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

As I was saying earlier in relation to these proposed reforms for current and future students, 50,000 students can look forward to benefiting from the abolition of the 25 per cent loan fee for FEE-HELP, and another 80,000 students who are studying in vocational education and training will not have to worry about the 20 per cent loan fee for VET-FEE-HELP. Our reforms mean more opportunity and more choice, particularly for students on the Central Coast. With such dynamic benefits to students, particularly those who need it most, I am very confident in supporting these reforms, because they make possible the world-class education that Australians need and deserve. I commend the bill to the House.

Ewen Jones (Herbert, Liberal Party) Share this | Link to this | Hansard source

The question is that the bill be agreed to. I give the call to the member for Wakefield.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Deputy Speaker, and I thank you in particular for being so tolerant before and just warning me. Your forbearance is much appreciated. So I can give this speech on the Higher Education and Research Reform Bill 2014, a bill that is an assault on the middle class.

Mr Tudge interjecting—

It is an assault on the middle class, and if you want to debate it across the chamber I am more than happy to have a spirited debate in this chamber about this bill, which has $100,000 degrees and an assault on social mobility and the middle class at its core.

This is about values, and it is about an assault on Australian values. We hear the parliamentary secretary opposite asking about other opinions. He should know this: we will oppose this up hill and down dale every inch of the way, because what it is, as I said before, is an assault on the middle class, an assault on social mobility and an assault on the idea that you can go to university, get a degree and then, with that public investment that has been made in you, pay it back in taxes by starting a business, by owning a home, by starting a family, by joining the middle class and by contributing to society that way. It is a very good model. It has been going on for decades. We know that education is the key to social mobility.

We have seen the austerity that the government have visited on the Australian community through the GP tax; they said one thing before the election and they did another afterwards. We have seen it in pensions: saying one thing before the election and doing another thing afterwards. We have just seen a debate on the minimum wage, overtime and penalty rates. We know they will say one thing today and they will do something else tomorrow. That is what we know about the government. You cannot trust their words, you cannot trust the word of the Prime Minister and you cannot trust them on education. Look at their 'Our plan—real solutions for all Australians' document. No doubt a lot of members would have gone to the election clutching this document, and of course there is much about education in it, but there is nothing about $100,000 degrees. There is nothing at all in here about $100,000 degrees. This is the election manifesto with which the Liberal Party went to their communities and said, 'Trust us.' They elevated that issue of trust to a level perhaps unwise for politicians, because of course they have said another thing and they have done another.

In this area of higher education, of course, it is a terrible blow to do this, because we understand that education is key to social mobility, productivity, innovation and having a trained workforce. Most other nations around the world are going the opposite way. They are not making it more expensive; they are making it cheaper. They are investing in their middle class. They are investing in their workforces because of those key advantages.

It is little wonder that, when we talk about overseas, we see an article by a fellow of the Council on Foreign Relations in Asia Unbound, titled 'Tony Abbott has to go'. I know, Deputy Speaker, you will say, 'How is that relevant?' I will quote from the document:

Abbott also does not seem to think it necessary to even discuss policy proposals with his top ministers and other leading members of his conservative coalition. His lack of consultation has made it harder for him to pass some critical legislation. In addition, he appears to have one of the worst senses of public relations of any prime minister in recent Australian history.

That is what a fellow of the Council on Foreign Relations says in a damning sort of article, which I will no doubt refer to again in the future at this dispatch box.

Jason Wood (La Trobe, Liberal Party) Share this | Link to this | Hansard source

No, you won't.

Nick Champion (Wakefield, Australian Labor Party) Share this | Link to this | Hansard source

We know these damning indictments on the government and the Prime Minister are ultimately driven by those opposite.

I hear my good friend the member for La Trobe muttering up there at the back. I do not know whether he was part of the 39. I think he would have—

An opposition member: I think he might have been.

Do you reckon? I do not know if he is part of the 39, but it is of course good to have him in the chamber debating these issues.

So there are broken commitments. There are these devastating critiques not just in our own domestic media but in foreign media, with foreign think tanks commenting on this Prime Minister. And of course we know that much of this commentary is driven by those opposite, driven by this ramshackle government. Barely a day goes by that we do not see one disaster after another—broken commitments and a retreat from adult government, which they promised the Australian people. There is no better place that it is symbolised—apart from health or maybe industrial relations—than higher education. As I said before, $100,000 degrees and $1.9 billion worth of cuts to Australian universities were not in the election manifesto of those opposite.

There has been $171 million cut out of equity programs. They are programs that take working class kids and disadvantaged kids and put them through university. Who could think that cutting funding for those programs is a good idea? It is not a good idea; it is a bad idea. I represent one of those communities which do not send that many kids to university. We know that that is the key—in part, along with a vocational education sector and an apprenticeship sector—that drives up earnings. The more you invest in education, the more you invest in training, the better it is for the individual, the community and the nation.

There is $200 million in cuts to the indexation of grants programs—sneaky cuts. The $170 million in cuts to research training is hardly sensible in a modern economy. There are fees for PhD students for the first time ever, when research is critical to innovation, to economic growth and to the clustering of particularly medical research but to other industries as well, such as defence and other things. If you get industry and PhD research students together, they come up with things that grow the economy and advance our society. To place fees on those students is stupid. It is just plain stupid. And $80 million in cuts for the Australian Research Council hardly makes any sense at all. Those cuts are devastating. Those cuts are designed, of course, to force universities into a situation where they are charging fees.

You might think: 'Well, nothing comes for free. You've got to pay for everything.' That is a common parlance over opposite. But Professor Bruce Chapman, in a rather articulate quote, does highlight the risk to the taxpayer of all this. He says:

The problem, as I see it, is that doubtful debt is a cost to the taxpayer but the universities are essentially controlling what that cost is going to be because the doubtful debt is a direct function of the loans that are outstanding and if the universities control what those fees are then … they will ultimately be controlling the levers that determine what that doubtful debt is and what the taxpayers pay. It is akin to a blank cheque being handed from the government to the universities on the matter of doubtful debt.

So it is not just that this bill has all these nasty things in it: cuts to universities, cuts to research, fees for PhD students, $100,000 degrees, an assault on social mobility and an assault on the Australian middle class. It is not just all of those things. It also creates a huge risk for the taxpayer in all of this because the universities are in charge of the fees and therefore can determine the amount of debt that the Commonwealth will take on in the area of bad loans. So there is a huge moral risk, a huge risk to the taxpayers, in all of this as well.

To highlight one of the other issues which I am aware of, it is of course how this bill would affect our medical workforce, which is always an issue in this country—finding enough doctors, enough nurses, enough allied health professionals. This is what the AMA President, Professor Brian Owler, has to say about these reforms. He says:

… the reforms are a 'ticking time bomb' that would price a medical degree out of the reach of kids from working Australian families, burden medical graduates with debt in excess of $250,000, discourage students from pursuing lower-remunerated medical specialties, and rob rural, regional, and outer-suburban communities of much-needed doctors.

That is what the AMA has pointed out will happen with this bill. So it is crazy stuff.

If we ask the medical students themselves what the effect is, the Australian Medical Students' Association says:

It is important for the Government to recognise the Higher Education Reform will affect more than just students – there are detrimental follow-on effects for rural populations who already suffer from medical practitioner shortages.

So this is going to exacerbate a problem that exists in many of the seats, many of the electorates, which are represented by those opposite. The National Party must have rocks in their head if they think that this is good for them. It is bad for them. It is terrible for rural medical workforces because what will happen is that, as the cost of a medical degree climbs, students understandably will seek to do specialties that give them the biggest return. It is a logical outcome of higher debt. They will seek to do the jobs where they can earn the most money to pay off those very large debts—and they will be large. So there will be a competition to practise in the lucrative areas, and of course a disincentive to practise where it is not so lucrative. That is a very, very important question, I think, for those opposite to answer, because they represent much of regional and rural Australia.

To conclude, I would say that those opposite have a lot to answer for. They did not promise any of this—and those listening in the galleries and those listening at home—

Mr Wood interjecting—

There you go! The member for La Trobe has perked up again. It is good to hear him, good to know he is here. I would not have thought the member for La Trobe would want this bill. I would not think anyone would want this bill. It is not a very sensible thing to be leading with. It does not make a lot of sense. It portrays an austerity mindset, a mindset which is going to hurt the middle class, not help it. As we know, the founder of the party of those opposite, Robert Menzies, made much of helping the middle class, and we find this government doing much to hurt it. It is not just enough to come into this place and mouth platitudes—

Mr Tudge interjecting—

We hear the parliamentary secretary interjecting; he does not like my feedback either, understandably. But this is a bill that hurts working families. It is a bill that hurts the middle class. It is a bill that has $100,000 degrees at its heart. If those opposite think they can get away with all the broken commitments, they are not going to like the outcome at the next election, because the Australian people will hold you accountable.

Sarah Henderson (Corangamite, Liberal Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Bill 2014. This bill preserves the essential elements of the Higher Education and Research Reform Amendment Bill which was defeated in the Senate late last year. Let me make it clear that there will be some great benefits for students and families if this bill is passed.

I have to reflect on the contribution of the member for Wakefield. It was a disappointing contribution. It would not really matter what was in this bill, he would still be running with the old Labor rhetoric of, 'It hurts working families'.

I come from a region where there are pockets of great disadvantage, in the region of Geelong and Corangamite. We are very mindful of that disadvantage, and of need to support rural and regional students, to ensure that those who most need our help get it. The Labor rhetoric does not cut it. You have to support it with the facts. What I am going to do today in my contribution is return to the facts, not the rubbish we have heard from Labor about $100,000 degrees, which is not supported by the facts.

Members opposite—including, the member for Wakefield, who disrupts every question time day in, day out, with his carry-on—can carry on about $100,000 degrees, but let's look at the facts. This bill will expand the demand driven Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees, at a cost of $371.5 million over three years. I can tell you that Menzies, the founder of our party, would be enormously proud.

The member for Wakefield is now leaving the chamber. I think he might be crawling out of the chamber because he is a bit ashamed that he is being held to account for some of the dishonesty we have just heard in his contribution.

We are very proudly extending Commonwealth funding to all Australian higher education students in non-university higher education institutions. These are students studying bachelor courses, but these are also the students that are not currently supported. Students studying diplomas, advanced diplomas and associate degrees will be supported. An extra 80,000 students each year will be provided with additional support by 2018.

There will be more opportunities for students from low socioeconomic status backgrounds through new Commonwealth scholarships, the greatest scholarship scheme in Australia's history. This would effectively mean free education for the brightest students from some of the most disadvantaged backgrounds. And I just want to stress that: we are absolutely focused on ensuring that those students from disadvantaged backgrounds are supported and lifted so they can achieve the very highest levels in their tertiary studies. In addition to Commonwealth scholarships, there will be a dedicated scholarship fund for universities, with a high proportion of low SES students that will be funded directly by the Commonwealth on top of university based scholarships.

The Higher Education Loan Program will see the taxpayer support student tuition fees up-front. What we are ensuring is that there will be no payment of any fees up-front. The loans will only be repayable once a decent income is hit by that particular student who goes on to work—a minimum of some $50,000 per annum. Let me stress: not one cent needs to be paid up-front.

In this particular bill there are five key amendments. And this reflects that we are working with the Senate, that we are listening, and that we are responsive to some of the concerns that were raised in the earlier bill that was defeated. Let me stress what we have before us with these amendments. We are retaining the consumer price index indexation for HECS debts. The government has accepted Senator Day's amendments to keep the indexation rate for student debts at CPI rather than moving to the 10-year bond rates. So we did listen to those concerns and we are receptive. We are working with the concerns of the Senate because we believe wholeheartedly in these reforms.

We have also introduced in this bill an interest rate pause on debts for primary carers of children aged less than five years who are earning less than the minimum repayment threshold. So the government has accepted Senator Madigan's amendment for a HECS indexation pause for the primary caregiver of newborns up to the age of five years. This is a very important initiative for new parents, making the HECS system better than ever.

We have agreed to establish a structural adjustment fund to assist universities to transition to the new environment, and that is very important as well.

In this bill we will introduce a dedicated scholarship fund for universities with a high proportion of low-socioeconomic-status students that will be funded directly by the Commonwealth, on top of university based scholarships. We are also amending legislative guidelines so domestic fees are lower than international fees—there is that particular certainty—and the government will also direct the Australian Competition and Consumer Commission to monitor these university fees.

There are some significant implications if this reform bill is not passed. An estimated 80,000 students will miss out on Commonwealth support each year by 2018: 35,000 at bachelor level and 48,000 starting diplomas, advanced diplomas and associate degrees—they will all lose. Many of these students will need to pay full fees to complete their preferred course and others will just miss out altogether. Around 50,000 higher education students and 80,000 vocational education and training students will still face a 25 per cent loan fee for FEE-HELP and 20 per cent for VET FEE-HELP loans. Again, there are some very significant implications if this particular bill is not passed. Thousands of disadvantaged higher education students will not receive the assistance that we are offering under this bill, and the primary carers of a child aged five years and under will also not receive the support.

