Ursula Stephens (NSW, Australian Labor Party, Shadow Parliamentary Secretary to the Leader of the Opposition (Social and Community Affairs)) Share this | Hansard source

I too rise to contribute to the debate on the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007. I commend the contributions of the previous speakers, particularly that of Senator Carr, who has been leading this debate on behalf of the opposition, and that of Senator Stott Despoja, who so clearly understands the intricacies of the higher education sector and articulated many of the concerns that we are all hearing from students around Australia who are being slugged by increasing HECS debts and fees and are now being confronted with full fee paying courses as the only option they might have to gain a tertiary education.

But, as Senator Carr said, Labor will support a number of the measures that are included in the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007 because the bill amends the Higher Education Support Act 2003 to provide for both the government’s 2007-08 budget commitments and the indexation increases. It also makes some technical adjustments for the years from 2008 to 2010 and adds maximum grant amounts up to the year 2011. The bill includes the higher education measures announced in the budget other than the Higher Education Endowment Fund. It covers a range of areas, including reducing the number of Commonwealth Grant Scheme funding clusters; changing the Commonwealth Grant Scheme’s funding levels across disciplines; specifying a revised maximum student HECS contribution for commerce, economics and accounting courses; introducing three-year Commonwealth Grant Scheme funding arrangements to commence from 2009; lifting the 35 per cent cap limiting the proportion of full-fee domestic undergraduate places; limiting the 25 per cent cap for medical places; and increasing the total number of Commonwealth supported places. I do not intend to go too much into the issue of increasing the cap for full fee paying funded places. I think that was well addressed by Senator Kirk.

Labor certainly supports the reduction in the number of Commonwealth Grant Scheme funding clusters. The government has argued that it will give universities greater flexibility in their capacity to allocate funds across courses. My concern, however, is that, while the proposed changes to the Commonwealth Grant Scheme and the removal of the cap on domestic full fee paying places will encourage competition for students and an associated development of different course offerings, these measures could actually have the effect of softening the demand for those disciplines in regional universities and attract students to full-fee places at ‘market-leading institutions’. That could pose some major challenges for regional universities, which could be challenged to devise course mixes that are attractive to students and also respond to regional needs. I know that the budget made provision for establishing the Charles Sturt University dental school. While that was a very important initiative that will help the university to meet local needs, that was the only such initiative that was funded in the budget and there are other regional universities playing a critical role across the country which will need to access the proposed Diversity and Structural Adjustment Fund to actually help them to implement the changes and avoid underenrolment of their agreed Commonwealth supported places. We have heard in the past that this has occurred several times across the country, with universities in regional areas not being able to fill Commonwealth supported places. That had to be to the detriment of regional economies and communities.

The legislation introduces three-year Commonwealth Grant Scheme funding arrangements to commence from 2009. It increases the total number of Commonwealth supported places. As I have said, that is a welcome measure, albeit belated, which I believe is in response to Labor’s repeated calls for improving the funding of our university sector. The legislation also increases the number of Commonwealth scholarships, from 8,500 to 12,000 a year, and allows them to be paid by the Commonwealth directly to students. Again, Labor strongly supports this measure. The legislation introduces an Indigenous scholarship classification for up to 1,000 higher education Indigenous students—a very important and positive measure to help the process of bridging the yawning gap that is Indigenous disadvantage in this country. In particular, I also welcome the additional funding to universities to improve teacher education programs. The bill creates the Diversity and Structural Adjustment Fund for universities, including the appropriation of an extra $67 million. That will be very helpful. The bill also provides additional funding to the Australian Research Council for the period from 1 July 2007 to 30 June 2011. All these measures are very welcome because they are all about a long-awaited investment in the higher education sector.

Labor also welcomes a provision that is related to, but is not in, this piece of legislation: the creation of the Higher Education Endowment Fund, with $5 billion initially, with extra funding from future surpluses going into that fund. Labor has always supported efforts to increase the number of young people who go to university because we believe that it is both in their interests and in the nation’s interests for them to do so. We want to see in Australia an education revolution that will underpin our future prosperity. But the Prime Minister has always been critical of that approach and has encouraged his party members to scoff at such an idea. Government members argue that Labor is being elitist. They accuse us of snobbery because we are committed to keeping young people at school and then encouraging them to go on to tertiary studies.

This budget indicates that finally the government is acknowledging its vulnerability in the area of higher education and is reacting to political pressure rather than having a view about the nation’s future and the importance of investing in it. This is actually Labor’s nation-building agenda. It is an agenda that recognises that the greatest investment of all must be the investment in the talents and creativity of our young people.

Senator Carr has identified that Labor does not support every aspect of the higher education bill. In the second reading amendment which he has moved, he notes:

... as a proportion of total revenue, Commonwealth grants to universities have decreased from 60 percent of their revenue in 1996 to 40 percent, while university revenue derived from private sources of income has increased from 35 percent to 52 percent and revenue from fees and charges has increased from 13 percent in 1996 to 24 percent ...

