under the new indexation arrangements, students may take longer to repay their HELP loans, but will not suffer from a reduction in their annual disposable income as a result, and such will not alter their capacity to maintain an adequate standard of living.

Members in this place must also remember that HELP loans are not the only support measure available to students, who may also be eligible for youth allowance or Austudy assistance.

Other measures in the bill include expanding the Quality Indicators for Learning and Teaching, known as QILT, to provide students with the performance details of each private and public higher education institution to assist students in making informed decision about what they would like to study and where. Information will also be provided about how successful previous graduates have been at finding jobs and what other students and employers think of the course. Reforms to the Australian Research Council Act 2011 will also be made to enable universities to charge Research Training Scheme students a capped tuition fee of $3,900 for high-cost courses and $1,700 for low-cost courses. Again, safeguards are in place, with eligible students able to defer these costs by applying for a HELP loan.

Further amendments to the act include $11 billion over four years towards research in Australian universities, including $139 million for the Future Fellowships scheme and $150 million in 2015-16 to continue the National Collaborative Research Infrastructure—two important initiatives which would have ceased to exist under the Labor government. Instead, this government has recognised that supporting research and future innovations is critical for Australia's future and committed to providing 100 four-year Future Fellowships each year. This is on top of $150 million in funding that has already been committed by the Australian government to fund 150 new fellowships across the country—$2.7 million of which I recently welcomed in Swan to support four potentially groundbreaking science projects at Curtin University.

Despite the scaremongering campaign by those opposite, it is clear that these reform measures are necessary to facilitate greater access to higher education and to ensure those who opt to pursue this path will receive a globally competitive education from leading institutions. I commend the bill to the House.

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

The Higher Education and Research Reform Amendment Bill 2014 is an attack on aspiration. This bill is designed to stop people from being able to access higher education unless they have the financial wherewithal to pay their way through. It is pricing people out and it is being widely condemned. Regardless of what people say in here, out in the broader community people know exactly what this is doing. This is injecting unfairness into Australian society, which has always valued at its core the fact that, with merit, people can get ahead and, with talent, they will have opportunity. They do not need to always be from a well-off background to be able to get ahead. We always celebrated the fact that in this country we were classless, but, when you see what is happening here, this is designed for one class of people—the people who have the financial resources and capacity. This is the only avenue. These are the people who will have the opportunity for a higher education, not anyone else.

In my region, I had the opportunity recently to talk with someone who was once the economics editor of the Sydney Morning Herald and had graduated from the high school I went to in Western Sydney, Mitchell High. He was the second person from my high school to go to university in the late 70s, the school being opened 50 years ago. In a short space of time after the Whitlam reforms, he was able to get into university, and the local community literally had a party. They literally celebrated the fact that someone from there, without necessarily having the resources, had opened up to them the chance to go to university. What do we have now? After all that progress, we have the winding back. We have the move to basically entrench university to privilege and income and to deny it to others.

When we raise these points, those opposite say, 'You're just engaging in class war.' You have opened up the class war. When you deny people the chance—people who have the ability but not the money to go to university—you are opening up the class war. So do not for one minute try and suggest that this is all about enacting or enraging a class war. You are opening it up with these very reforms. The University of Western Sydney—the university I was proud to graduate from—can basically boast, and it is something we should all celebrate: 65 out of every 100 students are the first ones in their family to be able to go to university. In my own family, when I look at my extended family overseas—my dad immigrated in the late 1960s—I could count on one hand those who actually got to university. How grateful are we in this nation that we have a chance to get ahead by going to university? So why would we want to do what is proposed in this legislation?