I do want to reflect on the scare campaign being run by the Labor Party. In my contribution I do want to reflect very much on the facts. It is fair to say that Labor, the Greens and the National Tertiary Education Union have been running what I would say is a completely irresponsible scare campaign. The claims in relation to fees are completely false. The Queensland University of Technology has published its fees for 2016, and they are massively below what the scare campaign has been saying. The University of Western Australia has set its fees for 2016 and, again, they are less than half of what the scare campaign is claiming.

Labor, the Greens and the NTEU have resorted to a very dishonest campaign in a desperate attempt to rally against what we are doing. The Labor Party, deep in its heart, knows that deregulation of fees will have no negative impact on disadvantaged students. Let me reflect on the shadow assistant Treasurer, Andrew Leigh, who said in relation to deregulation and deregulated fees: 'There is no reason to think that it will adversely affect poorer students.' That comes from his contribution, Imagining Australia: ideas for our future, from 2004.

Vicki Thomson, the then director of the Australian Technology Network of Universities, wrote in her article, 'Don't be fooled by "$100,000 degrees"':

… the university sector is not looking to introduce standard $100,000 degrees and deregulation won't deliver them.

There is a fundamental principle here: universities which roll out fees higher than can be afforded by students will have empty lecture rooms. Universities understand that in order to attract students they need to be commercial; they need to offer degrees that students want to study. But it seems that the Labor Party does not understand this.

The Australian Catholic University in its submission to the Senate committee on the reforms said:

… ACU does not anticipate a general and massive rise in University impositions on students.

The University of Sydney in its submission to the Senate committee said:

In our view there have been wildly exaggerated claims by the opponents of deregulation about degrees costing more than $100,000.

…    …   …

In our view the market will not sustain such exaggerated degree prices, …

Because this is a market-driven system:

… it is vital that we keep tuition rates down …

If tuition rates are too high the University of Sydney will not attract students. They understand it and every single university across Australia understands this basic fundamental principle. But not the members opposite.

Member institutions of the Council of Private Higher Education have confirmed that whatever they receive in Commonwealth support for students will be passed on to students through reduced tuition fees. The indicative fee levels published by the Council of Private Higher Education show that the total cost of degrees will be far below what the alarmists and what the scaremongers have been claiming.

Open Universities Australia says:

… we are confident that for numerous courses, deregulation of fees will also lead to a significant decrease in the cost of tuition.

This highlights that competition will keep fees down. Universities which charge exorbitant fees will have empty lecture theatres. The universities understand this.

I do just want to reflect on the wonderful university headquartered in my electorate of Corangamite, Deakin University. Deakin University is an example of a university which is innovative, which is forging credible links with industry and which is going from strength to strength. The Vice-Chancellor of Deakin University has expressed some concerns about our reforms but, as I have mentioned, we are working closely with the crossbench and with the Senate to address some of these issues, to ensure there is greater equity and a particular focus on looking after disadvantaged students and students from rural and regional Australia. Like you, Mr Deputy Speaker, and like many members in this House, we are fundamentally concerned about ensuring that those from rural and regional areas of Australia get every possible opportunity to go to university and to reach the best that they can be.

If I look at the work of Deakin University, there is the establishment of Carbon Nexus. It is a $103 million Australian future fibre research and innovation centre, partnering with the CSIRO and the Victorian Centre for Advanced Materials Manufacturing. It is a research facility delivering some extraordinary work—a 20-tonne carbon fibre pilot line which is demonstrating to the world Geelong's potential in advanced manufacturing. It is an incredible facility. It is an incredible investment and driven by Deakin University.

Deakin University also has a $55-million state-of-the-art centre for advanced design and training and is working very closely with industry partners and with business to deliver to its students—from its PhD students to its undergraduate students to its academics—every possible opportunity not just to study at this university but to forge links with industry and to deliver so many opportunities in a city which needs every possible opportunity it can grasp.

As I have indicated, there were some challenging aspects of the previous bill which we have addressed. There have been some 33 reviews of the university system and those reviews have been important in the history of providing university education in this country. We are now at a point where reform is required. Reform is very important. The ways in which we are addressing the issues for rural and regional Australia are incredibly important and how we are lifting the opportunities for those who are disadvantaged is incredibly important. I commend the bill to the House.

Laurie Ferguson (Werriwa, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Bill 2014. I note at the outset there was a very cute citation by the previous speaker in saying that an academic had indicated that there would not be a 'standard' $100,000 university fee. The most harsh detractors of this legislation have not alleged that it will be the standard. So for that academic to say that it will not be standard is actually saying nothing.

I broadly associate myself with the opposition to this legislation—nearly $2 billion in cuts to Australian universities, a thrust against equity programs at a time when they are even more necessary because of the danger to equity access in this country, cuts to the Research Council et cetera. I heard the assurances from the member for Barker that because his university was going to have a jazz course with James Morrison, nobody in regional universities—and I include regional city universities such as that in Western Sydney—had anything to fear. If that is the case, I do not think the government, as concerned as it is with deficits et cetera, would actually be offering a $100-million transitional phase over three years for these universities if they do not have any danger coming to them—of course it is only one-fifth of what they sought.

I divert briefly from the other points made by opposition members to talk about one specific issue that in a way has the support of the whole House but, unfortunately, the government has refused to delete it from the controversial aspects of the bill—that is, the question of special category visa students from New Zealand. There is a provision that they would in future be eligible for HELP assistance.

We have a situation in this country where New Zealand citizens are allowed, as we know, to come here forever and a day. Basically they do not require visas to come here but their children are treated as foreign students. I do not in any way support the overall campaign by Australian New Zealanders to be given access to every aspect of welfare. Essentially they would not be here if we did not have a visa-free system. However, when we are talking about access to university for the children, I think this is a very real social issue for the country.

We have a situation where the median age of Maoris in this country is 25 years. Thirty-one per cent are under 15 years of age with only 2.3 per cent over 65. I have a bit of self-interest in this because my electorate has one of the greatest concentrations of Polynesians and New Zealanders in the country. In actual fact, my electorate has a 16th of the total Polynesian population in the country. To give you an example of some of the social dangers that we are talking about, the incarceration of the 88 Samoans in Australian jails in 2013 represented a rate of 500 people per 100,000—the second highest rate of incarcerations in this country. So I think we have a very real social problem if we do not do something about giving these children access to university and to HELP assistance.

It follows a mistake made by the previous government where we accidentally—I would say—deleted access to English courses for New Zealand citizens believing somehow that every Polynesian that lived in New Zealand for some time was fluent in English, which is not the case. I would have hoped that the government would have seen a bit of sense and deleted that particular section from the bill.

I have heard assurances from many opposite that there is nothing to worry about, that essentially university fees will not increase greatly, that there will be competition and, as one speaker said, the halls will be empty if the fees are too high. I think their views are interesting but I think a guy called Ross Gittins, who is a fairly acknowledged economic commentator in this country, might have a bit of credibility. He said in an article in the Sydney Morning Herald on 31 May 2014 under the headline Ignore the PM, university fees will rise steeply:

The 20 per cent cut will give the unis an immediate and pressing reason to use their new freedom to increase the fees they charge, and the less generous indexation will maintain the pressure for further increases.

He said further:

In the tertiary education 'market', however, we have a relatively small number of large and larger organisations selling differentiated products of uncertain quality. We have oligopoly rather than 'perfect competition'.

He went on to say in conclusion:

On the basis of all this, my guess is the sandstone unis will raise their fees a long way and the less reputed unis won't be far behind them. Their notion of competition will be to make sure no-one imagines a lesser fee than the big boys is a sign of their lesser quality.

In actual fact one of the challenges for universities such as Western Sydney is that they will not move their fees as much as that. It is also quite possible that there will be a bit of an image problem for those campuses.

There have been many comments about why we have to do this—we are not up there with the top international universities, we are falling behind, et cetera. However, there are models overseas which show what really happens. In the United Kingdom, a study by the Higher Education Commission last year found that 73 per cent of students would be unable to repay their loans within 30 years, at which point debts are automatically wiped. This would amount to 45 per cent of the total debt remaining unpaid. It means that the majority of students who do actually repay will be paying back their university loans well into their 50s. It was noted by the Institute of Fiscal Studies that the average student debt incurred would be £44,000, up from the previous average under the old system of £24,750. The UK pattern has been one of a huge increase in costs and, even though we have heard comments that it would be limited to £900 when higher education was deregulated, it is not so. In the real world by 2015-16 only two of the 123 universities in the UK will not be charging the maximum.

In the United States student debt has reached $1 trillion. Since 1978, the cost of a college degree has risen 1120 per cent—four times the CPI—while food has only increased by roughly a fifth of that. Two of every three students leave college weighed down by debt; one in 10 has a debt greater than $40,000; 41 per cent were behind by over five years in repayments; $8 billion was owed in loans. The author of the article which cited those figures, Jason Ritchie in the HuffPost blog of 8 April 2014, gave this scenario of his family:

My grandfather suffered from black lung, which he caught during his years toiling in the coalmines of Kentucky … Sending his son to college meant that my father would never develop his same chronic cough and back pain. … Student debt means slower and higher unemployment … less money flowing through the business … less money to buy a home … fewer and fewer students attempting to gain a degree and fighting for the promise of a better future.

According to the Federal Reserve Bank, a credible authority in the United States, 40 per cent of those under the age of 30 have outstanding student debts of an average of $23,000.

The member for Herbert earlier spoke about a heroic resistance to the Labor government—with the Whitlam government for wiping university fees, et cetera—and the way Labor had backed away from that approach in favour of loans, but here we have a far more significant move. The member for Herbert is defending a far more draconian future for students. This government is bringing in the private sector. The London Review of Books five years ago carried an interesting article about the US experience. It noted:

The money that would once have been reserved for academic salaries is spent on marketing, which eats up as much as 25 per cent of expenditure: the Apollo Group spent $1 billion on marketing and student recruitment in 2010. Education is neither here nor there: if that is the fastest way to generate profit then no one will worry if a quarter of the funds are drained away from teaching.

Howard Hotson further commented in that article:

In April Willetts announced

that is in the UK—

that from 2012 students starting courses at private institutions will be able to take out government loans of £6000 per year. Worse still, in September public funding for teaching in the humanities and social sciences will cease in England. The fear is that the most lucrative courses will be cherry-picked by profit-driven institutions.

I believe this is a very backward step; it represents a real threat to the non-sandstone universities. The sandstone group has been very vocal—and who would not be in their situation with $2 billion of public money ripped out? They are saying that we do not need to worry about a sharp rise in the price of education. Clearly, there is very little alternative for those universities; they will get away with what they can. That has been the experience overseas.

It is interesting that the Minister for Education and the Treasurer were on the public record as opposing any increase when they were students. They are now saying that Australian students should face greater pressures than they did. I condemn this legislation. It presents a gamble on life; they say those with university degrees can earn more. That may be true, but not everyone is in the same situation as the member for Herbert who assured this chamber that, when he had asked his two daughters whether they would be affected by price rises, they had said, 'No, they wouldn't be.' I am afraid there are a few people out in voter land who do not have the income of the member for Herbert and whose children may be more affected by price rises. He also mentioned a survey, which he said was unscientific—and I agree with him—that at the university up there he and his staff found out that the majority of students did not know how much they paid in university fees. That might be the case under the current arrangements, but, I tell you what, they will know what the fees are when there is a gross expansion under these provisions. I join opposition members in strongly condemning this legislation.

Sharman Stone (Murray, Liberal Party) Share this | Link to this | Hansard source

I too wish to speak in this debate on the Higher Education and Research Reform Bill 2014. This is a 'most significant' reform. They are the two words that are being used over and over again not just by members of the coalition but also by the university sector itself. We have needed significant reform for a number of years, because we have had universities dependent on overseas students' fees for income—the majority of their income, in some cases—and we have had an extraordinary situation where rural and regional students have not been able to afford to go to university. Even though our Higher Education Contribution Scheme enabled them to pay back their fees at a reasonable rate, they could not afford the living-away costs—and I will come back to statistics about the rural and regional disadvantage later on.

This is a most significant reform. We have had reforms in the education fee-charging sector for a very long time. For example, in the sixties there were fees charged. At that time, if you were a rural or regional or low-income student, the way to go to university and have your fees paid, if you parents could not afford it, was to take up a teacher studentship, which was what the education department in the state of Victoria offered. So we had a couple of generations of people who went through university doing arts degrees and some science degrees who had no interest really in teaching but at least they got their courses paid for. They were bonded after those courses for a year or two to pay back the funds that had been spent on their university fees. But there was a whole industry for a long time working out how to get out of having to serve as a teacher, because of your mental capacities or your anxiety and depression when you thought about teaching after you had completed your degree.

The other alternative in those very difficult times in the sixties if you did not have a teacher studentship was that if you were in the top academic achievers of your year 12—then called matriculation year in Victoria—you could gain a Commonwealth scholarship. That paid your fees and also a very, very modest living allowance which you had to give up if you married. I know this from personal experience. So there was in fact a time in the sixties where options were very limited in how you could access a university education if your parents could not pay. Then we had the so-called glorious years of no fees, with the Gough Whitlam catastrophe when he was elected to govern. That no-fee period meant that the children of those who could go to university were subsidised by the vast majority of families who paid income tax towards those students, with few of their own children having the benefit of a university education.

