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

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 Its research facilities are out of date, shabby, falling apart and, in some cases, dangerous.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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

…            …            …

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

The minister says:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

While I am sure we could have listened to Senator Carr all day on these issues—

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

No!

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

time is up. I think that suggestion of ‘No!’ came from his own side. This is groundhog day for us. We have been doing this—that is, analysing and commenting on higher education policy—for 10 years at least, so I always enjoy the possibility of a debate with Senator Carr.

I also rise to speak on the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007 as the higher education spokesperson for the Australian Democrats. I begin just where Senator Carr ended—that is, that we debate this legislation on the day after a vital OECD report was released which demonstrated that our country is the only developed country apparently to cut public spending on tertiary education in the decade to 2004. When you look at the table in that report, as I have had the opportunity to do, as well as at the media reports today, it is very clear that Australia is lagging behind the rest of the world when it comes to government contributions to university funding. According to the Age article today:

The OECD found private spending soared—

soared—

mainly due to students leaving university with a greater debt after the federal government lifted maximum HECS fees in 1997.

Unsurprisingly, the government has challenged these statistics. I particularly like the comment from the Minister for Education, Science and Training quoted in the paper today:

… the OECD analysis was flawed because it counted HECS and government full-fee loans as money paid by students …

Der! It is money paid by students. Doesn’t the minister get it? People are repaying these loans, these debts—their HECS. The debate takes place today within the context of, yes, 11 years of blatant underfunding; 11 years of fee hikes and increased loans and charges; deregulation and further deregulation of the postgraduate sector; almost total deregulation, it seems at the moment, of the undergraduate sector; and, of course, paltry, miniscule movement on the issue of student income support. As I say every time, we know that this is a fundamental, absolutely vital issue, a key issue, when it comes to increasing participation in education across the board and higher education specifically, especially for those groups that come from traditionally disadvantaged backgrounds.

With that context in mind, yes, the Senate can welcome the legislation before it today, albeit that it is quite skeletal legislation, quite a framework of legislation, but not nearly as detailed or as specific as it should be. It certainly has some key flaws, some of which have been referred to by Senator Carr in his comments, particularly in relation to the powers of the minister—that is, ministerial discretion—and a lack of accountability and transparency in some of the roles of the minister and responsibilities when it comes to the decisions, for example, of the board.

The government’s Higher Education Endowment Fund announcement in the budget was indeed a surprise and a welcome surprise in many respects. The recent announcement, too, of an additional $1 billion to be added to the fund out of the massive budget surplus in this country is also welcome. The two announcements represent a long-overdue investment in the higher education sector in this country, a sector that has been long starved of funds. So no wonder the sector generally and legislators are pathetically grateful for what has been given as part of the budget this year.

As I say—and many commentators have made this point—and as Senator Carr said before me, it has to be seen within the context of 11 years of underfunding of the higher education sector, starting, of course, with some $1.8 billion of cuts back in 1996. As I mentioned, since then we have seen increases in fees, loans and charges—and do not forget the implementation of so-called voluntary student unionism. They have been just a few of the radical reforms under this government, in some cases aided and abetted by Independent senators.

The cost to the sector of inadequate indexation has now blown out to around $1.5 billion. The shortfall has been made up from university operating budgets. VSU has stripped around $160 million alone from annual contributions—funds that we know were used for sporting and other recreational facilities, student welfare and other services, and, of course, representation. These services are now either existing on voluntary student contributions—representing a mere fraction of their previous income—or being assisted, once again, through university operating grants, and there is more and more demand on those particular university operating budgets.

In that context, a regular stream of grants for capital works or research facilities will certainly be put to good use by the higher education sector. There is much support for this initiative—I do not doubt it. But we need to make sure we do not get too carried away with the headline figures. Yes, a $6 billion investment fund sounds very impressive. But it is expected to translate into between $300 million and maybe $450 million per annum in competitive grants, according to the government’s own figures. Do not get me wrong; the Australian Democrats do not oppose the idea of a long-term capital fund that can provide returns in perpetuity. We think the government is definitely getting much mileage out of the overall $6 billion invested in this fund. But I think that is actually quite misleading, and perhaps even more misleading was the minister’s statement from her budget press release, where she indicated that ‘a dividend of around $900 million over three years from 2008-09’ could be expected—and this was with the original investment of $5 billion.

Evidence to the Senate committee from Bruce Gregor of Mercer Investment Consulting suggests that the government’s estimates are quite optimistic, even with the $1 billion extra that has been contributed to the fund. You would know this, Mr Acting Deputy President Marshall, because you were there. I sat next to you for the committee hearings while we frantically used our calculators to work out exactly what this would mean on an annual basis. Mr Gregor suggested that an aggressive investment position could be expected to yield inflation plus four to six per cent in returns, which equals a dividend of around $240 million and $360 million for grants on a $6 billion fund. However, due to volatility and the requirement in the legislation to preserve the initial capital first and foremost—an understandable part of the legislation, arguably—a defensive strategy is necessarily required in the short term which is likely to yield a return of inflation plus two per cent.

With the United States showing some signs of heading into recession, and given the recent market volatility, you have to wonder what returns are likely from this fund in the near future when there is a clear and understandable intention to preserve its real value. If the government has reason to believe that the returns over the short term will be higher than those indicated by Mr Gregor then I am happy for them to explain that today. Perhaps the minister would take that on board and give us some of the financial modelling behind their estimates as to whether it will be greater or otherwise. Otherwise, I think we need to conclude that the impact of this fund will be seen further into the future than indeed the government would have us believe.

I also want to sound a note of caution regarding the government’s expectations that this fund will serve as some kind of ideal mechanism through which to attract a greater level of philanthropic donations to higher education institutions. Again, this was another area of debate and questioning during the Senate committee process. I agree with the government that this is a worthy goal and I commend the government’s focus in the area, though I will quickly rescind that if they see any improvement in this area as just another excuse to remove or rescind government funding to the area of higher education. However, as it stands, philanthropic donations need to be donated unconditionally. They will simply disappear into the fund itself, to be disbursed as the respective advisory boards and ministers see fit. For some people that may be fine; that may be how they want their donations to take place. Most philanthropic donors, I might suggest, like to feel some connection to the cause that they are contributing to. Again, this was evidence that we heard at the Senate inquiry. They are often more motivated to donate to specific causes that personally resonate with them. The more general the fund, the less likely, arguably, it is to attract support.

At the moment, philanthropic donations to the fund are handled in what I would describe as a very general fashion indeed. I note the minister’s intention to seek advice on how the management of philanthropic donations could be altered to allow donors more control over how their funds are used. I look forward to any announcements in this regard. But, until these are forthcoming, I do not expect this fund to be the catalyst for philanthropy that the government seems to suggest.

Over the long term, even with a more limited grant stream than the government is advertising, this fund should be more valuable than if the government were to award the whole lot now. The key difficulty, though, for us here is that we cannot really anticipate exactly how it will impact on the higher education sector because, once again, the Senate is being asked to rubber-stamp an initiative when we have been given little information and little detail on how it will actually work. This is a key issue. Even money given with the best intentions can have unintended consequences. This fund is no exception. There are a couple of factors that concern me about the direction in which this fund could go.

Firstly, the media release from the minister said that the HEEF advisory board would ‘take into consideration whether universities had been able to raise matching funds’. There is no doubt that such a requirement would favour the more established universities, particularly the Group of Eight universities, over the smaller regional ones and other institutions. I note the remark by the minister in her media release that proposals which ‘support Australian government policy with respect to diversity, specialisation and responsiveness to labour market needs’ would be favoured.

So there is a clear indication that certain types of projects that fulfil the government’s ideals would be favoured. This was further reiterated by the Department of Education, Science and Training in the submission to the Senate Standing Committee on Employment, Workplace Relations and Education inquiry. Eh? What is going on here? I thought this was supposed to be about infrastructure and research facilities. What does responsiveness to labour market needs have to do with anything in this debate? What does it have to do with the allocation of these particular funds? Does this mean that universities that are more active in putting their staff on AWAs might be frontrunners when it comes to handing out grants under the fund? If not, what does it mean? I implore the government to explain: what does that sentence mean? It has certainly struck a note of caution for some of us. I am very concerned by that statement from the minister. It makes me wonder whether this fund is some kind of stick, disguised as a carrot, with which to bludgeon the sector into adopting a broader government ideology. Before anyone chokes on their Weeties, we have seen blackmail measures through higher education legislation before, particularly in relation to Commonwealth grants and industrial relations. But I digress.

There is a problem here: we really do not have the details to be able to answer some of these questions. I know that the government today will use its numbers in this place to pass legislation with the bare minimum of detail, and legislation that gives the minister incredibly broad powers to implement the program as she sees fit—or, indeed, as does any minister in the future. As read, division 2 of this bill gives the minister the power to appoint the members of the advisory board, to terminate their appointment and to give them written directions about their functions and how they perform them. Under section 45, the minister can authorise grants with little apparent reference to recommendations from the advisory board. Presumably the minister will also hold the authority to determine the all-important program guidelines that will establish eligibility and merit criteria for the competitive application process.

This is an all too familiar trend that we have seen in this place of consolidating power for the executive government. There are not nearly enough protections or safeguards in this legislation. Indeed, the extent of ministerial discretion in this bill was noted by the Group of Eight, by the National Tertiary Education Union and by the Federation of Australian Scientific and Technological Societies, whom I note went to the point of stating that the Higher Education Endowment Fund runs the risk of being a significant slush fund for ministerial pork-barrelling. No-one wants that, so why not clean it up? Why not tighten some of the provisions in the act?

That is what the Democrats will attempt to do. I will have a series of amendments that deal with some of these issues of accountability, transparency and the advisory board. That is because I believe this is an important scheme. That is because I am happy to see increased investment in the sector, especially if we are realistically talking about the kind of money that the government has talked about—$6 billion. I want to ensure that it is used in a way that is good for universities, good for the sector and good for the community but that it is done in a way that is completely aboveboard, transparent and accountable. I am happy to speak to those amendments in more detail during the committee stage of the bill. Primarily, what I am intending to do is to amend the bill so that it is more specific about the composition of the advisory board and so that it requires the minister to table the recommendations of the advisory board. I think that is a pretty basic amendment. I would also like to make the program guidelines a disallowable instrument so that the parliament and, through us, the community and specifically the sector will be able to ensure that we are not merely signing off on funding that will have an impact on the sector which was not intended. So it will be making sure that the guidelines are not only public, as they will be, but also disallowable, so that there is a role for the parliament in that process.

The idea of these amendments was supported by stakeholders—those who appeared before the Senate inquiry. Indeed, most of these amendments were recommendations or were called for in the submissions that were put forward by the relevant sector groups who appeared before the committee. So I hope that senators will look at them objectively. They are not particularly radical or unprecedented, but they ensure that there are further safeguards built into the legislation and that there is some check on ministerial power and discretion.

