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

I rise to speak in this second reading debate on the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007. Labor supports much of the content of this bill, which includes provisions for the government’s new Higher Education Endowment Fund, HEEF, as well as other measures announced in the budget. While Labor supports the concept of the Higher Education Endowment Fund, I emphasise that many of the measures, including aspects of the new HEEF, the opposition regards as highly controversial.

The bill seeks to cover measures across a number of areas, including a reduction in the number of Commonwealth Grant Scheme funded clusters, changes to the Commonwealth Grant Scheme funding levels across disciplines, and an increase in the maximum HECS contribution for commerce, economics and accountancy courses. This bill has provision for increased student loans and contributions. There are a few measures that will provide a small number of undergraduate and postgraduate students with some additional financial support, which is of course welcome. The much-trumpeted HEEF is the centrepiece of the bill but apart from this by far the most significant aspect of the bill, in Labor’s view, and one that we regard as wrong and foolish is the change to remove the cap that limits the proportion of full-fee domestic undergraduate places. I will go to that matter in some detail later.

The government sought to present the recent budget as an education budget. The Treasurer went so far as to say in his budget speech that this was the budget that set up the nation for the future. The truth is that, while much in the education budget is welcome, it comes after 11 long years of neglect by this government of education and of training in this country. If we consider that education and training go specifically to building the skills and the capacities of our workforce for today to meet the challenges of tomorrow, it is a sorry state of affairs that there has been such a prolonged period of neglect by this government of education in this country. This government has in fact cut funding to higher education by, on average, $100 million a year during its first term in office. Despite its claims to the contrary, up until this budget this government reduced real funding to universities by six per cent per student place between 1995 and 2003. So to call this an education budget in that context is somewhat ironic.

According to the government’s own figures, Commonwealth expenditure on education as a proportion of total government expenditure is forecast to decline over the next four years from 7.7 per cent of GDP in 2005-06 to 7.4 per cent in 2010-11. As a consequence, at the conclusion of my remarks I will be moving an amendment to the second reading that points out the government’s failings in education policy in general and in higher education in particular.

This bill does nothing to lift research funding for our universities and for over a decade the Howard government has allowed research funding, especially research grant funding through the Australian Research Council, effectively to wither on the vine. It has taken away the autonomy of the Australian Research Council, abolished its independent board and made the organisation’s CEO directly responsible to the minister of the day, which means at the minister’s beck and call.

We saw the previous minister for education, Dr Nelson, veto a dozen research grants awarded by the Australian Research Council after an extensive process of peer review—knocked back by Minister Nelson without any public explanation as to the reason. As a consequence, the government is currently before the courts of this country seeking to prevent the public knowing what the reasons were for the government’s decision. This is the situation which led the outgoing CEO of the Australian Research Council, Professor Høj, to make somewhat frank and blunt public statements given the normal reserve of people who work in this particular area of the public service. He made comments about the implications of the government’s approach to our international reputation with regard to research. He was quoted in the Australian Financial Review on 2 May as saying:

I think in the longer term, if Australia got a reputation for excessive ministerial interference, I think people could well say that’s not such an attractive destination to be a researcher.

These are serious, measured and considered comments and they should be heeded by the government; and if not by this government, by this parliament.

The Higher Education Endowment Fund, HEEF, has attracted controversy. It has been claimed that that represents additional money for universities and to that extent it is unusual that it would be controversial. Of course, Labor welcomes additional money being spent but there are concerns being expressed that in the context of the dire financial situation of universities in this country, particularly with regard to very important infrastructure, there is some scepticism about what the government’s proposals involve. It has been described as cunning and as possibly too clever by half. For a start, we do not know whether this is actually new money to be spent to augment the current infrastructure program or to replace the current infrastructure program. Minister Bishop reportedly said in the Australian on 6 May that the new HEEF fund would eventually supersede—that is the word used: ‘supersede’—existing programs including the capital development pool and unspecified other programs.

These programs are vital for university research infrastructure. Just this week, the Minister for Education, Science and Training, under questioning from Labor’s Kirsten Livermore, refused to clarify this issue. These matters were being considered in the discussion of the appropriations in the House of Representatives. The minister said that she would commit to a promise not to reduce infrastructure spending to universities. She would not actually commit to increasing it. That leaves entirely open the possibility that existing funds will be subsumed in the new HEEF, which would essentially swallow them up.

Quite clearly there is considerable ambiguity about what the government’s intentions are in this regard. We simply do not know what the implications of the actual expenditure of government moneys will be when it comes to research infrastructure. A growing backlog is emerging in maintenance and delayed capital works. The government says that the $5 billion endowment fund will yield a $300 million a year dividend for university buildings and facilities. I am sure members of the public would say that that is a lot of money, but the figures need careful consideration. At the budget estimates hearings, departmental officers confirmed that universities were reporting a $1.5 billion backlog in maintenance claims alone. That was based on figures from 2005. The present situation is much more serious. The Australian National University reports a backlog of some $500 million in its current maintenance needs, and that is just one university. If you add deferred capital works, buildings that are needed but cannot be built for want of funds, the overall figure is more likely to be $3.8 billion, which is an even more pronounced need than the official acknowledgement of the current situation.

Across this country a number of universities are operating out of grossly outdated 1950s facilities. There are universities trying to educate students in crumbling buildings, overcrowded lecture theatres and decayed tutorial rooms. Many universities are in an embarrassing state of decay. There has been no serious effort to address the backlog of capital works in universities over recent years. This question of deferred buildings and other matters has been canvassed and complained about for many years, and yet there has been a failure of the government to respond. We are a First World country. Our international competitors are spending considerably larger sums of money on research infrastructure and university capital works than we are. The gap between our performance and that of our competitors is growing. We now have a desperate need to catch up and bridge the gap. I am concerned that this particular measure is not sufficient to meet that challenge.