Today I think we are going to be able to move towards the better of many worlds. One of the ways to ensure that even the lowest socioeconomic status families can achieve a university education for their children is to make sure that there is not only an adequate scholarship system but also a fee subsidy system where you can pay back the cost of your fees over a reasonable period of time, with interest rates you will never again experience in your lifetime of borrowing and with special dispensations. For example, there will be an interest rate pause on debts for the fees of people who are the primary carer of children aged less than five years and who are earning less than the minimum repayment threshold.

The government has proposed five key amendments. One is the retention of the consumer price index for HECS debts. This means that your fees can be paid upfront. No poor, low-socioeconomic status family should have its son or daughter denied a university education, if they have the academic results to enter that education stream, on the basis of not being able to afford the fees. They will be able to take out what I will call HECS debt support and that will be indexed for the period of their university days and beyond at the consumer price index only. As I have already mentioned, there will be an interest rate pause if you are a primary carer of children aged less than five years and you are earning less than the minimum repayment threshold.

Then we are going to establish a structural adjustment fund to assist universities to transition to this new environment. That is particularly important for the newer and smaller universities. In Australia we have what are commonly referred to as 'sandstone institutions', which have been around for more than a century. They do very nicely from endowments and trusts and have received a lot of full fees from overseas students and from families who can afford quite a high standard of living and pay big fees for courses like medicine or law. Those sandstone institutions will be okay. It is the smaller institutions that will need to have this structural adjustment fund—and I commend that key amendment that has come through.

We are also introducing a dedicated scholarship fund for universities with high proportions of low-socioeconomic status students. This will be funded directly by the Commonwealth on top of the university based scholarships. This is an excellent key piece of this legislation. In an area like mine in northern Victoria—where one in four people aged between 18 and 25 are unemployed; where we are in the lowest 10 electorates of Australia in terms of average incomes; where we have struggled through drought and flood and now we struggle through bad state government policy; and where our irrigation water system, a monopoly owned by the state, is stripping irrigators of the opportunity to make an income, with the fees and charges and the very poor service—our families need every little bit of help they can get to enable their children to upwardly mobilise through a university education into a high-income earning job or position.

There will be a generous Commonwealth scholarship scheme, which was first identified by our minister, that will come as a consequence of any extra fees charged—where substantial parts of those extra fees charged can be put into scholarships—but this will be an additional package of scholarships, funded by the Commonwealth. Thousands of students from disadvantaged backgrounds and students from rural and regional communities, in particular, will have even more help to get to university. It costs a minimum of $20,000 to $25,000 a year in living costs for students in my area to go to university. This is in addition to their fees and charges. Nearly 50 per cent of our families in Murray are on welfare support of one sort or another and they need that scholarship to help their young people get a university education—typically, away from home.

We are going to be amending legislative guidelines so domestic fees are lower than international fees. I think that is only right and fair. The government will also direct the Australian Competition and Consumer Commission to monitor university fees. I think that is an important initiative as well. We do not want to see gouging and we do not want to see unconscionable behaviour by universities taking advantage of their elite status or their geographic position in a capital city to charge extraordinarily higher fees than they did before.

I strongly support this Higher Education and Research Reform Bill 2014 and I want to give an example of why. My electorate of Murray has a number of local government areas. The City of Greater Shepparton includes the Goulburn Valley. In Victoria, 40 per cent of all year 12 students go on to a university. Unfortunately, in Shepparton only 22 per cent—or less than half of our students—go on to a university to obtain a degree. In the Strathbogie shire only 20 per cent go on to a university compared to the state average of 40 per cent; in the Campaspe shire, 19 per cent, the Moira shire, 15 per cent; and it is even lower in the Loddon shire. So we are just below half the state average in respect of the numbers of year 12 graduates who go on to a university.

At the same time, a number of my businesses and my manufacturers are so short of trained, skilled staff that they come to my office and ask me how they can be supported to get more 457 visas granted so they can bring in technicians and engineers, and people to work in animal husbandry and in skilled positions managing some of Australia's biggest piggeries and dairy manufacturing centres. So on the one hand, we have less than half the average number of students in my electorate going to university compared to the state average and, on the other hand, we have jobs going begging when it comes to skilled occupations. This is an absolute tragedy.

We had a terrible time during the mining boom when a lot of our skilled workers were attracted across to the mining areas on much higher wages than our local economy could generate for skills at that level. We still have the legacy of that problem. Our government has tried to address this through relocation support and allowances for the unemployed or for those shifting from an area where there are few employment prospects to areas where jobs are going begging. I commend our government for doing that.

We also need to address problems in our area like the lack of good, appropriate and informed career counselling. We need our students from years 7, 8, 9 and 10 to be able to get local work experience so they come to know the sorts of career opportunities that are available in a region like ours, a food- and fibre-growing and manufacturing area.

In Australia, there is an increasing divide between those born in metropolitan areas and those born in rural and regional areas. That is not fair, it is un-Australian and it is not what we have ever espoused as the Australian way. The La Trobe campus in Shepparton is now well established, through a lot of federal funding that has helped it build up its campus. It is not right that that campus has an expectation that many of their courses will be taught virtually. Their students will sit in front of television screens rather go to lectures, have face-to-face tutorials and engage directly with lecturers. They will be expected simply to tune in down the line to the campus at Bundoora. This is a particular problem in my area because a lot of my students are the first in their families to receive a higher education or a university education. There is no culture or tradition in their family of what it means to prepare for a tutorial or an assignment, or have a discussion in a university setting with like-minded students or their academic teacher. We need that experience face to face.

In the Goulburn Valley, we have a significant number of overseas born families, particularly refugees from the Middle East and migrants from southern Mediterranean areas. These families do not want their sons and daughters, particularly their daughters, to leave home until they are married. The girls are disadvantaged because very few university courses are offered locally or, if they are, the courses offered are taught via virtual technology rather than face to face. This personal interaction is so important for these students, especially in their first year.

There are a lot of important changes that need to take place in our university sector. I was an academic teaching in universities for a great many years. Before coming to this place, I was Manager for International Development at the University of Melbourne. I worked at the coalface in international student recruitment, particularly with north Asia countries, encouraging them to look at Australia as a place for their students to come to be better educated. I know that Australia has some of the world's best courses and academics who can substantially retain or increase the reputation of our country as a provider of excellent university education.

These reforms are going to make good university education all the more possible not just for international students but also for our domestic students, particularly those from areas like mine where there are very low incomes, difficulties with English language and families with little experience of a university education. I commend the scholarships in particular and I strongly support these reforms. I hope that they will progress without any further ado through both houses.

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Bill 2014. I want to declare up-front, in case there is any perceived conflict of interest, that I have been to university. I did not pay any HECS on my Diploma of Teaching, which I completed when I was 19 at what you would probably call a red brick university. I did my arts degree—my honours degree in literature—at a sandstone university, and my law degree at another red brick university. I should also mention that I have what you might call a 'gum leaf university' in my electorate—Griffith University.

This bill before the House today is the biggest proposed transformation to higher education that Australia has seen since the Whitlam Labor government gave us access to a free university education when it abolished university fees in 1974.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

Free! Someone paid for it!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

The major difference, Mr Huff-and-puff up there, is that Whitlam made historical changes that shifted Australia towards a significantly more equal society and made us more economically flexible. The current government aims to divide our nation with this legislation and make us a more elitist society where students will be given a debt sentence as a barrier to opportunity. This will also, importantly, undermine productivity opportunities. With a growing number of students finishing year 12 and looking for further education, the system was due for an overhaul, I understand. Funding the entire cost of their education would place a significant burden on the budget, the LNP made that clear; but let us contrast it and see it through the prism of the Whitlam government's changes, especially after his death.

In 1974 the Whitlam government abolished university fees, opening campuses to groups that had previously largely been excluded from this elite education. In 1989 it was the Hawke government which massively expanded university education through the Dawkins revolution, in the form of the Higher Education Contribution Scheme. Since these innovative changes, HECS-style income-contingent loan systems have been adopted around the world. Dawkins chose—quite controversially at the time—to fund this massive expansion in the number of university places available to Australian students through the introduction of this groundbreaking deferred-repayment, income-contingent student loan scheme. This values-driven choice of the Labor government meant that funding for the sector could be dramatically increased without students from disadvantaged backgrounds being locked out of the system.

A modern Australia requires our brightest to strive. The policy being promulgated by those opposite is the 'dumb-but-rich' model. This simply will not create the jobs and opportunities of the 21st and 22nd centuries and it demonstrates a stark difference between Liberal-National party policies and all those higher education reforms introduced under Labor. This government, the Abbott government, wants to allow universities to charge students as much as they want for a degree. This is an assault on the middle class and an assault on Australia's social mobility, to quote the member for Wakefield. A degree should not be a debt sentence.

Jamie Briggs (Mayo, Liberal Party, Assistant Minister for Infrastructure and Regional Development) Share this | Link to this | Hansard source

You can quote someone better than that, surely!

Graham Perrett (Moreton, Australian Labor Party) Share this | Link to this | Hansard source

I am sure the member for Mayo is always happy to quote the member for Wakefield. Sorry; I withdraw that.

Labor knows the economic and social returns that flow from investing in education are both worthwhile and crucial. With the students attend TAFES, universities or skills colleges, increasing their skills through education is what drives Australia forward. It is what helps us compete on the world stage. The ball-and-chain bill before the House has not changed from when we were debating this back in September last year. Pyne's folly still means cuts to higher education, higher student fees, more debt and a lot of uncertainty for everyone else. The ball-and-chain degrees legislation was defeated in the Senate; yet the pig-headed education minister wants the public to believe that these reforms are acceptable and inevitable. That is not the case, not while Labor is still standing.

Faced with a cut of 20 per cent in government funding most universities have submitted meekly to the decision to deregulate undergraduate student fees, certainly in public; but they are seething in private. The Minister for Education has defended his argument for a US-style college system in Australia by suggesting that higher education is somehow elitist in nature. He asks: 'Why should the rank and file taxpayer pay for 60 per cent of the costs of students attending university?' The point the hapless minister is missing is that the entire nature of taxation is that we are all taxed for benefits in which only some of us participate. Secondly, this ignores the intergenerational nature of support for education and the benefits that flow from it. One generation, through taxes, pays for the education of the next generation, which in turn pays for the education of the following generation. That is what good societies do. The minister's statement ignores the fact that university graduates not only subsequently extinguish their tertiary fee debt but also become members of wealthier professions and pay substantial taxes over the course of their professional careers.

The minister has ignored the social benefits of higher education. When I say the social benefits, I do not mean just the things the Minister for Education did when he was at university; I note from his CV that he was the President of the Days of Our Lives Club when he was at university in South Australia. It is good to see he had lofty pursuits early.

Our society thrives because of our teachers, our doctors, our engineers, our lawyers, our educators more generally and our architects. We must give every smart Australian the opportunity to contribute. The Prime Minister and his team are attempting to divert attention away from the fact that this reform before the chamber leaves students with $100,000 degrees hanging over them after they graduate—ball-and-chain degrees that will not boost productivity. These reforms to higher education are unnecessary and unfair, and I suggest that Minister Pyne head back to the drawing board.

For the Australian Labor Party, education goes beyond mere utility. As personified by so many of the MPs on this side of the chamber, education has been the catalyst for change and opportunity. It is the provider of confidence, tolerance and hope. The opportunity of an education is an Australian right that belongs to all of us. Much of our Australian egalitarianism is due to the availability of education, particularly over the last 50 or so years. Though we are proudly and profoundly, I believe, an egalitarian society, Australia is also challenged with this emerging inequality between household incomes. In 2013, Australia recorded the ninth-highest level of inequality among 34 rich countries—a phenomenon detailed in Andrew Leigh's book, Battlers and Billionaires; it is well worth a read. In 2014 a Senate committee tabled a report that showed income inequality had increased in Australia since the mid-1980s. The availability of affordable education for all Australians is increasingly vital when we are faced with this widening pay gap.

The fundamental point the honourable Minister Pyne seems to miss with this legislation before the chamber is that there are societal benefits and opportunities that come with the availability of education. During the 1920s, inequality was at a very low point in our history. During the postwar decades, Australia's inequality improved significantly, and this was partly due to the educational opportunities that Australia offered.

If the higher education reform bill is in force, students will face lifelong debt and some, regrettably, will avoid studying at university. The bill is disadvantaging students from poor socioeconomic backgrounds and creating a two-tier university sector—or some might say a three-tier university sector. This divisive structure exists in the US where quality education is available only to the rich. This is because the higher profile institutions are more able to attract the lucrative students from overseas as well as domestic students who seek out the higher status campuses. There is no argument being put up that that will not be replicated in Australia. In fact, you could even argue it is being replicated already.