I am happy to state that this is a welcome initiative. There are many unaddressed areas of the higher education sector in relation to funding. Obviously, the big, outstanding one is adequate, appropriate and realistic indexation. Who is tackling that? Don’t tell me that the Labor Party is tackling it. I note the comments in the paper today from Stephen Smith, the education spokesperson for the opposition. He said that the OECD report showed 11 years of underinvestment and neglect under the coalition. Yes, big tick—right on! Mr Smith said that Labor was committed to increasing funding at every level, but he would not give details. Not give details! Isn’t it time we should be getting details?

At least today I know a little bit more about the government’s position on higher education funding. Actually, having said that, I have probably known a lot about the government’s position over the last 11 years and have not necessarily liked it, but at least I have known the position. I say to Labor colleagues in this place: give us a little more detail. What are you going to do on indexation? What is going to happen on income support? Please do not tell me that you are going to emulate the pathetic approach of this government to student income support. Okay, so we have had a little win, and, yes, the Democrats are thrilled that the student income support bill will come before the Senate this week, ensuring rent assistance to Austudy recipients. Yes, I have been working on that for a long time. I am happy to see it. But it is nothing in the context of the broader issues that need to be addressed in relation to income support. When is the government going to respond to the Democrat initiated Senate inquiry into student income support? That was the first Senate inquiry that looked at those issues specifically. Isn’t the convention three months to respond? What are we up to? Three years? That was the last election. This government is not going to touch indexation. Is the next government, whether a Labor government or a coalition government? What are you going to do—either side? What are you going to do about student income support to realistically invest, particularly in those aspiring students who come from backgrounds that are disadvantaged? There are so many outstanding areas and I do not hear the requisite detail from either side.

We are feeling a bit bolshie today and are not going to support the Labor amendment. The Australian Democrats do not just want rhetoric from either side. We want a bit more detail. And I have to say that I am inclined to agree with Senator Carr on a lot of things, including about three-quarters of the amendment, as I recall. The bit about broadband is a bit too propagandish. They are good points, but, no, we are not supporting that today. We are going to move substantive amendments to the legislation that actually back this up with some detail, some transparency and some accountability. I implore colleagues to consider those amendments. (Time expired)

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Today, as a government senator, I proudly stand here on behalf of the government supporting both the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007. I want to say at the outset that government of any persuasion cannot make these sorts of investments and bold policy pronouncements without managing the economy well. You cannot do it without managing the economy well and you cannot do it without eliminating, for example, government debt, which is what this government has done. We have delivered successive budget surpluses and, as a result of that strong economic management, can now make this decision in legislation which is, in my view, vision in action. It is an investment of $6 billion into the future of Australia’s higher education sector. You cannot invest that type of money into any sector—let alone the higher education sector—for the future of our children and for the future of this nation when you are saddled with debt and running budget deficits. That is exactly what the previous Labor government did in this country.

So I want to salute, right up-front, the leadership of our federal Minister for Education, Science and Training, the Hon. Julie Bishop. She has been outstanding and has performed brilliantly in this role. She has taken this bold approach with the full support of the cabinet: Mr Howard, Mr Costello and the rest of the leadership team. She has the full support of the government senators. This is vision in action, where we are planning for the future. We are not dealing with the problems of the past. Many of those have been dealt with. There is still more work to do, but this is visionary legislation. It is planning for the future. As a member of the Senate Standing Committee on Employment, Workplace Relations and Education, I want to acknowledge, in her absence, the work of our chairman, Senator Judith Troeth, who is not here, for personal reasons, but who I know would like to stand here and strongly support this legislation.

The government senators’ report is available. It is a public document. In fact, the entire Senate committee report is a public document. I note with thanks that Labor senators—including you, Mr Acting Deputy President Marshall, who signed this particular report as deputy chairman—have supported the bills and that Senator Stott Despoja has welcomed the legislation, notwithstanding the various reservations that she has made about it. In respect of the report, I thank the committee secretariat for the work that was done to pull it together and I thank all my Senate colleagues on that particular committee for the work that was undertaken and the hearings that we had, including in Melbourne. The principle of the bill is to provide an additional income stream for universities, and that was widely supported. In fact, I think it was pretty much supported across the board—by all the witnesses and by all the submissions that we received.

The Higher Education Endowment Fund legislation will significantly increase the funds that are available to be invested in the higher education sector. As I said, this investment has been enthusiastically welcomed by that sector. There has been a lot said from the opposition benches and by Senator Stott Despoja in respect of the investment of that fund. I want to touch on that before talking about some other matters in respect of the bill. Yes, it is difficult to predict the returns of the investments under that fund, particularly in the short term, in light of the volatility of the various stock markets and investment regimes around the world. But it is noted that the Federation of Australian Scientific and Technological Societies estimated that the HEEF is likely to provide a funding stream of $300 to $400 million per year. Professor Richard Larkins, on behalf of Universities Australia, indicated an estimated potential funding stream of approximately $400 to $500 million per annum. It is noted that the Treasurer’s Budget Paper No. 2 lists a national return of just over $300 million for each year of the 2008-11 triennium.

Of course, there will be ups and downs, particularly in the short term. But in the short term, medium term and long term, HEEF is going to deliver real benefits for the university sector. I want to say right up-front that something that I learnt during the Senate inquiry was that there would be a doubling of funding to this sector of all existing financial investments and endowments currently held in the university sector. Professor Richard Larkins indicated that he estimated that it is currently at around $2.5 billion. So this will be a doubling or, in fact, perhaps more than a doubling of all of the existing financial investments and endowments currently held in this sector. This is fantastic news for the university sector. It is fantastic news for tertiary education in Australia and our future wellbeing as a nation in terms of our productivity and the economy. I say again that none of these decisions could have been made without the economy being well managed. The investment of the endowment fund will be managed by the Future Fund Board of Guardians, with operational support provided by the Future Fund Management Agency. Another great initiative of Treasurer Costello and our government was the Future Fund. It is fantastic; it is planning for the future. And the benefits will flow through to our children and, hopefully, their children and on and on. This is vision in action. This is a similar principle applying in that regard.

In fact, this is an unprecedented investment in higher education in Australia. It will be a perpetual fund, so the future capital and research facility needs of the sector will be assured, supported and encouraged for years to come. Further contributions to the fund will depend on whether our economy is managed well. There will be a risk to the economy being managed well if the opposition is successful at the election. The Australian people have a choice of going down the path of risk or having the economy managed well and successfully. The choice we face in the weeks and months ahead is about whether the Leader of the Opposition, with his superficial facade, and the opposition are going to have a chance to wreck our economy or not.

I want to touch on a few of the benefits under this legislation, particularly the philanthropy aspects of the legislation. Senator Stott Despoja and Senator Carr referred to this, but in my view they did not give due acknowledgement to the importance of this theme flowing through this legislation. The endowment fund will send a clear message to the community that we should provide greater philanthropic support to universities. It will send that very important message not only for years but for decades, and that is good. Our higher education institutions have not been as successful as their competitors overseas in attracting philanthropic donations. In fact, Minister Bishop has advised that less than two per cent of the income of Australian universities comes from philanthropic donations. That is a small percentage in anybody’s book. In comparable universities overseas, it can be as high as 15 or 20 per cent.

The Senate committee considered this matter and, in the government senators’ report, we referred to the figures of two per cent of income in Australia coming from philanthropic donations and 15 per cent of income overseas coming from philanthropic donations. At page 20 of our report we say:

… the Minister stated that Australian higher education institutions have not been as successful as their overseas competitors in attracting philanthropic donations.

…            …            …

The Government has therefore created a new avenue for business and the general public to make philanthropic donations to the higher education sector, and signal to the community that greater philanthropic support to universities should be provided.

We discussed this and we asked questions about it in the Senate committee inquiry. It was clear to us that the funding would be not just for research purposes or block funding but could be for strategic purposes. I asked questions about whether it could be targeted towards health services. Other senators asked about other aspects of concern to them. Basically the answer is yes. There are certain parameters and criteria with respect to that funding and tax deductability. In that regard, we are advised that the advisory board and the department will be consulting with the university sector about how to encourage future investments. They will be looking at tax deductions for research into certain areas, including health, diabetes and a whole range of other areas of interest. It was noted that this will be a great boost to the university sector throughout. This government has created a new avenue for business and the general public to make those donations.

In the first instance, the bill provides that tax deductable gifts of money to the endowment fund will only be able to be accepted on an unconditional basis. That was noted, but the government indicated that contributions could be earmarked for particular universities and that universities could choose to have their own philanthropic funds managed along with the endowment fund. This is an important point and I am sure that the universities will themselves look at this possibility, with respect to the management of their own investment funds, to see if they can make a difference and get a better return on funds invested for those particular universities.

According to the minister, these issues will be addressed following more detailed consultation with the higher education sector and the board of guardians, and the government may then consider amendments to the legislation. So watch this space. We are always looking to improve our legislative framework and our policy framework to encourage good policy and to encourage further investment in the tertiary education sector. I think the runs are on the board and this is actually being delivered.

We have had allegations from the other side and the crossbenches with respect to the lack of investment in the tertiary education sector. I reject those allegations out of hand. I want to compare the funding that the Australian government was contributing back in 1995-96 and what it is contributing now. This financial year alone the government will invest $8 billion in universities, a 31 per cent increase since 1995-96. This year the Australian government is providing an investment of $9 billion in education, science and training, including the centrepiece of this year’s budget, the Higher Education Endowment Fund. This builds on an investment of over $56 billion made by this government in higher education, including research infrastructure for the sector. In fact, we have freed up the sector. We have provided an injection of funds, not just from government but across the board, and that is where the benefits will flow.

During the inquiry, I, as a Tasmanian senator, asked whether the Australian Maritime College will have an opportunity to apply for a benefit from such an investment. The answer was yes. The AMC will, of course, soon be part of the University of Tasmania. The University of Tasmania has plans for growth, and I believe the endowment fund will support the University of Tasmania very significantly. They have plans to grow from 12½ thousand full-time student equivalents to 15,000 by 2010 and to 20,000 by 2020. They have already grown from 10,000 in 2000 to 12½ thousand in 2004.

The planned growth for 2020 will result in an estimated total contribution to the gross product in my state by the University of Tasmania of $425 million or three per cent. That is around the same impact as interstate holiday visitors and around half the total impact of tourism. The University of Tasmania is one of the major employers in Tasmania and, for every increase of 100 effective full-time equivalent students at the university, the contribution to the economy is: $1.6 million to the real GSP, with a total of $130 million more by 2020; $1.9 million to real consumption spending, with a total of $138 million more by 2020; and 26 new full-time equivalent Tasmanian jobs, with 800 by 2010, doubling to 1,600 by 2020. Interstate students will contribute $6 million more by 2010 and $14 million more by 2020.

