Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I have a question for the minister. Minister, this in a sense picks up from where we left off in our last discussion. Under the National Governance Protocols for Higher Education Providers the date for determination of compliance—as you know—is 31 August each year. Were universities expected to be compliant with the national governance protocols on that date?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Under the existing law that is the case. But perhaps I should add this, in terms of the government’s proposal for new arrangements. Following the repeal of the national governance protocols the minister will advise ministers that pending the development and the implementation of a new voluntary code she regards the national governance protocols as an ongoing benchmark for good governance practice. She would regard any substantial noncompliance with this benchmark—whether reflected in a recommendation arising from the quality audit by the AUQA or otherwise—as indicating a potential breach of the quality requirements specified in section 19-15 of the Higher Education Support Act.

It is a condition of funding under the Commonwealth Grants Scheme that the higher education provider must meet the quality and accountability requirements that are covered by sections 36-60. If a provider breaches a condition of a grant, the minister may reduce or require repayment of the grant under section 54-1—of course, with the additional matters in terms of the process that that covers, which are covered by other sections. The minister may also revoke a body’s approval as a higher education provider if the minister is satisfied that it has breached a condition of a grant or a quality and accountability requirement. That is covered by section 22-15.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I thank you for that comprehensive answer. In effect, Minister, the government is saying that financial impositions can be placed upon universities for noncompliance.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Senator Mason, that has always been the case. My proposition to you—and I repeat the proposition I have advanced in the previous times we have canvassed these matters—is that those compliance provisions should be accompanied by a proper understanding of the processes by which a minister must enforce the law. They are quite detailed and are covered in the act as well. It is my understanding that there has never been a requirement from a minister of either side—because these provisions have been in all the higher education funding acts for some time—to repay grants. Up to this point they have been resolved through a process of negotiation. The powers of the minister, the powers of the Commonwealth in the administration of higher education grants, be they in the teaching or research program, are substantial, and it would be unwise for an education provider to fail to fulfil their obligations under the act. Equally, those powers go to the point, as I have just indicated, where an education provider may have their approval revoked—the minister has the power to revoke a body’s approval as a higher education provider if they fail to comply.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I might then make some summary remarks before moving my amendments. I want to thank the minister again for his answers this morning. They are helpful. I think it is fair enough then to say, Minister, that we have established that the government does not in principle oppose the imposition of funding conditionality. The minister just mentioned section 19-15 and, of course, section 54-1. Both of them indicate that. No matter how you dress it up, 54-1 is funding conditionality, as is 19-15, and carries with it the possibility of financial sanction or even ultimately the closing down of the higher education institution. I repeat this point, particularly perhaps for Senator Milne’s benefit, just to illustrate that the minister has plenty in her armoury if there are non-compliant universities. The National Governance Protocols, in the opposition’s view, are not unusually punitive. That would be our argument.

Secondly, the minister mentioned last time in committee—and just a few seconds ago—that no university has been sanctioned under section 54-1, and I am sure, Minister, you are correct. But it was revealed in estimates earlier this year that every university was also compliant with the national governance protocols. Indeed, my first question to you this morning, Minister, referred to the fact that all universities seem to be complying with the national governance protocols to date. I repeat, all universities were complying with the national governance protocols. I think it is important to state that.

Thirdly, there has been no evidence in this debate beyond conjecture that any of the national governance protocols are inhibiting creativity or diversity in higher education. There has been only surmise. Senator Ludwig the other day in committee said that universities would be placed in a straitjacket. No-one can give an example of when this has occurred, nor of any particular protocol that inhibits creativity or diversity. So, again, my view is that it is surmise.

