Christopher Back (WA, Liberal Party) Share this | Hansard source

In the words of a recently departed Prime Minister, it's time. It's time that this Australian Senate acted in the role that we are elected and placed here to do, and it's time that this Senate passed the Higher Education and Research Reform Amendment Bill 2014. I intend to spend the next few minutes arguing that case.

Senator Whish-Wilson, a person for whom I have a lot of regard and respect, a person with a sound economic and commercial background, knows very well—as, indeed, does Ms Cate Blanchett, who spoke at Gough Whitlam's memorial service—that they did not receive a free university education at all; they received an education paid for by the Australian taxpayer. It took the Hawke-Keating-Dawkins government to realise the stupidity of the so-called free education and once again to introduce a circumstance in which there was a shared cost between Australian taxpayers, students and their families with regard to university and higher education. Today, in this country, the taxpayer is paying 60 per cent of the cost of education in higher education, but they are actually paying more than that simply because the HECS—the Higher Education Contribution Scheme—at the moment is funded for students at a rate below the bond rate, the bond rate being the rate at which the government borrows. Who do you think actually pays the difference? It is the Australian taxpayer. We have a multibillion-dollar unpaid HECS liability. Who do you think pays the interest on that liability? The Australian taxpayer. It is time to become more reasonable.

We listened to Senator Urquhart for a few minutes going on about the costs associated with higher education and the way in which the coalition apparently is going to destroy circumstances as we know them. Let me remind the listening audience that the then Labor government were proposing to cut $6.6 billion from higher education, should they have remained in government, and indeed had already cut $2.2 billion of that $6.6 billion. Whilst every person in this chamber and this parliament obviously supports the needs of higher education and the opportunities for postsecondary and higher education, including non-university education, we all know that, in today's world, there are going to be cuts in funding.

Why do I say it's time? There are two reasons. Firstly, in a recent survey, 56 per cent of the Australian community supported the deregulation of university fees as opposed to eight per cent who strongly opposed it. Secondly, to whom do you go when you need to ask the question associated with the sorts of changes that are proposed in the legislation? Surely the parties best equipped to advise the community, to advise the parliament and particularly to advise the Senate would be those with responsibility—the university vice-chancellors and the directors of the non-university education sector.

But I want to start my quotation, if I may, with the words of the shadow Assistant Treasurer, Dr Andrew Leigh, who commented:

Australian universities should be free to set student fees according to the market value of their degrees.

He said:

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

That is the shadow Assistant Treasurer of this parliament making the argument for the coalition, and I believe the crossbench senators need to take careful note.

But if we take the chair of Regional Universities Network, Professor Lee, he said:

… that the deregulation of student fees was the only way that the sector could maintain quality and access and remain internationally competitive, as significant, additional funding is unlikely, irrespective of political party composition …

Let us be logical in this argument. The Vice-Chancellor of the University of WA, which is in my home state, Professor Paul Johnson stated only two months ago:

The status quo is not feasible as it will over time erode the quality of our education and research activities—not a good position to be in when our nearest Asian competitors are investing so heavily in these areas.

What do we all want? We want a system that is accessible. We want a system into which students can come paying no fees. We want a system in which those who are not ready to transition from school to university can actually benefit from the sorts of assistance, the HECS-type schemes, for sub-university programs—diplomas and others. From my own 13 years as an academic in regional and rural universities in this country, and teaching at the University of California and as a visiting professor at the University of Kentucky, I know there are many young people who are not yet ready for a university degree. But what the coalition is proposing is a scheme whereby up to 80,000 students each year will be provided with the opportunity of participating in non-university higher education courses, in many instances on their way to transition to degrees and even further beyond. That is the excellence of the proposal in this higher education bill as proposed by Mr Pyne.