These figures reveal that, in the 11 years of the Howard government, Australia has adopted a policy of substituting private contributions for public contributions to higher education. The OECD, in its report Education at a glance, and in other OECD documents, has pointed out that Australia is arguably the only country—and if not the only country then one of the very few countries over the last decade—that has substituted increases in private funding for increases in public funding. The pacesetting countries have increased both public and private funding for universities. Australia is one of the few countries that has not done that. In fact, it has substituted one for the other.

Minister Bishop challenges the OECD on a range of statistics in this report, but she cannot argue with the fact that, over the last decade or so, real government spending on tertiary education in Australia has gone backwards by seven per cent, whereas, on average, across OECD countries it has increased by 48 per cent. The Prime Minister, the Treasurer, the Minister for Education, Science and Training and others glowingly cite OECD reports and analysis when it suits them. But on this issue—an increase across the OECD of 48 per cent in funding for tertiary education but a seven per cent decline in Australia—the argument is: ‘This cannot be so!’ The OECD report tells a very sorry tale about university education in Australia and this government’s lack of commitment to the university sector.

Another indication of the lack of commitment is this fact: over the period of the present coalition government there has been virtually no increase in the number of Australian undergraduate enrolments in universities—other than in the last year or so, but that was off such a low base. For two years there was a decline in the number of enrolments of Australian undergraduate students. The most recent figures are virtually unchanged compared to 1996. Earlier today we were debating funding for early childhood education and children’s services. At a time when we should be making a massive investment in Australia’s future, through higher education, schools, preschools and early childhood development, the government has presided over a situation where there has been virtually no growth in Australian undergraduate enrolments.

Instead, our public universities have had to rely much more strongly on overseas full fee paying students, and that is why we have a situation where revenues from fees and charges have increased from 13 per cent of university revenue in 1996 to 24 per cent now. It is as a result of having full fee paying Australian students, and before them it was very substantially the result of having foreign full fee paying students. The government has a view—and this is the biggest dividing line between Labor’s vision and that of the coalition—that higher education is essentially a private good. By that I mean that most of the benefits of going to university accrue to the student and not to the wider community, and therefore most of the funding should come from the student. That is the government’s philosophical view and it is one that Labor certainly does not agree with. Labor believes that there are much wider and stronger benefits for all of the community from young people gaining a university education.

How on earth is Australia meant to generate or attract or retain creative talent—that is, overwhelmingly, university educated people—to underpin the future prosperity of this country? Importantly, how do we encourage continued investment in regional Australia to generate new jobs and new wealth to support the national economy unless we invest in our young people? We continue to hear about the decline in agriculture, regional manufacturing and regional economic activity. Labor is very clear about the need to commit to a new generation of industries and opportunities that will harness regional creativity and opportunity.

The bill includes reducing the number of clusters funded under the Commonwealth Grant Scheme from 12 to seven, providing more flexibility to allocate places across different disciplines and respond to student and employer demand. Our public universities, which are becoming increasingly less able to access public funds and are taking on more of the dimension of private universities, are very much in danger of being out-competed by genuinely private universities because, as the total government funding of public universities falls but the regulation around them is not reduced, they will face a competitive disadvantage against private universities, which are less regulated.

Any measures that improve the flexibility of public universities to adapt to changing demand for university places in particular disciplines are to be welcomed. That is why Labor supports this measure. But, as part of that, the Commonwealth Grant Scheme funding for a number of disciplines is actually going to be cut, which will mean increased HECS charges for those disciplines. They are: accounting, administration, economics and commerce. To use the government’s own language, the funding for these will be ‘adjusted downwards’—which means ‘cut’—because, again, the government regards these disciplines as displaying much more the features of a private good than a public good. It is important that those young people who are training for accounting, administration, economics and commerce not be deterred from undertaking those endeavours by higher fees.

The Minister for Education, Science and Training has said that because HECS is repayable out of future income it does not matter if there are increases in HECS, because that will not deter students from going to university. What an absurd argument. Senator Stott Despoja made this point very well in her contribution to the debate. As for the idea that because a payment will be made out of future income it does not matter if HECS charges are increased, we have seen exactly what the impact of that has been on the level of enrolments in higher education over the past decade.

I particularly welcome the extra Commonwealth scholarships for low-income students. Students would be funded according to their need. Disadvantaged students should receive extra support. Labor is about access and equity in relation to higher education. We outlined that in our policy statement Education Revolution, which has as its central point the acknowledgment that education is the one thing that gives young Australians the chance to get ahead and maximise their potential. It also outlines the basic principle of a commitment to lifelong learning.

Education is now the single most important economic investment that we can make and the single most important economic issue that we confront. We have massive skill shortages across the country, an ageing population and a requirement to professionalise and improve the skills base and capacity of organisations and individuals around the country so that we can actually provide the services that we will need in our old age. To remain a prosperous society, to remain internationally competitive and to go to the next level of productivity, we have to make investing in the skills, education and training of the people in our workforce our highest priority. That applies whether we are talking about early childhood education, primary and secondary schools, vocational educational training, universities or ongoing professional development. I am afraid that the government’s economic measures in the budget and this bill fail to actually deliver much on that.