Fourthly—and I am repeating myself, but I think it is important to do this—we are talking here about the expenditure of $9 billion of public money. The national governance protocols were supported. They were developed and indeed welcomed by the university sector. They were welcomed—why? Because universities had a history and a reputation for lacking first-class governance. I do not think that that particular point is under debate. There were no real criticisms of the protocols until the government decided to be rid of the protocols. There was some muted criticism about compliance, but there always is when people are under threat of sanction for noncompliance with auditing principles. As I mentioned the other night, the fact that a few vice-chancellors do not welcome the scrutiny and accountability of these measures does not faze the opposition; we are much more concerned with protecting public expenditure—taxpayers’ money—than we are with the convenience of vice-chancellors.

The opposition’s amendment that I will introduce will do three things. Firstly it will require universities and higher education providers to keep meeting the national governance protocols as a condition of increased funding under the Commonwealth Grants Scheme. Secondly, it will retain the provision that for the funding to be affected the minister must be satisfied that the provider does not meet the requirements, known as the national governance protocols. In the event that the minister is not satisfied that the protocols have been met, he or she can apply a penalty. In short, the amendment restores the tried and tested relationship of conditionality for additional funding where universities meet the national governance protocols. With that, I move:

(1)    Schedule 1, item 6, page 3 (line 28) to page 4 (line 1), omit the item, substitute:

6 Section 33-17

Repeal the section, substitute:

33-17 Reduction in assistance for higher education providers failing to meet certain requirements

        (1)    A higher education provider’s *basic grant amount for a year is reduced if the Minister is satisfied that the provider does not meet the requirements known as the National Governance Protocols that were specified in the Commonwealth Grant Scheme Guidelines, as in force on 27 February 2008, as at 31 August, in the year preceding the year.

        (2)    The reduction under subsection (1) is an amount equal to the amount that would have been the increase under repealed section 33-15 if:

             (a)    the provider had been entitled to an increase of 7.5% under that section as in force immediately before the commencement of Schedule 2 to the Higher Education Legislation Amendment (2007 Budget Measures) Act 2007; and

             (b)    the *funding clusters were the funding clusters that existed immediately before the commencement of Schedule 2 to the Higher Education Legislation Amendment (2007 Budget Measures) Act 2007; and

             (c)    the *Commonwealth contribution amount for each of those funding clusters was the amount that would have been the Commonwealth contribution amount for the funding cluster for the year if the amounts in the table in section 33-10 had not been amended by the Higher Education Legislation Amendment (2007 Budget Measures) Act 2007 or any later Act.

(2)    Schedule 1, item 7, page 4 (lines 2 to 5), omit the item, substitute:

7 Application—section 33-17

Section 33-17 as in force immediately after the commencement of item 6 of this Schedule has no effect in relation to a higher education provider’s *basic grant amount for the grant year 2008.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I did not have an opportunity to contribute in the second reading stage, but my remarks will be confined to the substance of these amendments. Since the second reading stage, I have had an opportunity to have a briefing from the government and I have had extensive discussions with my colleague Senator Mason. I found both quite useful.

To summarise my position, I think it is fair to say that the existing national governance protocols have not been unduly onerous, they have not been punitive in their approach, but there is some criticism of them that they can be unduly restrictive. It would be fair to say that the government’s hyperbole, if I can put it in those terms, about the protocols as being a ‘born-to-rule mentality of the opposition’ is unfortunate. It is fair to say from the submissions made by vice-chancellors, by the Group of Eight, in the past, that these protocols have been on the whole beneficial. But my fundamental problem with these protocols, with the legislation as it currently stands, is this: it gives the minister enormous discretion, enormous power, to change those protocols at any time and to impose significant penalties. That to me is the nub of this issue—that there is a potential for ministerial intervention in our higher education sector and a potential for the minister to alter those protocols in a way that could be seen as punitive to make unreasonable demands of our tertiary sector. That is why I support the bill and I cannot in good conscience support Senator Mason’s amendments.