There are three elements to what is being proposed. The first is to cut public funding to universities by 37 per cent. The coalition know that the universities cannot survive with this funding ripped out, so what is the second thing they do? They say to the universities, 'We'll let you set the fees for the courses that you are providing.' The third thing they are doing is expanding the amount of debt that students have to carry in paying off their fees. In particular, they are changing the interest rate that is charged on loans, going from CPI to the bond rate, from about two per cent to six per cent in rough terms. They are lifting that, and when you consider the combination of those things you realise that this becomes a financial decision. Instead of being able to get ahead and improve themselves, people will actually have to weigh up whether or not they will be able to afford it. Saul Eslake said in the Hobart Mercury back in June:

It would be irrational for people not to consider the cost in relation to their working life, in the same way as when you borrow to buy a house …

He is referring to the fact that people will weigh up whether or not they can afford to go to university. This is wrong.

In trying to justify these reforms, the education minister said, 'Cleaners and nurses are paying for the education of university students.' I have never had anyone run up to me in the street, grab me by the shirt front and say, 'I don't want to pay for education. I want us to have a dumber nation, not a smarter one.' No-one ever runs up to you in the street and says that. Everyone recognises that education is not a cost to this nation; it is an investment in its future prosperity—not just for the individual but to make sure that there are people within our economy who have the skills to keep it running.

In a climate where we have skills shortages across a range of areas, to put in place a system or a scheme like this, that would deny people the ability to go into higher education and then deny our economy the talents of those people, defies logic. It defies logic to consider that that is a worthwhile scheme. But that is exactly what is being proposed.

I go back to the fact that in my region, in Western Sydney, where we finally got—as a result of the Dawkins reforms under the Hawke-Keating government—our own university. I was amongst the first wave of people to graduate from that university. We finally had our own university in Western Sydney so that we did not have to travel long distances—I am sure it was the same in other parts of the country too where they did not have tertiary education at their doorstep—to get that education. We have it in our region and it is now opening up the doors of universities to families who never thought they would be able to do it. Now we have people being priced out of it. This is what universities have told me is more than likely to happen: the stronger universities will jack up the fees for courses, and we have already heard a scale of fees likely to be confronting people—over $100,000 for some courses—forcing students to pay them off for the best part of their working lives. Some universities will jack up their fees but there will be others that will know that they cannot. For the people they tailor their courses to, and in the regions where they operate, they will not be able to lift their fees in the same way. So you will have this double-barrelled impact of not being able to charge the fees and, at the same time, you are trying to deal with the fact that you are not getting the funds and the support from government that once existed. What happens with those universities? They basically shrivel. They lose their capacity to deliver education to the same quality and standard that they previously did, while the big universities—the established universities that are concentrated in capital cities—flourish. How is that fair? How is it fair that you should have a different standard of education based on where you live? It is not right. It flies in the fact of everything we have done in terms of reform to make education in this nation more accessible.

I am just talking about my area of metropolitan Sydney. What about the area that the minister represents? What about the area that the Nationals represent? We have not heard one thing out of them resisting what is proposed. If the two-tiered system of education that denies a quality education to people who live in regions affects the people I represent in Western Sydney, what about the people that the minister or his colleagues in the National Party represent? I say to the minister at the table: the last time I checked, your surname was 'Joyce' not 'doorstep'. You are not a doormat allowing these people to walk all over the people you represent and deny them the right to get a quality education.

Mr Joyce interjecting—

The fact of the matter is, Minister, I have spoken up on issues when my community is affected. You are too busy talking and not listening; you would not remember the times that I have spoken up. The fact of the matter is: your side is allowing the other side of the coalition to bring in these reforms and to deny the people that you represent the quality education that they should have. What you should be doing, and what every National Party member should be doing, is joining with the Labor Party and saying, 'This is not good enough for the nation.' It is simply unacceptable to the welfare of the nation that you would allow this reform through.