Despite the HECS deferred loan scheme that currently operates, poorer students are much less likely to take on debt than students from wealthier backgrounds, who have the family support needed to cover these and other living costs. Higher fees could also shut out rural and mature age students. This leads to a tertiary system where equality of access is further compromised and not everyone who is eligible and smart enough for a university place goes on to tertiary study—something I am sure the National Party will be particularly aware of. Hopefully, they will not forget the bush yet again. This is not in the best interests of Australia, which ought to uphold its egalitarian ideal of ensuring good education is available to all.

Under the former Howard government, Commonwealth funding per student was lower in 2007 than it was when the LNP took office in 1996. The current Prime Minister and the Minister for Education, Minister Pyne, were both members of the Howard government in 1999 when Prime Minister Howard promised:

We have no intention of deregulating university fees. The government will not be introducing an American style higher education system. There will be no $100,000 university fees under this government.

Today the Abbott government is bereft of those Howard government values. It demonstrates that the Australian public never know what they are going to get when they vote for the Liberal and National parties. Prime Minister Abbott has taken the Australian public for mugs when it comes to higher ed.

Labor is proud of its ongoing commitment to higher education. Under Labor, an extra 190,000 students were able to undertake an undergraduate degree and university funding almost doubled. Revenue increased from $8.1 billion in 2007 to $14 billion in 2013 and by 2017, despite the tough budgets, it would have reached $17.7 billion. Obviously there is a slight change in the taper due to budget constraints but, despite the misrepresentation of those opposite, it is true to say that our budgets delivered real increases to the university sector over our six years in government. Over the same time period the real level of funding per student place increased by more than 10 per cent. I stress that again—the real level of funding per student place under Labor increased by more than 10 per cent over the same time period.

Labor's strong belief in education is in stark contrast to the Abbott government's agenda that only wants to impose radical and regressive policy that promotes elitism and exclusivity. These ball-and-chain degrees will restrict opportunities and curtail productivity opportunities. Women who want to return to studies after having a family, students from low-income backgrounds and students from regional Australia—country towns like St George where I come from—will be hardest hit by these higher fees and higher interest rates on student loans.

Australia wants to be known as the clever country—not just for the bragging rights but because of the jobs it will create for our grandchildren, their children and beyond. However, we cannot remain competitive, especially with Asia, unless we have a sophisticated, well educated workforce. Dumb but rich just does not cut it. This ball-and-chain degree bill before the House will mean talented students will think twice about pursuing a university education. Labor will fight these unfair fee changes to our universities. Accessible, affordable and quality higher education need not be a pipedream. It is simply a matter of government priorities. Students should not have to pay the price for the Prime Minister's betrayal, as exemplified by Minister Christopher Pyne. I do not support this bill before the House.

Brett Whiteley (Braddon, Liberal Party) Share this | Link to this | Hansard source

I am more than happy this evening to speak on the Higher Education and Research Reform Bill 2014 and to respond to some of the more recent claims by those opposite. Who would have thought that this quote I am going to read came from a very senior member of a former Labor government? The honourable Gareth Evans said:

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

That was the honourable Gareth Evans.

The member for Moreton, who just left the chamber, spoke in glowing terms of John Dawkins, a former education minister of a Labor government. He spoke about him as a ground breaker who introduced policy changes that were just magnificent and really set us up in this sector. What does John Dawkins have to say about the current reforms we are debating tonight? He is saying to his former colleagues: 'For goodness sake, grow up and get to the table. Have a discussion. We cannot go on this way. We need change and you need to be a part of the solution, not a part of the problem.'

Anyone listening tonight on the radio or reading the Hansardandprobably the first thing I should say is they should get a life—would have heard the last speaker. He would have them believe that the university sector of Australia, represented by Universities Australia, did not really believe in their heart of hearts that these changes were needed. He went around a little bit and said: 'Behind close doors they are not happy. They are browbeaten and they have come out because they really have to'—and I think the inference was that was because they might be punished. What an interesting take. Who would have ever thought that a conservative government could browbeat the universities of this great country? That would be a first since Federation, I would have thought. They are not normally rowing the boat with us, which is the best way I can put it.

We have quotes from the University of Sydney, for example. This is not just some misreported article in TheAustralian, TheAge or TheFinancial Review, it is in the University of Sydney's submission to the Senate inquiry. They said:

In our view, there have been wildly exaggerated claims by the opponents of deregulation—

aka the Labor Party—

about degrees costing more than $100,000. In our view, the market will not sustain such exaggerated degree prices. It is vital that we keep tuition rates down.

The previous speaker said deregulation will mean fees will be out of control. He basically said: 'Who can say what they'll charge? They'll be able to charge anything they want.' Well, Bunnings can charge anything they want, too—for the barbecue that I bought last Friday. But there is a point that comes into play here. I will determine, based on price, where I do business. If Bunnings wants to charge a ludicrous, ridiculous inflated price for a barbecue, I will go down the road and buy one from someone else. It is ridiculous to claim that these reforms will lead to a professional, mature sector that has been here for 100 years just going crazy and waking up one day and saying, 'Let's triple the price of university!' How ludicrous! I mean, do those opposite actually believe what they read when they get to the dispatch box? If they do, I just wonder where the country is going if it gives even an ounce of thought to giving the treasury bench back to the Australian Labor Party. It is ridiculous.

I want to refer people to what I thought was a magnificent contribution in this place last sitting week by my second amigo from Tasmania, Eric Hutchinson, the member for Lyons. Everybody should go to his website and have a look at the contribution he made in this chamber. It was a superb contribution which went to the heart of the issues facing Tasmania. I do not want to re-do that because I could not do it any better than what has already been done—and I do refer people to that.

I hear a lot from those opposite—and we heard it just a few moments ago—about the great Whitlam years, when free education was available to Australian students. I mean, what planet do this lot come from? We hear often, in the context of us trying to build a sustainable health system, that they want free health, and they want free education. Well, any clown would know that there is no such thing as something for free—someone, somewhere, is paying for it. Let me give you a real life example in relation to these reforms. Let us say that a young man in my electorate chose, for whatever reason, not to go on to tertiary education. In my electorate 43 per cent of students do not even finish grade 12. The Tasmanian government is doing a lot of good, positive work in that area, and there is improvement on the go, but a lot of people do not even have anyone in their family who has been to university. A cultural change is needed—but that is a story for another day. So let us say that this young man decides that he wants to go and do a trade—or maybe his sister might want to do a diploma. There is no taxpayer help for them—none whatsoever. So he goes off and does his trade, he gets an apprenticeship, and he starts paying tax from the first pay that he gets. His taxes are in fact paying for the education of someone who has chosen to do a university degree. And good luck to them—I am not suggesting that that is a bad thing. But let's get this into some sort of perspective. There is no such thing as 'free'. For a young tradesman of 17 or 18 years of age earning his first pay packet, some of his tax is going to his next-door neighbour who will have the privilege of doing a university education—with 60 per cent of the fee, by the way, funded by the taxpayer—when that person, over a lifetime, will be able to earn $1 million more than the young tradesman.

Let's get some reality into this debate, for goodness sake! I can cope with a little bit of political rhetoric and pointscoring, but we are talking about the future of our young people and the education future of our country. This lot opposite do not want to come to the table with any sensible plan to try and build the tertiary education that we need. They are holier than thou. Butter does not melt in the mouth when they talk about these reforms. Let us not forget that, in the six years of the Rudd-Gillard-Rudd government, this lot opposite, when on the treasury bench, took $6 billion away from the higher education sector. In the last year alone, $3.1 billion was taken out. And even now they will not support the very changes that they wanted in the Senate and which we now have before the Senate. Give us a break! For those who are reading or listening to this, let's just get our feet on the ground and get some reality into this debate and make sure we actually build a system that is sustainable.

The other matter I want to talk about goes to the whole issue of the scare campaign that this will build an elite system, that only the rich will avail themselves of the system. Nothing could be further from the truth. In fact, this is the exact opposite. I go back to my example of the tradie. We are opening up 80,000 more places in tertiary education across this country. We are opening up the door of opportunity for young people in my electorate who have not had the example of a generation before them leading them to a tertiary education. As a step towards a degree, they may in fact choose to do a diploma. And, for the first time, the taxpayers of Australia are saying: 'Good on you as a tradie. We're going to put the same amount of support, effort and taxpayer subsidy behind you as we do for someone who has had the cultural and generational example to go off to university'—and why shouldn't that be the case. Talk about elitism! It is not this reform that is elitism; it is the refusal to accept this reform that is elitism because they want to keep it in the hands of those whom I would presume they now seek to demonise on our behalf.

The other thing I want to say is in response to the claims by those opposite that our young people will be debt ridden. They will not be able to get into university; they will not be able to afford it. I say to the Australian people, particularly in my electorate: right now, today, if you sign up for a tertiary education with a degree at a government university around Australia, there is no cash to be put on the table in the first place—not one cent. So can we get some truth into this debate? Any young person in this country, from the poorest to the wealthiest family, has exactly the same door to walk through, and that is the door of government supported places in the education system. I said this in a previous speech, and let me say it again because most people do not know this fact.

I dare say—and I know this because I have had them in my office—even educators do not understand that right now the Australian taxpayers like the tradie I talked about and the sister who went on to be a hairdresser, who pay their taxes, subsidise every university degree taken out in this country by 60 per cent. We do not hear that. What is left for the student to pay—only when they earn over $50,000, by the way—is 40 per cent. The bottom line here is everybody has access. Everybody has the same loan scheme—the HECS system—to be able to pay their debt back. They do not have to pay one cent back until they earn over $50,000. What is wrong with that? Most countries in the world would die for this system. We heard the previous speaker talk about other countries and how they have similar HECS fees. There are not too many similar. He talked about the US style. I have direct family in the United States, and they would die for this system because grandparents have to come onto the scene to help pay for their grandchildren's education in the US because it is just unaffordable for the parents.

The Labor Party can continue on with this hype about how it is going to be an elite system and cost students more money to get into the system when it does not cost them anything at all, and the degrees will be $100,000. Vicki Thomson, the Director of the Australian Technology Network of Universities, wrote an article with a headline that said 'Don't be fooled by "$100,000 degrees"'. She went on to say:

… the university sector is not looking to introduce standard $100,000 degrees and deregulation won’t deliver them.

The Australian Catholic University in their submission to the Senate say they do not anticipate a general or massive rise in university impositions on students. So let's get real.

Let me wrap up with this. I believe that this is all upside for the University of Tasmania. I am going to put on the record tonight that they have been dancing around a little bit with Senator Lambie over there in the Senate, thinking that they might be able to extract a little bit extra from the government, and good on them, but I want to say to the University of Tasmania: do not get left behind. There are opportunities. The glass is half full. It is not half empty. I again refer people to the speech of the member for Lyons some weeks ago. We have to take on this issue; otherwise, we are going backwards.

Do you know that, before Labor got its hands on the Treasury benches, education export or import—whichever way you want to think about education in this country, or overseas students coming to our country to take out their tertiary education—was the third biggest export item in this country's GDP? Under the watch of those opposite, it went backwards.

I want to finish with this: be very careful what the Labor Party wish for. Do you understand that, as we lessen our standards, we lose our attractiveness, lose our competitiveness and will lose those university students from overseas. Right now we do not subsidise them. They pay full fees, and those fees actually cross-subsidise the education of our young people. It is all very well to take the political pot shots, but this is the party that ripped $6.6 billion out of it when they last served in government. It is absolutely unbelievable. They have no shame to think that they hold the higher ground on this debate when in fact they do not. I say to the people of Australia; reform is necessary, and we need to see it passed in the Senate as quickly as possible.

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

It is a pleasure to make some comments tonight on the Higher Education and Research Reform Bill 2014. Labor will be opposing this bill, and that is because this is the same toxic piece of public policy that it always has been. It is the same $100,000 degrees and will lead to the same settings that will prevent young people in my electorate of Hotham pursuing that dream of going to university.

Of course we are opposed to this bill because it flies in the face of everything we on this side of the House believe about education. As Labor people, it strikes right to the core of who we are and the country we represent. What those on the other side of the House will never understand is that education means everything to us as Labor people. This is how we make an equal Australia. This is how we ensure that our economy continues to grow. It is at the very heart of the Labor dream that a child that is growing up in my electorate, perhaps in a migrant home, can go to a good-quality public school and will have that great chance to go on to university and, hopefully, one day have the chance to do something like serve in a chamber like this. When we restrict access to university in the way this bill is proposing, we say that is not what we want in Australia anymore, that that is not the Australia we want to live in. Labor will not stand for that. We will not stand for extinguishing the opportunities for young people in that position.

That is why I am very confident that in standing up here and making these comments tonight I am reflecting the views in my community. When I talk to people in Hotham, this is really what they are worried about. They do not want to be in a situation where families right across the country have to think about starting savings accounts for their children when they are born to pay for their college education as we see so commonly in other parts of the world.

I will talk a little about some of the specifics of what is in the bill. I said that, essentially, it is the same package that we have been debating in this House. Unfortunately for those on the other side, it is a debate they have been losing for the last eight months. The same basic principle—that universities will be able to charge whatever they want for the studies they offer—will lead to $100,000 degrees.

We also know that this is going to have a particular impact on the sustainability of regional universities. It has been generally accepted in this debate that there are regional campuses that are going to have to close—again, not something that Labor is willing to put up with. We want young people from right around the country to be able to study, whether they live in regional areas or not.

