Anne Urquhart (Tasmania, Australian Labor Party) Share this | Hansard source

I rise to voice my serious opposition to the Higher Education and Research Reform Amendment Bill 2014. On Insiders on 1 September 2013, the now Prime Minister Tony Abbott, said to Australians:

I want to give people this absolute assurance: no cuts to education.

In the final hours of the election campaign Mr Abbott again cemented this message with his now infamous words, which promised:

No cuts to education, no cuts to health, no changes to pensions, no changes to the GST, and no cuts to the ABC or SBS.

However, Mr Abbott has already told the people of Australia that we cannot trust his words, and that instead: 'The statements that need to be taken absolutely as gospel truth are those carefully prepared, scripted remarks.'

In the area of higher education we are lucky because the Liberals also put their promises in print. In fact the Liberals 'Real Solutions' brochure states:

We will ensure the continuation of the current arrangements of university funding.

So it now seems that, not only can't we trust what our Prime Minister says, we also cannot trust the finely-honed, focus-group-tested, glossily-printed brochures of the Liberal Party either.

This is a very sorry state of affairs indeed and it poses serious concerns for the state of our democracy. It shows complete contempt for both the Australian people and for some of the most fundamental responsibilities of government. It was also particularly hypocritical coming from the man who assured Australians that under Abbott Australia would get:

… a no surprises, no excuses government, because you are sick of nasty surprises and lame excuses from people that you have trusted with your future.

Touche, Mr Abbott, touche! I am sure that all those young Australians who are starting to feel a university education might soon be out of reach would love to remind our Prime Minister of this particular pre-election promise. Although in the area of education it really should not surprise us that one of the first actions of this government has been to set out on a radical and regressive agenda of cuts and deregulation.

We should have remembered—and many of us did—the appalling form of the previous Howard government. Mr. Howard's first act on higher education was to cut the budget by five per cent. Per capita funding fell by nine per cent from 1995 to 2005. In the same period of time, direct public payments to universities saw no real growth.

When Labor returned to power in 2007, higher education was in a parlous state. During Labor's term in government, we committed to proper indexation of university funding, which meant that universities were $3 billion better off than they would have been under Howard's models. We also uncapped the number of Commonwealth supported places. This meant there were an extra 190,000 students on campuses across the country. Equality of access also improved, with Indigenous student numbers jumping by 26 per cent, and there was an increase in the number of students from low-income families of 36,000.

Labor is committed to quality higher education and to providing all Australians with the opportunity to get a degree. We know that an educated Australia lifts us all up. We also know that, if we really want to invest in our people, access to education cannot be determined by the depth of your pockets and the quality of education cannot be impacted by the distance you are from the capital city GPO. Make no mistake, this is deeply flawed legislation that will greatly increase the cost of higher education and shift the burden back on to students.

The bill before us today sets about creating a two-tier university system, which gives universities carte blanche to charge exorbitant fees. It will lead to $100,000 degrees that will burden individuals and their families for decades after their graduation ceremonies. Modelling by the National Tertiary Education Union found there will be an increase of at least 33 per cent in university fees, to compensate for the enormous federal funding cuts.

In an email to students, University of Melbourne Vice-Chancellor, Glyn Davis, revealed that the real situation is even more dire, saying that fees might have to rise by as much as 61 per cent just to cover the impacts of this government's cuts. Renowned economist and architect of the HECS system, Professor Bruce Chapman, and his ANU colleague Dr Timothy Higgins, warned that some universities will go beyond cost-recovery in their fee schedules.

Many have likened the impacts of this debt burden to taking on a second mortgage. This is a good analogy, but the situation is actually more serious. Students will have to sign up for a potentially lifelong debt before they know what they will earn in future years—and before they can determine their capacity to pay it back. For many it will be a gamble not worth taking.

There will inevitably be a trend of Australians opting out of higher education because it will not be a worthwhile investment. We are already starting to see evidence that this is exactly what is happening. At a recent Senate estimates, Department of Education officials revealed that early figures show university applications for 2015 have dropped a significant 2.9 per cent from last year. In many professions, the risk will outweigh the potential returns of the education. It is clear that the government's extreme attack on our higher education system could lead to serious skill shortages in some of the most necessary professions in the country. Key areas like teaching and nursing will struggle to attract the number of students that Australia needs. Massive debts coupled with modest future salaries would render certain career paths financially unviable.