That is a great result. I congratulate Professor Daryl Le Grew and his team at the University of Tasmania on the work that they have been doing in growing the university and on its success. I know that the federal member for Bass, Michael Ferguson, is working very hard on getting further and better support.

Mathias Cormann (WA, Liberal Party) Share this | Link to this | Hansard source

He is a very good member.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

That is right, Senator Cormann. He is a good member for Bass; thank you for that. He is working with the university to see what more he can do on behalf of the Australian government to support them and his constituents in the electorate of Bass. I know that likewise Mark Baker, the federal member for Braddon—

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

Another good member.

Guy Barnett (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Thank you, Senator Birmingham. I agree with you. He works so hard. He is delivering for the north-west coast. I know that he is very supportive of the University of Tasmania and of the infrastructure and students they have on the north-west coast. He is doing everything he can to see if he can better those outcomes for the university.

So there are some things that are being delivered. I believe this legislation will deliver distinct and specific benefits to the University of Tasmania. I know that the Liberal Senate team are right behind and are very supportive of this particular legislation because of its vision and action. It is fully supported.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to speak on the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007. Both of these bills were referred to the Senate Standing Committee on Employment, Workplace Relations and Education for inquiry and report. The Higher Education Endowment Fund Bill 2007 establishes the Higher Education Endowment Fund, a perpetual endowment fund to generate earnings for capital expenditure and research facilities in higher education institutions. The Higher Education Endowment Fund (Consequential Amendments) Bill 2007 amends the Future Fund Act 2006 and the Income Tax Assessment Act 1997 to support the implementation of the Higher Education Endowment Fund.

The Higher Education Endowment Fund (Consequential Amendments) Bill 2007 provides that investments made by the Future Fund Board of Guardians will be determined by the Future Fund Board of Guardians, not by ministerial direction, and also specifies that responsible ministers cannot direct the Future Fund Board of Guardians to use the assets of the Future Fund to invest in particular assets.

By the government’s own analysis, Australian universities have a significant backlog of deferred infrastructure maintenance. The Department of Education, Science and Training estimated this backlog at $1.5 billion for the university sector as late as last year. When the EWRE committee looked at the HEEF legislation, this exact point was made by several submissions, including by the Federation of Australian Scientific and Technological Societies, the Group of Eight universities and the National Tertiary Education Union. The Group of Eight universities went even further than the department, estimating that the total of the deferred maintenance liabilities was $1.53 billion across the Group of Eight universities alone.

The main reason behind this backlog is that, since it came to power more than 11 years ago, the Howard government has undermined the higher education sector. It is not just Labor that makes this point. Numerous submissions to the committee of inquiry hearing into these two pieces of legislation pointed out that the Commonwealth government’s underfunding of the university sector since it came to power is a significant contributor to the current situation.

The submission by the Group of Eight noted that:

While $6 billion is a large amount of money it needs to be viewed in the context of recent funding trends for Australia’s public universities, the recurrent expenses and infrastructure challenges they now face ...

It is worth looking at the Howard government’s record on higher education investments since it was elected in 1996. As the Group of Eight have openly acknowledged, the Howard government’s first budget in 1996 slashed university operating grants by a cumulative six per cent over the forward estimates from 1997 to 2000, resulting in an $850 million cut to the sector. Not surprisingly, this has had significant flow-on effects in subsequent years as universities have dealt with the impact of those cuts. Universities Australia have confirmed that the government’s funding cuts to university operating grants since 1996 have put greater financial pressure on university finances and, following on from this, the services and quality of education they then provide.

Recent work undertaken by Universities Australia has demonstrated that funding shortfalls by the Commonwealth and the inadequate indexation formula have had a direct impact on teaching quality. That work shows that, since 1995, student to staff ratios have increased, with the result that students today receive less time one-on-one with their lecturers and tutors than their counterparts 12 years ago. According to this study, the student to staff ratio today is 20.4 compared to 14.6 in 1995. This assessment was reinforced by the Group of Eight’s submission, which stated that the implications of funding pressures faced by universities today include: even larger increases in student to staff ratios, with implications for quality of teaching and learning; reductions in academic salaries relative to average wages, with implications for the sector’s ability to attract talented candidates; and the deferment of essential expenditure on the maintenance of buildings and facilities, with long-term consequences for the quality of essential infrastructure.

Australia’s education system now relies on private financing more than all other OECD countries bar the US, Japan and South Korea. More than half of the cost of tertiary education today is met from private sources, with dependence on private sources having increased to 52 per cent from 35 per cent in 1995. As a proportion of total revenue, Commonwealth grants to universities have decreased from 57 per cent of their revenue in 1996 to 41 per cent in 2004. At the same time, university revenue derived from fees and charges has increased from 13 per cent in 1996 to 24 per cent in 2004.

The government is often heard justifying this situation by stating that tertiary spending has increased by 25 per cent since 1996. Whilst that may be true, enrolments have increased by more than double that since 1996. As a consequence, the average amount of Commonwealth funding per student in real terms has declined by nearly $1,500, while student HECS contributions have increased by nearly $2,000 and fees and charges have increased by over $3,000. It is a sign of what a clever politician Mr Howard is when he has Senator Barnett stand up in this place to talk about the real increase in funding, but one only has to step slightly behind those figures to see an absolute demonstration of how much money has actually been cut from this sector by this government.

The provisions of the Higher Education Endowment Fund Bill have been modelled on the provisions of the Future Fund Act 2006. The bill provides the Future Fund Board of Guardians with statutory powers to manage the investments of the Higher Education Endowment Fund. The bill also provides that, as per the Future Fund Act, the Treasurer and the Minister for Finance and Administration are the responsible ministers. In this capacity they will issue directions to the board about the performance of its investment functions. The board is therefore accountable to the Treasurer and the finance minister for meeting its obligations to manage the HEEF. The responsible ministers will set rules to determine the maximum amount available for payments from the HEEF and make the determinations to credit government contributions—initially $6 billion—to the fund and any subsequent government contributions.

A HEEF advisory board will be established to provide advice to the education minister on grants. Because of the different nature and intent of the HEEF compared to the Future Fund, the education minister, not the responsible ministers, is responsible for authorising grants of financial assistance to eligible higher education institutions and for appointments to the HEEF advisory board. It is unsurprising that the Higher Education Endowment Fund has been so well supported and welcomed in the higher education sector, given the continued underfunding of the sector by the Commonwealth government.

Putting the favourable reception by a neglected higher education sector to one side, this HEEF proposal is not without some concerns. This is confirmed in the detail of the bills. A central concern is the transparency of ministerial determinations. Under these bills, the education minister determines who sits on the fund’s advisory board and authorises grants of financial assistance to eligible higher education institutions in relation to capital expenditure. There is no direction in the legislation as to the make-up of the advisory board. There are no requirements for sufficient expertise or merit, and many groups have questioned why the responsibilities of the board are not set out in the bills themselves. This provision rings alarm bells, given the history of this government in administering funds on a political rather than a practical basis.

Just recently we saw the Regional Partnerships program used as a pork-barrelling slush fund yet again, although this time it was the Minister for Foreign Affairs, Alexander Downer, wanting a slice of the action after watching so many of his National Party colleagues trash due process to reward their own electorate projects. In this latest Regional Partnerships program fiasco, the foreign minister bypassed the standard application process, asked the Prime Minister to intervene and then ignored the relevant department’s advice after an application for funding in his electorate was rejected.

As this government has shown, it falls prey to temptation when it comes to subverting proper process for its own political advantage. These bills must be evaluated on the basis that they will be used for political advantage rather than on the merits of individual proposals. Senator Stott Despoja raised some of those concerns on behalf of the Democrats. I suspect that in future the strategic consideration of Liberal Party and National Party electoral prospects will have more influence than any strategic consideration of the sector’s infrastructure needs. I thought that the FASTS submission put it best when they stated that, in its current form, the fund is in effect ‘a significant slush fund for ministerial pork-barrelling’.

On top of this, there is no requirement that the advisory board’s recommendations or any variations to those recommendations be made public. It is not surprising that the Howard government prefer no public scrutiny when it comes to public money, as they seem to treat it as their own. Such is their arrogance after 11 years in government. The legislation does not even set out in any detail the rules by which funding will be distributed under the HEEF program.

In the event of a negative return for the fund, when there is little or no income, the fund will not release money. This would have the effect that the fund would not discharge any of the $300 million forecast by the Howard government. This has implications for eligible higher education providers that may be relying on being awarded approval for HEEF funds for infrastructure projects. There is little detail provided as to the investment strategy being considered by the board of guardians, including the time frame and scope of investments being made on behalf of the Commonwealth. Are the board of guardians considering an investment approach in the first few years that will not allow for returns to be released to eligible higher education providers? Nobody, at this point, seems to know. If this were the case, it would be at odds with the budget papers, which forecast an estimated average six per cent return per year.

This $300 million forecast is one that deserves to be looked at in detail. While the government is happy to trumpet this announcement, in reality there will be no sizeable return until late 2008, given the transfers to the HEEF will be made at the end of October 2007 and then at the end of January 2008. Based on the evidence presented by the government’s own Department of Education, Science and Training, and by Mercer Investment Consulting, the fund will struggle to deliver $300 million per year in the first years of its operation.

I found it interesting that the provision in the Higher Education Endowment Fund (Consequential Amendments) Bill 2007 specifying that the responsible ministers cannot direct the Future Fund Board of Guardians to use the assets of the Future Fund to invest in a particular asset was commented upon by the Minister for Finance and Administration, Senator Nick Minchin. He claimed that this amendment was to ‘stop the Labor Party robbing future generations by raiding the Future Fund, taking its annual earnings and dictating to the board that it should invest its money in advancing Labor’s political interests’.

I know that the senator is worried that we may seek to copy their impressive efforts in subverting due process when administering funding. Whether it be aged-care bed licences, Senator Boswell’s mysterious entitlements, the Regional Partnerships program or the shemozzle that is the broadband network tender process, I can assure the good senator that he should not be worried. We will not be emulating such amazing feats of political favour, ignoring process whenever and wherever. We are guided by the concepts of good governance, transparency and accountability—concepts which some government members think belong to another language. When these concepts are talked about by Kevin Rudd, most government members think that he is lapsing into Mandarin, such is their understanding of the principles of good governance.

Should we be entrusted by the Australian people to govern, Labor has given the commitment to restore transparency and accountability to government programs. Labor supports the Future Fund and is committed to the Future Fund objective of meeting public sector superannuation liabilities. The current coalition government has no plans for long-term investment in infrastructure. In contrast, Labor will invest future surpluses in the Building Australia Fund and make earnings available for infrastructure investment, with investment priorities recommended by Infrastructure Australia. Labor is committed to investing up to $2.7 billion in a national broadband network, with earnings reinvested in the Future Fund. Along with contributions from the private sector, the $2 billion Communications Fund will be used to help build the national broadband network which this country so desperately requires.

