Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

An amendment by Senator Bartlett has been circulated in the chamber. Perhaps I will briefly indicate, if Minister Vanstone does not mind, Labor’s view on that amendment, despite the fact that it has not been moved. I understand that Senator Bartlett is on his way to the chamber, so to expedite debate I will briefly indicate my attitude to the foreshadowed amendment of Senator Bartlett.

The Democrats will oppose schedule 2. I want to place on record the opposition’s view in relation to that. We do not support the deletion of schedule 2. We do support the retention of the FEE-HELP scheme. We regard it as a scheme which provides necessary support to students in certain courses, particularly those undertaking postgraduate coursework degrees. It has also become an important program for supporting students at non-government universities such as Notre Dame and with other private higher education providers. The Labor opposition has already committed to retaining FEE-HELP to help students who choose to study with a private higher education provider.

As I outlined in my speech in the second reading debate, Labor is extremely concerned about the spiralling levels of student debt in Australia. The changes that I referred to in my speech in the second reading debate will alone add an extra $73 million to student debt by 2010, bringing the total to $20 billion. The issue is how one approaches dealing with this unacceptably high level of debt. We believe that the path to that is through Labor’s commitment to the abolition of full-fee undergraduate degrees in Australia’s public universities. We do not believe that abolishing the scheme, as is essentially proposed in the amendment, is the answer. Labor remains opposed to six-figure degrees—$100,000 or $200,000 degrees—of the sort that I believe the Prime Minister said we would never have. As I said, we have committed to the abolition of full-fee undergraduate degrees in Australia’s public universities.

Accordingly, the Labor position is that, to prevent crippling debt for students at our public universities, we intend to eliminate this problem at its root by opposing full-fee undergraduate degrees in public universities and, in government, by phasing out these degrees.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I apologise for not being here at the start of the committee stage of the debate. As I mentioned in my speech in the second reading debate, the Democrats want to indicate in this committee stage our opposition to the schedule of the bill relating to increasing the amount that can be accessed through FEE-HELP. The Democrats oppose schedule 2 in the following terms:

(1)    Schedule 2, page 5 (line 2) to page 6 (line 25), TO BE OPPOSED.

I outlined the reasons for this in reasonable detail in my second reading contribution, so I will not go into them at great length again here. I accept that there are arguments both ways on this particular approach. It is a reality that the fees that students have to pay are going higher and higher. Therefore there is very good reason to increase the amount that is available to assist them through FEE-HELP even if it means assisting them by putting them into even greater debt. The counterargument is that increasing the amount available through FEE-HELP facilitates the ability to charge higher fees by making people more likely to be able to afford them even if that is in the immediate term with the consequence of a larger long-term debt.

The Democrats’ concern is that, by increasing the amount that can be accessed through FEE-HELP, in a way you are partly facilitating the continuing increase in the overall amount charged through fees. But I accept that it is an argument that has valid positions on both sides of the approach that could be taken. I also very much agree with Senator Wong that the key action that is needed is to take an approach that directly addresses the problem, which is the extremely high fees that students have to pay.

We had that very clear-cut commitment by the Prime Minister that we would not see $100,000 degrees in this country. Not only do we now see them: we see degrees whose cost is much higher than that. This is completely inequitable. It is against our national interest as well as being unfair for many individuals who are less able than others to afford to pay such exorbitant fees. It reinforces the reasons why the Democrats have consistently and continually argued against fees and charges being imposed on people wanting to access higher education. We believe that education should be an investment rather than a cost. Clearly, as I said in my speech in the second reading debate, we have an approach where we have had a dramatic under-investment in education, in higher education and in other areas of skills and knowledge development. We as a nation are all now paying the price for that. That is the real core of the debate.