What we will see as a consequence of this bill is a two-tiered education system—an education system where there are some universities that cater to wealthy Australians and that get themselves on the great world-class metrics, and other universities which are affordable universities. I think we know which ones the first class, best quality education is going to be delivered in.

There are one or two important changes that have been made in the legislation from the last draft that we considered as a House. One of the critical ones that I want to discuss in a little bit of detail is about the change to the way that the interest rate on student loans would be set. We know that the initial proposal from the Minister for Education was that student debts would gain interest according to the bond rate, so this was a situation that would see a woman who went through university and perhaps studied engineering or even something like nursing, and who might take a few years out to look after children, then be in the position where she would never be able to pay the cost of her degree in her working lifetime. We saw particularly the impact that this would have on women because they were taking those years out of work.

In the legislation before us, we have seen the Minister for Education make a pretty significant change in policy, which is that, instead of setting the interest rate at the bond rate, it will go back to CPI. In some ways this is a significant shift, and in other ways it is not. We see that some of the gross unfairness of the rate that we were going to see people's debt rise by has been, in part, dealt with. I would say that all the things that I have talked about—the $100,000 degree and the threats to regional universities—will remain. But one of the things this does is blow a massive hole in the savings that were meant to be the result of the proposals before us. Instead of saving $3.9 billion each year, we save $0.4 billion each year. Let's just let that sink in: the minister went around and talked to everyone about the excitement of saving the budget and all the things that he was doing to try to get the budget under control, but nine out of 10 of those dollars are gone now because of this change. So this bill now makes all of those changes to our system, making our system so much more unfair and making access so much more limited, and yet we do not really make much in savings from it. So, if anything, this is actually an even worse piece of public policy than the one that the minister introduced in conjunction with the budget last year. I actually cannot believe it: the same terrible policy, and yet we make hardly any savings. This is absolutely ridiculous.

This is not all that the bill does. I want to speak in a little bit more detail about some of the specific additional things that I am concerned about here. As part of the policy framework here, we are seeing a $1.9 billion cut to Australian universities, we are seeing $171 million cut for equity programs, we are seeing a $200 million cut in indexation of grants programs and we are seeing $170 million in cuts to research training. Can you think of anything more economically backward than going around and cutting funding for our scientists and researchers, as this government seems to want to do? Another element I find particularly disturbing is that, for the first time in Australia, under this bill PhD students will be charged to study. These are the brightest minds in the country, and what we are doing is telling them that something they can do all over the world with subsidies from the university, because their research is so important, they are now going to be charged to do in Australia. In addition, we see $80 million in cuts for the Australian Research Council.

When you add all these things up, what I see here is pretty much the worst thing you could do to an economy that is in the position of Australia's economy now, especially when we think about the long term, because a lot of these proposals that I am finding so concerning—and it is on behalf of my constituents that I am making those views known tonight—are about the long term. This is a government that, we have seen, is taking away funding to scientists, funding to the CSIRO and funding for researchers and trying to put this additional cost on individuals who are going out and trying to get themselves educated.

What is so disturbing about this is that what we want to build Australia's economy in the long term is for every Australian to go as far in the education system as they can—as their wits will allow them—yet here we see an additional cost being imposed on every Australian who wants to do that. What we want is for science to be supported so that we have something that we can rely on in the future when we are outside the context of a mining boom, as we will be very shortly. So I see this as being basically a disaster for the economy, especially when you take into account the context that the key savings measure is gone from this bill. I cannot believe it. I actually cannot believe that the minister is even putting this before the parliament.

We have talked about issues around the impact on the economy, and I mentioned particularly the long term, but of course the other critical thing for us Labor people is that this policy is just plain unfair. We need to remember that the cabinet that is putting this policy forward contains 12 people who went to university completely for free, yet what they are trying to do is put in place a policy that will ensure that other Australians not only do not get the opportunity for free education but do not get the opportunity for affordable education. This is just outrageous.

We are starting to hear a little bit of rhetoric from this government about intergenerational equality. I honestly do not know who these people think that they are fooling, because what they are doing is trying to charge younger generations of Australians for education, astronomically, putting prices on these degrees that many Australians will not be able to afford; not taking serious action on climate, allowing our environment to degrade; and taking away important things that will drive long-term economic growth in our country.

Under the policies, when you put them all together, we see that the vision that this government has for Australia is one that is less equal, is growing less quickly and has a degraded environment and a lower quality of life. I reject all of these things. What we need is to look after our next generation by investing in them—by giving them the skills and the capabilities that they need to build a great life for themselves. We are not going to do that by putting this extreme additional cost on getting themselves educated.

We have had the refuted argument from the other side—and I am sure we will hear more speakers talk about it—that this will not really make a difference and low-income families will not be deterred by $100,000 degrees—that this is untrue. That is absolutely not the case, because the argument that $100,000 degrees are not going to deter young people from studying defies expert opinion, and it defies common sense, I think, if you ask any Australian. Even in Australia, where we have seen fees changed over time, a recent study by Deloitte Access Economics found that past experiences of raising fees in Australia have seen an eight per cent decline in demand for education. What is quite interesting is that all of that decline in demand has come from young people from disadvantaged backgrounds.

I hear this reiterated by local principals that I talk to in my electorate, because their frustration at this policy is absolutely palpable. What they say to me is: 'The amounts that are being talked about'—this is a quote from one of my local principals—'will absolutely scare my students away. For these kids a sum like $100,000 is a TattsLotto win. It's an unimaginable amount of money.' What perhaps some on the other side of the House do not appreciate is that we have people who live in my community of Hotham—

Mr Briggs interjecting—

Mr Taylor interjecting—

Mr Wyatt interjecting—

Ross Vasta (Bonner, Liberal Party) Share this | Link to this | Hansard source

Order! The member for Hotham has the call.

Clare O'Neil (Hotham, Australian Labor Party) Share this | Link to this | Hansard source

people who I come into this chamber every day to represent, who are on incomes that are less than half of what the degree will cost, supporting relatively large families. These families are not going to consider $100,000 to be a simply absorbable cost, as we might see from people in other electorates in other parts of Australia.

I know that, in the world that some other members may live in, everyone's parents are at home encouraging them about the importance of education and talking to them about their need to stay at school for as long as they want, but there are lots of kids who live in my electorate who actually do not have their families saying that to them. They have families at home saying, 'Please, you need to be earning so you're helping our family now.' These are not families that are going to think that $100,000 is an amount of money that they can afford for their kids to go to university. That is just ridiculous.

Something else that I have talked about to local principals is that, for sure, there will be this shorter term impact on kids who are going into the end of their secondary years now, and of course they are not going to be as excited about going to university when they are going to be saddled with this enormous debt, but the principals are actually most concerned about a change to the culture over time. What these rules say to them is that education is for families who can deal with these amounts of money. Those families are not the ones that go to some of the schools in my electorate.

This policy says to us that this kind of scholarship scheme—which is the throwaway to the people who cannot afford through their families to pay fees—is going to resolve the equity question, but not all the kids in these schools are going to get these scholarships. It is saying to them that it is fine for families that can afford it. There is much broader access to education for those families. But, in these really struggling households, it is only a few of the best and brightest that will get to go to our best universities.

In Australia, this is just not how we do things, and I do not think that most Australians want to see that changed. We want our country to be a meritocracy. That is what Labor stands for. We want to live in a community and a society where young people all around the country believe that their skills and their capacities will be equally valued and that the government will be just as enthusiastic about getting the best out of those young people as they are about getting the best out of young people who are trying to get degrees but have families who are able to pay those exorbitant fees that we are going to see as a result of these policies.

This is absolutely anathema to the Australia that, as Labor people, we want to live in. I just say to those on the other side of the House that I can understand that, in different types of communities, you might not experience this. You might not have schools like those in the really disadvantaged parts of my electorate. But it is just the honest truth that, when I talk to those principals, they are extremely worried. They are extremely concerned. When I talk to young people who live in regional Australia, I hear the same types of messages. We know that there are lots of young people in regional communities who study at regional universities and who would not study were the university not there. We cannot just assume that all young people are equally mobile and able to move into the city when they want to take up that opportunity to go off to university.

I am really proud to stand today and say that, on behalf of the people of Hotham, I absolutely oppose the measures in this bill. It is bad policy. It was bad policy to begin with, made perhaps only worse by the fact that the savings measures in this bill, by and large, are now gone. So now we have a dramatic change to the way education is funded in Australia that puts costs onto families and costs onto students, and we do not get much back by way of savings. It was bad policy to begin with; it is bad policy now, and I am proud to say that I do not support it.

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

I rise to support the measures in the Higher Education and Research Reform Bill 2014. Of course, I spoke on this legislation when it was first introduced in the parliament and am deeply committed to these very important reforms. In fact, it has been really galling to listen to that fact-free moralising and fearmongering that we have had constantly from those opposite in regard to this bill—a bill, by the way, which is supported by all of the vice-chancellors of the G8 universities and most of the vice-chancellors across Australia. There is extraordinary support because this is so fundamental, significant and necessary for students and the university sector. The absolute lack of understanding of this sector that I hear from those opposite, who claim to really understand it, is just so galling. We have to go right back to basics and understand what is going on here. What do we need from our university sector, and what is going on there that is so critical that requires these reforms?

Let me start with the student side of the equation, which is the demand driven model that we have moved towards, which this government supports and which is so fundamental to the need to change the way we regulate and fund our university degrees. In 2012, of course, the government lifted previously imposed limits on the bachelor degree student numbers and moved to this demand driven system. It replaced a supply driven system, one which I grew up with and which I went to university with.

The new policy has been successful in increasing student numbers, and of course that is part of a much longer term trend increase in student numbers that we have seen for a long time now. In fact, we now have over a million Australian students enrolled in our universities. I was interested to see how that compared with the time when I went to university. I started in 1986, when it was 400,000. We have had a 250 per cent increase. Anyone who tells you that we have not worked out with fee-paying students and with HECS—HECS came in in the time that I was at university—anyone who says that we do not know how to increase access or that we have not done it effectively, is absolutely kidding themselves. We have seen this 250 per cent increase. I sat down and looked at what the growth rate was and it turns out that is 4½ per cent a year. What an extraordinary outcome.

Of course part of that process was Labor introducing HECS. Now they are talking about free education for all. It is extraordinary. I think they are going to wind it back if they get back into government. It seems to me to be the only logical conclusion from where they have been going.

There is one thing I agree with the member for Hotham about—and there is not much that she says that I do agree with—there is nothing more important than increasing access to education. But that is not because, as she said, we want Australia to be equal—only a communist would believe that equality was actually the objective—we want equality of opportunity, and reform in our sector is fundamental to achieving that.

The thing you have to remember is that the demand driven system has increased the cost of education for all taxpayers whether they went to university or not. The losers in that equation are those who have not gone to university and will never go to university. Yes, there are spin-off benefits from high numbers of students or enrolments in our universities, spin-offs to all Australians, and that is why the federal government should and will continue to pay a significant part of the cost of university education. But the idea that students should not pay their fair share is ludicrous and a slap in the face to the majority of Australians who are not receiving and will not receive a university education. I hear that every day in my electorate. It is absolutely appropriate that people make that all-important point.

Let me move to the second big trend we are seeing in our university sector, and that is intensifying global competition. Those opposite seem to want to put their heads in the sand when it comes to the global competition we are facing in our university sector. We heard from one of the earlier speakers on this side of the House that this is now our third-largest export. And what an extraordinary export opportunity we have tapped into here. When I started university—as I said, in 1986—the number of international students was almost insignificant. By 2013 the number of international students exceeded 300,000—or about 25 per cent of student enrolments.

To put this into perspective, though, the competition we face across the world is extraordinary. There are more students enrolled in China this year than the total population of Australia. That is what we are up against. Leading universities around the world, including my old university of Oxford, are fighting extremely hard for students, and Australian universities are competing head to head with these international universities. And, as I said, we cannot put our heads in the sand.

Heavy regulation of a sector engaged in ferocious global competition just does not make sense. We are handcuffing our universities at a time when they need to be liberated; unless we want those universities to lose in that global competition. But the cost of that will be enormous for all Australian university goers and for all Australians, because we must remember, as we heard from an earlier speaker, that there is a large cross-subsidy from those international students to our domestic students. So we cannot afford to lose them. Under Labor we were starting to lose them; we were certainly starting to see a big slow-down in growth in the number of international students. We cannot afford for that to continue. We need to free up our universities to compete in that ferocious global market place.

The third major trend at work in our university system is the extraordinary distortion we create from the regulation we have in place now, and particularly the fee regulation. It is heavy-handed. The government effectively sets the fees, with limited knowledge—as governments always have—of the costs of providing those courses. You do not have to be a particularly good economist to know that that is going to cause some huge distortions in the way universities behave. In fact the results can be simply awful.

Some universities focus on driving large numbers of students through the most profitable degrees, often in the social sciences and humanities, because they are cheap degrees and the fees have been set at a level where the universities can make a lot of money. Kids are being encouraged to do degrees where job opportunities are limited. So, with the way the system works now, it is great for a university to pump people through an arts degree where there are no job opportunities at the end for those kids. They get the money, but the student does not get the right education. So we have a huge distortion in the system.