Labor supports the establishment of the Higher Education Endowment Fund. This is in line with the submissions received by the EWRE committee on the bills and in light of the evidence presented by the higher education sector to the committee. The measure to establish a Higher Education Endowment Fund is a welcome one. Indeed, the measure to increase Commonwealth funding for infrastructure purposes is long overdue and comes after years of neglect by the Howard government of our higher education sector.

We could do with some positive policies in this sector after such a long line of spectacular policy failures. Here are just a few to jog the memory. There are now more than 100 degrees offered by public universities that cost in excess of $100,000, and this has occurred despite the Prime Minister’s promise that ‘there will be no $100,000 university degrees under this government’. There are now degrees at public universities that cost more than $200,000. You can get into a full-fee degree with a mark 20 per cent worse than your HECS counterparts if you have the money to pay the full fee. VSU legislation has destroyed student services and campus amenities. Work Choices is being forced onto universities through funding arrangements, with further restrictions to come as university workers have voted with their feet by rejecting AWAs in favour of collective agreements.

Having brought down the quality of education, services and access across the higher education sector, the government has now firmly set its sights on trade skills and training. Given the current skills shortages, we must take action now. However, for this government action means a poor-quality quick fix, a dumbing down of trades qualifications and a lack of concerted effort to work with the three largest stakeholders in Australia—industry, the states and the Australian people.

The choice is now very clear. Australians can vote for a tired, arrogant and out-of-touch government who believe public money is their own and whose answer to problems with productivity and skills shortages is to slash wages and working conditions of ordinary Australian workers. Or they can vote for a party which believes education is the engine room of the economy, that education is about fairness—a party that believes helping Australians foster and create new skills through education and training is the pathway to prosperity.

Labor sees education and training as being about the economy and about opportunity. We see education as a means not only to learn and earn, but also to inspire creativity and innovation. Education, skills and training are the pathway out of poverty. They are the pathway to a career, security and a decent standard of living. We want education and training to be about lifelong learning. From the cradle to the classroom, from the living room to the workplace, we need to keep investing in ourselves, in our skills and therefore in our future. No matter where you are from, or how much money you have, you should still get a great education. That is our goal. We want education to be for the many and not just the few.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I support the Higher Education Endowment Fund Bill 2007 and I seek leave to incorporate my speech on the second reading in Hansard.

Leave granted.

The speech read as follows—

Mr President, I wholeheartedly support this Government’s moves to establish a Higher Education Endowment Fund to secure the financial future of Australia’s world-class universities. I think it is further proof of this Government’s strong economic leadership that it has not only brought about a significant budget surplus for several years running now, but that it has had the foresight to invest part of this surplus in education—one of the most important investments that can be made for Australia’s future.

That said, I wish to make a contribution to this debate on the consequential amendments created by the Higher Education Endowment Fund Bill because there is an important change contained in these amendments, and a change which will potentially affect many thousands of people in my community of the Australian Capital Territory.

This Bill will expand the role of the Future Fund Board of Guardians to include the management of the Higher Education Endowment Fund. This is a sensible move, as it will ensure that this fund is responsibly and appropriately managed by people who have experience in managing big investments on behalf of the Australian community. But more importantly, Section 18A of this Bill will protect both the Future Fund and the Higher Education Endowment Fund from intervention or meddling by Government Ministers of any persuasion, and for that, many thousands of Commonwealth Superannuants in my electorate will be extremely thankful.

Specifically, section 18A prevents the Treasurer or the Finance Minister directing the Board of Guardians to invest in a particular financial asset, acquire a particular derivative or allocate financial assets to a particular business entity or a particular business. The effect of this will be that no Government, of whatever political inclination, will be able to direct how or where the money from these funds is spent. The Future Fund, and with it the Higher Education Endowment Fund, will become a locked box. It is impossible to overstate the importance of this section 18A, particularly when we have an alternative Government who have clearly stated their intention to treat the Future Fund less like a locked box, and more like a piggy bank to be cracked open whenever they hear the ice-cream truck of wild ideas coming down the street.

The Future Fund was set up to meet the unfunded superannuation liabilities of thousands of past and present Commonwealth Public Servants. It was set up so that those who have spent their careers working diligently on behalf of the Commonwealth will receive every cent they are entitled to in retirement. It was set up to allow future governments to meet their legal and social responsibilities to today’s workers, without bankrupting future generations in the process. It was not set up so that future governments could dip into it at will to fund the promises which they are banking on to secure election later this year.

And yet that is exactly what the Labor Party is proposing to do. Despite criticising this Government in the past for not making the Future Fund enough of a ‘locked box’, Labor is now proposing to dip into the fund and swipe $2 billion to pay for their half-baked broadband scheme. They want to take $2 billion out of the pockets of retirees and older Australians to pay for a broadband plan that won’t reach all Australians, won’t deliver services to the bush, and won’t address inherent infrastructure problems with existing telecommunications technology. Our Government has a plan to use a mix of wireless, ADSL and satellite technology—and a mix of public and private investment—to provide high speed coverage to 99% of the Australian population at very little cost, and will have this service up and running within two years. By contrast, Labor wants to drain the $2 billion Communications Fund and take $2 billion from the Future Fund to pay for a plan which will leave many Australians to wallow in coverage black holes, and which won’t even be up and running within this decade.

This is Labor’s so-called ‘Broadband Future’, and Commonwealth superannuants are expected to pay for it with their hard-earned entitlements. Perhaps it wouldn’t be so bad if it were only $2 billion they proposed to spend, but Labor’s Lindsay Tanner has also repeatedly refused to rule out further raids on the fund. He has refused to say what else Labor might use the Future Fund and its interest for, or how much might be left over for its intended purpose of paying superannuation entitlements when they’ve finished frittering it away on pointless broadband plans, consultative committees and advisory groups. This willingness on the part of Labor to pick superannuant pockets to pay for their promises begs a rather serious question: does Labor care about Commonwealth public servants at all?

Perhaps they don’t, Mr President, and perhaps they take these public servants and their roles for granted, and therein lies the problem. From the top of the party down to the local apparatchiks we see nothing but disdain for the public service, and hear nothing but loud rhetoric about big spending cuts which will put jobs at risk and severely curtail the important work our public servants do. Although my colleagues and I on this side of the house seriously doubt Labor’s ability to make these cuts given the dodgy maths their claims are based on, the fact is that they have long had the public service in their sights.

As if it isn’t bad enough that this is the case, as if it isn’t worrying enough that Labor is talking about cutting billions of dollars from the budgets of dozens of Departments, now they also want to rob those public servants who manage to hang on to their jobs long enough to accrue superannuation of this entitlement! Let’s be completely upfront about this: robbing the Future Fund is robbing from Commonwealth superannuants. Labor’s plan to raid the Future Fund amounts to a raid on the secure futures of many thousands of Commonwealth public servants.

There are some senior Labor figures that do not seem to have a problem with this. For example, in August this year in a debate on communications infrastructure, former Labor Leader Simon Crean told the Parliament: “The government’s solution is to put [savings] into the Future Fund, which does what? It meets the unfunded superannuation liabilities of who? Commonwealth public servants. Why should the nation’s savings be used for such a limited purpose? Why should the Future Fund be used to pay only the superannuation liabilities of Commonwealth public servants? Apparently, to Mr Crean, providing for the retirement of many thousands of Commonwealth workers is a “limited purpose”. Apparently, Labor doesn’t think this is a worthwhile way to spend a portion of the nation’s savings.

Well, I do. As Senator for the ACT, the territory where so many public servants are based, I know very well the contribution these workers make, and how hard they work on behalf of the Government of the day – whoever that Government may be. I know that many public servants spend their entire working lives within the service, accumulating a wealth of valuable experience and knowledge which Governments often rely on to guide their decision-making. And I believe that these workers, like all other Australians, have the right to know that when the time comes, their employer will be able to pay their superannuation entitlements, not turn around and say ‘Sorry, but we spent it all on broadband and some other stuff that seemed like a good idea at the time.’

This is why this Bill is so important, and why I am pleased to lend my support to it, particularly section 18A. It may seem as though this Bill just ties up the legislative loose ends surrounding the creation of the Higher Education Endowment Fund, but in reality, there is a much more important question at stake. That is: do we lock the Future Fund away from interference by governments so that it is able to meet the Commonwealth’s superannuation liabilities into the future, or do we leave it open to raids by any Government which needs a quick cash injection?

I know that I speak for the many thousands of Commonwealth public servants in my electorate when I say that the Future Fund should be treated as a locked box, not a piggy bank, and as an investment for the future, not a source of ready funds today. Commonwealth superannuants have just as much right to a financially secure future as all other Australian workers, and for that reason I would urge my colleagues on both sides of this chamber to support this Bill and save the Future Fund from the grubby hands of a future Labor Government or any others who would try to raid it.

George Campbell (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I seek leave to incorporate Senator McEwen’s speech on the Higher Education Endowment Fund Bill 2007.

Leave granted.

Anne McEwen (SA, Australian Labor Party) Share this | Link to this | Hansard source

The incorporated speech read as follows—

The Higher Education Endowment Fund Bill 2007 is a small step in the right direction towards providing Australia’s tertiary education institutions with the funding they need and that our nation urgently requires.

The Bill, and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007 follow the Government’s announcement in the 2007-08 Budget to create a continuous endowment fund which is intended to generate earnings to be used for research facilities and capital expenditure in Australia’s higher education institutions.

Labor supports this Bill with some reservations. Like so much of the legislation the Government brings to this chamber, it is too little too late and is a desperate attempt to remedy 11 years of neglect of a sector critical to the future economic and social well being of the nation.

We know that this legislation is here before the Senate only because Labor and Kevin Rudd have put education front and centre for the forthcoming election campaign and a desperate Prime Minister has decided he had better do something to make it look like he really cares about something other than caring about clinging on to power long enough to plan his retirement.

For 11 years the Howard Government has undermined and underfunded the higher education sector and it is only now, on the eve of an election that the Government has chosen to do something that will, hopefully, increase the sector’s funding. This funding mechanism, cumbersome though it is, is welcomed, but is not enough.

The National Tertiary Education Industry Union expressed a similar view stating in its submission to the Senate Enquiry into this Bill that it “acknowledges the Higher Education Endowment Fund does provide additional funding to universities, although we would stress that it in no way makes up for nearly a decade of serious disinvestment by the Commonwealth in Australia’s university system.”

A vibrant, well funded tertiary sector is a priority for the NTEU—the major union in that sector—but Mr. Howard made it clear from the beginning of his term as Prime Minister that education would not be an area that he would prioritise.

In his very first term of office in 1996, Mr Howard presided over budget cuts to university operating grants of a cumulative 6% from 1997 to 2000. That meant a massive $850 million loss to the sector.

