Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Hansard source

I would like to speak to the second reading of the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007. These bills establish the Higher Education Endowment Fund, or HEEF, as announced in this year’s federal budget. Labor support these bills. We do so for the reason that our publicly funded higher education system has been cruelly starved of funds for 11 long years by the Howard government. We support these bills because our university system is languishing in a state of serious decay. Its capital stock is in disrepair. Its research facilities are out of date, shabby, falling apart and, in some cases, dangerous. I will provide a few salient examples of the crumbling research facilities a little later in my remarks.

On the government’s own figures, the maintenance backlog alone of our universities stands at $1.5 billion. That is before we begin to look at the needs of major refurbishment and replacement of facilities and buildings, and it does not include the needs of new facilities. The measures outlined in this bill have been hailed by some as a $6 billion windfall for Australian higher education. It is Labor’s view that it is nothing of the sort. This money is not being handed over to the higher education system at all. It is just the return on the investments that will flow to the system. The government’s largesse is not quite as some people have presented it. However, the government’s own estimates suggest that this new fund will provide a welcome boost of over $300 million per annum. At this rate, it will take five years just to clear the immediate maintenance backlog on university infrastructure, which is hardly overgenerous. This backlog figure, I recall, is a couple of years old, so in fact it will take longer than that to reach any level of equilibrium, on the government’s own figures.

The lion’s share of the funds generated by HEEF will go to university research facilities and infrastructure, and this increase is long overdue. It comes at a time when researchers in the sector are worried about the future of some of the existing programs that have funded universities’ research. In particular, there is concern about the future of the major national research facilities that have been funded under the government’s flagship Backing Australia’s Ability research package.

The National Collaborative Research Infrastructure Strategy, or NCRIS, will terminate in 2011. ‘Terminate’ is the term used by a DEST officer at the last budget estimates. If it terminates, it will leave a significant number of large and expensive but vital scientific research facilities high and dry—facilities like AuScope, an integrated national research system for acquiring and analysing geophysical and geochemical data so that scientists can learn about the geological structure of the Australian continent. This research is vital to managing our environment, developing energy and mineral resources and anticipating natural disasters. This facility is funded at $43 million to 2011.

Another such facility is the Population Health and Clinical Data Linkage. That links and integrates population health data from different datasets across Australia. It facilitates researchers having access to that data. This initially will vastly enhance Australia’s research capacity to undertake health research in fields such as epidemiology. This data facility will be funded at $20 million over five years.

But what will happen when the NCRIS program terminates and the funding abruptly stops? What will become of facilities such as these? That is the question we put to the government: what will happen to these research programs, given the statement that officers have made at Senate estimates that that funding will terminate? If the past is any guide, continued Commonwealth funding for such facilities is in fact far from guaranteed under this government.

The previous large research infrastructure fund, the Major National Research Facilities—or MNRF—Program, was established by the previous Labor government in the 1994 federal budget. When the life of that program came to an end in 2005, a number of expensive research facilities were indeed left high and dry—at least, the universities which housed these facilities were left high and dry. Those universities have to decide whether they will be left with some pretty big white elephants or whether they will try to find some other means of securing funding to keep these national facilities in operation.

Let us take the case of the Airborne Research Australia facility, based at Flinders University in South Australia. It consisted of a series of specialist research aircraft designed to support atmospheric and meteorological research and included a unique high-altitude plane. This is a facility that cost $8.5 million. I understand that this facility has effectively been grounded. This is because the Howard government stopped funding it, leaving the responsibility for its continued operations up to Flinders University. The university tried to keep it running by charging fees for service, but without ongoing Commonwealth support it proved too costly. The last advice I had on this issue was that a very specialised, expensive aircraft is actually sitting in a hangar, completely idle. Of course, it was the university that was left with the responsibilities.