We still do not know anything about the conditions attached to the establishment of the new fund. The government is seeking to raise expectations about what can be done with this fund, but it has given no clear undertakings as to what will be done with this fund. We do not know about the composition of the board. We have had indications of some appointments, including the Chief Scientist and others, but we have yet to see the full range of personnel the minister would like to appoint to the board. We do not know anything about the guidelines that will govern the fund. All we have been told by departmental officials is that this is a very complex measure and that they hope to have some matters before the parliament by September. I wait in some anticipation to see whether that actually happens.

The university sector has been starved of funds for the better part of the last decade. We have seen a decade of shameful neglect, and we are now seeing an attempt by the government to repair damage that the government itself has inflicted upon the sector. We will support this measure, but with those caveats because there are considerable issues that need to be looked at.

This bill includes a change to the fee-paying regime, an attempt by the government to further increase the level of fees that can be charged to students for domestic undergraduate places. There is a measure to remove the cap on domestic fee-paying students. We oppose that measure. Labor’s policy is to phase out these full fee paying domestic student places, which are only three per cent of the total student load at the moment but nonetheless reflect a determined ideological drive by this government to shift responsibilities away from the Commonwealth and onto individuals.

We are discussing with the higher education sector the finer implications of these measures, but ours is a philosophical position driven by a desire to give all students a fair go and equality of opportunity. Labor will of course allow full fee paying students who are currently in the system to finish their courses, but the policy position we argue is to phase out full fee paying students right across the public university sector, beginning in the 2009 academic year.

We oppose the government’s budget measures here for other reasons. It was indicated in the estimates hearings that the measures in this bill—reducing the number of funding clusters, removing the cap on the number of full-fee degree places—will mean that universities will be free to enrol an entire discipline as a full-fee domestic course. It will be possible for universities to move to full fee paying programs in highly commercial areas where they believe they can maximise returns.

The position that has been acknowledged by the departments is that, within the clusters, there will now be opportunities for universities to charge the sorts of fees that have been a matter of some deep concern to the public in terms of the way in which this government approaches universities. This means a university will essentially be able to shift its program to those lucrative areas, particularly those exclusive areas, where it can charge the maximum amount for students to go to university.

The government decided early in its life to allow universities to charge up-front fees. We have seen students who can afford to pay higher fees being able to buy their way into courses when they have much lower entry scores than those of their peers in publicly funded places. For example, last year the entry score for a HECS place in the Bachelor of Behavioural Science course at the University of Sydney was some 17 points higher than the entry score for a full-fee place. Frankly, that raises serious questions of equity and also quality—and that suggests to me why it is necessary to remove this policy.

We have seen this government moving away from a commitment to fund education appropriately as a matter of national priority. What we see in the measures contained in this legislation is a recognition by the Howard government of its neglect, but these measures will in no way compensate for the 10 years of neglect. We are four months out from a federal election—so of course it is important that additional resources be spent on education! It is terrific to see the government suddenly feign an interest in education and research. But the fact remains that the provisions in this bill will actually see a much higher level of expenditure shifted towards individuals and away from the Commonwealth’s national responsibilities in these areas. What ought to be emphasised is that education should be seen as an investment, not just a cost. That is why I move the following amendment:

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

(a)

notes that the Budget announcements in higher education come after more than 11 years of neglect and complacency towards, and underinvestment in, Australia’s higher education sector, and that under this Government:

(i)

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

(ii)

Commonwealth investment in education as a proportion of total Government expenditure is actually forecast in the Budget to fall from 7.7 per cent in 2005-06 to 7.4 per cent in 2010-11, and

(iii)

there has been a significant and serious run-down of research infrastructure, including a failure to provide a real increase for Australian Research Council project funding; and

(b)

further notes that the Budget:

(i)

abolishes the current cap of 35 per cent on full-fee domestic undergraduate degree places, and

(ii)

increases contributions of the Higher Education Contribution Scheme for commerce, economics and accounting courses to the maximum amount while at the same time reducing the Commonwealth contribution for those courses”.

Finally, it is an irony that the Productivity Commission, of all organisations, has now come to the aid of public research and public universities in this country. It is an irony that the high priests of market economics have reminded the government of its responsibility to ensure the proper place of our public university system in this country and the critical role that universities play when allowed to fill their proper function of creating new knowledge, transferring new knowledge, training the next generation of researchers and highly skilled people and, of course, engaging in community debate and civic responsibilities. The Productivity Commission has said that the government’s emphasis on its very distorted view about the role of commercialisation needs to be addressed. Unfortunately, what we have seen with these sorts of measures is that the government has failed to heed even that warning from a body in whose words it would normally find considerable comfort. I will not spend a huge amount of time canvassing these issues in the committee stage, but it will be necessary to move amendments to this bill, which we will do. I commend the second reading amendment to the chamber.

Natasha Stott Despoja (SA, Australian Democrats) Share this | Link to this | Hansard source

I am the Democrats higher education spokesperson. I have been in that position for almost 12 years, I might add, so it is a bit like groundhog day for me today. It is always a bit like that when the Senate is sitting on a Friday. It is always a bit like that, too, when we are dealing with another raft of higher education reforms from the coalition government that seek to further entrench deregulation, privatisation, fee increases and the lifting of caps on full fee paying places. But, for fear of seeming too churlish about the legislation before us, I do acknowledge that there are some good measures in this bill as well—not enough, however, to make up for the radical cuts that have been made to the sector over the past 11 years or so.

I rise to speak on the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007 on behalf of my party, which obviously is passionately committed to and unshakably supportive of publicly funded higher education. I acknowledge that there are some worthwhile measures in this bill. Certainly, this legislation does represent more funding for the sector than it has had—not to mention a raft of broader reforms to the sector. I will start with the bits of the bill that we like. With regard to the income support measures, for example, while they are not specifically a part of this bill, I was especially pleased to see the government extend rent assistance to Austudy recipients. I would be incredibly disappointed to leave this place next year having not seen that particular change. I have argued for that change for a long time now; it is a change that I have run campaigns on and moved amendments on. I would be sorely disappointed—not to mention downright angry—not to see it implemented.