The Democrats’ opposition to the schedule really goes to one of the ways in which we deal with the symptoms of the problem. Our concern is that by increasing the amount that can be accessed—the debt that people can go into—through FEE-HELP, which is a curious name, we are facilitating or enabling the continual increase in fees. The counterargument is that the fees will continue to go up anyway and that, if this is the only way that people can afford to undertake study, it should be made available to them. The real solution that is needed—but that unfortunately this government is not addressing—is the solution to the core problem of the outrageously high fees that Australian students have to pay.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

I thank Senator Wong and Senator Bartlett for expressing their views, and I would like to express mine. My usual practice, when handling a bill for another minister, is to simply rely on the advice, in effect, from the other minister, through the officials. But on this occasion I am tempted.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

You can’t help yourself.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

I cannot help myself. I am sorry. Senator Wong, you have got it right: I cannot help myself. I feel very strongly about this issue, because I was the minister who introduced the opportunity for Australians to invest in themselves. For those people who could not get a government supported place, the answer was, ‘No, you go off and choose another entirely different career.’ By saying to them, ‘If you want to take a chance on yourself and invest in yourself, you can’, we gave them the opportunity simply to make that choice if they wanted to.

It seemed extraordinarily unfair to me, in the extreme, that Australian universities would allow overseas students and their families to invest in themselves but have the hide to say to Australians: ‘I’m sorry, the government’s only got so much money and so you don’t get a government funded place. You cannot possibly invest in yourselves, but we’ll allow overseas students to invest in themselves. We’ll take their money, but yours isn’t good enough. You’re not entitled to a place.’ We all know the TER scores that are used to ration places into degrees have got nothing at all to do with whether you need to have that level of memory skill to get a TER of that height, and they have got even less to do with whether you will be any good in that faculty. They have got nothing to do with whether you will be a good doctor, a good engineer or a good whatever.

I was happy to introduce full-fee-paying places for another reason. The reason is this: it is important that we focus on our higher education sector; it is a tremendous asset that provides great opportunities to Australia and to individual Australians. But, if we do so at the expense of others who do not get to go to university, then I am not in favour of it. When I had this ministry, I certainly tried to make changes that would create further opportunities for the 70 per cent of kids who do not go to university. It is still a damn disgrace when you go to a school and you ask someone what they are going to do if they define themselves in the first instance by saying, ‘Well I won’t go to university.’ How disgraceful is that?

So one cunning ploy that is mentioned in my notes—I have digressed, and I am sorry—is if a student does not get their first choice, they do not have to go into their second or third choice faculty. They can perhaps borrow the money or, if their parents are rolling in it, I suppose they can buy a place. That is a good thing, because students who are in faculties that are not their first choice do not do as well. There were so many disparaging remarks made about kids who were born into rich families, as if it is okay to give them a kick in the backside when it is never okay to give someone, just because they are poor, a kick in the backside. I accept that. But I equally think it is not okay to give someone a kick in the backside just because they happen to be born into a wealthy family. It is not their fault. Whether you are rich or poor has nothing to do with who you are and whether you will be good at anything.

Having listened to the chants of ‘make the rich pay’ when I was at university, I actually liked the idea. All right, perhaps we cannot make them pay, but I tell you what we could do: we could let the rich pay. The consequence of that—when there is a kid whose family can afford it or who is prepared to borrow and invest in himself or herself—if that child would otherwise get a government funded place, is what? The government funded place is freed up, because the government gives out a certain number of places. If there are kids from wealthy families who say, ‘I didn’t get my choice,’ and they shift to another place, yes, I am pleased that this policy lets them have their place. But I am more pleased that it frees up a government funded place for a kid who otherwise would not get in.

So those who are opposed to full-fee-paying places for Australian students should say to all the kids who did not get in, ‘Listen, the rich would like to pay and they’d like to free up some spots for you to get in, but, I’m sorry, it doesn’t suit our ideological bent, so you will just have to miss out.’ That is where we differ. I am happy to let the rich pay. Let them pay in spades, and let a kid who cannot afford to pay get the government funded place that the rich kid would otherwise get.