Mr Shorten knows very well—and I wish he and Senator Carr would stop their nonsense about the 'Americanisation' of the courses. Firstly, there is no HECS in the United States of America. Secondly, those state-based schemes will often charge interest: they will charge interest at levels three or four times their own borrowing rate and they will require repayment the day the new graduate starts work. The circumstance here in Australia? No fee upfront; no debt initially; no repayment until a graduate is earning $50,000 or more, and even then only four per cent repayment; $100,000 of income repaying eight per cent. What sort of a deal is that?

If we do need to adjust the level of HECS post-graduation, let us talk about that in this chamber. But let us remember the people of Australia are saying to us that this is not some high school debating club in which, at the end of the debate, we all go home and nobody is the better or the worse for the experience. This is the Senate of the Parliament of Australia. The decisions that we make impact heavily—on individuals, on families, on communities, on businesses, on governance—and the time is now past for us to be having the sort of high school debating discussions that we have at the moment. We have got decisions to make. We have got existing students and future students and their families considering what their options are. We must move to pass this legislation with or without amendment.

Some interesting comments as to why we are where we are. In addition to cutting $6.6 billion from higher education, as was the intention of the Labor government should they have continued, we have a circumstance in which the then government removed the cap on student numbers, encouraging the universities and others to increase dramatically the number of students, but of course there was no concurrent increase in funding. Therefore, if you have more participants and the same number of dollars, then quite obviously and logically what you have is a deterioration in the per student delivery of services. That is the point being made about the fact that if we make no changes, we are going to have the inevitable circumstance where the quality of education for our students will deteriorate. If we existed in a bubble, you would say, 'Does that matter very much?' We know very well we are in an intensely competitive environment in higher education not just for our own graduates working in Asia but also the value that international students provide to our education system by seeing this country as a desired and desirable place in which to get their degrees. Therefore, if we do nothing we will see a deterioration in standards. We cannot afford for that to happen.

We have also heard this business about $100,000 degrees. We know at the moment the qualification for which I was once a graduate, veterinary science, is already more than $100,000. It is a six-year course. Some engineering courses are already more than $100,000. Our colleague Senator Kim Carr gets up there and talks about $100,000 degrees, but you have the UWA vice-chancellor saying that the capping will be $16,000 a year. So a three-year degree times $16,000 equals $48,000. Where is the $100,000? A four-year agriculture degree: four times $16,000? It is $64,000. We have to get rid of this nonsense. It is the high school debating standard. We are the Senate of the Australian parliament. We are making decisions that impact on people's lives, and it is just no good to have these cheap shots—multiplying 16 by four and ending up with 100. Maybe Senator Carr needs to go back to primary school, if not to university?

I do want to, if I may, for a few moments devote my attention to the non-university higher education suppliers. In the inquiries that we have had the information provided to us was that some 10 per cent of higher education students in this country are at the moment educated in the non-university higher education sector. What is interesting is because this group will be picked up under the umbrella of protection with this new legislation, far from courses increasing in fees, they will actually see fees come down.

Are these institutions intensely in competition with the universities? No, they are not. In many instances they provide the transition programs and the language programs so people who attend these institutions, particularly those coming in from overseas, such as migrants, who do not have high-quality English or the mathematical standards, subsequently go to the universities. A lot of programs are run jointly. They will see a reduction in their course fees, because at the moment these students and their families are electing to pay a higher fee than is being charged in the universities.

What was also interesting to me was that, whilst at the moment they do have access to the HELP scheme, for some reason, which nobody could explain to me, there is a 25 per cent levy on top of the HELP scheme or HECS for these students. So they already pay more, they are getting no support under Commonwealth supported programs and for the privilege of it they pay another 25 per cent HECS. Where is the equity in that? I absolutely do not know. Nevertheless, this group will benefit enormously because they will be picked up under the legislation as proposed by Mr Pyne.

I want to reflect for a few minutes on the international scene. When fees increased substantially in the United Kingdom in the recent past, in the first year attendance by low-socioeconomic students went down. Do you know what happened from the second year on? They actually went back up and have now increased beyond those levels. Why? Because all of us recognise the inherent value of higher education to our careers and to our lives. It is probably the biggest long-term decision some of us will ever make.