So a big tick to the government on that one. Do not think you are off the hook, though, because the government has yet to fully implement, or even acknowledge, a raft of recommendations in relation to student income support—recommendations, I might add, that were contained in the report of the first Senate committee inquiry to look solely at the matter of student income support. There are a raft of unanimous measures in that report which have yet to be responded to, let alone taken up or implemented. With property renters facing annual rent increases of up to 16.7 per cent—and, as we know, people are paying record median weekly rents—this particular change in relation to rent assistance is long overdue. But I remain concerned that the issue of student income support—which we know is a fundamental issue, if not the most important aspect, in ensuring participation in higher education by traditionally disadvantaged groups—is being sidelined.

Universities Australia—then the AVCC—in its report Australian universities student finances 2006 showed that 30.4 per cent of full-time Australian university students received youth allowance and 4.8 per cent received Austudy, compared to 29.7 per cent and 12.7 per cent respectively in 2000. Yet 12.8 per cent of full-time students had their applications for income support rejected, versus nine per cent back in 2000. So we are seeing a diminution of those students who are eligible for, or accessing, proportionately, student income support. That is hugely concerning to me. Nevertheless, the extension of rent assistance is a good, welcome measure, although a comparatively small one, as are the number of other measures contained in this legislation. With fees going through the roof and other charges being brought to bear on students, I can promise you that while I am here, and probably once I have left, I will continue to campaign for additional income support measures.

I want to put on record my concern for the process involved in this legislation. I wanted this bill to go to committee for some very good reasons, some of which have been articulated by Senator Carr on behalf of the Labor Party. That move to committee was rejected. Once again, I just want the people of Australia to know that we are operating a bit like a sausage factory—ramming through the bills with minimal scrutiny and minimal analysis. Even when there are good bits, there are also bits that are questionable. There are also good bits that need to be examined in further detail.

Take the diversity and structural adjustment fund. This $208.6 million is intended to assist universities to specialise according to labour market needs. It is specifically aimed at regional and smaller metropolitan institutions. The Democrats are not opposed to specialisation; we are certainly not opposed to diversity either. It is easy to believe that there are some issues confronting the university sector—funding problems, namely—which will make the current sector unsustainable into the future, unless there is some additional investment or broader reform on top of what has been included in the budget. Without that funding the sector is forced to reform and to rationalise, so this fund might be helpful to that end. Or it might not. It might be woefully inadequate for its intended purpose, in which case any attempt to further deregulate the sector is likely to advantage the prestigious universities at the expense of those smaller regional and metropolitan ones. That is probably pretty obvious. What is not obvious in this legislation is that we cannot work out the intended consequences or unintended consequences of a particular fund. We are being asked to pass funding measures, and funding that implements radical changes to the sector when senators in this place—and no doubt the members in the other place—as well as those in the university sector and the community generally have been given limited detail on how these measures might work. Once again, we have a framework that is being implemented, a debate that is inevitably rushed through and a committee stage rejected by the government. Once again, people have good reason to feel a little sceptical. We are naturally suspicious of government’s desire to deregulate the university sector. Opening up to market forces always sounds a bit catchy, but the reality is that the markets tend to favour those with resources and the brands already in place.

There are some other potential pitfalls for universities that are hidden in the detail of this bill. The sticky subject of workplace relations, for example, rears its ugly head under item 5, schedule 2, where the minister has a discretion to apply a 7.5 per cent penalty on a university’s CGS grants where she believes that the national governance protocols and/or the higher education workplace relations requirements have not been met. Remember those wonderful requirements that were passed in this place? Remember when the government did a deal with those four independent senators and how they lost their independence that day? Remember that further intrusion into university autonomy: the application of sticks not carrots to the university sector? Downright bribery it was. There is now a 7.5 per cent bonus if a university meets these requirements under a bill that will change a 7.5 per cent penalty with no apparent provision for appeal of the minister’s decision. Consider that the minister in her address to the annual conference of the Australian Higher Education Industrial Association this year on 15 March claimed that universities could be doing more to apply the spirit of the workplace relations requirement and that her apparent measure for the spirit of those requirements was the extent to which they adopt Australian workplace agreements. She said:

No-one is forcing staff on to AWAs ... But universities’ work practices must come into the 21st century.

While the minister, understandably, emphasised the carrots in that scenario, there are a few sticks in there as well. For students there is actually less in this budget; there is not a whole lot for students. The Democrats believe in a strong higher education sector that allows equitable access for students and that does not mean burdening them with already massive debts. Australian fees at both our public and now our private institutions are among the highest in the world. OECD figures show that the average tuition fees for students in our public universities lag behind only the United States and Korea, while students in our private universities are only behind the US in the amount that they pay. It is worth noting that public institutions in the US in many cases do not provide the same kind of the structure that we do in this country. The extent of the fees and charges that have been put onto the heads of university students and graduates in Australia is extraordinary.

Under items 1 and 2 of schedule 2 in this bill there are changes to the funding cluster—and Senator Carr talked about this—reducing the total number of clusters from 12 to seven, which increases for most disciplines within those clusters. We do support additional Commonwealth funding for those disciplines, particularly maths and statistics, which will increase by $2,729 per place. Hopefully, this will help arrest a dramatic shortage in maths and stats skills in academia and the broader workforce.

But there is a sting in the tail, with accounting, administration, economics and commerce places now receiving $1,029 less per place than previously. Of course, the government is now trying to cover this up by saying that the total funding per place for these courses could actually be more than it currently is, neglecting to mention that, where that is the case, it is because students are the ones who are picking up the tab.