I do not seek to blame the university for this sorry state of affairs, but I do blame the government. I do blame this government for its failure to appreciate the long-term research needs of this country. I do blame this government for the fact that, as the OECD has yet again pointed out, this government has fallen further and further behind our international competitors. I do blame this government for not having the strategic wisdom to understand the significance of national research projects and the strategic wisdom to ensure that our research infrastructure was not allowed to deteriorate under these circumstances. I blame the government because it has failed to set up long-term strategies to ensure the funding of facilities such as this, which of course means that in effect there has been an enormous waste of public money because of the government’s lack of long-term planning and long-term strategic vision.

We could take the case of the H1 Heliac at the ANU nuclear physics department. This is a research facility of national and international importance. I say that for a number of reasons. It was initially funded under Labor’s Major National Research Facilities Program back in 1996. As I understand it, it was the only university based research facility in Australia that had the capacity to train future nuclear scientists. That is a particularly important issue, especially when we understand just how important nuclear research is in this country. I know there are some simpletons around who suggest that all nuclear research is bad and must be somehow or other devoted to the production of weapons or nuclear power stations. Of course, nothing could be further from the truth. Nuclear research is critical in this country in a range of industries, from engineering to medicine; in geoscience, for instance in the oil and gas industry; in mining; in water and in waste disposal and sewerage; in the chemical industry; and of course in a host of industries in manufacturing. So the means of teaching nuclear scientists and researchers is quite important, and it is important for a myriad of peaceful purposes which are very much part of modern-day life, from cancer detection to food sterilisation to computer electronics, which are just a few examples.

This is a facility which is at the centre of Australia’s research into nuclear fusion. Nuclear fusion has the potential to become a safe form of energy generation, one that does not create dangerous radioactive waste. Of course, it is a long way off and it requires substantive public investment, but, as I am advised by scientists at the ANU and by colleagues around the world, that is what they are seeking.

This facility was built and commissioned years ago and, in the fast-changing world of nuclear science, it is becoming out of date and obsolete. To operate it depends on a radiofrequency generator, a second-hand device sourced over 30 years ago from what was then Telecom. Upgrades are needed for chemical-handling gear and for basic safety. Research facilities are complex worksites, and government’s reluctance to fund the installation of modern occupational health and safety equipment is limiting our capacity to undertake research of critical national importance. I do not know the cost of maintaining and operating this facility, but I expect it would be considerable and I would expect that funding for it, under the national research fund program, will run out. There is no replacement program for funding those facilities formerly funded under the MNRF Program. So far, the Howard government has failed to guarantee to continue funding for this facility. This is the same government that wants to foist onto universities a string of conditions and administrative overburdens to restrict universities’ capacity to make independent judgements about where their funds should be allocated. This is also a government that wants to foist on us a string of nuclear power stations, seeking across the eastern seaboard to find sites for the building of nuclear power stations—a government which, at the same time, will not fund the necessary research for a facility such as that at the ANU.

This sort of short-sighted hypocrisy highlights the lack of vision by this government. There is lack of understanding of the need to prepare for the future and there is lack of insight into what should be a long-term strategic vision of where our research infrastructure should be provided. It means that Australia will look rather foolish when it loses the capacity to train up our own nuclear scientists for the future. Australia will lose its chance to contribute to a safe and, arguably, climate-change-neutral energy source. This situation is similar to our national security. The Howard government cannot seem to be able to appreciate and guarantee the ongoing funding of a facility at the ANU, and the ANU itself is not able to fund the long-term running costs of such a centre. So the question arises: who will fund such a centre as this? It seems that, under the HEEF initiative, using a gesture of this type, the funding cannot be guaranteed either.

The HEEF funding is a strategy the government has pursued, which we see through the National Collaborative Research Infrastructure Strategy, NCRIS, which runs out in 2011. There is no strategy beyond NCRIS. It is quite obvious that the strategy the government adopted to provide ongoing support to the MNRF funded research facility was simply to pull the plug, and I am yet to see any indication from anyone in the government that there is a replacement strategy for that funding for the national infrastructure programs. The reality is that we have no guidelines yet. This legislation has not passed, and we do not know who are going to be the guardians on this body. We are in some doubt as to what the government’s real plans are. My guess, however, is that when 2011 comes around and, under this government’s model, desperate universities are casting about for a source of money to maintain their expensive NCRIS funded research facilities, there will only be one place to find it—and that will be this source of funding.