Now, having got that off my chest, I shall return to the notes, which advise me that this is all about choice—that is true; it is. There have been full-fee places since 1998; I did not think it had taken us quite that long to introduce it. They do not take away from government funded places—that is a point that has already been made. Students are no longer forced into their other choices. This new general $80,000 FEE-HELP limit for students of other than medicine, dentistry and vet science should cover the full costs of the vast majority. It is an income contingent loan. It is like HECS-HELP; you do not pay back until your repayment income reaches the minimum threshold, which is $38,149. In other words, you do not pay back until you are above the regional minimum salary level for skilled migration. Until you are earning more than that, we do not take a cent from you. I have some personal views on that matter. I am tempted, but I will not give into the temptation, to share those at this point.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

You’re not bored with immigration, Senator Vanstone, are you?

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

No, but I do feel very, very strongly about students having the opportunity to invest in themselves and richer people, who can afford to pay for a place, getting the opportunity to do so to free up a place for a kid who cannot afford it.

Medicine, dentistry and veterinary science are amongst the highest costing courses. They are currently funded at the highest level for Commonwealth supported students and, therefore, they get a higher $100,000 FEE-HELP loan limit for students taking those on a fee-paying basis. The higher cost courses are often associated with higher income streams and, therefore, a greater capacity to repay loans. Higher income earners repay their loans at a faster rate, and students in these courses also tend to be highly motivated and committed to completing their studies and entering the workforce in their chosen field of experience.

In conclusion, just as a matter of interest, one of the universities confirmed for me how annoyed they were at full fee paying places. The woman concerned said—and I am not sure of the technicalities of how this happens, Senator Bartlett, so I am asking for a caveat on this that says I recall a conversation—these kids shift into HECS places in their second and third year, and doesn’t that mess up the system? Doesn’t that tell you something? It tells you that if kids are prepared to risk investing in themselves, they put a lot into it and they end up doing well. And it tells you that our selection procedures are not everything everyone thinks they are. We do not support the amendment.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

As I said, and Senator Vanstone agreed with me, she could not help herself in having an argument about full fee paying places, and I feel that I need to respond very briefly to some of what has been said on that.

The minister says, with a flourish of her hand, ‘Full fee paying places are an opportunity for people to invest in themselves.’ Do you know what they are an opportunity for? They are an opportunity for people who have a sufficient bank balance—whose parents, families or themselves earn enough—to jump the queue when it comes to access to our universities. That is what it is. You can dress it up as some wonderful rhetorical statement by saying, ‘This is about investing in yourself,’ but, fundamentally, it is saying, ‘In Australia now you can buy your way into university over people who are more suitably qualified who have better results than you simply because you can pay for it.’

That is what this is about. It is not about investing in yourself; it is about inequitable access to higher education. It is about ensuring that people can have the opportunity if their financial circumstances are sufficiently generous and positive to buy themselves a place in our universities. As a Senator Bartlett previously indicated—and I have too—we are talking about $100,000 or $200,000 degrees. These are not places that are accessed by ordinary Australians; these are places which are accessed by people who are going to spend more on their degrees than many Australians may even spend on their house. So let us not pretend that this is some great equity measure from the Howard government; it is about wealthy people buying their way into universities.

The minister says, ‘We should give these people the same opportunities as overseas students.’ What about giving more people access to universities instead of making it available on the basis of whether your parents earn enough money to buy your place or whether you have earned enough money to buy yourself a place? What about actually funding universities so that we can have sufficient access. The minister’s approach seems to be: ‘There are all these poor people who cannot get access, so we’ll let the rich people buy a few more places. Then we might be able to fund the poor people more.’