But I think that to say, as I think some in the government have said, that these protocols have been a bad thing is unfair. It is the potential for the protocols to be altered and the potential for punitive action to be taken that concerns me. I think it is also fair to say that through the AUQA there are significant sanctions and sufficient powers for the minister to deal with the issues of quality assurance and educational standards in a qualitative sense in terms of the education standards of our tertiary institutions.

One example that was put to me, which could affect my home state, is the issue of governance protocols relating to the University of South Australia, which has a number of campuses and also two regional campuses. It may be that the Whyalla campus of the University of South Australia wants to have a separate council to engage with the community. Under these protocols, as I read them, that might not be possible. I think that you need to have some flexibility there.

The other issue that I want to put to the minister—because I think it is important to get clarity on this and this is the one sticking point that I have with this legislation—is: what happens if this bill is passed and the protocols are appealed? I understand it is the position of the government that the universities will develop their own governance protocols, if you like, by way of a code or a self-regulatory model. But in the meantime, until that is done, to what extent are there protocols in place? Are we left with a hiatus or will these protocols still be in place in a substantial sense? That is my concern, because I do not think we should have a vacuum in terms of protocols.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

I would like to seek to answer Senator Xenophon’s question. I made some observations a moment or two ago with regard to a question from Senator Mason which you may not have heard, Senator Xenophon, because I do not think you were in the chamber. I will go to those issues again and indicate to the chamber that I will repeat the advice that the minister has given to me directly.

She has told me that, following the repeal of the national governance protocols, the minister will advise universities that, pending the development and implementation of a new voluntary code, she will regard the national governance protocols as an ongoing benchmark to good governance practice. She would regard any substantial noncompliance with this benchmark, whether reflected in a recommendation arising from the quality audit by the AUQA or otherwise, as indicating a potential breach of the quality requirements specified under section 19-15 of the Higher Education Support Act. It is a condition of the funding under the Commonwealth Grants Scheme that a higher education provider must meet the quality and accountability requirements—that is covered by section 36-60—and, if a provider breaches a condition of grant, the minister may reduce or require repayment of some or all of the grant. That is covered by section 54-1.

Further, the minister also has the power to revoke a body’s approval as a higher education provider if the minister is satisfied that it has breached a condition of the grant or a quality and an accountability requirement under section 22-15. I would like to say a word about the amendments at some point, but if there are any further questions I would seek to deal with them now.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

I thank the minister for his answer. Could the minister clarify this: when you say that it is an ongoing benchmark, does that mean that there will be sanctions if there is a breach of the existing protocols pending the new code, the self-regulatory model in place? I am just trying to understand what the actual status the existing protocols will have in an administrative or a legal sense. If it is a benchmark, does it mean that a breach of it will lead to sanctions being imposed by the minister or is it simply a guiding principle for the minister?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

It is my understanding that all universities are currently compliant with the old code. I do not believe there is an issue at this point. The government’s view is that there would have to be a substantial breach for there to be a question about noncompliance—a substantial breach, not a minor issue—because these protocols are quite prescriptive. I will go to that in a moment. In the case of a substantial breach, the normal provisions of the act would cut in. That is, a process of discussion would occur and the university would have to show good cause as to why there should not be a reduction in the grant or other action taken. So the normal provisions of the act would apply. What the government is seeking to do is to take away this arbitrary imposition of a 7.5 per cent penalty—

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Arbitrary? It is not arbitrary.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

It is quite arbitrary, because under the current administrative arrangements it specifies that the grant would be reduced by 7.5 per cent—that is 7.5 per cent of the base grant—which is a very substantial amount of money.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Hopefully that will resolve the issue for me. I appreciate the minister’s answer. Can the minister clarify this final point for me. Firstly, if there is a deviation from the protocols, a noncompliance—and I understand what the minister is saying, that it seems that the institutions are currently complying with the protocols—if there is a breach at some time in the future before the code, to what extent will that information be readily available to the public? Secondly, is it anticipated that if there is a breach of the new code, the self-regulatory model, the public will have a mechanism for finding out? Is there some auditing or some process of scrutiny or public disclosure so that at least members of the public can determine whether or not there has been a breach?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Currently AUQA reports are public. The minister also takes the view that there is no difficulty in providing information on a public basis beyond that report if there is a breach of the voluntary protocols that would be entered into.

