Kerry Nettle (NSW, Australian Greens) Share this | Hansard source

The Higher Education Legislation Amendment (2006 Budget and Other Measures) Bill 2006 fits in with the government’s general approach to higher education. On the one hand the government rhetoric is all about cutting the sector free of the apron strings of government support in the context of their bold and clear vision for higher education, but on the other their level of action rather than rhetoric sees them cutting the apron strings but replacing them with miles of red tape and a vision which gives way to piecemeal policy delivered as a result of pork-barrelling concerns and half-baked election promises. This bill is typical of this approach, because it delivers a hotchpotch of policy changes which have been hastily introduced into the parliament without much chance for reasoned debate and which lump in overdue good investments with more poorly thought out changes and ham-fisted attempts to fix major problems in the sector.

The two biggest problems that are pertinent to the content of this bill are the lack of appropriate indexation in university grants from the Commonwealth and the impact of the FEE-HELP scheme on the equity and quality of the higher education sector. Regarding indexation, this bill contains the indexation amounts for university grants over the next four years. The problem is that the government is still indexing universities’ core government funding at around two per cent—far less than the rise in the costs that universities face, which is nearer five per cent. This means that each year universities have to provide the same services to their students and the community with less government money in real terms, despite what may appear to be increases in funding in this bill. The OECD’s latest publication, Education at a glance 2006, detailed the breathtaking fact that, whilst the other developed countries in the world have increased their public funding to universities by an average of 48 per cent over eight years, the Howard government has presided over a cut of seven per cent. It is hard to see how any government can claim to be funding universities at higher levels than ever before, as this government does, when the independent review of its spending performed by the OECD has shown so clearly that it is cutting funding in real terms.

The Australian Vice-Chancellors Committee has been consistent in its criticism of this government for its refusal to deliver fair indexation to universities. The Greens have campaigned on this issue, but we also recognise that the problem is not just the indexation but the low base level of the grants to universities from the government to start with. As a result of these low grant levels we see the consequential move to force students to take on the burden of funding universities. The federal government now contributes on average just 40 per cent of funding revenue to universities, with some universities receiving far less than 40 per cent. When people talk about public universities they expect that that will mean that they receive substantial funding from the public purse, not the miserly contribution of 40 per cent of funding from the public purse that we currently see as the average contribution made by the federal government to universities across this country.

This bill will make this sorry situation worse by increasing the amount of money that the government will lend to domestic full-fee-paying students to pay their up-front fees. This bill increases the FEE-HELP loan cap from $50,000 to $80,000, or $100,000 for vet science, dentistry and medicine. This is being done with no indication of the inflationary effect on fee levels. The government is at the same time increasing the number of higher education institutions whose students can access these loans to pay their fees. The institutions recently permitted to offer these government loan full-fee places are private institutions, often fairly new and looking to expand. For them, what better way is there to expand than to milk this government scheme to the max by charging fees up to the highest level that the government will lend to a student and ploughing the increased revenue back into expanding? This is the effect that raising these fee levels has on the growth in the sector. It is an unplanned growth, underwritten by government money in the form of the FEE-HELP scheme but with no thought given to the effect it will have on the quality of the higher education sector as a whole.

And it will have an impact on quality. The government majority on the Senate committee that reported into this bill said that the government considers that these new FEE-HELP limits will improve students’ ability to make choices about their courses of study, promote participation and bring about a more diverse higher education sector. But the newer, smaller, narrower in vision, cheap and efficient no-frills higher education operators that grow on the supply of the FEE-HELP loans impinge on the viability of courses and schools at public universities and other high-quality educational institutions. This means that the government is simultaneously increasing the indebtedness of students and lowering the quality of the education that they are paying for. The government is undermining the integrity of a public higher education system developed over centuries by reducing the share of government spending on higher education and failing to index that spending by at least the cost of inflation.

It is quite a bleak picture, but the spin from the minister is quite different. I was interested to read the transcript of the minister’s recent speech at Murdoch University, in which she told an audience of alumni, staff and students about her vision for the higher education sector and outlined the context which 10 years of the Howard government has delivered. Throughout the speech were a series of peculiar views of the current situation that should not go unchallenged. I will take the Senate through some of these now.

Firstly, seeking to establish the generosity of her government, the minister said:

Currently, there is a high reliance on the Australian Government for funding, both directly and through our management of student loans schemes—accounting for almost 60% of total funding.

That is misleading, because 20 per cent of that 60 per cent is actually student loans—not government money being put into our institutions—so only 40 percent is actually an investment in and public funding of our university institutions by the government.

As so many Australians are now coming to realise when they read their payslips each week, HECS does not make education free; you have to pay back every last penny. That means it is private funding of university, not public funding. The minister went on to say:

Today, Australia’s universities have access to higher levels of revenue than ever before. In 2004, total revenue available to higher education institutions from all sources was $13 billion—an increase of more than $5 billion or a 65% increase on 1996 funding levels.