Under section 2 of schedule 7, the maximum student contribution amounts will be varied to allow universities to levy significantly higher fees against students in the accounting cluster—$8,499, up from $6,709 previously. The government claims that universities are not required to do so, which is a very naive way of doing it and, speaking about naivety, this brings me to schedule 5, which the Democrats do not support. I have circulated an amendment to that effect with regard to the removal of the cap on full fee paying places for Australian students. A full-fee combined medicine-arts degree at the University of New South Wales costs $237,000. Good, if you’ve got it! Nice for some! That is not the average amount available to students in Australia today. People may say, ‘They don’t have to pay it.’ Poorer kids of lower socioeconomic backgrounds, who are traditionally disadvantaged, are told: ‘Don’t worry, kids, you don’t have to pay it; you can compete for a Commonwealth funded place’—albeit with differing levels of Commonwealth funding these days—‘You’ll still have a massive HECS debt that is the size of your parents’ mortgage. You’ll not get income support. But don’t worry about that because you will get to pay it off when you get married, have kids, buy a house and live the rest of your life.’ The government’s view is: ‘We don’t believe in debt in this country, so we get rid of the public sector debt. We just put it on individuals who are starting out their careers.’

I must not forget about mature age students. What do they start out with in this scenario? They have already got big debts, so they can just accumulate more debts. Do not worry about those people who are perhaps not as well off as some people, they can compete for Commonwealth funded places, because it is the rich kids or people who have access to money who can pay for these places. If that is not downright fundamentally inequitable, I do not know what is. I believe in higher education. Education at any level is an investment, not a cost. I believe in publicly funded education. I do not believe that it should be a province for the elite wealthy; it should be based on your merit, not on your bank balance. This bill basically signs the cheque, which says: ‘The cap on full fee paying places will be removed. It is now a free-for-all but, if you are wealthy, that is an added bonus.’

The Democrats will move an amendment designed to get rid of that schedule. We hope that all politicians, particularly on the coalition side, will consider this a worthy amendment. Do not get sucked in to believing that there is some kind of guarantee that the government, or the minister, can give that poor students will not be shut out of top courses. I invite the minister’s representative today, Senator Scullion, to articulate exactly what guarantee the government can possibly give. I cannot work it out, and I have been involved in higher education legislation not for just as long as I can remember in this place but before as an adviser. I do not know anyone in the sector who has been able to tell me or my office exactly what is involved in this guarantee. How can you put a guarantee in place that will stop universities, with the reforms included in this bill, from establishing only full fee paying courses? Commonwealth funded places are allocated according to cluster. What is there to stop universities from allocating their Commonwealth places to one discipline within that cluster and having only a full-fee course in another discipline within that same cluster? The removal of the cap on full-fee places, combined with the reforms proposed in this bill under schedule 4, allowing universities greater flexibility in enrolling students in Commonwealth supported places, could allow them to do exactly that. And it was confirmed at estimates hearings by the Department of Education, Science and Training. Let’s not take my word for it; take the government’s and the department’s word for it. Look at last month’s Hansard of Senate estimates hearings. According to the department, it will indeed be possible for universities to move places around within a cluster to create only full-fee degrees. The department has said it on record.

When it comes to a choice between what the bureaucratic experts are saying versus a minister giving a promise to backbenchers that these courses will not be funded, I know who I believe. With this freedom, it would be particularly lucrative for universities to manipulate their Commonwealth supported places and full-fee places within each cluster so that particularly high-demand courses are only full fee paying. In some respects, one could not blame universities for doing this, given how long they have been starved of funding. In fact, the government ripped funding out of the sector. The effect on student debt levels could be disastrous. The fact that the cap on full fee paying degrees has been removed is illustrative of that. This cap is not being increased to 50 per cent or 70 per cent; it is being entirely removed.

There is no other way to say ‘free for all’ than to completely remove the cap once and for all. By definition, that of course signals the possibility of only full-fee courses. How could it not? Again, through you, Mr Acting Deputy President, I ask the minister’s representative to explain to us how you will guarantee that you will not have only full fee paying courses. I assume that the representative is now Senator Minchin, not Minister Scullion. The government has brought in full-fee degrees for domestic students. It has overseen an increase in student fees, among the highest levels in the world, and it has slashed campus services and facilities. The impact of so-called voluntary student unionism is now being felt on campuses through a range of things—reduced resources, infrastructure, services and sporting facilities; the closing down of student newspapers; differing events on campus, a lack of representation, and a lack of welfare and other opportunities and services that were previously provided. The government agenda has been very clear.

No matter how you spin it, full fees signal true inequality. They subvert academic merit as a principle and fairer determinant of entry. It should of course be based on merit. The removal of this cap, combined with other changes in the legislation that allow universities greater flexibility in apportioning places, could fundamentally transform the equity of the university sector once and for all.

As I have indicated, the Democrats have circulated an amendment that deals with schedule 5 of this bill. We will be opposing that schedule. All that the amendment does is ensure that the current cap on full fee paying places remains in place. If any government members were thinking that this might be some kind of a threat to the notion of full-fee places, it does not. It just means that the cap will stay in place. I would dearly love to reform this legislation much more broadly. And just let me get at the Higher Education Support Act—I would love to reform that little baby too. But I know that that is not going to happen.

If the amendment is successful, the cap will stay in place. How can that be threatening for members of this place? Without the cap, you would be opening the way for full fee paying only courses. I say again that anyone who thinks that there is a guarantee or that the minister’s word will ensure that there are not those places should just look at Hansard from estimates. Look at what we have been told. It is absolutely clear that it is possible to move all places to one course and offer another course as a full-fee one within the cluster. It is done and dusted; full fee paying courses in Australian universities and full fee paying courses only.

This bill is incredibly damaging. The removal of that cap signals a profound shift in public support for higher education. I certainly hope that senators on all sides will realise exactly what they are ushering in. I am confident of the non-government perspective, but I hope that the government senators will realise too. The elite and the wealthy will get university courses but the rest will just pay their debts and fees and give up on getting into some of the courses, particularly the new courses that could be—and I am sure will be—full fee paying courses only.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I seek leave to have a speech by Senator Kerry Nettle of the Australian Greens in relation to the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007 incorporated into Hansard. The speech has been circulated.

Leave granted.

Kerry Nettle (NSW, Australian Greens) Share this | Link to this | Hansard source

The incorporated speech read as follows—

The Greens are interested in two considerations when assessing Education legislation that comes through this place: 1: Quality 2: Equity

This bill breaks from the norm of Higher Education bills from this government in that it does have some measures which will improve the quality of higher education provision in this country and it also contains some improvements to equity provisions. But unfortunately and predictably the measures which threaten to reduce quality and undermine equity overshadow them.