The flipside of that is that there is an incentive to minimise the students going through degrees that make a loss. They tend to be in the science areas. In fact, we have seen an extraordinarily vivid example of this in agriculture. An agriculture degree is very expensive for the university, because it is scientific. Every student that goes through an agriculture degree loses money for the university. So what do universities do? They cut the numbers. We got down to the point where we were seeing less than 40 per cent of the number of students graduating from agriculture than was the case five years earlier. And this is at a time when one of the biggest opportunities for Australia is in agriculture. What an extraordinary distortion, and it is all caused by this heavy-handed regulation, which we need to see the end of.

At the same time, the universities have very little incentive to innovate in price and content of courses. At a time when technology is absolutely revolutionising so many industries—and few more than education, if only through online lectures and tutorials—there is a clear opportunity to leverage technology to provide new types of courses, particularly at lower costs than the regulated fees. However, the incentive to do this is limited in the current system. So, by freeing it up, we will encourage enormous innovation, which we are seeing at work across the university sector throughout the world.

The fourth major challenge at work, driving these reforms, is the challenge to our budget. The member for Hotham makes the cardinal error that Labor keeps making in thinking about the budget: they only ever focus on the next four years.

But the problem with our budget is primarily about what is beyond the next four years. Quite simply, if you run expenditure growth at a rate faster than GDP you have to keep raising taxes forever—every year! What Labor did—and the Parliamentary Budget Office gives us the numbers—was to lock in 3.6 per cent. No economist will tell you that we can possibly reach growth rates of 3.6 per cent. So, what does that mean? Do we keep raising taxes every year? We could get it through bracket creep, but we are probably going to need more. We will probably have to raise the GST forever more. And you can get up to extraordinary numbers by 2030—I am sure we will see these in the Intergenerational reportif you allow those locked-in expenditure growth areas that Labor committed to continue.

So, we have to look—as we are—beyond the forward estimates to that long-term sustainability of our budget. And, of course, one of the fastest-growing costs in our budget—because of the demand-driven system—is higher education. So, we have no choice. We have to contain it; we have to get our costs down to a level at, or preferably below, GDP—to, say, two or 2½ per cent—if we are not only to prevent increasing taxes or a Greek-style debt blow-out but to ensure that we get the debt and deficit that we already have under control.

The benefits of this legislation will help in all of those areas. For students, it will provide greater opportunity to gain a higher education, with around 80,000 more Australians able to access Commonwealth funding—and that includes Commonwealth supported places for all Australian undergraduate students at all registered higher education institutions. They will continue to have access to HECS, or HELP as it is now and, of course, the interest rate on that will not change.

What is particularly important to me in this legislation is that we are establishing new Commonwealth scholarships. I hear every day from the parents of students and students that come from my electorate in regional areas that the biggest barrier to them going to university has nothing to do with the fees—absolutely nothing to do with the fees! It is the cost of picking up, leaving home and getting accommodation in Sydney, or Wollongong, or Wagga or wherever it is that they go to university. That is the barrier, and what we are proposing in this legislation are Commonwealth scholarships which will contribute to solving that most fundamental problem for regional students—a problem that those on the other side of the House do not recognise.

The legislation provides for the universities to set their own fees and in this way compete for students, not only in offering the course but the price of the course. I am very confident from evidence we have seen elsewhere—and I will talk about some of that in a moment—that this will enhance the quality of the courses offered, making higher education providers much more responsive to the market and to the needs of students. Domestic fees will be required to be lower than international student fees, minus the Commonwealth subsidy. And, as part of the fee deregulation, the government will also direct the ACCC to monitor university fees. We know they have done a good job on this with energy and I am confident they will do a very good job with the university sector as well.

One of the points that is lost in this debate by those opposite, is that when you look at the deregulated part of the sector that we already have, which is post-graduate and international students, the vast majority of courses for those students are within a modest fee range of $10,00 to $30,000—$100,000 is not even in sight! Where this number comes from is just classic Labor fearmongering—fearmongering which is deliberately designed to ensure that the future of this country is undermined in an incredibly important area: higher education.

With that in mind, we need to remember that no government can afford, without raising taxes or cutting other services, to keep expanding student participation without a complete blow-out. All the higher education peak bodies in Australia that represent universities, TAFEs and private higher education providers agree that reform of the current system is absolutely necessary.

These changes will mean that students will be able to get an education of the quality they need—a truly world-class education in the courses they want and with the support they want. I commend this bill to the House.

Bernie Ripoll (Oxley, Australian Labor Party, Shadow Minister Assisting the Leader for Small Business) Share this | Link to this | Hansard source

I rise to speak on the Higher Education and Research Reform Bill 2014.

While the Prime Minister struggles with his own chaos and disunity created by himself, while the Minister for Education struggles for support for his higher education changes and to convince anybody that they are of any value and while the government struggles with any coherent argument about how you could support and grow our innovative opportunities and our capacity to grow our economy—while the government clearly struggles with all these things—what we find is that universities and students also continue to struggle.

They continue to struggle with uncertainty from this Liberal government, the threat of less funding for the universities and the threat of a deregulated education market that, in the end, will shift the focus away from education as it should be in a system that does work. It is a system that does deliver; a system that, even though it is not free, does deliver in a reasonable cost space for a reasonable method of payment good-quality Australian education degrees. It shifts all that focus away towards a new base, based on pricing, on prestige and on profits.

It is not outrageous to say, as some members would contend, that this new proposal for a highly deregulated market in higher education would cause university degrees to cost up to $100,000 and beyond; that it would shift the focus away from an equitable base to the bigger universities working much more on profit and looking at how they can maximise what they deliver through the popular courses—the courses that people are prepared to pay more for; and also shift the focus away from merit-based selection criteria to ability-to-pay criteria and a whole range of other issues, especially for the regional universities in being able to deal with this massive change which would disadvantage them. I think if you spoke to anybody in regional areas and regional universities that you could see this proposed deregulatory change from the government is problematic for them. The prestigious universities, the universities in big cities are always going to have some sort of natural geographical advantage but under these so-called reforms from the government they would have a further advantage as well.

Labor made it clear when Labor leader Bill Shorten said that only through education will Australia fully develop its economic potential, its scientific potential, its artistic potential and in fact its people's potential. The Prime Minister's $5 billion in cuts to higher education are so destructive. It marks the end of Australia's fair and equitable higher education system. The cuts will bring down the curtain on the legacy put in place by the Whitlam reforms to higher education. Labor has made it very clear in this place and has made it very clear outside publicly that we will vote against these cuts to university funding and student support. Labor will not support a system of higher fees, of bigger student debt, of reduced access and of greater inequality. We will never tell Australians that the quality of their education depends on their capacity to pay.

I am certain that Labor's position is very clear. I am not so certain that the government's position is clear though. I am not so certain and I do not think the community is so certain that Liberal members of parliament are so certain as to what their position is on these particular bills because they do seem to shift and move over periods of time. But I can guarantee this House that Labor is certain that it will oppose these measures. Labor is opposing cutting public funding to undergraduate courses by up to a 30 per cent because it is a bad idea, as simple as that.

Labor opposes any move that puts pressure upwards on the cost of degrees to $100,000, which is a likely outcome and one which we would see because we have international experience. We can look to other markets, other jurisdictions. We can look to what has happened in similar markets. Whether it is the United States of America, the United Kingdom or other places, we do not support those types of systems of higher education. We do not support what we have been calling the Americanisation of our world-class university system.

This is something that ordinary people actually do get. They do understand this. Australians also oppose this because they understand the value of universities. They understand the value of university education. In fact they understand the value of education more broadly. Whether it is at a primary level, a secondary level, a tertiary level, a TAFE level or whether it is at all those levels, there is a really clear distinction in my mind and in the minds of Australians that it is Labor that stands up for all of those sectors of our education system.

Labor's record is clear. Labor supports those sectors not only through good laws, support and regulation but also through good funding. It is really clear to the Australian people and clear to the people of Queensland just recently that when you slash and burn your TAFE system, which provides a very important segment of our education system, or when you put pressure on universities, on the education system and on schools, the community does not support it. I think the community is pretty smart. If I were to decide on which way I would fall on who is smarter between the current Liberal government in Canberra with Tony Abbott and his ministers or Campbell Newman as premier in Queensland and his ministers or the Australian people and the Queensland people, I would go with the Australian people and the Queensland people every time because I reckon they got it right.

If we were to look at this more philosophically, what is the Australian dream? It could be a lot of things such as owning your own home or having a block of land—that may have changed slightly in recent times as demographics change and the world changes. But something that has not changed is that my parents and their generation did not get a university education. They either could not get access, they were never really in a position where that was a viable option or they just simply could not afford it in their generation. I think that is a common story for many Australians be they migrants or people who were born in Australia.

Many of us in this place were the first of our families to get a university education. It was certainly the case in my family. I was the first to get a university education. For many people on both sides—I do not make this as a political statement as such—it really was that great Australian dream that your children would do better than you did. One of the ways—I am not saying it was the only way—you could do that was by having one of your kids go to university because you understood what that meant.

Particularly in the context of the modern world, the jobs of the future will be more difficult to attain in the sense that you will need a higher education—be that year 12, be it TAFE, be it some sort of further vocational training, be it university or a masters degree or postgraduate degree or a doctorate or whatever. Everyone understands that jobs of the future will involve people getting further education and higher education. What governments should do is underpin the systems that deliver in the public interest for public good, not for a profit motive, a budgetary motive or some other motive.

I do not subscribe to some of the views I have heard from government members about escalating costs and fees. If you subscribe to the view that 'We cannot afford this,' then we cannot afford anything. Because they are the same excuses, the same arguments and the same tired words that are used for every single debate. For every single argument they say, 'We cannot afford this.' I am afraid that is not right in this area because we can afford it. We have a system where it is not free. It is not just borne by the taxpayer as a free system. It is not the case that we cannot afford it. The case is people do make a contribution. They do not pay for all of their education. Work necessarily does need to be done in these areas.

I have a view that says we have to look at how we make education sustainable in the future. It is not that that it is not sustainable. We should always be looking at these things. Labor understands that; we get that. We should not lose sight of the facts that what our current system delivers is something unique in the world. It is something that delivers for our economy and it is something that delivers a great deal more than can be measured in simple terms like budgets. For Australia to grow our economy and to compete, we need a strong, healthy higher education system that is affordable, that focuses on merit and outcomes. If you work hard at school, regardless of your background or your capacity to pay, you will have the same opportunity to get to university as everyone else. That is the principle that should apply to all of us and it should be applied rigorously.

Australia does do well at the international level. We may not have the most prestigious universities in the world, but we probably have one of the most equitable higher education systems and some of the best outcomes in the world. There are some areas in which we will never be able to compete, but in education we can not only compete but excel. It is evident to anyone who looks at our export earnings that education is one of our great success stories. We should not be saddling students with crippling debt, as this government proposes. Some students would carry that debt for many years of their working lives. Some people would make choices and decisions about their career based on the debt they face, rather than pursuing something they might excel in or prefer as a career path. They might also make different decisions about having a family or buying a house, but these are not decisions that people should make when it comes to their education. There is no doubt that change is constant in technology and a range of other things, and this will have an impact on the way education services are provided, but such matters should not be used in this debate as an excuse for making things more expensive.

This government has struggled in explaining things to the Australian people—whether it be the Medicare co-payment or further deregulation of university fees or any other area. They need to make a coherent argument. I heard the previous speaker say, 'If we apply the same principles as we did in the deregulation of the energy market, what great success we would have in education.' Might I remind the member, and anybody else listening, that success in the energy market has only meant continually-spiralling upward costs for the householder. I am not necessarily opposed to deregulation in some forms; in some cases privatisation might be a good thing. There are areas where it has worked in the past, though energy has not been one of them. What was the outcome of energy deregulation? Costs in Queensland, for example, have increased by 70 per cent and they continue to rise. It has not been good for the consumer; it has not even been good for the national grid or the way we deliver energy.

I would say there is a big lesson to be learnt from that. Before we apply the same pressure or structural impost on education, we should take a very close look at the damage that could be done. If there were any area of our economy that I would look closely at, it would be energy markets. I would say: 'We want to learn from the mistakes that have happened there and we want to make sure that we don't repeat those mistakes and we certainly don't want them in our education system.' There is enough evidence, though that evidence is being ignored by the government, and that is because the government is taking an ideological approach, rather than an evidence based approach. They have an ideological view about what our higher education system should like—even what our schools should look like. This government talks about red-tape reduction, freedom and so on, but what it does in practice is quite the opposite. It wants to dictate to the university sector and to students how much they should pay and where they should pay it. If you research this area, you will find evidence from the earlier deregulation of the higher education sector that there were limits on what students could pay, but under that old system it was suggested that fees could be lowered. The argument from the education minister at the time, Brendan Nelson, was that fees would come down, but the evidence is 100 per cent the opposite: no fees came down and no-one got better value. In fact, everything went up and that is exactly what will happen with this scheme, and that is why Labor will oppose this very bad policy.