The Australian Medical Association has warned that the changes could see the cost of a medical degree skyrocketing to $250,000 or more. This does not even factor in the impacts of a rapidly compounding interest rate charged at higher level. This could also lead to a shortage of general practitioners as students make the final decision to move into more lucrative areas like plastic surgery.

Similarly, with an average salary of $77,000, veterinary students could be left with unsustainable debts. The Australian Veterinary Association President, Dr Julia Nicholls, has warned that even if the interest rate is not hiked, vet students are likely to take around 30 years to pay off their student debt—repayments that would total well over $200,000. Likewise, the Australian Nurses and Midwifery Association has warned that Australian nurses would be 'chained to HECS fees for life' and 'forced to work into their 70s just to pay off their debt'.

So we can see how prospective students will be turned off studying particular degrees if the returns are low or repayment is unlikely. But for many thousands of Australians, the entire idea of tertiary education will be dismissed as being unfeasible. People from poorer families who are not able to call on their family for financial support will be particularly affected.

Professor Bruce Chapman's modelling suggests that poor graduates will pay 30 per cent more than those who are richer due to the proposed interest-rate. Women will also be unfairly hit as their debt will continue to balloon at real interest rates while they take time out of work to rear their families. A report from the Melbourne Institute of Applied Economic and Social Research confirms this. It predicts the HECS repayment time will double and up to 40 per cent of women will never repay the debt in full. This is simply unacceptable.

At the same time, regional universities will struggle to make ends meet as they try desperately to recoup the massive cuts to their budgets by raising fees but will quickly hit the ceiling in what the local community is able to pay. I am particularly concerned that Tasmania's economic future will be at risk if these are considered cuts go ahead. The university of Tasmania is slated to take a $113-million hit to funding over the next four years. Also at risk is the $1.7 billion that the University of Tasmania contributes to Tasmania's economy each year along with local employment and business confidence.

Recently I hosted the Leader of the Opposition, Bill Shorten, when he visited Tasmania to see the potential impacts of the government's cruel policies of the north-west coast. In Burnie we visited the University of Tasmania Cradle Coast campus and met with staff and students. Staff told us that the university's preparation program helped attract the first person in a family to take on higher education. Many of these were women and mature age students. However, cuts to the university will undoubtedly impact on this program and on the university's strong scientific research focus. Students told the Leader of the Opposition that the government's proposed higher education reforms could see the Cradle Coast campus close or be forced to reduce study options. Mr Shorten also heard that people from the north-west and west coast of Tasmania would not be able to afford to take on the huge level of debt that this government is so keen to burden them with. These are the concerns of the students at this campus. Thirty-one per cent of University of Tasmania's students come from low socioeconomic backgrounds. This is the third highest rate in Australia and nearly double the national figure. In the north of the state there is an even higher proportion of students from poor families going to university.

Recently, I received a letter from the Launceston City Council raising serious concerns about the future of University of Tasmania's Launceston campus as a result of the government's higher education plans. There is no doubt that if this legislation passes, regional Australia will be amongst the biggest losers. Tasmanians cannot afford $100,000-degrees and we simply cannot create a situation that discourages further education. But the truth is that the entire country will be poorer as we are denied the contribution of thousands of smart minds who will have to make the difficult choice to forego tertiary study—and all this at a time when Australia desperately needs to harness our intellectual capital to transition our economy. We can only do this by investing in education so we are ready and able to take our place in the global knowledge economy.

As I mentioned earlier, there were no signs that anything as sinister as this bill was on the minds of those now in government before the election. Nor was the community ever invited to have input into this ill considered plan. Indeed, the complete opposite has occurred. There was no green paper, no white paper and no exposure draft legislation for discussion. HECS architect Professor Bruce Chapman and his colleague Dr Timothy Higgins have raised serious concerns about:

…the apparent haste and seeming lack of expert consideration of the many complex and potentially inequitable outcomes implicit in the suggested radical free deregulation agenda that makes up the Commonwealth's plans.

The obvious question now is: why is the government so determined to proceed with this bad policy when the devastating impacts are well documented? It will be devastating to students, devastating to communities and devastating to our economy. Mr Pyne has trawled out a number of flimsy excuses for this radical plan. The first excuse uses the tried and true conservative tactic of fear mongering. Mr Pyne has tried to scare us into believing that our universities are lagging so badly behind global standards that they will no longer be able to provide quality education, and billions of dollars in income from overseas students will dry up. For an Australian education minister to be talking down a world-class university system is completely inappropriate—not only that but it is factually wrong. The reality is that Australia's higher education system is remarkably competitive.