This bill includes many significant changes to the funding and administrative provisions which guide the higher education sector. Last time I spoke on a higher education bill in the Senate I reminded Senators of the over 50 pieces of legislation I have dealt with in the 5 years since I have been The Greens spokesperson on higher education in Parliament. And here we go again.

Perhaps the most headline grabbing change that is in this bill is that it abolishes the cap on the number of full-fee paying places that a university can offer in each course. Until now universities have only been able to enrol up to 35% of enrolments in any one course as full fee paying students. This bill does away with that cap. It then goes further to say that whilst universities must offer their commonwealth supported places first (ie before they then fill up courses with full fee paying students) they only have to offer the number of commonwealth supported places within a funding cluster not within each course in that cluster.

This means that instead of having to have a least some (or indeed a majority as it used to be) of commonwealth supported students in every course, now universities are free to put all the commonwealth supported places allocated to a funding cluster into just one course within that cluster and then proceed to fill the other courses entirely with full fee paying students.

This means that for the first time in public universities in Australia we can see completely privatised courses for domestic students. I.e. universities will be able to set up say an accounting course and only accept students who can pay a full fee up front. This fee is determined entirely by the university so the university can get the student to pay a higher fee for their education so that the university makes a profit.

This change further solidifies the transformation under this government of the university sector from a publicly owned and operated educational community dedicated to free inquiry and educational excellent to a publicly subsidised private market of profit making purveyors of educational services.

Who wins out of this transformation? Do the students win?

Well if the shift to full fee paying courses gets off the ground then you can’t say that they will. They will end up more in debt than ever if indeed they are able or prepared to stump up the high fees in the first place.

Will educational standards win?

The answer must be a no. This change like so many of the changes introduced by this government has been made completely without reference to the big picture of educational outcomes.

This government has become so enamoured with the economic fundamentalism of privatisation, deregulation and profit making that it has totally lost sight of the point of a higher education system.

It’s certainly hard to see how this current change will improve educational standards.

When we see that the current take up of full fee places is well below 5% even though universities have been able to enrol up to 35% of students for some years now you wonder how universities are going to lure students into paying the large fees and filling up the full-fee courses this change is designed to allow?

It doesn’t take a genius to work out the best way would be to offer much lower entry grades than are needed to access a commonwealth supported place. That way a new market can be accessed particularly for high demand courses which offer higher remuneration opportunities on graduation.

But this will surely mean that standards will fall just in the same way as they have fallen in some courses which have been largely underwritten by full fee paying overseas students in recent years.

We have all heard the stories of academics being pressured to pass students who would not have ordinarily made the grade because of the financial imperatives that come with full fee paying courses.

So this particular change will not help students, it will not improve standards, and may in the way I have just described put academics under new pressures. SO why is it needed?

I have to say I am left scratching my head as to find any reason except that any shift away from relying on commonwealth supported places will further enable the government to affect a retreat from supporting our higher education system. That is the government does not want to invest in higher education.

Lifting the cap on full fee paying places may well take a while to have much of an effect. But what will impact on student much more quickly is the shift in the Commonweatlh Grants Scheme that this bill introduces which will mean that once again HECS fees for many students will go up.

The change to the CGS is to reduce the number of funding ‘clusters’ from I 2 down to 7. Why 7 you may ask. Why is 7 better than 12? Well there is no answer to that it just appears like an arbitrary change. But putting that to one side what the change does is to increase the amount that students will have to contribute to the cost of their education via the HECS-HELP scheme for studying accountancy – economics – administration and commerce. These courses have been moved into the highest bracket of HECS fee along with Dentistry, Medicine, and Veterinary Science.

That means that a commencing student studying economics will have a HECS debt which is up to $6000 more for a 3 year course. How does this improve the educational outcomes of our higher education system? It doesn’t.

On the other hand there are measures here which increase the amount that the government pays to universities on a per student basis for teaching maths, statistics, allied health, medicine, nursing, behavioural science, dentistry and veterinary science. This is of course welcome. But before we laud the government too highly for this increase, let’s remember that this increase comes in lieu of adequate indexation for universities from the government.

Adequate indexation was a core request that was voiced by the Australian Vice Chancellors Committee back in 2003 when the Higher Education Support Act was so hotly debated. I well remember that debate and remember the representatives of the AVCC finally agreeing to support the bill on a promise from the government that the key issue of adequate indexation would be addressed in the follow year. Four year later, we are still waiting.

These funds are much needed because as we well know Australia is trailing well behind its competitors in the OECD in terms of public investment in higher education as a percentage of GDP. The government hotly deny this accusation of underfunding but it is pretty hard to argue with the figures from the OECD which show that not only has Australia not kept pace with its public investment in education as our national wealth has grown but we have instead gone backwards. That is inexcusable.

Public investment in higher education is crucial to ensure that the two criteria I referred to at the start of my comments are met—that is higher quality and real equity.

When the government pulls investment out of universities, we see universities turning to private sources of income to make up the short fall. I have already touched on how a reliance on student fees has a negative impact on quality and creates obvious problems for equity, but it is also corporate income that universities are turning to as the government reduces its investment in universities.

The problems of this approach have been clearly shown this week in a report by the public policy think tank the Australia Institute. The Australia Institute’s report ‘University Capture: Australian Universities and the Fossil Fuel Industries’ tells us; in Australia over the last decade the fossil fuel industries have become steadily more involved in Australian universities. Fossil fuel industry associations and fossil fuel companies have spent millions of dollars funding research projects and sponsoring university chairs, academic posts and even entire schools. The Australian Coal Association Research Program, for example, has allocated $145 million to 929 different projects since 1992.

Likewise in 1999, the Minerals Council of Australia (MCA) set up the Minerals Tertiary Education Council (MTEC) with $15 million to achieve ‘cultural change in universities’. It sponsors 12 lectureships and contributes to the development of course materials at several universities.