Universities have  attempted to claw back this money somehow, and charging exorbitant amounts for degrees and taking in full fee paying students has been the avenue some have been forced to take.

In 1999, Prime Minister Howard infamously said that ‘The Government will not be introducing an American-style higher education system. There will be no $100 000 university fees under this Government.’ Of course that was another untruth from this Government and the most recent edition of the Good Universities Guide shows that there are now 104 domestic full-fee university degrees that cost in excess of $100 000, three of which cost more that $200 000.

Labor Leader Kevin Rudd made comment the other day about how he had benefited from a free tertiary education thanks to the vision of a former Labor Leader, Gough Whitlam.  Many of us in this Chamber were also beneficiaries of that system and it is depressing to see that in such a short time we have now got a university system that—unless this Government is stopped in its tracks—is fast approaching the bad old days when only the wealthy could afford to contemplate a tertiary eduction.

Unlike the soon to be retiring Prime Minister and the Treasurer, Mr. Costello, who would like to be Prime Minister and who has been instrumental in wrecking our higher education system, Labor on the other hand does support universities and does support students and proudly puts education front and centre of our vision for the future.

We are committed to phasing out domestic full-fee degrees at public universities commencing 1 January 2009 to ensure access for all young Australian students is based on merit rather than financial means.

This Government’s appalling disregard for the nation’s higher education system doesn’t stop at lack of funding. Another attack on our universities was the Howard Government’s introduction of Voluntary Student Unionism—despite the opposition of the sector. That was a spiteful and miserable piece of anti-student legislation which has had a significant impact on universities across the country.

This bullying, extremist Government saw VSU as a way to silence students and—in its usual blinkered, visionless way—failed to see the implications such legislation would have on universities and their surrounding communities. Student unions provide subsidised child care, organise sporting teams, provide free advocacy to students and create vibrant, social campuses. A number of these services provided by student unions were also made available to the local community and this was particularly important in regional areas. Student unions also paid for the maintenance of many buildings on campuses. By introducing VSU the Howard Government put even more financial pressures on universities to provide services and infrastructure on top of an  $850 million budget cut.

The Government’s own analysis has shown that there is a significant backlog of deferred infrastructure maintenance that has built up since 1996 when this Government was first elected.  That deferred maintenance expenditure was estimated by the Department of Education, Science & Training to be at $1.5 billion for the university sector. The Department’s figure appears to be  conservative.  The Group of Eight Universities estimated that the total deferred maintenance liabilities was $1.53 billion in 2006 for the Group of Eight universities alone.

A number of submissions to the Senate Inquiry into this Bill expressed the view that the Government’s under funding of the university sector since it came to power is a significant contributor to the current situation. The funding cuts made by the Howard Government have not only led to the deferment of essential expenditure on the maintenance of buildings and facilities, but have changed the operation of universities. With greater financial pressures, the quality of teaching in the university sector has been difficult to maintain, a situation that negatively affects hundreds of thousands of students across Australia.

According to Universities Australia, the student-staff ratio has gone from 14.6 students per teacher in 1995, to 20.4. The Group of Eight’s submission to the Senate Committee also found that universities have had to reduce academic salaries relative to average wages, making it difficult for the sector to attract top quality staff.

Of course, this Government’s only real contribution to the staffing situation at universities is to tie up administration in red tape, not the least of which is to force universities to offer AWAs as a condition of funding. This is a  classic example of the breathtaking hypocrisy of a Government that spruiks about freedom of association and choice and flexibility but really it is just an  interventionist and overbearing bully that demands the higher ed sector implements the governments IR agenda or risks funding.

The effects of this Government’s under funding of the tertiary sector has had real implications for Australians. Apart from Ireland, Australia spends the least on education of the English-speaking OECD countries.

Another damning statistic is that of the English speaking OECD countries, Australia now ranks second lowest for persons in the age groups 25 – 35 with an upper secondary education. 

These are appalling statistics that show under this Government Australia has not kept pace with our compatriot OECD countries. Instead of facilitating growth, the Government has stopped growth in the education sector.

Australia’s education system now relies on more private financing than all other OECD countries with the exceptions of the United States, Japan and South Korea.

It is an absolute disgrace that during a period of rapid economic growth, largely due to the resources boom—and in a period of huge government surpluses—we fail to provide for our educational institutions. An estimated 52% of the cost of tertiary education today is dependent on private sources, a huge increase from the 1995 figure of 35% dependency on private sources.

So now, in a desperate attempt from a desperate government to address its woeful lack of investment in Australia’s future, we are being asked to support the establishment of the Higher Education Endowment Fund, a financial asset fund consisting of cash and investments.

The Treasurer and the Finance Minister will have the power to credit cash amounts to the Fund through a Special Account which is created by the Bill. These Ministers will also be required to issue an Investment Mandate to the Board regarding the investment of monies in the Fund.

A Higher Education Endowment Fund Advisory Board will also be established. The chief role of this board will be to prepare reports for the nominated Minister as well as keeping the Minister informed on any relevant issues. The nominated Minister is in turn responsible for providing copies of those reports and the annual report to the Education Minister.

The consequential Bill amends the Future Fund Act and the Income Tax Assessment Act 1997 to support the implementation of the Higher Education Endowment Fund. The Bill consists of two primary amendments along with related changes and some minor amendments.

The first primary amendment is the extension of the Board’s functions under the Future Fund Act to include its functions under the HEEF legislation and the second amendment to the Future Fund Act is to ensure that investments will be consistent with the Future Fund’s objectives by including two limitations on its mandate.

Labor will support the Higher Education Endowment Bill 2007 and the Consequential Amendments as we recognise the importance of investing in our tertiary education facilities, particularly after the financial hardship they have faced over the last 11 years. We do, however, have a number of concerns which I would like to outline.

Firstly, the Bill gives the Education Minister of the day an enormous amount of power over the Endowment Fund. The Education Minister will decide who is on the Advisory board, appointing and dismissing members of the board at his or her own will. This allows for an incredibly biased, political board and not the independent board wanted by the sector. The National Tertiary Education Industry Union submitted that:

‘Given previous experience of the use of Ministerial power in relation to areas like the Australian Research Council grants process, the interests of transparency and good governance would be better met if the functions and responsibilities of the Board are set out in the Higher Education Endowment Fund Bill 2007. This must include the appointment process, which should be open and transparent.’

Many submissions received outlined another concern in regard to the Advisory Board and that is the credentials of those appointed to the board. It is important that the board is comprised of people who are very experienced in the tertiary education sector so that they will be able to make decisions that will be most beneficial to the sector.

From the submissions received it is clear that for the board to have the confidence of the sector there will need to be appropriate selection criteria. For example, The Australian Academy of Science expressed its hope that members of the Advisory Board will be appointed for their knowledge of the higher education sector, and on the basis that there is no conflict of interest.

The Australian Technology Network of Universities—in its submission—acknowledged that:

‘When assessing proposals, the Advisory Board will also consider the degree to which funding will support Government policy with respect to excellence, quality and specialisation.’ This consideration is particularly important as we face such an enormous skills shortage—another result of the lack of vision and future planning from this tired Government and its stale leadership.

Under this Bill, power is given to the Education Minister to give directions and authorise grants to eligible higher education institutions. With the allocation of grants determined only by the Education Minister, however, the grant process may not be independent and based solely on merit. The only requirement that needs to be met when allocating grants is that the board must have provided a statement for the relevant financial year. This does not stop the Minister from having complete control over the grants process as the Advisory Board is appointed by the Minister.

There is also the possibility of some institutions receiving large grants for the Government’s own political gain. While the Board will specify a maximum grants amount in accordance with the Maximum Grants Rules, these rules will be determined by the responsible Ministers. It has been advised that the deliberations regarding the Maximum Grant rules will be informed by external advice from an asset consultation, but this is not in the Bill and does not seem to have been committed to by the responsible Ministers.

The Group of Eight reflected these concerns in their submissions, stating:

‘The Bill vests control over the selection and allocations of grants from the Fund to the Minister of the day. With such large amounts of public funding involved, the policy priority should be the achievement of clear, transparent and non-political mechanisms for allocating grants. There are risks under this model that funding allocations will be based on political factors rather than on the merits of individual proposals or through any strategic consideration of the sector’s infrastructure needs.’

I note that the Scrutiny of Bills Committee Alert Digest no. 11/07 indicates that the Committee intends to ask the Minister whether or not the ministerial directions and authorisations in the Bill are appropriately exempted from disallowance provisions.  We look forward to the Minister’s response and note that, once again, the Government has put into the Chamber legislation that is insufficiently detailed and accompanied by an explanatory memorandum that is also lacking in detail.

Both the Australian Technology Network of Universities and Universities Australia noted that the legislation does not set out in any detail the rules by which funding is to be distributed under the HEEF.

This is concerning as without the detail, we cannot know if the system chosen will be fair or if it will disadvantage some institutions. Labor would like to know how the income expected to be generated through the fund will be distributed.

Many submissions noted concern with the requirement that a university is able to put up funds to match those provided by the fund. The Innovative Research Universities Australia stated in their submission that ‘matching funds should not be a requirement as some infrastructure cannot attract such funding.’ There is legitimate concern in the sector that this requirement would seriously damage a number of universities, particularly new, small and/or regional institutions.

There is also great concern regarding the possibility of a proportion of the grants being competitive. The March 2007 Productivity Commission Report on Public Support for Science and Innovation agreed that:

‘Competitive grants schemes effectively lock up a significant proportion of each university’s block funds and that any attempts to increase the proportion of competitive research funding relative to discretionary research block funding is not warranted and would threaten universities’ ability to undertake meaningful strategic research.’

That Report  also stated that ‘the high cost to universities in leveraging competitive grants is a threat to the quality of educational services that universities are able to deliver, especially in an environment where there have been significant real cuts in university operating grants for government supported students.’

It is unclear exactly how much funding the Higher Education Endowment Fund will provide as predictable returns will not be achievable over the first five years and very few of the Bill’s practicalities have been made available.

However The Federation of Australian Scientific Technological Societies estimates that the fund is likely to provide a funding stream of between $300 and $400 million per annum. This is a similar amount to the $300 million for each year from 2008-2011 estimated in the Treasurer’s Budget Paper.

Labor is particularly concerned by Section 49 which provides that in the event of a bad year and the Fund returns little or no income then the Fund will not release any money. Such a decision would mean a loss of an expected $300 million to the sector.  This has implications for eligible higher education providers that may be relying on being awarded approval for funds for infrastructure projects.

For Australia to be successful on an international level, it is crucial that Australia has high quality educational institutions. The Higher Education Endowment Fund will benefit research and capital projects, as well as improve the necessary infrastructure for teaching and research in the coming years. However the detail of the Bill will determine wether or not these benefits will extend to all tertiary education institutions.