Despite our relatively small population we have secured an international reputation for high-quality, innovative and highly internationalised universities. In 2014 Australia was placed ninth in Universitas 21's ranking of national higher education systems across the globe. There were no Asian countries ahead of Australia in this ranking, despite Mr Pyne's claim. This year, in the Shanghai ranking, we had four universities in the global top 100 and 19 in the top 500. This is a great improvement on 2004, when just two universities made the top 100 and only 14 were in the top 500 list. While it is true that Chinese institutions are improving their global reputation, there are still no Chinese universities in the top 100. It is not surprising that a recent ABC Fact Check found Mr Pyne's politically-motivated claims of decline in our university sector are 'far-fetched'. But even if we were to accept that the system is deteriorating, there is absolutely nothing to suggest that the measures before us today will improve the situation. Surely, dropping standards are actually evidence of the need for greater investment in education, not callous cuts?

Another argument that Mr Pyne has put forward to justify this regressive legislation is that Australia should be looking to emulate what is happening in America, saying 'We have much to learn from our friends in the United States.' This is a very curious position to take, particularly when you consider the massive debt burden and lack of equity in access that typifies higher education in America. In fact, American student debt adds up to $1.2 trillion, with more than 7 million people in default. While 79 per cent of students born in the top income quartile in the US get bachelor's degrees only 11 per cent of students from bottom quartile families graduate, and millions are foregoing university education as the fees spike well beyond what is financially viable. These are staggering figures indeed. The situation is so bad and so unfair that a group of academics have diagnosed a crisis of justice in United States higher education access in a recent paper.

When describing the US system, economist John Quiggin has said that it:

… does a great job for the 1 per cent who go to the Ivy League Schools (and whose parents are mostly in or close to the top 1 per cent of the income distribution), does an adequate but expensive job for the next 20 per cent or so, and leaves everyone else in the lurch.

There is absolutely no evidence that deregulation of the American university system has led to anything but decreased access, massive debt burdens and enormous equity problems.

The University of Canberra's Vice-Chancellor, Professor Stephen Parker, got it right in the Canberra Times, where he wrote that the proposed Australian legislation:

… spells disaster for students and the country.

He pointed out that the measures might benefit a few elite universities but that they would damage the university system as a whole.

Nobel prize-winning economist, Joseph Stiglitz, went further, referring to these changes as 'a crime', and saying:

While we in the US are trying to re-regulate universities, you are talking about deregulating them.

There is always room for improvement in every system, but making Australian universities more expensive and less accessible is not the answer.

The third argument that Mr Pyne has been trotting out relates to the wider stories the government is trying to drive about the so-called 'lifters' and 'leaners'. Mr Pyne has been insinuating in a very divisive manner that university students are somehow unfairly taking from other taxpayers who choose not to go to university. Mr Pyne outlined the argument on Lateline in May, where he said:

… less than 40 per cent of the population have a university degree, so more than 60 per cent of the Australian public are paying 60 per cent of the costs of students to go to uni and those students will get a huge personal benefit.

Pitting Australians against each other in order to breed resentment and division is one of the lowest political tactics, but it is, sadly, one those opposite have been using a lot.

Putting that aside, it is a totally spurious argument which denies the reality that investment in education reaps rewards for the whole nation, not just the individual who gets the degree. In fact, recent OECD data pours a big jug of cold water all over Mr Pyne's assertions. This data, which was analysed by Fairfax, shows that the public rate of return from tertiary education in Australia is almost twice the rate of return that the individual who undertakes the study receives. It proves that it is the Australian public that benefits most from higher education, not individuals.

The data shows that Australia ranks second out of 29 OECD countries in providing the biggest benefit to society from an individual's education. So not only is the government's plan unfair; it is also economically reckless. We know that higher education is critically important, not only to our knowledge and skills base but also to national productivity and international competitiveness. We also know that if we are to maintain our strong wages and high standard of living, we need to actively drive the structural transition to a knowledge economy. Measures that discourage university entrance and lock people out of the university market based on their gender or family income will do precisely the opposite.

This bill is inherently unfair, will lock millions out of higher education, create massive skills shortages in vital professions and stifle Australia's transition to a knowledge economy. (Time expired)