And it is not just the fossil fuel industry that has sought to influence the educational landscape in our universities. Science labs are sponsored by bio tech companies, computing facilities provided by hardware and software manufacturers and academic positions sponsored by organisations as diverse as financial services companies, churches and poker machine manufacturers. What all these organisations have in common is that they have a particular barrow to push and that is why they are Involved in subsidising education services.

This bill is part of this deliberate policy of encouraging universities to rely on private money and therefore weakens the independence and ultimately the quality of the work done in Australian universities.

The Greens and others find it appalling to watch this train wreck in slow motion and we fervently hope that there will be a changing of the guard in the education ministry soon and that this changing of the guard will mean that the public is put back in public education—including in higher education.

We also are working very hard to ensure that those who understand the importance of the public funding of public education have the majority in this Senate Chamber next year.

We do this because we want to see the twin goals of quality and equity to be reinstated as guiding principles of government’s higher education policies. That must include more support for students. The Greens policy calls for a simplified higher education living allowance that would ensure that means tested students would be able to access the living support they need to allow then to actually attend the courses that the government pays for them to attend rather than having to work to pay the rent. The Greens want to see student organisations properly funded so students can benefit from the vitality of campus life and access student controlled services, advocacy and representation.

The Greens welcome increased money on scholarships in this bill but note that compared to The Greens policy of abolishing fees (which would cost less than a quarter of the annual cost of the tax cut for high income earners announced in this years budget) it appears piece meal and little more than an admission that the rise in HECS fees and the general increase in cost of student life is a barrier to poorer prospective students.

The fact is the government can afford to make university free for those qualified to attend. They simply choose not to. It is a false economy, a short sighted ideological move than is costing us all in so far as it prevents merit from becoming the only way to success at university.

The Greens will not oppose this bill because it does increase funding to universities and it does make some provisions which will improve the access for some to a university education. But we will continue to work towards a future where education is free to all Australians and where the freedom of academic inquiry is unhampered by the need to go cap in hand to the business world.

Linda Kirk (SA, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak on the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007. This bill has been criticised quite rightly for its mechanisms specifically. But it also raises broader issues which, when placed in the context of changes to education policy during the term of this government, do need to be highlighted.

I would like to focus the Senate’s attention on the matter of the removal of caps on full fee paying places—which have been referred to by a number of speakers this morning—and also on the fundamental deficiencies in the education policy of this government as demonstrated throughout its 11 long years in office. I want to express my concern at the growing disregard that this government shows when making decisions that affect some of the most important aspects of Australian society.

Higher education is crucial to Australia’s future and we simply cannot afford to compromise its ability to innovate, create, expand and continue to move this country forward. I am disappointed to say—as many of my colleagues already have said this morning—that, when the history of education funding under this government is scrutinised, two startling and disturbing patterns appear. The first is that of cuts to education funding, which were followed by years of neglect of the education sector. As the election approaches, there seems to be an apparent re-emergence of interest in education by the government and it could only—and cynically—be categorised as nothing more than political puffery.

This in itself would be damaging enough, but the second pattern—a philosophical and policy one—should cause even greater alarm to Australian families who are concerned for their children’s future education. During the last 11 years we have seen a distinctive policy shift towards this government distancing itself from universities through its continual encouragement of fiscal independence for our tertiary institutions. As a result, higher education institutions have, by necessity, become economically focused. The combination of lower Commonwealth funding and the implementation of the full fee paying instrument for generating revenue have created strong incentives for what might be described as the evolution of the focus of universities. The government, however—as they constantly tell us—are proud of these initiatives. Although these initiatives might look good on the balance sheets, they have the effect of moving Australia away from the fundamental goal of having a universally accessible, merit based higher education system. It is only under such a system that universities will produce the best results and the best graduates and advance Australia as a nation in the most effective way. To trap and force universities into an economic focus alone is to change their role from one of educating to one of surviving. Yet, even during this election year proclamation of an educational conscience and push for redemption, we still see the damaging aspects of this government’s policy. They remain glaringly obvious.

The history of education under this government is clear. In the first year of its first term the government cut education funding by $100 million. It cut funding to technical and further education in TAFE by 13 per cent in the same year. Between 1995 and 2003 there was an alarming six per cent per student place drop in funding. These cuts paint a very dark picture of the regard that this government has for higher education and its place in a prosperous Australia.

As my colleague Mr Stephen Smith pointed out in the House of Representatives: to rub salt into the wound, this year’s budget, whilst being described by the Treasurer, Mr Costello, as an ‘education budget’, in fact estimates a drop in education spending as a proportion of GDP, from 7.7 per cent to 7.4 per cent. This is a government which, no matter what it claims, has over the last 11 years ignored and failed to understand the nature and importance of education as the driving force behind Australia’s future.

This combination, of financial pressure and the imposition of a purely economic option, is a powerful instrument for shaping decision making and priorities in the higher education sector. It is this combination that the government seems to enjoy imposing upon the Australian people. We have seen it recently with the Work Choices legislation and we see it in the bill before us. Reduced government spending over the last 11 years, combined with the introduction of full fee paying places and now, with this bill, the expansion of the subject clusters and the removal of full fee paying caps, has effectively created coercion through circumstance, presenting to universities an economic choice but, in reality, leaving them with no choice.

Make no mistake: Australian universities have reacted in the expected way—in fact, in the only way they could—to the government’s policy direction. We have seen in universities, as the Senate is well aware, a big increase in private-source income and income from fees and charges. When the HECS contribution rate went up, the universities passed that increase straight on to students. When full-fee places became an option, universities were able to, and have, implemented strategies to allow students to enter university simply on the basis of the weight of their chequebook rather than merit. With the changes proposed in this current bill, and as confirmed by the Department of Education, Science and Training during the last round of Senate estimates, there is now an opportunity for universities to offer entirely full fee paying courses. What an absurd and contradictory situation in what should be a merit based system of education in this country. It is both understandable and predictable that Australian students oppose these measures, just as we in the opposition do.