There are other impacts in terms of what is being proposed. The legislation we are debating now, in terms of the $3.9 billion in cuts, will slash funding for Commonwealth supported places in undergraduate degrees by roughly 20 per cent, on average. For some courses it is nearly 40 per cent. It reduces the indexation arrangements for university funding to CPI in 2016, and it is down from the appropriate rate that Labor in government introduced. That means about $202 million in cuts over forward estimates—but it is a major contributor to a $2.5 billion per annum shortfall in 10 years time. Those are the statistics generated by the Parliamentary Budget Office. There are cuts of almost $174 million from research training schemes, which support the training of Australian research students. It introduces fees for PhDs and, as I reflected upon earlier, it introduces a real rate of interest on HECS moving from CPI to the 10-year bond rate capped at six per cent. These are just some of the changes that have been put forward.

In terms of fee deregulation, we are told that there will not be substantial fee hikes. But nowhere in the world has the deregulation of university fees led to the price competition that is being promised by those opposite and by the minister. It has not led to lower fees. In the UK, fees were deregulated in 2012. There was a cap of 9,000 pounds. For the 2015-16 academic year, there will only be two universities out of 123 that will not be charging a fee of 9,000 pounds. Why is that? It is because price is an indicator of quality—and those universities that initially charged less actually suffered because they were perceived to be not so good. So competition does not lead to lower prices. It actually leads to acceleration amongst universities to see who can jack up their prices to attract students.

We should be spending more time in attracting students and attracting quality education than going into a bidding war between universities. We have those opposite say, 'Well, the universities support us.' As I reflected yesterday, of course the universities are going to support this. What choice do they have? When you look at the universities who are potentially having their funding cut, they have no choice but to support fee deregulation. This is pretty much a case of the hostages reflecting favourably on the captors. They have nowhere else to go if they do not support fee deregulation. They are not going to get money out of the government. The only thing that universities have spoken up against is the move to change the interest rates on student loans. But that is not good enough. As educators, and as people who operate within their regions, they know that doing what the government is proposing will impact on the welfare of the people they work with, live with and feel responsibility towards.

I have listened to some of the contributions made by coalition MPs in this debate. They have said reform is not easy. They are making out that this is taking a great deal of courage. Oh, it is really courageous to tell people before an election that you will not do any of this, that you will not charge fees, that you will not cut university funding—and what you do when you come in? You cut it. And this is not just in terms of the changes here in higher education. We have already commented on and resisted strongly what is being done in terms of education. Look at the combined impact for health and education. There has been $80 billion cut there, plus these changes in terms of higher education, which is an absolute outrage. Where is the courage? Reform is not easy. Reform is easier when you are honest. Reform is easier when you are up front. Reform is easier when you have taken people into your confidence and let them know what you are doing and why. If the reform is hard, build the support for it. Don't do what you are doing now—which is breaking a promise and holding universities to ransom so that, if they do not support it, they will not get the money that is required to undertake education.

The other comment that I heard quite often—it must be in their talking points—is that you have to 'deal yourself into the game'. Really? In the last term of the previous parliament, when we were inviting everyone to work on big issues and trying to get cross-party groups together on some of the big issues like climate change, who was the only group that did not get involved? The coalition. And they are now saying to us that we should get involved in this process!

This is not an invitation to be involved in what they are doing. This is an invitation to underwrite the ripping apart of our university system and undermine education in this country. That is simply not something that we are prepared to do. As has rightly been pointed out, we will fight every step of the way—and we should fight every step of the way. For people in the area that I represent, we will fight this because it does not represent your best interests in the longer term. It does not represent the nation's best interest. More than anything else, it is a breach of trust by the coalition. A compliant National Party is allowing the Liberal Party to get away with blue murder.

Lucy Wicks (Robertson, Liberal Party) Share this | Link to this | Hansard source

I rise today in support of the government's Higher Education and Research Reform Amendment Bill 2014. This is a major reform that will transform the landscape of educational opportunity for 80,000 additional Australian students who want to further their qualifications. It has the potential to create more choice and opportunities for higher education in regions like the Central Coast. And importantly, as the Minister for Education said in his second reading speech to the House, it will enable Australia to achieve the best higher education system in the world and have some of the best universities in the world. Some may say these are bold words,. But these reforms are not just bold words. These reforms and this bill are the articulation of a vision for more opportunity for Australian students; more choice for those who live in regional areas; the best possible future for our third largest export, the $15 billion international education market; and the best possible future for our Australian universities.