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

I am pleased to rise to speak on the Higher Education and Research Reform Amendment Bill 2014. This is an important bill which will expand opportunities for students, in particular disadvantaged and rural and regional students, and ensure that Australia has a world-class tertiary education system.

This bill has been significantly amended, when compared to the bill that went through the House of Representatives but not the Senate last year, but nevertheless it preserves the essential elements of the higher education reform policy package, which the Abbott government and Minister Pyne are pursuing.

In the time available to me this evening, I want to make three arguments: firstly, that universities are critical to our national economic performance; secondly, that today Australian universities are seriously constrained in the way that they operate; and, thirdly, that the changes embodied in the bill before the House will free up universities to be more competitive, more flexible and, in turn, to be higher performing.

Let me turn firstly to the point that universities are critical to our national economic performance. You need only look at some of the indicators of the economic importance and significance of universities. There is evidence that improved investment in education delivers significant economic returns. The OECD has estimated a net present value of around $104,000 per man and $71,000 per woman who are university educated, attributed mainly to the higher lifetime taxes paid by a university graduate in excess of the direct costs of funding the additional university place. I hasten to add that the difference between the two figures for a man and a woman reflects the time that women typically take out of the workforce to look after children.

Secondly, universities play a very important role as an employer. According to a policy note issued by the Group of Eight universities, in 2012 there were more than 112,000 full-time equivalent employees in the public higher education system, and that system generated around $25 billion of revenue.

Another important argument as regards the economic importance of universities is the return on investment in research and development. The Universities Australia pre-budget submission in 2014 looked at a large number of studies conducted in a wide range of countries over a 30-year period to the mid-1990s. These studies consistently found that the rate of return on investment in research and development is high. Equally important, of course, is the fact that innovation from research and development—in which universities play a key role—is a very important driver of per capita income growth, increasing productivity and living standards.

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

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

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

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

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

The other trend which clearly emerges from the OECD work is that there is a substantial level of private funding at the tertiary level across most OECD countries and over time that is growing. That of course is no surprise. Despite the wishful thinking we hear from speakers from the other side of the chamber, no government is in a position to fund without limit its tertiary education system when it faces so many other demands on the public purse. Governments around the world are facing many of the same issues as the Australian government in terms of how to achieve the continued growth of the education system, how to allow it to meet the needs of an ever-growing proportion of the population and how that is to be funded. The previous government had no plan to deal with that. This bill embodies a plan to deal with that issue.

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

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

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

He went on to say:

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

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

The deregulation embodied in this bill is a logical next step in an ongoing reform process. It will give universities more autonomy and flexibility, and they will be free to compete on price and course offerings. To again quote Ian Young:

Deregulation will enable universities to differentiate, to play to their strengths.

The measures contained in this bill are consistent with the course of higher education policy development in Australia over the last 30 years.    They arise from a path of incremental steps that have been taken over time to improve responsiveness to changing education policy.

I do want to emphasise that, despite some of the rhetoric that we have heard from the other side of the House, this package contains a number of very important equity and fairness measures. The bill, as amended, will introduce a dedicated scholarship fund for universities with high proportions of low-socioeconomic status students that will be funded directly by the Commonwealth, and that will be on top of university based scholarships. This will add to the already generous Commonwealth scholarship scheme proposed, with an additional package of scholarships funded by the Commonwealth. This will mean that thousands of students from disadvantaged backgrounds and in rural and regional communities will have even more help to get to university, particularly in their local area.

The Commonwealth will for the first time be supporting all Australian undergraduate students in all registered higher education diplomas, advanced diplomas and associate degrees as well as in bachelor degrees. The Vice-Chancellor of the Australian Catholic University, Greg Craven, in an article in The Australian last year addressed some of the overstated and overblown claims that have been made about the equity impacts of the measures the government is pursuing. Speaking of education minister Christopher Pyne, he said:

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

As a graduate in arts law from Sydney University myself, I thought that particular rhetorical flourish was a little cruel. Greg Craven further said:

… in a scarcely remarked move, Pyne has moved decisively to protect students entering lowly paid but socially vital professions. Yes, public support for students will decrease overall, but the cut to nurses and teachers, for example, will be noticeably less, recognising their relatively limited earning opportunities, as well as the comparatively low cost of providing their degrees.

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

This bill contains some important additional safeguards—for example, by amending legislative guidelines so domestic fees are lower than international fees.    The government has committed to maintaining the HELP loan scheme so that no student need pay a cent up-front for their higher education until they graduate and are earning a decent income—over $50,000 a year—as a result of their education.

Finally, much of that overblown commentary about the equity implications of this package tends to ignore the reality that the universities will be operating in a competitive market; they will face a market discipline. It will not be open to a university to set fees which are conspicuously above those charged by its competitors. They will be subject to the same market disciplines as anybody operating in a market.

The package before the House, including the elements that have been added as compared to the earlier version of the bill that passed this House last year, is very important and continues a reform direction in education that has been underway for some time. This package recognises the importance of our universities being high performing. It recognises the importance of universities being free to chart their own course and gives them much greater freedom to do that than they have had under the previous heavily regulated arrangements. That is important for universities, that is important for students but, most of all, it is important for our national economic performance because universities are such a critical part of our economy.

Warren Snowdon (Lingiari, Australian Labor Party, Shadow Parliamentary Secretary for External Territories) Share this | Link to this | Hansard source

I am pleased to participate in this debate on the Higher Education and Research Reform Bill 2014. I will make some comments about the contributions of the member for Bradfield and the member for Hume in the course of my contribution. I am not sure if the member for Bradfield recognises the internal contradictions of his contribution; nevertheless, I think it should be obvious to those who listen to this debate. I was a bit amazed that somehow or other we are in this position because of Gough Whitlam, that he had the temerity to reform the university system and open it up to Australians who would hitherto have not had access. How dare he. Now we are in a position where, as a result of Gough Whitlam, we need to charge students up to $100,000 for degrees! That makes sense! That's all Gough's fault! It ain't Gough's fault.

These decisions are being made by the Abbott government and Australians who are thinking about these issues know what the impact will be on them. What surprises me somewhat is the apparent lack of awareness of how poisoned this proposal is within the broader community. I hope this is not the truth, but I am assuming that when government members get up to speak about this bill and when they talk to people in their home communities, they say they 100 per cent support it because, clearly, the intend to vote for it. Yet they know that when they talk to people in their electorates, whether or not they are aspirants to a degree themselves or for their families, they are most concerned about these proposals. It is just another feature of a budget—yet to be finally passed through this parliament—which demonstrates to the community how out of touch the government is. The member for Hume said, 'Only communists would say that equality should be an objective.' I am not quite sure what he meant; but what we are talking about is something we would all agree upon—equality of opportunity and equality of access; the ability to be able to attend a higher education institution without being penalised because of who you are, where you come from or your family background. But that is precisely what these proposals before us will do.

Again, the member for Hume, when he gave his contribution, talked about market distortions and the fact that Australians who do not go to universities do not benefit from the university system—although indirectly, of course, they do; and he said that . What he does not understand and clearly has not bothered to think about is that working people in this country have aspirations for their children. Whether or not they themselves have been to university, most Australians see the pinnacle of higher education as an aspiration they want for their families and their children. Most of them see that; yet what this government is doing is saying, 'Don't look too closely, because if you do you will need to be prepared to pay potentially huge amounts of money and leave university with a mortgage.'

The member for Hotham, I thought, made a very good contribution. In her contribution she said, among other things, that there are many people in her own electorate—and this is true of mine; I am not sure about the member for Bradfield's—who are working Australians and working families with incomes which are equal to half of a $100,000 university degree. The prospect of their children going to university and potentially paying up to $100,000 for a degree is beyond their contemplation, as it is for those students. The member for Hotham made some very interesting points. She observed that Deloitte Access Economics provided information about how, when university fees were increased in the past, demand for those university places decreased by eight per cent, and that all the decline in demand for those places was among students from lower socioeconomic backgrounds. Doesn't that tell you something?

If members opposite had anything but tin ears they would know that, in their own electorates, working families do not want this bill. They do not want this bill because they see it as frustrating their aspirations for their families and their children's families. It is worse if you live in a regional or remote part of this country, as I do. I do not know who the member for Hume talks to in his electorate, but he said that the show stopper for families in his electorate was not fees, it was the cost of relocation and setting up a new place of accommodation in a major city when moving to go to university. It is true that one of the inhibiting factors that confronts families from regional and remote parts of this country is the cost of relocation to go to university; but it is also true that, for many, the contemplation of higher university fees is a massive disincentive and will ultimately lead them to make decisions which will mean their children do not go to university.

We have heard that somehow or another all undergraduates in this country should be happy about this government. I heard, again, the member for Hume talk about postgraduate degrees only costing $10,000 to $30,000 dollars. Let us just ask this simple question. In Australia we have emerging, in some universities, what is called the Melbourne model. The Melbourne model is one where, to do a professional degree, you need to do a generalist degree in the first instance. So if you go to Melbourne university and you aspire to be a lawyer, you need to do a pass degree—a science or an arts based degree; one which is of broader scope and designed to teach you to think, be creative and learn new disciplines. Once you have done that degree, having paid the HECS for that degree, you are then entitled—lucky you!—to do a professional degree, say, a JD or a medical degree or an engineering degree; a postgraduate degree for which you will also pay. So by the time you get to earning any sort of income you have the HECS bill for your pass degree and the bill for your postgraduate degree. Combine the two together: if it is $10,000, $30,000 or $40,000 for the postgraduate degree, and it is $50,000, $60,000 or $70,000 for the pass degree, depending on what the degree is, then you are saddled with an enormous whack of money to be returned via the HECS system at a later point. Is that fair? Is it reasonable? I say that it is not, and we on this side of the parliament do not believe it is something we should be saddling the Australian community with.

It is no wonder we are seeing the disputes happening opposite around the leadership and the other internecine discussions taking place within their party room and throughout their party across the nation. Most of it is due to their stupidity—their inability to understand what the Australian community demands of them or how stupid some of their policy initiatives have been, including this one. They know that this is poison in their electorates. How self-serving is it, I say to members opposite, that you should be supporting a prime minister, a treasurer and an education minister who say to you: 'Go out and canvass support for this proposal which will potentially disadvantage working people and their children in your electorates.' You are doing that with such gusto; it is working very well for you!

We know what is going on; you are just too blind to see it.

Let me go to the issue of regional universities. These reforms are especially damaging for students from regional, rural and remote locales and the universities that service them. In the Northern Territory, Charles Darwin University faces a 20 per cent cut to its Commonwealth grants funding—and in their case that is a bit over $50 million over the period from 2016 to 2019; the abolition of student start-up scholarships; changes to the relocation scholarships and other equity programs—about $800 million nationally; a 10 per cent cut to research training funding—about $170 million nationally; and a substantial cut in indexation to the university grants—another $200 million nationally.

The minister claims that regional universities will be advantaged by record levels of new Commonwealth scholarships. I do not accept that. I do not believe any potential student or current student of regional universities believes it either. That is your problem—no-one believes you. In the Northern Territory's case, Charles Darwin University has a 75 per cent mature age student cohort. They are 25 years and older, so they are working people. These are people who have decided to go back to university after many of them have started a family. They already potentially have significant debt—a mortgage. We are saying to them: 'For the privilege of bettering yourself, improving your opportunities, creating better opportunities for the Australian economy by you getting an education and being more productive, you now have the privilege of compounding your home mortgage with a mortgage for your education.' That is a massive disincentive for mature age students to return to university. In a country like Australia students should never be dissuaded from further study because of the risk of crippling debt repayments.

Regional universities enrol well above the sector average when it comes to the proportion of domestic students who are Aboriginal or Torres Strait Islander, who come from a low-SES background and who come from rural and regional areas. For example, in Charles Darwin University's case their Aboriginal enrolment is 7.3 per cent and, in contrast, Monash University's is 0.4 per cent. At CDU the low-SES student cohort is 19.6 per cent and at Sydney University it is 7.8 per cent. Regional and remote students in the Northern Territory are 63 per cent and at Macquarie University, by contrast, are 5.9 per cent. These are different places. They are not like the University of Sydney and not like the University of Melbourne. They are not like those universities. Charles Darwin University is unique in its own way, as other regional universities are.

The member for Bradfield said something that actually did make sense. Not a lot of it made sense, but this particular point did make sense. He made the observation—and I agree with it—that Australia's public investment in tertiary education as a proportion of GDP has been lower than other developed countries, including the United States. The member for Bradfield went on to say that this was largely because there were private contributions to the university sector in the United States far in excess of what is given here in Australia. That is true, but it is a bit counterintuitive, isn't it? You cannot on the one hand say that they are better off because there is private sector funding and then say that, because there is no private sector funding in the Australian system, the people who should pay should be the students. I say we should go out and get more private sector funding. Let us get more research funding from the private sector. Let them wear a greater burden of the cost of research that they benefit from either directly or indirectly.

This bill is a bad bill. This bill should not be supported by this parliament. This bill is not supported by the people in my electorate and, Mr Deputy Speaker Kelly, I am sure by the people in yours. I commend the opposition's position of opposing this legislation.