In the time that I have left, I would like to speak briefly on the issue of full fee paying places. As I said a moment ago, the Australian system of university admission is, and should be, a merit based system. Students work hard to acquire the UAI score they need in order to get into the course that they wish to pursue. In this way, the system does encourage the brightest students into high-demand courses and ensures that graduates of the highest quality enter the Australian workforce. This is a key element of higher education. Yet it is one that is fundamentally undermined by the existence of the full fee paying avenue of entry into university courses.

Labor has opposed, and will continue to oppose, the existence of full fee paying places. Our shadow education minister, Mr Smith, has declared that when elected to government Labor will phase out full fee paying places. This is not to deny the demand for university education but rather to acknowledge the importance of quality education to Australia’s future. Labor policy represents the opposition of the majority of Australians students to full fee paying places. The National Union of Students strongly opposes the government’s full fee paying places scheme. The NUS has expressed its resentment of the possibility that this policy gives to those with money to enter university courses with lower admission scores and the way that it fundamentally undermines the value of a university degree. In fact, we saw, on Wednesday of this week, students here on the front lawn at Parliament House making this exact point. The removal of the 25 per cent cap in the field of medicine elicited a strong response from the Australian Medical Students Association. Its national president, Mr Rob Mitchell, stated:

With this move the Government is sending a clear message to the Australian public: gone are the days of equality of access to education.

The message is clear.

This government is out of touch with students. To many—to me, particularly—that is not surprising. But we have to ask: is the government in touch with the wants of the universities themselves? No, it is not, according to the Group of Eight major research universities in Australia. Here we see a view counter to the view that the full fee paying solution to demand for university places is administratively effective. In its discussion paper published this month, the Group of Eight asserts that there are better and more effective ways to meet demand for university places than the full-fee mechanism, and that if these were implemented the question of full-fee or no full-fee places would become irrelevant. This demonstrates that this particular initiative of the government not only undermines the education system and alienates students but is considered to be potentially irrelevant to universities. It does not appear to be a sound policy at all but instead one driven by the tired old notion of ‘balance the books in any way possible and everything will be fine’. The problem is that it will not be fine. Students know it, universities know it and Labor knows it.

It is no secret that this is an ideological debate. It goes to the very core of how the government and Labor view education and, more broadly, the future of Australia. This government has been in office far too long. It is convinced that if you balance the books everything will be okay. But this ignores the need for a vision of a better Australia—a growing, advancing and expanding nation.

The Leader of the Opposition, Mr Rudd, has demonstrated this with his education revolution—Labor’s commitment to Australia’s education future. As Australians we need to define ourselves not by what we have been but by who we can be, and to move consistently and directly forward towards this. Education is the engine that drives progress, Higher education is the key to this process, and the decisions that governments make, however small they might seem, affect this crucial sector of our economy. The inclusion of full fee paying places in this system, the removal of the caps on those places and the refusal by the government to accept Labor’s amendments to this bill are all damaging decisions, ones which have the potential to irretrievably undermine Australia’s higher education system. I urge senators to take this matter very seriously. While these may be only a small number of changes, they do have the potential to cause enormous damage to the higher education system. I urge senators to oppose this legislation.

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

Steve Fielding (Victoria, Family First Party) Share this | Link to this | Hansard source

It was about 28 years ago that I first stepped onto a university campus to start my engineering degree. Back then university courses were free. Now of course there are a lot of costs involved in attending university. Family First strongly believes that Australia’s education system—primary, secondary and tertiary—should promote access and fairness. These budget changes will potentially deny access and erode fairness, and that is something Family First cannot support.

Family First believes it is fair that university students who receive some of the community benefit of university education should pay some of the costs—that is only reasonable—but there is always the question of how much is reasonable. What is the best balance which allows university students to contribute to the cost of their course but is not an unreasonable burden? What is the level which affects access to university? Access to university must be based on merit, not on who can afford it.

One of the concerns Family First has with the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007 is that it would increase the cost of HECS for accounting, administration, economics and commerce students by 17 per cent. That is a significant amount, and Family First is not convinced it is reasonable to increase already significant costs. It was only a couple of years ago that universities were allowed to increase the HECS rate by 25 per cent, and most have taken that up. Family First’s No. 1 concern is that the bill could pave the way for universities to be able to offer degrees to only full-fee students. It is a huge concern that universities could offer courses, probably more prestigious ones like law or dentistry, on a full-fee-only basis under these budget changes, despite the government having insisted they had to fill their HECS places, or Commonwealth supported places, first. A Senate committee last month heard that a university could exclude HECS students from courses by simply shifting subsidised places to other disciplines within the same cluster or funding band. The university could then charge full fees for everyone wanting the sought-after courses. I imagine some students would be prepared to pay these high fees; after all, what choice do they have? But what about those who simply cannot afford high fees? What happens to them?

The budget has changed how universities are funded by reducing from 12 to seven the number of discipline clusters. For example, law is now in the same cluster as accounting, administration, economics and commerce. This means a university could shift all its HECS places to accounting and commerce and require law students to fork out full fees. The incentive for a university to do so would be enormous, given that law and similar courses are highly sought after. Previously, there was a cap on the proportion of full-fee Australian students in a course and universities had to fill all HECS places in every discipline rather than a cluster before accepting full-fee students. This is a radical change which could have far-reaching consequences.

As the Higher Education Group manager in the department, Colin Walters, told the Senate committee:

If a university chose to set up a full-fee dentistry school and offer just full-fee dentistry places, it could.

Minister Bishop has confirmed that universities would only need to fill HECS places in a cluster group, not each discipline, before accepting full-fee students, but she said that government approval would be required for any significant movement of HECS places. This does not satisfy Family First and does little to appease our concerns that some universities will not see this as a green light to offer courses on a full fee only basis. The fact is, this legislation allows that to happen, and that is the key issue. The legislation allows universities to offer courses only on a full-fee basis, and that is wrong. This issue is about access. It is about Australian students being able to enter higher education and leave without a massive debt. Full fee paying places remove access for ordinary Australian families who cannot afford to pay up to $100,000 for a degree. For those who take out the $80,000 loan available from the government, this is a huge burden for graduates who will leave university wanting to start up careers, buy their first home and start a family.