Again, that is misleading. If the indexation level of higher education is pegged at a conservative five per cent—that is, less than the government’s own indexation for schools—then, over 10 years, you would have a rise in cost of $5.05 billion. So total revenue has not kept pace with inflation. The minister went on to say:

Australia’s funding of universities is often compared unfavourably to countries such as Finland and Sweden, where virtually all funding comes from the public sector and students pay minimal or no contribution—although this is changing. However, proponents of this ... model fail to mention government taxation rates in Finland and Sweden.

Is the minister advocating an increase in taxation rates? If not, is she implying that the Swedes and the Fins are somehow worse off because of their high-quality, free higher education and higher taxation rates? If so, she may wish to note that Finland is ranked second on the World Economic Forum’s global competitiveness index, and Sweden is third, as compared to Australia’s 19th place. She may also wish to note that Sweden and Finland have a higher proportion than Australia does of people who are happy and satisfied with life as a whole, according to the World Values Survey.

The Greens advocate for a change in funding policy which would bring us closer to matching the successful policies of countries like Sweden and Finland in how we fund our higher education. To begin with, we would abolish HECS and return Australia to a situation which we had not so long ago—that of free tertiary education. It is interesting to note here that a recent convert to the idea of abolishing HECS, at least for some courses, is former Liberal Premier of Victoria Jeff Kennett, who advocated last week for the abolition of HECS for courses in which he considered Australia had a skills shortage, such as engineering.

However, the minister and this government are not interested in Commonwealth investment in education. Never mind that Australia is richer now than ever before in history and that the government is awash with cash. This minister and this government want other people to pay for higher education. The minister put it this way in her speech to Murdoch University:

What is not ... widely known or appreciated is that while states contributed $230 million, they took out more than $377 million in payroll tax. State and territory governments in fact profited from their universities in 2005 to the tune of $147 million.

In other comparable federations, state governments acknowledge the benefits to their communities of their universities and contribute accordingly. So there’s an obvious untapped source.

Clearly, the minister wants to find another excuse to freeze public funding from the Commonwealth to universities. It is not just state governments that the minister is planning to ask to pay more. Students and ex-students are also in her sights. She tried to argue that the student debt crisis is overblown when she pointed out in her speech:

To date, around 780,000 (41%) of people have repaid their debt—

that is, their HECS debt—

The average outstanding debt is around $10,500.

According to the minister, this is apparently good news. But, when you turn it around and you say that nearly 60 per cent of Australian HECS graduates are now carrying a debt from their tertiary education, it does not sound quite so great. For young people, an average outstanding debt of $10,500 is a substantial amount of money, particularly if they have other debts in the form of credit card debts as well.

It is depressing to see what is happening to the higher education sector under this government. Their vision, which is pretty clear from the speech that the minister gave at Murdoch University, is all about government disengagement, privatisation and commercialisation. They do not talk about what education is for, or about the central importance that it plays in shaping the society we live in and progressing the collective benefits of that society, both at home and globally.

Australia is in a period of unprecedented economic boom. Just a couple of weeks ago the Treasurer found he had an extra $1 billion in tax revenue that he had not expected, on top of the $15 billion surplus already reported. Yet, despite these riches, we never appear to have enough money to make a long-term investment in education—in public schools or in pre-schools, in TAFEs or in universities. Instead, we see from this government an attack on student life through voluntary student unionism legislation, an attack on staff working conditions through the higher education workplace relations requirements, funding cuts—as noted by the OECD—rising student debt levels, ministerial meddling in research directions and the encouragement of small degree factories to undermine our great public university institutions.

The minister concluded her speech to Murdoch University by reminding the audience that she is a graduate of Harvard Business School, which is all well and good. But the point of her reference went well beyond big-noting herself. The minister’s thrust was to explain how, in the United States, much of the high levels of funding for the most prestigious institutions come from the deep pockets of their alumni. She then volunteered this as another funding source that might help to replace federal government funding for Australian universities.

The Greens have a very different vision for higher education, a vision that recognises the contribution that universities make to all of our society and the need for governments to be investing in great public institutions such as our universities, which provide benefits to the whole of our community. We need to have this investment in our students to allow them to become top quality graduates and we need to invest in research to continue Australia’s proud tradition of innovation and excellence. This is the kind of investment that realises massive benefits for the broader community.

When every qualified Australian can have access to university education, then the culture, the society and the economy benefit. When every community can access the resources of a local university campus, it is not just the students reaping the benefits. When graduates can pursue their chosen career paths free of the burden of debt, then the caring careers—the careers that are about public service more than private profit—can flourish. This is an alternative vision that the Greens have for investing in our higher education institutions so that the whole of our community can benefit. I would argue that is the necessary vision if we are to build and invest in the great community of Australia into the future.