Can I just indicate the reasons why the government does not support the opposition’s amendments. Essentially, the opposition amendments would maintain penalties for noncompliance with the national governance protocols. In our judgement, these amendments seek to entrench the current prescriptive and punitive approach towards the national governance protocols—that is, to maintain a financial penalty on universities for breaches of the detailed requirements that do not respect the institutional autonomy of universities. They do not recognise the professional responsibilities of universities. Financial penalties are in fact very substantial, with a 7.5 per cent reduction in a university’s base grant. The penalty would be incurred if a minister, not just the current minister but any minister into the future while these provisions apply, is not satisfied—’satisfied’ is the word used to describe the criteria on which these assessments would be made—and that the university has not met its obligations under the national governance protocols.

There are three key reasons why the government is seeking to remove these provisions that the opposition is seeking to maintain. Firstly, they do not allow for diversity in university governance. Secondly, they are not focused on increasing accountability or imposing outcomes. They are about micromanagement of universities and they are about fundamentally undermining the institutional autonomy of our academic institutions. Thirdly, they demonstrate a fundamental distrust of our higher education institutions and, as I said, they constitute a threat to the autonomy of such institutions. The government is committed to taking the foot off the throats of our academic institutions.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

They developed these things.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

The Liberal Party had a view, as I have indicated before, Senator Mason, that you had to make up for your defeats in your youth at the hands of some obscure student politicians and you have had to impose these penalties on universities as a means by which you can restore some dignity. Senator Abetz still lives through the days of his glorious youth. The Liberal Party essentially takes the view that universities are to be treated as ideologically hostile institutions.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Senator Mason interjecting—

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

You take a very strong view on this. I am disappointed in you personally, Senator Mason, because I know that you worked in an institution and you should be able to persuade your colleagues of just how wrong their attitudes are. Senator Trood is here too. I am sure he would understand just what a preposterous thesis it is that the Liberal Party has been captured by. But, essentially, this is the mentality that drives the attitudes of the Liberal Party that seek to undermine the autonomy of our academic institutions.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Why did they develop them, then?

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

The reason you developed them, the reason you imposed them, was to keep the NTEU off administrative councils of universities. Let us get to the nub of this: this was all about making sure that the union was not able to find representation on university councils and that student groups were not able to find representation on councils—that the universities could only have certain persons on university councils that the government thought were appropriate.

Senator Mason, as a result of your changes, you and I were removed from the ANU Council. I have always said to you that I thought that was a retrograde step. I knew that they were not really complaining about my presence on the ANU Council, that Dr Nelson was really after you. We understand the poverty of that philosophy that took the view that certain groups being represented on university councils were incompatible with the good management of the university.

We now know that one size is not appropriate to fit all higher education institutions in the 21st century. We trust universities to develop an approach to governance that best fits their circumstances with respect to their autonomy and their capability to undertake their functions in society. We believe that the next fundamental reform for the sector is to foster diversity and to recognise the importance of diversity in their institutions in the 21st century.

Universities Australia has supported this move, and its chair, Professor Richard Larkins, made the point about governments loosening:

... existing prescriptive requirements and allow universities to pursue their missions as self governing bodies.

Under this legislation universities will be free from micromanagement and red tape, which has characterised the oppressive attitudes—the essentially anti-intellectual attitudes—of the Liberal Party in regard to their ideological obsessions with and their hostility towards centres of learning in this country. It represents a deep ignorance and a poverty of philosophy in regard to the Liberal Party.

The national governance protocols were designed by the Liberal Party to, in their mind, bring to heel their ideological opponents. This morning we heard that Senator Mason believes that the opposition of the vice-chancellors is nothing of concern to the Liberal Party. In fact, he dismissed—

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I did not say that.