Many members on this side of the House have already spoken, with great eloquence, about the importance of these reforms. In rising to add my voice to this great and very important debate, I think back to my own experience as a 17-year-old girl growing up in Point Clare in my electorate and facing a choice about which university I should attend. Mine was not a wealthy family—far from it. I have spoken before about my own experiences growing up in a largely single income family. I was the eldest of five children, and the daughter of a school principal. My parents could not afford to support me financially through my university degree, but they did encourage me to pursue my dreams. For me, that was studying English and History at university, with maybe a bit of music thrown in for good measure, through a Bachelor of Arts degree.

I studied hard at my school in Narara. I got a good TER, as it was called back then. That TER enabled me to have a range of options in terms of university choice. But no TER could have given me the choice to study locally—because even though we had a university campus on the Central Coast, the Ourimbah Campus of the highly esteemed University of Newcastle, the degree that I wanted to pursue, a general humanities degree, was not an option. I could travel two hours each way to Sydney or about the same length of time to Newcastle to study, but there was not the opportunity or the choice to study that degree in my home town. So I chose to study at the University of Sydney, an outstanding university with a wonderful history and reputation, and I received an excellent education, graduating with honours in English literature. I remain grateful for that opportunity and education.

If I look back at that moment in my personal history through the prism of these reforms, what strikes me is that my ultimate choice to study at Sydney university was not actually informed by the cost of my degree. I knew I could repay my course fees once I was earning above the threshold wage because of the HECS system, now known as HECS-HELP. My choice of where to study was partly informed by the quality and reputation of the degree on offer, it was partly informed by family history, as my parents had both studied and met at Sydney university, and it was partly informed on the raw reality that, while the HECS system paved a way for my fees to be deferred until I could reasonably re-pay them, I still had to deal with the reality of supporting myself through university—paying for board or travel, for food and books and the compulsory student union fees that we paid annually at the time.

As I look at the reforms contained in this bill, what impresses me greatly is the freedom of opportunity and choice they afford for more students of today and tomorrow, regardless of socioeconomic demographic, and the possibility of more opportunities and more choice that may be created tomorrow and in the future for students in regional areas like the Central Coast. A highlight of these reforms is the development of the greatest Commonwealth Scholarship Scheme in Australia's history, which gives more opportunities to students who need it most and in a way that is flexible and allows greater choice. For example, there are students in my electorate who have dreams to go to university but share with me their concerns about the struggle with meeting their everyday costs of living, travel, accommodation, tutorial support and assistance in other critical points in their study.

Under our Commonwealth Scholarship Scheme, however, universities and other providers will spend $1 in every $5 of additional revenue on these scholarships for students from lower socio-economic backgrounds. Our Commonwealth Scholarship Scheme will enable universities and higher education institutions to offer tailored, individualised support to disadvantaged students, including for example a needs based scholarship to help meet costs of living or for fee exemptions, or tutorial or other support. I know this will be of enormous benefit to students from regional areas, including the Central Coast.

This package of reforms strengthens the HECS system that I knew as a student. It is still the case that no-one is forced to pay a cent up front. The government is not increasing fees. Students will be able to complete their course, look for work and only when they hit an income of $50,000 will they need to start repaying the loan. We are working to make sure that students are not disadvantaged by these changes. HECS loans will continue to be available to assist students with the costs of their education.