This is a government—and we talked about this during the second reading debate—which has presided over a reduction in terms of the gap between indexation of costs and actual costs. I think it was over half a billion dollars over the term of the Howard government. In other words, they are reducing the effective recurrent funding compared to costs to universities, which is where you could actually do something about ensuring education is accessible. Let no-one listening to this debate believe any of the rhetoric that suggests that making people pay $200,000 for a degree is somehow an equity based measure. As I recall, my colleague Ms Macklin from the other place earlier this week or last week actually issued some data, which I believe the Department of Education, Science and Training in fact provided through a question on notice—or it might have been another government body—which demonstrated the gap between entry level scores applicable to government funded places as opposed to up-front fee places in universities and demonstrated precisely what Labor has been saying for some time: there are a number of courses in which full fee paying places require a lower threshold of entry. In other words, if you are wealthy and you do not score as well, you do not get in.

The minister says, ‘We all know that what you get in your HSC or your year 12, or whatever the equivalent qualification is, is not necessarily an indication of how good you will be.’ That may well be true, but that is the primary test that is used, and we know that that is what people compete on. I would have thought that it was a pretty reasonable principle to say that you should get into university on merit and not on the size of your bank balance. That is the first point. The second point is: let us not pretend that this is somehow an equity measure. The third point is—and I want to finish on this, because I am aware of the time—if we are serious about saying, ‘We want more poor kids,’ I think was the phrase used, if we want to broaden access to higher education, then perhaps we should fund the higher education system properly.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

The only people jumping the queue here are the people lining up to jump the queue because of Labor’s about-face that is about to happen on temporary protection visas. They are the only people jumping the queue. As for the suggestion that people are spending more on their education than—

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Oh, come on! The great moderate! The great moderate!

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

Order, Senator Wong! The minister has the call.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

With respect, Senator Wong—

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

The great moderate!

The Temporary Chairman:

Order, Senator Wong!

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

Senator Wong interjecting—

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

I am just about to, actually. I am about to say something to you quite directly. I understand the senator is not very happy with those remarks, but there will be a debate in the Labor Party over temporary protection visas—no doubt. To the suggestion that people will spend more on degrees than many Australians will spend on a house—not many. I do not think Senator Wong has looked at house prices lately. I think that is a serious issue.

The claim over more suitably qualified candidates is one that does need to be contested. We can have our differences of opinion over the entry mechanisms for the government funded places—the appropriateness or otherwise of TER scores being linked with interviews and various other mechanisms that decide who gets in to which faculty—but I think we have to agree that there are only a certain number of government funded places and that, while we might disagree at the edges as to how the distribution is done, it is done with good faith that everybody thinks is fair. Everyone is always looking for a better way to do it—that is, within the government funded places, those who are suitably qualified get in. There is no argument that I have heard that people who ought not to are getting into government funded places.

Nonetheless, that leaves the question: why do we let overseas students invest in themselves and not Australian students? Senator Wong’s response to that is: ‘Why don’t we just pay for them all?’ The taxpayer cannot afford it. We are not going to be a government that goes back into deficit. We are not going to borrow from the rest of the world and make our children pay the debt. That is the old-fashioned Labor way—borrow from the rest of the world to buy your way back into government. Put the government into debt and let Australians pay the bill for you to buy your way back into government. We are not going to do that.

As to the suggestion that investing in yourself is inappropriate, that is interesting—I am going to consider sending Senator Wong’s speech to universities like Harvard and Oxford and ask them if they would like to reconsider. I might spend a bit of time writing to people who have got their degrees there, asking them if they think they are rich and thick because they paid for their university degrees. It is a ludicrous notion that Australians should not be able to invest in themselves.