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

Well, I thought you said that the attitude of the vice-chancellors could be easily dismissed. So I will draw your attention to what the Group of Eight vice-chancellors are saying, as I am sure you will appreciate their comments. Professor Alan Robson, chair of the Group of Eight and Vice-Chancellor of the University of Western Australia stated:

The Federal Opposition should pass legislation before the Senate designed to allow Australian universities to decide the governance structures that best suit their circumstances.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

Senator Mason interjecting—

Kim Carr (Victoria, Australian Labor Party, Minister for Innovation, Industry, Science and Research) Share this | Link to this | Hansard source

You will be further surprised to hear that he goes on to say:

The Opposition has signalled its intention to move amendments in the Senate—

and they have done that today, I might add—

that would require all Australian universities to continue to comply with National Governance Protocols. Failure to comply would see universities incur a financial penalty of 7.5 per cent of block funds for teaching.

The protocols impose a one size fits all approach to university governance. They represent an out-dated and ideologically driven intrusion into the governance of Australia’s universities.

The debate over the protocols is not about accountability. There are many other mechanisms the Commonwealth has in place to ensure that taxpayers’ funds invested in universities are used appropriately. It is about whether it is appropriate for the Government of the day to dictate how universities manage their governance, or whether universities should be trusted to manage their own affairs.

The Go8 calls on the Senate to support the Government on this matter of principle and calls on the Opposition to review its policy to develop a more contemporary approach to its relations with universities.

These protocols are so prescriptive that they go down to such things as the number of members that can be on a university council. Surely a university can work out how many people should be on its council. Surely that is a matter for a university to work out. It is something that, in the 21st century, one would have thought we could rely on our universities to work out for themselves. I urge the Senate to reject these amendments and pass this legislation.

Brett Mason (Queensland, Liberal Party, Shadow Parliamentary Secretary for Education) Share this | Link to this | Hansard source

I was not going to say anything but of course I have been provoked by the minister, Senator Carr. Briefly, in relation to the press release from the Group of Eight, it is a strange thing that the Group of Eight and, indeed, Universities Australia were primary participants in the development of these national governance protocols. Why? Because university governance in the past has been very poor.

It is no surprise that university vice-chancellors want fewer and fewer strictures and fewer accountability mechanisms. I am not surprised to hear that from the Group of Eight or indeed from Universities Australia. If I were a vice-chancellor I would want less accountability too. But our duty here in the Australian Senate is to look after the public’s interest, not just the universities’ interests. The Senate should support the opposition’s amendment.

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

I had not intended to speak either, but Minister Carr has also provoked me into rising to my feet. I am sure the manager of government business will be speaking to him on this matter. I rise to put on the record again the fact that the Greens will be supporting the government’s position and opposing this amendment.

But I also want to say to Senator Carr that his words will come back to haunt him—every single phrase he has used about trust, about sanctions, about treating, in this case, schools in an ideological way and as hostile institutions, about autonomy, and about one size not fitting all when it comes to schools. I would remind the minister that the Prime Minister has made it very clear in the media that he has threatened the states and education unions by declaring that future federal education funding will be conditional on information about the performance of individual schools being made available to parents. That is just as prescriptive, just as ideologically driven, just as hostile and just as provocative as exactly everything that you accuse the opposition of having done in relation to universities, and now the government is about to do the same to schools.

I put the minister and the Senate on notice that when the government introduces these bills all of Senator Carr’s phrases will come straight back to him, including Minister Gillard’s phrase when she said that this government was about taking the foot of the Howard government off the neck of universities. I say that they are about to again put the foot of the Rudd government onto the neck of schools. I want to indicate that everything that has been said here today will be like the boomerang—it will be coming straight back, Senator Carr.

Question put:

That the amendments (Senator Mason’s) be agreed to.