There is a very good argument being mounted about repayment of HECS by many people who go out of the workforce and then come back into it and whose debt will continue to increase and there is also conversation about what actions can be taken to protect these people. I make two observations. The first is that people returning to work on a part-time basis—and there are many from my own profession; many young veterinarians and young doctors go out of full-time work to have a family or for some other purpose and return to work part time—never get to that trigger of $50,000 CPI linked so they are not repaying the debt.

The second point that needs to be made in this circumstance is that it is beholden on a student in making their decision as to which course they are going to participate in to have a look at the employability and the worthiness of that course for their own future earnings, their career, their progression and their job satisfaction. It is the case in this country that we are incredibly generous when it comes to providing the opportunity for postsecondary education, but I do not think anybody armed with the fact that at the moment the taxpayer is paying 60 per cent of a student's education—and with the proposed changes in the Pyne legislation it will drop to 50 per cent—would suggest that a student should just wander off and participate in some vocational course to satisfy their own interest levels when indeed there never was the capacity for a reasonable income to be earned from that pursuit and therefore expect the taxpayer to fund a second course that is going to stand them in good stead for employment.

I have a lot of sympathy for the comments that Senator Whish-Wilson made with regard to Tasmania. I had businesses in Tasmania. I employed 250 or 260 people in Tasmania in the 1990s. I remind Senator Whish-Wilson that the provisions contained in this legislation, which are going to allow over 80,000 students a year to be provided with financial support so that they can participate in advanced diploma courses, associate degree courses and sub-bachelor courses, will be of enormous value in my view to Tasmania and to Tasmanians. Therefore, I see this as being of benefit.

In fact, it is interesting when you reflect on what is expected of the Australian taxpayer. We speak of the government. The government of itself has no money at all; it only gets money from taxpayers and businesses and distributes it, and all too often it does not distribute it all that effectively or wisely. The Chancellor of UWA commented not very long ago, in the middle of this year:

I’m a bit bewildered to see left-wing students campaigning for lower fees on the basis that people who don’t go to university should be funding their education. What they’re saying is people who don’t go to universities—

have never been to university and are not going to go to university—

should through their taxation be funding university students who in due course earn higher incomes.

It is an interesting question as to the ethics and the logic of that circumstance.

I want to go back now to the people we should be listening to—the vice-chancellors. John Dewar and Glyn Davis, two eminent vice-chancellors of this country, made the comment:

… unless the policy settings change, universities … continue to grow only by taking market share from each other. This will not be good for institutions that sit lower in student preferences but play such a vital role in providing access, particularly in smaller communities.

They say:

… rejecting the package, as urged by some senators, provides no solutions for a sector that cannot operate on present public funding and has fewer options to supplement income.

Then there are other comments relating to higher fees, making the point that I made earlier—that is, there is no suggestion that there is going to be a complete and utter increase of hundreds of thousands of dollars. What we are introducing is competition. If three or four institutions offer an equivalent degree in physiotherapy—courses of equal value, of equal input academically—and if one of those institutions is providing that education at a lower fee, the students will vote with their feet. And those who are charging unreasonably high fees will fall out of the market.

Dr Spence from the University of Sydney will not say how much the fees are going to be. He simply says that, based on his modelling, he supports that $16,000 per year flat fee first proposed by UWA in the looking to provide an equity package. Time has not permitted me to reflect on the sorts of scholarships that will be available. They will be of enormous benefit to rural and regional universities.

In summary I ask, where will we find ourselves if this Senate does not grow up and start making the decisions for which we are paid? What are those who are opposed to this doing? They are condemning students of the future to a low-quality, overcrowded education; to a lack of competition for quality courses; and a tertiary education sector at risk of falling behind our international competitors. They will deny low socioeconomic students a place in the institutions that are best equipped to offer the courses that they want. This will be an enormous burden as university leaders have told us and as community sentiment has told us, and as the majority of the parliament has said.