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

I rise today to speak on the importance of the Higher Education and Research Reform Bill 2014. This bill will see a new higher education system which is necessary to make possible world-class education that Australian students want and deserve. Education breeds confidence. It unlocks the door to knowledge, possibilities, growth and employment, and where there is employment there are further opportunities. This bill will for the first time cast the blanket of opportunity further by offering more people in our community the chance to access an education.

This bill, through the deregulation of fees and under the careful watch of the Australian Competition and Consumer Commission, will give universities the certainty they require to be international leaders in higher education, our nation's third largest export. It will allow the largest Commonwealth scholarship program ever to assist students from disadvantaged backgrounds and from regional and rural communities. Some 80,000 students studying in vocational education and training will benefit from the abolition of the 20 per cent loan fee for VET FEE-HELP and another 50,000 students will benefit from the abolition of the 25 per cent loan fee for FEE-HELP.

For student primary carers—that is, mum or dads of children aged less than five years of age—earning less than the minimum repayment threshold it will introduce an interest rate pause on debts. And university students will continue to receive a first-class higher education. Reform will strengthen Higher Education Loans, HELP, which sees the taxpayer support all students' tuition fees upfront and ensures that students have no upfront barriers and only repaying their loans once they are earning a decent income of more than $50,000 a year as a result of their education.

Our education minister has listened and the government has agreed to amendments to the bill to maintain the HECS indexation rate at the consumer price index. So Labor can stop scaring people with this untruth about indexation. HECS, which is part of the HELP scheme, is here to stay. We will also amend legislation guidelines so domestic fees are lower than international fees minus the Commonwealth subsidy.

As the budget papers show, government expenditure on higher education is going to increase each and every year and it will cover more people seeking it. The government is not increasing fees and will continue to support courses through Commonwealth funding, only now it will support more choices. A new system will cast the net of opportunity further by expanding the demand driven Commonwealth funding system. For the first time ever, all Australian undergraduate students in registered higher education institutions will be supported for all accredited courses—higher education diplomas, advanced diplomas, associate degrees and bachelor degrees offered at any Australian higher education institution whether public or private universities, TAFE's or colleges

Labor has misled the community and, in doing so, is robbing those they say they are committed to—the vulnerable, the disadvantaged, the diverse and those who seek alternative study pathways. The new Commonwealth Scholarship scheme will create an unprecedented level of support for disadvantaged students to access university. Under the new higher education system universities and other higher education providers will be required to spend $1 of every $5 of additional revenue raised on scholarships for disadvantaged students through the Commonwealth Scholarship scheme. Universities and education providers will decide what to charge and students will choose what to pay. If fees are too high, lecture theatres will be empty. As with all consumables, if the price is not competitive you would look elsewhere.

Labor can now stop scaring people about $100,000 degrees. In a media release on 8 December 2014 the Chair of the Group of Eight, Professor Ian Young OA, said:

The changes in the reform package means $100,000 degrees are simply hyperbole.

However, to provide more certainty in this area, the government will also direct the Australian Competition and Consumer Commission to monitor university fees. Additionally, to protect quality and standards, the Australian higher education system will continue to be underpinned by quality assurance arrangements, including a national quality agency and the Tertiary Education Quality and Standards Agency. I would like to take this opportunity to congratulate Professor Peter Shergold AC, Chancellor of the University of Western Sydney and former Secretary of the Department of Prime Minister and Cabinet, on his appointment as chair of TEQSA. In a letter to me last week, the Vice-Chancellor and President of the University of Western Sydney, Professor Barry Glover, said:

May I ask that you bring to the House's attention the need for an end to the current intolerable state of uncertainty. Mindful of higher education's status as a major export earner for Australia, it is exceedingly difficult to think of a comparable industry that could endure and, indeed, remain globally competitive amid this level of legislative limbo.

The University of Western Sydney plays an important role in education and research and for our community of Greater Western Sydney. I am privileged to have their Hawkesbury Campus in the electorate of Macquarie. Under the guidance of Professor Barry Glover, Greater Western Sydney has a first-class university which strives to inspire all to achieve and broaden their education horizons. I take this opportunity to congratulate Professor Glover. It was announced on Friday, 20 February that he would be the new chair of Universities Australia.

This government supports opportunity and, for all those who seek it through pursuing higher education, we want to widen your opportunities. I again quote Professor Young:

No change would mean fewer opportunities for Australia's students, especially those from disadvantaged backgrounds. Staying still—or moving backwards—won't help. Deregulation of price and student numbers can deliver the change Australia needs.

Those opposite who promote a false political message oppose a fair go and opportunity for all. I commend the bill to the House.

Wayne Swan (Lilley, Australian Labor Party) Share this | Link to this | Hansard source

This week students at universities right the country will be attending O-week, and they will be doing so at a time when our higher education system is under a vicious assault from the tea party conservatives who sit on the other side of the House. This assault of course takes its form in the Higher Education and Research Reform Bill 2014. This bill is the second attempt by the Prime Minister and the Minister for Education to wind back the clock to the 1950s, when our universities were reserved for the wealthy elites of our society. As far as they are concerned, they cannot get there quickly enough. Late last year we saw the crossbenchers join the Labor Party to do the right thing by students and future generations in rejecting the first incarnation of this bill. Today I call upon all of those crossbenchers to do that once again—to stand with Labor for fairness in education, for investment in the future and for a society which is marked by high levels of wealth creation and high levels of social mobility.

The conservatives opposite love to trumpet the American system. They think the American system of tertiary education is the way to go. Indeed, they also trumpet the American system of health care. When it comes to education, they say the US system is the gold standard—look at Harvard, look at Yale, look at Princeton. Well, rather than cherry picking one or two—which are not correct comparisons anyway—let's just have a look at the American system of education.

According to the OECD in its latest assessment of education levels across developed nations, the United States as recently as 1996 had the second highest share of adults who earned post-secondary education credentials and the highest share of adults with university degrees. This is no longer the case. In the space of less than 20 years America's level of educational achievement has fallen behind other nations to the point where in 2012, the most recent year measured, the United States was ranked fifth in the percentage of adults who had earned a higher education award.

As the inclusive prosperity report recently published by the Centre for American Progress shows, not only has the proportion of Americans receiving a higher education fallen; but there is a pronounced downward trend in educational mobility in that country. In America 29 per cent of men and 17 per cent of women had less education than their parents compared with the OECD average of 19 per cent for men and 13 per cent for women. Only 20 per cent of US men and 27 per cent of US women had more education than their parents compared with the OECD average of 28 per cent and 36 per cent, respectively, falling well behind the OECD average, but this is the system which is deified by this Minister for Education and Training because it goes to the very heart of their survival-of-the-fittest mentality. Let the market rule anywhere; that is the only measure they have. But what these figures show is that those sorts of approaches produce lower social mobility and at the end of the day lower economic growth and a less mature, informed and prosperous economy and society.

This downward trend in educational mobility is likely not only to impact on long-term productivity growth because that relies on the accumulation of knowledge but has a much more profound effect on the society itself because truly optimistic societies are those societies where there is a high degree of social mobility, where people understand that, if they work hard, study hard and get a good qualification, they can achieve an outcome from doing that. Lower social mobility leads to a much more pessimistic society and less social harmony.

Recent studies in America have shown that for every one per cent increase in the share of a state or region's population who successfully complete a higher education course there is a corresponding wage increase of 1.6 per cent for all high school graduates. What that figure shows is simply this—and in many ways it is common sense, but it is very good economics and it is even better social policy—when you invest in higher education, you do not just lift a few boats; you lift all of the boats and you drive economic growth through education.

No country can afford to turn its back on the wealth-boosting and –creating potential of higher education, but that is exactly what our country is doing, exactly what this government is doing precisely at the wrong time when we are so poised to reap huge benefits which will flow to this country from the Asian century. The most concerning aspect of the conservatives' fascination with the American higher education system is simply its callous disregard for future generations, who are going to be saddled with overwhelming levels of debt—quite ironic as you sit in this parliament and are lectured by those opposite about levels of debt. They have no compunction about going down the American road of huge levels of debt for students. In the United States student debt is $1.2 trillion, there are default rates of 40 per cent and there is certainly a growing concern in that country that student debt is not just a drag on economic growth but a drag on future consumption from families and also a cause in the future of financial instability within their economic system itself.

This is the system that the conservatives in this country want to impose on future generations in this country: greater inequity and greater debt. That is why I call it a form of class and intergenerational warfare—nothing more, nothing less, particularly when it is combined with the proposal to have time limited unemployment benefits—and then some—and the attack on universal health care. There is no financial responsibility more important to social mobility peace of mind than the combination of knowing that when you have a family your children can get access to education and be safe in the knowledge that, if some trauma happens in the family, affordable health care is available. That too is being withdrawn from future generations, and those three attacks—unemployment benefits, what is going on in higher education, what is going on in health care—are intergenerational and class warfare in our system from the conservative, survival-of-the-fittest mentality mob who run this country at the moment.

One of the reasons they are in so much political strife is that they are trying to impose this model on a group of people who have the common sense to see it for what it is. They want to import a model where there is a real-time measurement of the crisis it causes in an economy and transpose it on ours in spite of all the evidence that exists about what is going on in the United States. It is a system in crisis.

If we look at the Australian system since 2000, we see Australia has significantly boosted our share of the population which has earned post-secondary education credentials and degrees. In 2000 just 27 per cent of Australian adults had earned post-secondary education credentials. By 2012, the most recent year for which data is available, the share of adults in Australia with post-secondary education credentials had increased to 41 per cent. Twenty-seven per cent to 41 per cent. Among Australian young adults aged 25 to 34, 47 per cent had earned post-secondary education credentials, up from 31 per cent in 2000. Overall, at 77 per cent, Australia is first amongst all OECD and partner countries in the share of young adults who are expected to pursue university degrees before turning 25 years old. We are punching well above our weight—because Labor governments from Whitlam all the way through have been active partners in funding the higher education initiatives which the coalition is now determined to tear down.

What is most perplexing about the coalition's plan for higher education is highlighted in the inclusive prosperity report which I spoke about before. It notes that in order to fix the American higher education system a bold new approach is required. It says that America should make community college or a public four-year college virtually free at the time of study so that all high school graduates and their families have no doubt that they can afford higher education. Sound familiar? The report goes on to conclude:

Under such a system, students would be required to repay all or part of the support they received as a percentage of their income over a specified period of time—for example, 20 years or 25 years. If former students are struggling economically, no payment would be required until their earnings are sufficient to make payments.

That is the Australian system that we have now, before its destruction as proposed by those opposite. The Australian system has an emphasis on affordable education. It encourages, not discourages, wide participation. Now in Australia now have a government which wants to move Australia to a high-cost American system while the Americans want to move to an Australian system because the financing of their higher education system in that country has been such a comprehensive failure. No-one in this House should be surprised at this because this agenda has lurked on the conservative side of politics for years, but it popped out after the last election when we suddenly saw their real Tea Party credentials—and of course it was exposed in full on budget night 2013. These are just some of the reasons we oppose this bill so strongly.

We have got to be clear about what the coalition is trying to do. Cuts have been run through—with $2 billion in grants alone. The product of that is $100,000 degrees. This is going to discourage participation by those people who cannot afford to take on this level of debt and who, in all likelihood, will be receiving only modest incomes in a whole range of professions and who will therefore decide in the future—or their children will decide—that it is simply not worth getting a degree when the debt that comes with it cannot by paid off with the modest income that they are likely to earn in the future. That is why this system is so tragic. That is why it will lead to intergenerational inequality: it will simply push out of the system those whom we spent years and years getting into the system in the first place. It is going to be particularly hard on professions such as nursing and education but it is also going to hit engineering hard. Those figures have been canvassed pretty thoroughly in this debate. What we do know, and what those on the other side of the House are in denial about, is that the cost of the degrees will impose a crippling debt that will discourage active participation. At the end of the day we are all going to be the losers. Individuals will be the losers and our economy will be the loser as well.

This debate is pretty revealing of the government's priorities overall. They do not see any form of collective solution to any particular form of social policy as being the way to go. They have got an individualist view of the world where governments should play a minimal role, if any role at all. In their view, the actions of a whole host of individuals will produce something that is greater than the sum of its parts. This defies experience around the world.

One of the reasons Australia has been so good, over 100 years, at matching strong economic growth with social equity is that we have always had a really good partnership in our economy between government on the one hand and business and community on the other. And we have worked together with the models we put together in education, with universal public provision so that people can pay more to buy up. In health, people can get a good basic service but pay more and trade up. This has all been done on the basis of government working cooperatively and intervening where necessary in the community. We have had a decent system of industrial relations with a decent level of minimum wage and collective bargaining rights, universal health and education, a progressive tax system and transfer payment system—the basis of the Australian model. And surely, bit by bit, plank by plank, this government has identified every one of those key public policies that go to the core of the fact that Australia is not only prosperous but fair. What they do not understand is: it is bad economics when you start attacking the platforms in the economy that drive social mobility and fairness. What that drives is a low value, unfair economy which does not grow.

Debate adjourned.