We are also determined to create an environment where universities can remain at the forefront of research. A few examples include $150 million in 2015-16 for the National Collaborative Research Infrastructure Strategy and there will be $139.5 million to deliver 100 new four-year research positions per year under the Future Fellowships scheme. We are accelerating research into dementia by committing $26 million to this important area of research. This is all part of our plan to make our universities more internationally competitive in teaching and research. Our reforms include reducing the Commonwealth Grants Scheme by 20 per cent. This is the fund that pays each university the subsidies for student fees. But the current debate about these reforms has led to some inflated and, dare I say, inflammatory claims about fees. Let us be clear: the government is not mandating a fee increase. We are actually freeing universities to set their fees based on what an individual institution may choose to charge and what students who wish to attend that institution choose and agree to pay.

The reality is that in order for Australian universities to be some of the best in the world, in order for the higher education system to be financially sustainable and in order for high-quality teaching and learning to be delivered for decades to come, we need these changes to happen. Members opposite need to accept the reality that the coalition government is dealing with the mess that was left to us by the former Labor government, who, in their six years in government, cut $6.6 billion in funding to higher education, including more than $3 billion in their last year in office alone. They need to accept the reality that our reforms will help make our university sector more sustainable, by reducing the cost to the taxpayer of student education from an average of 60 per cent contribution from the public purse to around 50 per cent and they need to accept the reality that we are making the system fairer by asking students, who, on graduation, will on average earn 75 per cent more over their lifetime than non-graduates and who typically earn around $1 million more over their working lives than non-graduates, to make a fair contribution to the cost of their education.

A large and important part of our reforms is about creating more choice, for universities to respond to the market and to their own centres of excellence and expertise, and for students. I say for students because the government's reforms will extend the opportunity for study to another 80,000 higher education students every year supported by government subsidies by 2018. This includes an estimated 48,000 students in diploma, advanced diploma and associate degree courses and 35,000 additional students undertaking bachelor courses. Importantly, these students will include more people from disadvantaged backgrounds, rural and regional communities, people who require extra support to succeed at university and workers who want to update their skills and qualifications. This reform of extending the demand-driving Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees will cost $371.5 million over three years and was derived through consultation with the education sector.

In relation to my electorate of Robertson, at present 4,447 people are attending a university and 2,920 people attending a technical institution. Five point four per cent of my electorate attend a tertiary institution at present. We rank 90th out of 150 electorates in terms of tertiary institution attendance. Ten point nine per cent of my electorate have already obtained a bachelor degree, which is 3.17 percentage points below the national average and 3.87 below the New South Wales average. But my great hope—and I have no doubt that this will happen—is that these reforms will provide more opportunity for people in electorates like Robertson to pursue higher education. And the dream of so many people on the Central Coast is that our region, while not known as a region of educational advancement and career opportunity in the manner that cities such as Newcastle and Sydney perhaps are today, may become such a region tomorrow.

We know today that the workforce in my electorate has a lower proportion of people with tertiary qualifications than the New South Wales average. In saying that, it should also be noted that universities are not for everyone and that there are many people in my electorate of Robertson who have made a tremendous contribution to our community and who have achieved a strong technical education. In Robertson we have 22.88 per cent of people with a certificate level education, which is around four per cent above the national average and 4.42 per cent above the New South Wales average. I am proud of the fact that the coalition government values technical education and has a strong record of ensuring support for education opportunities right across the spectrum. But these higher education and research reforms make for a better tomorrow for regions like the Central Coast, because we are giving tertiary institutions greater freedom to respond to the demands of students, the market and, dare I say it, regional areas as well. Regional education providers will have the opportunity to set their own tuition fees and offer more courses. In doing so, they will be in a better position to successfully differentiate themselves from and compete against well-established city based institutions for student enrolments.