So I ask the minister at the table: is HEEF no more than a replacement of NCRIS? I will seek advice from the officials on that basis. Is this genuinely additional money? Can there be a guarantee that NCRIS funding will continue? What we have seen from the minister to date has been nothing but vague statements. She has vacillated on this issue. She was quoted in May at a press conference as saying that the HEEF would eventually replace other capital and infrastructure funds. She said:

I have been concerned that we have in place a number of funds, each with different guidelines and numbers of criteria, and that universities have to put in lots of different applications ... Over time I would like to see that streamlined ...

The Treasurer, however, speaking on budget night, said that the fund would ‘not take over existing education funding’. The minister’s own second reading speech identified the fund as ‘additional to existing programs’ and, more recently, the minister has said that HEEF represented ‘an opportunity for more of our universities to emerge as world-class institutions’. What is not clear from any of these statements is the purpose of this fund. We are not being told what the guidelines are. We have not seen these guidelines. We have no basis for assessment of the criteria for the allocations of moneys under this program. The higher education sector is to be excused for being confused about what the government’s intentions are and, in fact, they have every right to be terribly suspicious about what the government’s actions are.

I put it to the Senate that at least part of the government’s purpose is this: HEEF will, in a de facto way, be there to replace the current NCRIS funding. The scenario is simply this: NCRIS terminates in June 2011, just as the investments from HEEF will be beginning to bear fruit. Universities will be forced to turn to HEEF to replace ongoing running and maintenance costs associated with the sophisticated pieces of research infrastructure that NCRIS currently funds. So, in my judgement, all I can see to date—given what the officials have told us at estimates—is that this money will be used to replace the current research infrastructure programs.

The other problem I have with this bill is the fact that the guidelines have yet to be published. We have no way of knowing how the program will actually be administered. As the minister recently said:

This initiative will promote excellence, quality, and specialisation in Australian universities for years to come.

…            …            …

It is not – as some suggest – a source of recurrent funding to be divided equally amongst our universities.

The minister says:

This is the opportunity for more of our universities to emerge as world-class institutions.

So it is not to be divided equally amongst universities. There is going to have to be some form of allocative mechanism put in place. We are entitled therefore to ask: on what basis will money be allocated? The minister has absolute discretion to make grants under this legislation, and, of course, under this legislation the recommendations of the HEEF advisory board will not be made public. In any case, the minister is free to treat these recommendations as she wishes. She can ignore them, and there is nothing in this legislation to prevent that occurring.

What we have is a government that has failed to provide the parliament and the public with the details of the criteria for the allocations and failed to provide us with any understanding of how money will be spent and for what purposes. Under this arrangement, the government is able simply to enact a sleight of hand to replace existing infrastructure funding under these new arrangements. I think we are entitled to know this and I expect that in this debate we will ask the minister for an explanation. We will ask: where are the funding guidelines? Who will be appointed to run this fund? Who will be there to make recommendations? What access will there be for the public to know what guidelines have been issued?

Since coming to power 11 years ago, the government has pulled the rug out from under the higher education sector by cutting university operating grants. In its 1996 budget it actually cut university operating grants by a cumulative six per cent, which resulted in a cut to the sector of some $850 million. As a proportion of total revenue, Commonwealth grants to universities have decreased from 57 per cent in 1996 to almost 40 per cent in 2004—and that is the point the OECD report makes—while university revenue derived from fees and charges increased from 13 per cent in 1996 to 24 per cent in 2004. It is against this background that we are entitled to assess the government’s performance when it comes to such matters. That is why I now move the second reading amendment in respect of the Higher Education Endowment Fund Bill 2007:

At the end of the motion, add “but the Senate:

             (a)    welcomes the fact that the Future Fund and the Higher Education Endowment Fund are for investment in Australia’s long-term national interests, including the objective of meeting public sector superannuation liabilities;

             (b)    notes that the Government’s failure over 11 years to invest adequately in Australia’s higher education as illustrated by the following:

                   (i)    on the Government’s own analysis there exists a significant backlog of deferred infrastructure maintenance, estimated at $1.5 billion for the university sector,

                  (ii)    the Group of Eight (Go8) universities estimate in 2006 that the total deferred maintenance liabilities was $1.53 billion across Go8 universities alone,

                 (iii)    the principal reason behind this backlog is the fact that since it came to power more than 11 years ago, the Government has undermined the higher education sector by cutting university operating grants, including in its 1996 Federal Budget which cut university operating grant funding by a cumulative 6 per cent over the forward estimates from 1997-2000, resulting in $850 million in cuts to the sector, and

                 (iv)    as a proportion of total revenue, Commonwealth grants to universities have decreased from 57 per cent of their revenue in 1996 to 41 per cent in 2004, while university revenue derived from fees and charges has increased from 13 per cent in 1996 to 24 per cent in 2004;

             (c)    condemns the Government for the adverse impact this has had on Australia’s universities, including that:

                   (i)    since 1995 student-staff ratios have increased from 14.6 to 20.4 today, with adverse implications for the quality of teaching and learning,

                  (ii)    Australia’s education system now relies more on private financing than all other Organisation for Economic Cooperation and Development countries except for the United States, Japan and South Korea,

                 (iii)    university revenue derived from fees and charges has increased from 13 per cent in 1996 to 25 per cent in 2004, with the result that more than half of the cost of tertiary education today is met from private sources,  with dependence on private sources increasing to 52 per cent in 2004 from 35 per cent in 1995,

                 (iv)    the average amount of Commonwealth funding per student in real terms has declined by nearly $1 500, while student Higher Education Contribution Scheme contributions have increased by nearly $2 000, and fees and charges have increased by over $3 000, and

                  (v)    the deferment of essential expenditure on the maintenance of university buildings and facilities has had long-term consequences for the quality of essential infrastructure;

             (d)    further notes widespread concerns that, over time, the Higher Education Endowment Fund could be used to replace existing capital and infrastructure programs in higher education, notably the Capital Development Pool, the Institutional Grants Scheme, the Research Infrastructure (Block Grants) Scheme and the National Collaborative Research Infrastructure Scheme;

             (e)    also notes that               despite these belated measures, the Government has not put in place a long-term plan for meeting Australia’s infrastructure needs, including a national broadband network and that instead it has:

                        (i)    produced 18 piecemeal broadband proposals in the past 11 years,

                       (ii)    recently imposed a two tier broadband solution for Australia through the 17th and 18th broadband plans,

                      (iii)    engaged in an election stunt designed to delay the building of a high speed fibre to the node network in the major cities,

                      (iv)    through Broadband Connect Infrastructure Program subjected millions of Australians living in regional and rural Australia to a second class broadband network that is based on an obsolete technology and is only capable of delivering average connection speeds twice today’s average, and

                       (v)    become embroiled in legal action involving preferential dealing in the Broadband Connect Infrastructure Program, after moving the funding goal posts for the program while only informing one participant; and

              (f)    in contrast to the Government, Labor is committed to build with the private sector a national broadband network that includes a fibre to the node network that will deliver minimum connection speeds of 12 megabits per second to 98 per cent of the country – the remaining 2 per cent will receive a standard of service which depending on the available technology will be as close as possible to that delivered by the fibre to the node network”.

We call on the Senate to support this second reading amendment. In government, Labor will retain the Higher Education Endowment Fund. But, unlike the current government, we will guarantee that the money generated from its investments will be allocated to universities in a manner that is open, transparent, accountable and in the overall interests of the nation. That is what Labor is about: rebuilding our national innovation system and ensuring that we have adequate support for our major national research facilities.