If it is good enough for universities to sell places, predominantly to students from India and from China—and I welcome them doing that—then it should be good enough for them to sell those places, additional places, to Australian students. It is a matter of note that the Labor Party choose to play what I think is a race card by saying, ‘We cannot have Chinese workers coming here taking jobs; we have people coming from India taking jobs,’ but they are quite happy to take money from Chinese and Indian students to fund the higher education sector. Every way you turn they want one thing on the one hand and another on the other. Just spin the dice. Which way are they going to focus today? We focus on choice and opportunity. There are only so many government funded places. Relatively speaking they are distributed fairly. But, if people over and above that want to invest in themselves, we should not be holding them back and we certainly should not be selling places to the rest of the world and refusing to sell them to Australians.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

I cannot help contributing now either, although I do not really want to prolong the debate—it probably would be helpful to get it dealt it with before 10 to seven. Once we start having issues like temporary protection visas and overseas migration brought up, it is a bit hard to leave those points uncontested. I am not sure if the minister has noticed, but I have occasionally agreed with her on her concerns about some of the rhetoric being used in regard to the skilled migration visa debate. I do not apply that to all members of the ALP or the union movement, but I can only assume that some of them are consciously playing on some of those old-style fears about migrant workers taking Aussie jobs, ruining our conditions and all those sorts of things. That is not to say that there are not problems that need to be addressed in the 457 visa category, but I do think we need to be very careful—perhaps even careful to a fault—in trying to ensure that we express those concerns in a way that does not play on racial prejudices.

Amanda Vanstone (SA, Liberal Party, Minister for Immigration and Multicultural Affairs) Share this | Link to this | Hansard source

I agree with everything you have said so far.

Andrew Bartlett (Queensland, Australian Democrats) Share this | Link to this | Hansard source

Good, but you probably will not agree with the next bit, which is that I do not think your suggestion that removing temporary protection visas is in any way going to lead to so-called queuejumping; it is not borne out by the facts. I think the phrase ‘queuejumping’ is erroneous in that context.

But back to the bill and the amendment. Just to reinforce the point, I think the issue here is that overseas students pay, and certainly I am not against that, although I think that there is a genuine problem that some universities have become so dependent on income through overseas students that, firstly, they are going to be in serious trouble if that market declines, which it quite probably will do once China really gets up and going with some of its institutions. Universities are going to be in real strife because they have become dependent on it. There is a real problem that, in some respects, we have a degree factory, sausage machine mentality in some universities because they are just so dependent on income from overseas students to fund their overall operations. That is a problem. That is not against overseas students but it is a problem in terms of the overall funding mix for some universities.

I think the obvious reason overseas students who come here pay and invest in themselves or their future is that they are not necessarily going to be staying in Australia—although many of them do through our migration programs. Again, I am not opposed to that, although we could maybe do a bit better by helping some of them settle more effectively. That is the core issue. When Australian residents are studying, it is recognised that this is not just an atomised, individual thing. This is about investment in Australia as well. It is not individual people all investing in themselves; it is also Australia investing. That is why we have that separate approach for Australian students.

But it is still a fact that entry mechanisms are never going to be perfect. There is always going to be a need to continually review them. But when a person’s bank balance makes the difference between whether or not they get in, rather than their academic ability, you are getting into a bigger problem. That should not have anything to do with whether or not they make a good doctor or engineer either. It should be based on merit. When that becomes secondary to bank balance, we have a big problem and a distorting effect. That is leaving aside the core problem, which is that, even if you accept some of these things in principle, it is a matter of degree—and now you have your degrees costing as much as they do. This is in direct contradiction to the Prime Minister’s promise of not very long ago that we would not see $100,000 degrees in Australia. We have that and more now, and that clearly is a barrier to many people.

Penny Wong (SA, Australian Labor Party, Shadow Minister for Corporate Governance and Responsibility) Share this | Link to this | Hansard source

I will only be 30 seconds because I think we want to try to vote on this. The minister talks about choice and opportunity. I make the point that it is choice and opportunity not for middle Australia but for people who are wealthy enough to spend $100,000 or $200,000 on buying their way into university.

Judith Troeth (Victoria, Liberal Party) Share this | Link to this | Hansard source

The question is that schedule 2 stand as printed.

Question agreed to.

Bill agreed to.

Bill reported without amendment; report adopted.