Competition is not a bad or a frightening thing for the future of world-class education in Australia, particularly for regional areas like the Central Coast. I only have to look at the interest that is being shown in my home town of Gosford by overseas university institutions who are talking with Gosford City Council about the possibility of establishing a university campus in the heart of the Gosford CBD, or the intention expressed by the University of Newcastle to establish a research hub, again in the Gosford CBD, or the statement made by the Group of Eight Australia in their response to the government's budget of 13 May 2014 titled 'Micro-economic reform of the Australian higher education industry', where they outline the increasing requirement for higher qualifications in the Australian workforce in the future. Their prediction is that in the next five years around 100,000 new jobs in Australia will require a diploma or associate degree, and around 300,000 new jobs will require a bachelor or higher qualification. In fact, their response goes further and outlines the possibilities of greater choice that these reforms may bring. In their submission, they say that some universities:

… may focus at the elite end. Prestigious universities from North America, Britain, Europe, Scandinavia and Asia might consider a presence in Australia, perhaps in joint ventures with Australian institutions or with other partners or independently. They may seek a share of Australia’s domestic and international student markets.

Imagine the possibilities borne by the choice and opportunity these reforms provide. Imagine the possibility for the future of regional cities like Gosford, with student accommodation, business opportunities and local employment being created hand in hand with any new or expanded university campus opportunity. In fact, our growth plan for the Central Coast encapsulates this, and it is precisely because we understand the crucial role that universities play in driving development in regional areas, through job creation and educating the community, that we committed before the election to work in partnership with the Central Coast community to identify further training and education opportunities for our region. Part of our commitment was to work with local governments on the Central Coast to progress necessary approvals to facilitate universities developing campuses on local government owned land. I know that both Wyong and Gosford city councils are currently working on such projects.

I believe these reforms will help to enable the realisation of the dream of people on the Central Coast to be known as a region of world-class excellence, particularly in educational opportunity. I am convinced that the legislation we are debating today will help to realise the dreams and aspirations of so many more people on the Central Coast. I commend the bill to the House. (Time expired)

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

I rise to join with my Labor colleagues today in opposing the insidious bill that is before the House—the Liberal plan for higher costs, higher debt and higher interest rates for our past, present and future university students; the Liberal plan for making regional universities, like my University of Newcastle, suffer greatly. It was very interesting to listen to the contribution of the member for Robertson just prior to me, because she would understand the role that regional universities play in a community like the Central Coast or indeed Newcastle and the Hunter. I would hope that she might appreciate, too, some of the stark regional demographics that play a very important role in this debate. Her constituents on the Central Coast, for example, have a median household income that is $444 less than those in greater Sydney, which equates to some $23,088 difference over a year. Likewise, the people of Newcastle have a lesser household income than the people of greater Sydney. So there is very much a question about people's capacity to pay for some of these higher costs, higher debts and higher interest rates in regions that have a vastly greater proportion of students and families from low socioeconomic backgrounds.

The Higher Education and Research Reform Amendment Bill 2014 seeks to implement the government's budget announcements on higher education. I would like to take a moment to emphasise that. The timing of these announcements was the budget in May this year, some four months ago now. This was not a position taken by the Liberal Party to an election. There can be no claim for a mandate for these so-called reforms. This was a budget announcement. And you would think that a government that continually references that they are there to deliver on their mandate from the Australian people, to deliver on their election commitments, would actually be doing so. But we know that that is not the case. We know the long list of promises broken by this government.

Now, for a moment, let us put aside the words spoken by the Prime Minister and the education minister about funding of education, because we know those words do not really mean much at all. We know well the famous commitment from the Prime Minister 12 months ago, when he said: 'No cuts to education, no cuts to health, no changes to pensions, no cuts to the ABC or SBS.' We know now—as, indeed, we suspected at the time—that the Prime Minister's words were untrue. All commitments have been broken and the cuts to funding are hurting Australians everywhere.

But it is not just the spoken words of the Prime Minister that are cause for concern. I refer to the government's famous pre-election brochure, Real solutions. Some would claim it is their mandate to govern—although it is hard to find a government member today who will proudly stand beside their blueprint for governing. What did that Real solutions booklet have to say about higher education? Apparently, a Liberal-National government would strengthen higher education and encourage Australians of all ages to further their education so that they could gain a comparative advantage and get ahead in the new global economy. And the Australian people were assured that current arrangements for university funding would continue. There was no ambiguity about these statements. This was the commitment on higher education that members opposite took to the last election. That was their so-called mandate.