I trust that the HEEF’s potential to be politicised will not be exploited and that we see the creation of a transparent funding process.

After 11 years of neglect, it’s about time the Government gave back to the universities of Australia.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

It is my pleasure to speak in favour of the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007 and to welcome them as yet another step in the Howard government’s advancement of Australia’s future prosperity. In particular, I acknowledge in the gallery today many young Australians who are obviously studying at present and who will be enjoying the benefits of this bill in their future years. Certainly, this is the type of initiative that is an investment in their future as much as it is an investment in the future of Australia.

The world is undergoing much global and economic change, and that is why higher education is so important to Australia’s future. I acknowledge that the Senate Standing Committee on Employment, Workplace Relations and Education completed a report on this bill, and within that report it stated:

... internationally, major investments are being made in universities and research facilities. These countries are Australia’s economic competitors, both now and in the future, and if Australia is to be successful on an international scale, then it is imperative for Australia to be able to compete in the top end of the market.

This new Higher Education Endowment Fund will ensure that Australia is well placed to compete at that top end of the education market. It injects $6 billion into a perpetual fund to ensure that our higher education facilities can have the resources, infrastructure and facilities that they deserve into the future. It is part of the Liberal-National government’s broad commitment to getting it right across the education sector, across all the aspects of education and learning that Senator Marshall referred to earlier—not a narrow focus just on universities or on any one particular area, but a commitment to getting it right everywhere. It focuses on our schools, investing in our schools and ensuring that we have the right curriculum—a curriculum that addresses basic skills in literacy and numeracy, a curriculum that ensures that young Australians learn about our history—and get the right mix of curriculum.

Indeed, the Senate only recently completed a report into academic standards in schools, instigated by the Howard government. This will be used as a driving force, I am sure, in the future to ensure that those standards are raised. This is coupled with government investment in the school sector standing at a very high level, supporting both the government and non-government sector, particularly through programs such as the Investing in our Schools Program, which again is providing the practical facilities that schools so desperately need.

It is not just about the schools sector and the higher education sector. This government has provided strong benefits to vocational education and training. This government has proudly reinvigorated traineeships and apprenticeships as an important part of that mix, which has ensured that we have more Australians undertaking such apprenticeships than has ever been the case before. These are proud achievements in getting the right mix of education throughout lifelong learning for all Australians. This will ensure that young Australians, such as those in the gallery today, have a great schooling system and at the end of that have the opportunity to choose the pathways that will suit them best, be it an apprenticeship, a traineeship or going on to university.

We have worked with TAFEs and with the vocational education and training sector. I acknowledge that in this budget we have introduced not only this Higher Education Endowment Fund but also FEE-HELP for VET students. In fact, we are providing practical support as a first and new measure to assist those undertaking vocational education and training, just as we have provided such support to university students over a long period of time.

The university sector is the focus of this legislation. The university sector, contrary to what we hear from the opposition and the minor parties, has been enjoying a resurgence and is doing extremely well under this government. We need only look at the revenues that the university sector is generating. Details were announced today by the Minister for Education, Science and Training, Julie Bishop, who is doing such a good job in all of these areas of education. Minister Bishop announced that revenues for universities reached in 2006 a record $15.5 billion. That is an increase of $1.6 billion or 11 per cent over the year 2005. That represents significant growth in the revenue available to our universities to support students, and to support and develop the facilities they require.

That level of revenue has been achieved because this government has funded more public places than ever before, as well as supporting the option of up-front fee-paying places. It is that mixture of fee-paying places and government supported places that has provided universities with the surge in revenue that will allow them to achieve great things into the future.

Government funded places, as I said, have also been on the rise. The minister announced only last week 2,300 new Commonwealth supported places to help meet the demand for higher education into the future. These places are addressing student demand and skill needs for Australia. They include 560 new places for engineers, 390 new places for science professionals, 395 new places for nurses, 375 new teaching places, and 210 places for other health professionals. All up, they will contribute to around 4,600 new places that the government allocated last year, in 2006. So the Howard government is building growth upon growth in our university sector. Ultimately, it is expected that 50,000 new university places will be funded by the Australian government by 2011. This represents significant investment in university places for young Australians by this government.

We actually have historically low levels for the number of eligible students who cannot get a place. Some 92 per cent of eligible students received an offer this year, up from 90 per cent last year. So, contrary to what we hear at times from those on the other side of this chamber, it is the best result in more than two decades. If a young person qualified for a place in university, in the last year they had the best chance of getting that place in more than two decades. That is a great achievement by this government. I acknowledge that Senator Marshall in his comments recognised that enrolments in universities have more than doubled under this government. That is a proud achievement—that we have increased the number of places in universities and increased the funding in universities to match. That is why this government has something to be proud of with regard to its work in the university sector.

In my home state of South Australia, some 290 of these places will be injected for this year. They will fund 95 new science professionals, 90 engineers, 75 nurses, 10 teachers, 10 health professionals and 10 psychologists—additional places in key skills areas and additional opportunities for young South Australians. By 2013 the Australian government will have funded another 830 university places in South Australia. Coupled with this was an announcement which is of great benefit to South Australia: the government is supporting our first veterinary science school, at the University of Adelaide’s Roseworthy campus. For too long young South Australians who have aspired to study veterinary science have had to leave South Australia and study elsewhere. Now we will have a new veterinary science school proudly established at Roseworthy. I acknowledge the commitment of the minister to contributing $15 million in one-off funding to allow the University of Adelaide to establish this school. That is funding for places so that by 2013 up to 270 young people will be studying at the campus for either a Bachelor of Animal Science degree or a Master of Veterinary Science degree. This is a great achievement. In addition to acknowledging the minister, I acknowledge David Fawcett, the member for Wakefield, where the Roseworthy campus is based. He is a very hardworking local member who campaigned very hard to achieve the funding for this university campus from this government. It is a proud achievement for David Fawcett and for the government that we have managed to deliver this new opportunity for young South Australians.

This is a healthy tertiary education sector with a bright future that is being made even brighter by the funding provided as a result of the Higher Education Endowment Fund. As we have heard, the fund will take the opportunities for universities to invest in their facilities and infrastructure to a new level. It will create a special account under the Future Fund, managed by Future Fund trustees. It was initially announced in the budget this year at $5 billion but was subsequently increased to $6 billion. A long-term commitment was made by the Treasurer to take that amount further, to hopefully see at least $10 billion in this fund. I hope for even more over the years, for a perpetual fund that will provide ongoing financial support to our tertiary sector. As the Senate committee acknowledged:

The HEEF is expected to significantly increase the funds that are available to be invested in the higher education sector.

It went further:

This investment has been enthusiastically welcomed by the sector.

This is good news that is well appreciated by our universities. It is estimated that the initial investment will provide some $300 million to $400 million per annum for investments. These investments will be assessed by an independent advisory committee. So we will ensure that the money goes where it is needed most. That is in addition to the ongoing investment from this government in the higher education sector. The minister has made it perfectly clear that this fund will not be in place of anything—that it is an additional boost. It is in addition to the Capital Development Pool, which has had approximately $607 million invested over the past 11 years; it is in addition to the Research Infrastructure Block Grants, which have had approximately $1.5 billion invested over the same period; and it is in addition to the Major National Research Facilities Program, in which over $59 million has been invested. Over the next five years an estimated $540 million will be invested in the National Collaborative Research Infrastructure Strategy. This is not just about supporting new university places and the facilities at our universities; it is a great investment in the research and development and intellectual capabilities of Australia going into the future.

As my colleague Senator Barnett acknowledged, the fund will also be open to philanthropic donations. As a government, we hope the fund will provide a vehicle to encourage further consideration by the private sector to support these universities and to support the future potential for such excellence in Australian higher education. The Senate committee noted:

Grants from the HEEF are intended to promote the development of a world-class higher education sector with the provision of significant, targeted and strategic investments in the sector. The committee believes the HEEF has the capacity to deliver excellence in the higher education sector.

I welcome those findings of the cross-party committee. It is important that we do deliver these benefits, this additional funding and the financial gains it will provide to our universities.

The government are able to make this major social investment in Australia’s education sector because of 11 years of good economic management. This is part of the social dividend that we as a government are able to deliver that would not have been possible 11 years ago. Why would it not have been possible 11 years ago? Because 11 years ago we were paying more than $6 billion a year in interest on Labor’s $90 billion of debt. That is the reason. We were having to fork out this type of money on an annual basis as a nation just to meet debt payments. Now, 11 years later, this government has turned that around, has eliminated the debt and is making investments in the future—investments into the Future Fund that will clear up our future public sector superannuation liabilities; and investments into the Communications Fund, a $2 billion investment to ensure that into the future Australia’s rural and regional communities get the types of communications infrastructure they need.

Once again Senator Marshall, in his comments, committed the Labor Party not just to raiding the Communications Fund but to spending it all in one fell swoop and wiping it out. This is the type of attitude we have coming from the other side of the chamber. The risk the Higher Education Endowment Fund will face and the risk the Future Fund will face is that we will see a Labor government that not just starts to take little bits of it but starts to spend the whole lot on its way to placing Australia in debt again.

I welcome the establishment of the Higher Education Endowment Fund. It is a major investment into our university sector. It has been enthusiastically welcomed by our university sector. It is a demonstration, again, of this government’s commitment to fiscal responsibility as well as to investing into the future—to actually be putting money aside for perpetual investments into the future. A re-elected Howard government would no doubt be able to build on the approach of the last couple of years in the establishment of these funds to build them up to reduce the tax requirements for future generations and to ensure that we have the type of ongoing investment in Australia’s economic and social infrastructure that is required. I am confident that this will be of great benefit to many future students in Australia’s university sector, and I endorse the bill to the Senate.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

The Higher Education Endowment Fund Bill 2007 implements the government’s budget announcement about the establishment of a perpetual endowment fund for the use of higher education institutes in this country. The fund so set up will generate earnings which can then be applied for and used for capital projects. The Treasurer and the finance ministers will be given the powers to credit cash amounts to this fund, which will in turn be managed by a board of guardians. The responsible ministers then issue an investment mandate—a series of ministerial directions—to the board regarding the investment of the funds and benchmark returns expected on these investments. They will also have the powers of setting the rules for determining the maximum amount of payments from these funds. We note here that these directions will be tabled in parliament as legislative instruments. I understand, though, that these instruments will not be disallowable. The Minister for Education, Science and Training is responsible for appointments to the board and then responsible for authorising grants from the fund based on advice from the Higher Education Endowment Fund Advisory Board.

We note that, by including non-disallowable instruments concerning ministerial determinations and Higher Education Endowment Fund investments, the government is actually minimising the transparency and accountability of the processes surrounding this fund, its investment and allocations. I know that the bills concerning the establishment of this fund were sent to the Senate Standing Committee on Employment, Workplace Relations and Education, and concerns have been expressed about the operation of this fund and the way in which the funds emanating from this will be distributed. In fact, we have expressed concerns and uncertainty about exactly how it would work.