To think that some Australian students could be denied access on the basis of cost, because they could not afford full fees or because they are quite rightly reluctant to take out a huge loan, is deplorable. We already know with HECS that students are sensitive to the cost of a degree. Potential students do consider whether degrees are worth the extra debt, and some decide they are not. I can think back to my engineering degree almost 30 years ago, when, coming from a family with 16 children, my parents did not have a lot of spare cash. Quite rightly, we would have been very wary of taking on a huge debt if my engineering degree had been a full-fee degree. There are some loud voices in academia, industry and the media arguing that to ensure Australia has a world-class tertiary education sector, and to compete globally in the 21st century, full market forces must prevail. But, as Family First has long argued, what is market friendly is not always family friendly. In fact, the two cannot be reconciled. There are reportedly 17,000 students already paying the full price of degrees.

Family First is also concerned about other possible changes to higher education beyond this. The minister has already publicly expressed the government’s support for greater deregulation of universities. The Howard government has been moving in that direction; but moves towards full deregulation, which the big research universities are calling for, could lead to even higher course costs. It has been reported that this proposal would allow universities to charge 25 per cent above the cost of delivering a course, which is a massive price hike. Any further moves to full deregulation could also punish smaller and regional universities and threaten their existence. Family First is not willing to take this extra step of higher HECS fees and full fee only degrees. Our university system should promote access and fairness. Access to university must be based on merit, not on who can afford to pay.

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

I thank all honourable senators for their contributions to this debate. The Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007 will fundamentally reshape the higher education landscape in Australia. It responds to calls from the sector for greater flexibility and less red tape. It will allow a more diverse and vibrant higher education sector to emerge, one that strives for excellence and one that can achieve its own destiny. No longer is university elitist. No longer is higher education unsustainable, as it was under the 1970s era of Whitlam. The reforms of this government will also enable the sector to break out of the ‘one size fits all’ straitjacket of the 1980s Dawkins era. The decision in the budget to fully fund university overenrolments of up to five per cent of a university’s total funding will potentially create around 21,000 additional Commonwealth supported places, thereby effectively eliminating remaining unmet demand—that is, the number of eligible applicants who miss out on a place at university. In addition, it will allocate a further 2,300 new Commonwealth supported places later this year. Essentially, anyone who wants, and is eligible for, a place at university next year should be able to get one.

This is a far cry from the days of previous Labor governments when 100,000 young Australians who were eligible to go to university missed out on a university place. This coincided with unemployment of 11 per cent when a million Australians were on the unemployment scrap heap. This bill will relax the caps on Commonwealth supported and domestic full fee paying undergraduate student places. Labor has suggested that universities will en masse convert Commonwealth supported places into full fee paying places and will turn their backs on students seeking to take up a Commonwealth supported place. I expect universities to act responsibly, and I am instructed to tell the Senate on behalf of the minister that she will not let this happen.

Government policy remains that universities must offer their Commonwealth supported places in a disciplined cluster before they offer full fee paying places. Any significant shifts in student load between clusters must be approved through the funding agreements between the Australian government and universities. The Australian government will not let Australian universities walk away from their obligation to ensure access for Australians who want, and who are eligible for, a university education. Senator Carr has confirmed today that Labor would phase out fee-paying domestic undergraduate places.

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

Yes, I have.

George Brandis (Queensland, Liberal Party, Minister for the Arts and Sport) Share this | Link to this | Hansard source

Thank you, Senator Carr. Where does this leave Bond University and the University of Notre Dame? This budget provides a massive $6.9 billion for the higher education sector, including an initial investment of $5 billion in the new Higher Education Endowment Fund. This means that funding for higher education increased by 31 per cent in real terms between 1995-96 and 2007-08, not including income support for students. At the same time, universities are reporting large increases in their operating surpluses and asset bases.

The taxpayer is funding record numbers of Commonwealth supported places. This bill provides a further half a billion dollars for many courses, including maths and statistics, allied health, engineering, science, clinical psychology, teaching, nursing, medicine, dentistry and veterinary science. In response to calls from the sector, this bill also reduces the number of clusters from 12 to seven. Reflecting the higher salaries that business graduates can expect to receive over a lifetime, the maximum student contribution for accounting, administration, economics and commerce units, and the Commonwealth Grant Scheme subsidy, will be aligned with law. It will be a decision for each institution as to whether it raises the student contribution for these disciplines. The change will only affect students who commence studying at higher education providers from next year.

This bill also establishes the new diversity and structural adjustment fund, which will assist universities, particularly those in regional areas, and smaller metropolitan universities to play to their strengths to ensure a diverse and sustainable sector with a focus on quality, access, efficiency and good governance. This bill also introduces three-year Commonwealth Grant Scheme funding agreements from 2009 to replace the annual agreements. Institutions that finalise a three-year agreement during 2007 will be able to take advantage of this arrangement from 2008. Through this bill the Australian government is increasing the number of Commonwealth scholarships from around 8,500 to 12,000 per year. This is over and above the additional annual scholarships for 1,000 Indigenous higher education students to undertake an undergraduate or enabling course. The current administrative arrangements will also be changed to ensure that scholarships are offered at the same time as students are offered a place and will be paid directly by the Australian government. This will help students make better informed decisions about which offer to accept.

This bill promotes a more diverse, responsive and dynamic higher education sector that delivers benefits for universities, for their students and in turn the wider Australian community. I say to the Australian people, if you cannot manage the economy you cannot invest in the future. The dividend of strong economic management by this government is that we can provide Australians with a good education and a job. I commend the bill to the Senate.

Question negatived.

Natasha Stott Despoja (SA, Australian Democrats) Share this | Link to this | Hansard source

Mr Deputy President, under standing orders I ask that my name be recorded as supporting the motion.

Original question agreed to.

Bill read a second time.