On the front page of the Real solutions brochure, this book of broken promises, there is a badge with three simple words: 'hope', 'reward', and 'opportunity'. I will outline today how this government, through their proposed higher education reform, is in fact crushing hope, denying reward and cruelling opportunities for the students of today and tomorrow.

This higher education bill will increase the cost of university for students, increase the debt for students and increase the interest rates that students will have to pay on these increased costs and their spiralling debt. The Leader of the Opposition put it simply in his contribution to this debate yesterday:

Opportunity in education is a pact between generations … a solemn promise to pass on an education system that is better than the one you inherited … You do not meddle carelessly with one of the great markers of life—and education is indeed one of the great markers in the line of life.

Labor firmly believes that this government is breaking its pact with the Australian people and is recklessly tearing up the fabric of our educational foundations.

Labor believes in equality of opportunity. Labor believes in affordable, accessible higher education for all Australians. We will vote against the doubling and tripling of university fees. We will vote against a real compounding interest rate on student debt. We will vote time and time again against this government's cuts to university research. We will never consign the next generation of Australians to a debt sentence. We will not support a system where the cost of university degrees rises faster than the capacity of society to pay for them. We will never tell Australians that the quality of their education depends on their capacity to pay. Education is a birthright in Australia, not a privilege for the few.

We stand by these values not solely because we believe they are right; we stand by them because they are the want of the Australian people. Unlike the government, we have been listening to our communities—not talking at them or ruling over them, but listening to them.

In May, before the budget announcements of higher education vandalism, I attended a student rally at the University of Newcastle's city campus—a campus, I might add, that is to be significantly expanded, thanks to Labor's contribution to Newcastle through the higher education investment fund. At this rally were the students of today and the students of tomorrow, parents and their children, the retired and the elderly, the workers of today and the workers of tomorrow—in essence, our community at large. Their message was loud and clear. They did not vote for these changes to higher education funding; in fact, nobody did. They did not vote for grossly inflated education fees. And they most certainly did not vote for increased debt or higher interest rates on degrees. Again, last month, when I visited the University of Newcastle's main campus with the shadow higher education minister to meet with more students and educators alike, their message was the same as that at the rally in May.

I mentioned the story of one student in particular, who I met with the shadow minister, in a separate statement in this House yesterday, but it is worth repeating her story today. The woman I met was a prospective mature-age university student. She completed her Open Foundation program last year, and she was intending to attend university as a student for the first time. She had raised a family and worked in retail for more than a decade but wanted to undertake university study to try and improve her future employment prospects. She knew it would be tough to balance work, study and family life, but she was willing to work hard and thought that getting a degree would be worth it in the long run. But these so-called higher education reforms were a step too far. She told me: 'I've already got a mortgage, and I can't afford another one.'

I know this woman is not alone. I know that there are many more potential university students reconsidering their choice to study, based on this government's cruel reforms. I am sure she is not the only woman asking herself: 'Is it really worth it?' The people hurt most by these changes to higher education will be women who take time out of the workforce to start or raise a family.

NATSEM modelling estimates that an increase of just 20 percent in the cost of degrees, a conservative estimate in a deregulated environment, combined with the changes to the interest rate on HECS debts, will mean: a woman with a nursing degree is looking at the doubling of her student debt, from $23,000 to $46,000; a woman graduate teacher is looking at a debt of $63,000 and 16 years of repayment, compared with $32,000 over nine years for the same degree today; and a woman with a science degree will be looking at nearly tripling her student debt, from $44,000 to a staggering $123,000.

Again the government's conflicted commitments ring loud and clear. On the one hand—

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

Order! The debate is interrupted in accordance with standing order 43. The debate may be resumed at a later hour.