I noticed when the majority report was tabled that it played down the risk of the fund being used for pork-barrelling and, of course, I questioned whether the advisory board would have the expertise that is needed in order to allocate this fund. We know that the board is going to have a chairman and six members, including the Secretary of the Department of Education, Science and Training and the Chief Scientist. The minister has told us that members will be chosen for their knowledge of the higher education sector—that is probably a good thing, an essential thing—and other relevant expertise. ‘Other relevant expertise’ is yet to be defined.

We are not sure what that would mean. Perhaps under this government it would mean previous Liberal government members or even ministers. As we have seen with the Regional Partnerships program, this government is not averse to ensuring that funds it sets up are delivered and directed most prominently to its marginal seats, so we have grave reservations about how these funds will be allocated. The implications for the higher education providers that may be relying on being awarded approval for the endowment funds for infrastructure programs are, I think, fairly massive under this government. We know that decisions may well be made for political purposes. I noticed that in the minority report Senator Stott Despoja actually suggested that the funding recommendations from the board be made publicly available and the funding guidelines should be subject to parliamentary scrutiny and veto. So there are concerns about not only exactly how this fund will operate but how the funds will be awarded and established at the end of the day, particularly under this government.

We are in the position of having publicly said that we would of course support much-needed funding for higher education, but we are critical of this government, which has neglected higher education for so many years. In fact, we have seen a real funding decline in this sector since this government came to power in 1996. The government commenced cuts to this sector of the education industry in its first budget in 1996, under Senator Vanstone, and has never reversed the trend. It has never turned around the funding implications and the funding cuts. It has never reversed the trend in cuts to the higher education sector in its 11 long years in government. It has forced universities to find other funding avenues and forced students to pay even higher fees.

The government’s own estimates are that there is a backlog of $1.5 billion in infrastructure needs in the higher education sector, so no wonder it has sought to set up a fund under the guise that this is something new and wonderful. Once again, this government is really playing catch-up for its 11 long years of neglect. Universities have put a much higher figure on what is needed in infrastructure. This government would say $1.5 billion; the Group of Eight say that it is closer to $1.53 billion just for them alone. That is $1.53 billion for just the Group of Eight, unlike this government’s guesstimate, which is $1.5 billion for our 38 universities, so there is quite a significant difference in where this government believes the infrastructure shortfall is at this point in time.

As a proportion of their total revenue, this government has cut Commonwealth grants to universities from 57 per cent in 1996 to only 41 per cent in 2004. It has forced universities to raise 24 per cent of their revenue from fees and charges since 2004. While just about every other developed country has been increasing higher education funding, the Howard government has gone the other way. The result of this perverse policy, bucking the trend of the rest of the developed world, has been that, since 1995, student to staff ratios have increased from 14.6 to 20.4 today. Bigger class sizes clearly have an adverse impact on teaching and learning, but this is a concept that this government has failed to grasp—not only in the higher education sector but particularly in primary schools and in early childhood education, where the government believes quality teaching is the be-all and end-all to outcomes in education, as opposed to actually looking at staff-student ratios, resources and infrastructure needs. Many lectures are now given to groups of well over 100 per class. Tutorials and seminars, too, have decreased in numbers offered and have increased in class size.

The Group of Eight sum it up in their submission to the Senate inquiry, in saying that the implications of the funding cuts are fivefold:

1. large increases in student to staff ratios, with implications for quality of teaching and learning;

2. reductions in academic salaries relative to average wages, with implications for the sector’s ability to attract top talent;

3. the deferment of essential expenditure on the maintenance of buildings and facilities, with long term consequences for the quality of essential infrastructure;

4. the pursuit of alternative sources of income, for example from full-fee domestic and international students; and

5. the pursuit of various practices designed to increase productivity and reduce costs.

These are all indicators of the implications of the funding cuts under this government.

Indeed, this government has been more concerned with forcing their industrial relations laws on the higher education sector than they have been with the quality of the education itself. Our higher education system now relies more on private financing than all other OECD countries except, of course, America, Japan and South Korea. It is clear that the present Prime Minister follows everything the American government would want us to do, and he would have us go the same way. We often talk about and hear about the Americanisation of our higher education system. The average amount of Commonwealth funding per student has declined in real terms over the life of this government by nearly $1,500. At the same time, HECS fees and other charges have had to rise to cover not only the real decline in government funding but the ever-rising costs faced by universities. Even with the rising charges and fees, universities have often had no choice but to defer important capital infrastructure projects.

Now they may have the chance to get some of this work funded, although there is no guarantee of that under the model proposed by this government. Submissions for assistance from this fund will be made on a competitive basis, by competitive tender on as yet unknown criteria. It is, therefore, possible under such conditions that the smaller, newer universities and institutions in the regions may be disadvantaged by this process. I might say that institutions that, perhaps, are in very safe Labor seats may well be disadvantaged as well. They may lack the economies of scale of projects on larger campuses or be forced to incur higher costs due to isolation.

Of course, the amount available will depend on the performance of the fund and the returns managed. Over the past few years, these returns might have been expected to be high, but in the present situation the financial market is quite volatile, largely—and very ironically—tied to the economic situation in the Prime Minister’s favourite country, once again, America. Returns have become far less predictable and may, indeed, be very low in the present circumstances. Under the maximum grant rules, the ministers responsible cannot allow payments to exceed accumulated nominal earnings, so the trust fund has to earn a return, and this may not be much in the early days. Mercer Investment Consulting, under Bruce Gregor, presented evidence before the Senate inquiry which said that a provision designed to preserve the government’s initial cash contribution would impose a very defensive investment strategy, possibly leading to no returns at all in the event of extreme market volatility in the early years.

This fund will not be operating until the end of this financial year and will certainly not be of immediate benefit. One would have to say that 18 months from now might see some funds available for payment towards replacing or repairing degraded infrastructure. The budget papers have the fund returning a notional $300 million a year, but, as indicated earlier, this is by no means guaranteed. However, even at this rate, if the Group of Eight are correct with their estimate of their needs being $1.53 billion between them, it would take six years of returns to meet the needs of just those eight universities. In their submission to the Senate committee, the Group of Eight said:

While $6 billion is a large amount of money it needs to be viewed in the context of recent funding trends for Australia’s public universities, the recurrent expenses and infrastructure challenges they now face, and international developments in public investment in higher education systems.

In other words, it is not as generous as this government would have us believe. The appointed advisory board will advise not only on grants made but also on investment proposals and strategies. As I said, this board will have a chair and six members, all appointed by the minister and able to be unappointed and dismissed by that minister.

The Senate inquiry into this legislation received several submissions expressing concern about the composition and appointment of this board. Again, these ministerial discretions are non-disallowable instruments, so the degree of transparency and accountability of the board can be questioned. The board could be open—and will be open, I suggest—to undue pressures or influence, as we have seen in the past, as I mentioned before, with the Regional Partnerships program. Again, I use the Group of Eight submission to reinforce this point. They say:

However, as introduced the Minister will determine who sits on the Fund’s Advisory Board (ss.40(2 &3)), how the Board is to carry out its function and the processes by which it will operate (ss.40(4)), will decide which grants are funded (s.45) and the terms of any funding (ss.50(3)).

The Group of Eight go on to say:

There are risks under this model that funding allocations will be based on political factors rather than on the merits of individual proposals, or through any strategic consideration of the sector’s infrastructure needs.

Philanthropic gifts can be paid into this fund; however, under this legislation they cannot be for any specific project. You would perhaps have to wonder why you would not just give your money to a single institution in its own right rather than go through the fund. The funds will go into the general ‘pool’, so a grateful former student of a particular university will be able to donate to the fund but will not have a say in where their donation is used—hardly any real incentive to donate. Despite all these doubts about the workability of the fund, it is a sure sign that, after 11 years of neglect, the Howard government has, in its own way, rediscovered higher education. ‘It must be an election year,’ I hear you say.

The recent ACOSS report A fair go for all Australians: international comparisons, 2007 found that Australia spends the least on education of the six English-speaking OECD countries except Ireland. We are lagging behind Canada, UK, New Zealand and the United States. The OECD report Education at a glance for 2006 shows that we are fourth lowest in the proportion of public expenditure on education—not a performance, I would have thought, that would give much optimism for the future of the skilling of this country.

The government of course makes all the excuses it possibly can and brings out the spin doctors and statistics geniuses to deny these reports. Even today we have Senator Bishop denying figures that have been released in an international report with regard to school education.

Kate Lundy (ACT, Australian Labor Party, Shadow Minister for Local Government) Share this | Link to this | Hansard source

Minister Bishop. You said ‘Senator Bishop’.

Trish Crossin (NT, Australian Labor Party) Share this | Link to this | Hansard source

Well, we wouldn’t give her that elevation. We have had Minister Bishop denying funding reports on an international report on primary education, saying that they are the wrong statistics at the wrong time, without looking at the fact that, during the period this government has been in office, higher education investment has declined no matter what sector you look at and no matter what period of time you concentrate on. Statistics are used by this government to disguise their neglect of the sector. They roll together figures for expenditure on both public education and private education to hide the fact that sometimes we are talking about money specifically being withdrawn from public education. Private education is necessary, of course, but private is private and public is public; they are two different things and they are funded quite differently by this government.

Australian public funding of tertiary education is at 48 per cent of their funds, down from nearly 65 per cent in 1995 and compared to the OECD average of 76.4 per cent. So, when the OECD average for public funding of tertiary education is over 75 per cent, here in Australia it languishes at 48 per cent. While spending on tertiary education has risen in real terms against the base figure for 1995, it has declined considerably in per-student terms due to the large rise in student numbers. It has declined by around $1,500 per student. ABS figures show that since 2001 spending has risen by six per cent but student numbers have gone up by 12 per cent.

I have already stated the effects of this: larger class sizes, less one on one with lecturers and tutors, more reliance on classes being delivered online through the internet, and, of course, increased fees payable by students one way or another. Student fees and charges have risen from 13 per cent of tertiary revenue in 1996 to 24 per cent of tertiary revenue in 2004 and they are rising annually. Aussie students now face mounting HECS debts after completing studies or higher full course fees to get their degrees. Our universities have been forced to rely more and more on HECS fee increases and full-fee-paying students, whether domestic or overseas—predominantly, I would have thought, overseas. It is not a desirable or long sustainable situation as more overseas countries such as China increase their own provision of tertiary education.

As said previously, this Higher Education Endowment Fund will be supported by Labor, although it could be seen as too little, too late. There are obvious faults with the way in which it is proposed to be managed, with government ministers having too many unfettered powers and with many of the regulations being determined as non-disallowable instruments. There is too little transparency and accountability. It is very welcome, provided, too, that it is not used to replace existing programs. Again, I refer to the submission from the Group of Eight, in which they said:

There are a variety of existing Commonwealth Schemes that directly or indirectly support investment in university capital and research infrastructure.

They said that, for reasons outlined in their submission:

… it is critical that the HEEF never be seen as a substitute for these important schemes which each serve specific purposes.

Labor believes that the income derived from this fund should be available as an addition to any existing program and that it should be available to those projects that genuinely advance our national interests and not just for any short-term political interests of the government of the day.

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

We have seen overnight, with the latest OECD report, that Australia lags well behind comparable countries in public investment in education. In fact, for public investment in education Australia ranks 29th out of 34 countries in the OECD report. Those countries that choose to put more public money into education have better educational outcomes and do better economically. The GDP of those countries that choose to invest public money in education is higher than that of Australia.

We have the opportunity here in Australia to invest more public money in education so that we cannot only improve the quality of education but improve our society and our economy. The Greens call on the government to invest an additional $5.5 billion of public funds in education each year. If the government invested an additional $5.5 billion each year in education, that would put us among the top 10 comparable countries in the OECD—it would bring us up to about seventh—in terms of public investment in education.

The Higher Education Endowment Fund Bill 2007 relates to a $5 billion education announcement that occurred on budget night. It is not a decision to invest $5 billion each year but rather a one-off payment to go into a fund, the interest of which will be invested into capital infrastructure and research at Australia’s universities. Five billion dollars for education is a good thing, and the Greens support this bill because it puts public funds into education. But we have a variety of different ideas about how you might choose to invest $5 billion in higher education. One of the things the Greens have been advocating for many years now is that we return to a situation where students are able to get into university based on their ability and their merit rather than their capacity to pay. Five billion dollars could go a long way to removing the exorbitant HECS fees that students have to pay right now in order to get into university. The Greens would like to see the federal government investing money in higher education for the purpose of making higher education more accessible. Let us ensure that all the students who qualify academically are able to access a university rather than just those who are able to pay the fees associated with it. We would like to see our whole society benefit from a government investment in higher education that allows more people to access higher education. Our whole society would benefit from more people having the opportunity to access higher education. Funding that would remove HECS fees and full fees that prevent students from accessing higher education would be a worthwhile investment. The Greens would like to see the government put funding into higher education to do that.

We have other priorities and ideas about what might be the best way to invest $5 billion in higher education. We are concerned that these bills fall well short of what could be achieved with this kind of money available to the government. We are also concerned that the control over the distribution of the income generated by these funds leaves too much power in the hands of the education minister. On budget night, the Greens were the first to point out that the $5 billion headline could amount to less government investment going into university research and infrastructure than currently occurs. These concerns have been borne out by the ambiguous statements from the minister and the department about whether the income in this fund will be additional funds. The minister was reported in the Australian saying that these funds would ‘eventually supersede other capital funding sources such as the Capital Development Pool’. Yet in her second reading speech on this bill, the minister assured us that this is not intended to be a recurrent funding stream. That would be nice, if you could believe that.

The thrust of the way in which the government has been funding education—or not funding education—over the 11 years it has been in office has resulted in a shift away from government money to private funding. That is another thing we found in the OECD report that came out overnight—that shift to fund education in this country has moved onto the shoulders of students and their parents, as the government has pulled out funding. The government has reduced the amount of public investment in education and, instead, put the burden onto students and their parents. There has been an overall shift by this government in relation to education funding. I think we need to look at this bill in that context—that the government has reduced public funding and has put the funding burden onto individual parents and students.

Another confusing aspect of policy in this bill relates to philanthropy. The kind of philanthropy that the minister talks about that occurs in the US and the UK to encourage the university sector in those countries would not be effectively stimulated by this fund. The legislation fails to show how potential donors would be encouraged to contribute when the funds would be swallowed into the government fund. It does not allow the kind of support for specific projects that donors usually require. The reality is that most donors will continue to contribute directly to the institutions which they are interested in supporting and this fund will remain largely a public fund.

The way in which this fund is significantly different to other funds paid for from taxpayer surplus funds is not clear. What does it matter to the university or the taxpayer that the investments that have generated the funding have been labelled the Higher Education Endowment Fund rather than some other label where the surplus is invested? The key difference seems to be that this fund allows even greater power over the direction of research investment to rest with the minister.

The Greens share the concerns of others about the lack of transparency about the decision-making process that the minister would follow in approving projects paid for from this fund. The previous minister showed a willingness to ignore the advice of the Australian Research Council in rejecting research funding applications. Why does the government think that it is appropriate for a minister to reject the advice of expert panels without having to give reasons to the parliament? Why does the government think it is appropriate to make the determinations of the minister not subject to disallowance or approval by this parliament?

The government seems to have set up a fund which made great headlines on budget night but which fails to deliver on any significant educational or public interest grounds above what already happens. The Greens conclude that the government would be better off investing the $5 billion directly in the higher education sector now. Failing that, the government should put more government revenue—and that is all this fund is, just revenue with a different name—into recurrent funding of research. They should not add to the complexity of the research funding competition by introducing another competitive funding source. Instead, why can’t we see more funding going through the Australian Research Council block grant model?

Investing $5 billion in higher education is a good and necessary thing. The Greens call on the federal government to put an additional $5.5 billion into education each year so that we can go from being right at the bottom of comparable OECD countries in terms of public investment in education to being up in the top 10. The Greens have pointed to other ideas about how the government could spend its $5 billion by investing in higher education, including the abolition of HECS and making universities accessible to those who have the ability to get into university rather than simply being able to afford it. I foreshadow that I will move a second reading amendment on behalf of the Australian Greens.

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

Senator Nettle sat down before I thought she was going to.

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

Are you going to support our second reading amendment?

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

No, I want to conclude the debate.

Ruth Webber (WA, Australian Labor Party) Share this | Link to this | Hansard source

Ha!

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

That is not as funny as it might seem, Senator Webber, because it is a serious issue.

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

You support my higher education amendments as a rule!

Chris Ellison (WA, Liberal Party, Minister for Human Services) Share this | Link to this | Hansard source

Senator Carr knows very well that we have a history with education going back some years. We might have both shared an interest in it but I am not so sure we agreed on how that interest was to be reflected. The Higher Education Endowment Fund is an unprecedented investment in higher education in Australia. That is a common theme and something which is accepted. This is a $6 billion fund which provides future funding for capital and research facilities in the higher education sector. It is a true endowment fund, with a requirement in the legislation to maintain its real value over the medium to long term. Grants from the endowment fund will be directed towards promoting excellence, diversity, quality and specialisation in Australian universities—all laudable goals which I am sure are supported by all.

There will be an advisory board to ensure that grants are allocated in a way that delivers meaningful outcomes for the sector. This independent Higher Education Endowment Fund Advisory Board will be established to provide advice to the education minister, and its role will be to advise on the best way to implement and manage the endowment fund.

The provisions of the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007 allow for the movement of moneys into the endowment fund and for those moneys to be invested for the future. The responsibility for that investment rests with the Future Fund Board of Guardians. So there is a layer of probity, accountability and prudential requirement.

The sector will have a genuine opportunity to provide input into the development of guidelines, outlining how the funding program will operate. There is no requirement for this level of detail to be included in the legislation, but I say that so that it is on the record. I think the sector would welcome that opportunity to provide input.

Consistent with the government’s aim of encouraging diversity within the sector, all institutions listed under table A and table B of the Higher Education Support Act 2003 will be eligible to apply for funding. That is something which speaks for itself and is open to transparency and public inspection.

With the establishment of the endowment fund the government has created a new avenue for business and the general public to make philanthropic donations to the sector. That is something that universities in particular benefit from. In my home state of Western Australia, the University of Western Australia has, over a period of time, enjoyed that to great benefit. That is the reason it is perhaps one of the wealthiest universities in the country.

In the first instance, the bills provide that tax deductable gifts of money to the endowment fund will only be able to be accepted on an unconditional basis. At the time the endowment fund was announced, the government indicated that contributions could be earmarked for particular universities and that universities could choose to have their own philanthropic funds managed along with the endowment fund. These issues will be addressed following more detailed consultation with the higher education sector and the board of guardians. The government may then consider amendments to the legislation.

In order to support the establishment and operation of the Higher Education Endowment Fund, amendments to the Future Fund Act 2006 and the Income Tax Assessment Act 1997 are required. Broadly, the amendments to the Future Fund Act extend the functions of the board of guardians to include its functions under the endowment fund act. The bill also makes it clear that there are two investment mandates that the responsible ministers can issue to the board: one for the Future Fund and one for the endowment fund. Correspondingly, the consequential bill clarifies that the board has two investment functions: one for the Future Fund and one for the endowment fund.

Both bills set out the limitation of the investment mandates. In line with good governance practice, the bills also specify that the responsible ministers cannot direct the board to use the assets of the Future Fund to invest or support particular financial assets. The Income Tax Assessment Act is also being amended to allow deductable gifts of money to be made to the endowment fund. I thank those senators who have contributed to this debate and, in particular, the standing committee for its work in relation to these bills. I commend these bills to the Senate.

Gavin Marshall (Victoria, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the second reading amendment moved by Senator Carr be agreed to.

Question negatived.

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

I move in respect of the Higher Education Endowment Fund Bill 2007:

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

             (a)    condemns the government for failing to invest adequate public funds into higher education and consequently:

                   (i)    leaving Australia languishing 29th out of 34 Organisation for Economic Cooperation and Development (OECD) countries by public investment in higher education,

                  (ii)    presiding over a decrease in real terms in public investment in higher education over the past decade,

                 (iii)    allowing teacher student ratios in universities to blow out to over 1:20,

                 (iv)    increasing the financial  burden on students who now pay almost the highest proportion of the cost of their education in the OECD,

                  (v)    forcing universities into competitive commercial management models that have put educational outcomes below financial considerations,

                 (vi)    forcing universities to pursue alternative funding sources that have skewed the academic profile of those universities, and

                (vii)    leaving academic and general staff under increased pressure, impacting on their ability to provide the best quality services our students deserve; and

             (b)    calls on the government to reverse its policy of university privatisation and instead:

                   (i)    abolish the Higher Education Contribution Scheme and upfront full fees for all appropriately qualified domestic students, returning Australia to a fee free higher education system,

                  (ii)    commit to a per student increase in direct Commonwealth grants to universities to bring Australia up to the top ten of OECD nations by public investment in higher education,

                 (iii)    ensure that Commonwealth support for region and rural universities allows those institutions to prosper as both research and teaching institutions, and

                 (iv)    boost the numbers of Aboriginals and Torres Strait Islanders that both graduate from and work in the university system”.

Question negatived.

by leave—I note that the Greens were the only people in the chamber to support that amendment.

Original question agreed to.

Bills read a second time.