Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

As we all know, the business of the 21st century is knowledge. To better compete and to more effectively contribute to Australia's well-being, universities, which are our knowledge factories, have embarked upon change and reform. Over the last few years there has been robust debate about the future of our higher education system—a debate spurred on by the Bradley Review of Australian Higher Education. This debate is likely to last for many years, given the crucial importance of our universities to our economy and indeed to our society in general.

The Higher Education Support Amend­ment (Demand Driven Funding System and Other Measures) Bill is the legislative expression of one of the two main recommendations of the Bradley review, as adopted by the government—namely, the move towards a student demand driven system right across our public universities. The other major recommendation of the Bradley review sets a target for increased participation in higher education of 40 per cent of our young people in the age bracket 25 to 34 by the year 2025, with a particular emphasis on attracting more students from currently underrepresented groups such as students from low SES backgrounds, students from rural and remote areas and of course Australian Indigenous students. These two reforms are interlinked, since abolishing the restrictions on the number of university places will go some way towards increasing participation in higher education.

The coalition supports these reforms, though with some important caveats in regard to both the current bill and the overall implementation of the Bradley reforms by the government—subjects I will touch on later. Let me state at the outset that the move to a system where demand by qualified students determines how many places are offered by universities is a vast improvement on the centralised state control model that has been operating so far, where the public servants in Canberra micromanage the number of places that each university can offer in each particular course. The removal of the restriction on the number of undergraduate places, otherwise known as Commonwealth supported places, that Australian universities are able to offer is a step in the right direction. The laws of supply and demand work better than the dictates of bureaucrats, no matter how well qualified.

However, the bill does not provide for a complete removal of restrictions. The bill does not uncap the number of enrolments for medical student places as those degrees are reliant on the availability of clinical placements provided by state governments, nor does it uncap the number of Common­wealth supported places for postgraduate students in our universities. The bill also gives the minister for higher education the ability to cap the number of places in particular disciplines or particular institu­tions in defined circumstances. The coalition will await the resolution of these issues and is particularly interested in the last mentioned power, especially in light of the persistent rumours circulating in the university sector that the government might be tempted to start capping places again, having slowly become aware of the fiscal implications of the move to a fully student demand driven system.

The bill goes further than setting up the framework for the partial deregulation of the university sector. It also abolishes the student learning entitlement that requires universities to enter into a mission based compact with the Commonwealth government and to institute policies which promote and protect free intellectual inquiry in learning, teaching and research. The coalition is opposed to abolishing the student learning entitlement. The SLEs were introduced by the Howard government in 2003 and limit a student's ability to qualify for a Commonwealth supported place to a defined number of years of full-time undergraduate study. The defined number of years is typically seven, with some exceptions, and it accrues over the lifetime of the student. The measure was introduced to prevent so-called lifelong or professional students from undertaking continuous studies at taxpayer expense with no intention of ever paying off their FEE-HELP or HECS debt. Far from losing their relevancy over time, the SLEs actually become even more important under the student demand driven system for this reason—abolishing the student learning entitlement, combined with abolishing the restrictions on the number of Commonwealth supported places, results in a system where an unlimited number of students can study for an unlimited amount of time. The government's proposal, under this bill, means that an unlimited number of students can study for an unlimited amount of time. The opposition opposes that.

What are the fiscal implications of that for taxpayers? No-one knows, including the government, which has not produced any plans, estimates or projections of the cost of implementing the Bradley reforms. In the absence of any concrete information, and considering this government's record of profligacy with other people's money, the coalition believes that it is only sensible to maintain some restrictions, such as the SLEs, on the expansion of higher education costs.

The government argues that the SLE restriction is hindering students who have undertaken a bachelor's degree, followed by a five-year professional degree, from completing their degree by substantially increasing their FEE-HELP debt. The coalition understand that there have indeed been some substantial changes in the way some undergraduate degrees are taught. The coalition are aware of that, so we believe the upper level of student learning entitlement should be set at eight years rather than at the current limit of seven. This would, for example, allow students to undertake a Bachelor of Science degree with an additional honours year and then complete a medical degree. The coalition will be moving an amendment to that effect.

Moving on to compacts, the interim agreements between individual universities and the Commonwealth are already in place and have been for the past few months. These agreements require universities to lay out holistic, integrated plans for linking their research direction with their teaching and learning expertise and to link these goals to a university's Commonwealth Grant Scheme funding agreement. While not ignoring the potential benefits of compacts, the coalition still retain some concerns about these new arrangements. We are worried that compacts could be used to micromanage universities rather than to simply align the universities' objectives with those of the Commonwealth. At a time when the university system is undergoing significant reform and expansion, the coalition would not want to see the freedom to diversify and excel restricted by the Canberra education bureaucrats.

Our universities are now competing not just against each other within Australia but against all other universities in the world. At stake are the significant income and other benefits derived from international students, the capacity to attract the best staff and the ability to build and enhance reputation. All this calls for less, not more, regulation and for more, not less, flexibility. To that effect, I will be moving a second reading amendment that reminds the government of the growth of red tape under their administration and of their broken promise to only introduce new regulation after repealing an earlier one. Universities already suffer under the compliance burden of myriad different regulations and requirements imposed on them, mostly by federal laws and regulations. Legions of employees are now needed to ensure policies are adhered to or that information is collected for the federal government. Imposing more regulation, as may be the case under the compacts, goes completely against the spirit of higher education reform, where the trend is towards more freedom, more flexibility, more choice and more options. The amendment I will move as a second reading amendment broadly seeks to minimise the regulatory burden on universities.

I move:

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

  (a) notes:

     (i) the government response to the Bradley reforms may impose increasing regulation on the higher education sector,

     (ii) the growing burden of red tape and regulation imposed on small businesses, not-for-profit organisations, higher education providers and industry by the Gillard Government, and

     (iii) that the increasing regulatory burden represents a broken election promise by the Labor Government which said that it would only introduce a new regulation after repealing an earlier regulation – a 'one in, one out' rule; and

  (b) calls on the Gillard Government to adopt immediately the Coalition's red-tape reduction policy which will seek to reduce the cost of the Commonwealth's regulatory burden by at least $1 billion per year".

The bill also requires universities to have institutional policies in place to promote and protect free intellectual inquiry in learning, teaching and research. The bill does not prescribe what is to be included in these policies. While the coalition firmly believe in the value of academic freedom, we also believe that the prescription in this bill is only half complete. With that in mind, we will be moving an amendment to ensure that academic freedom extends not just to academics but also to students, researchers and other teachers. Students in particular have complained to me and to many others for many years about their work being marked not on the quality of their argument, their understanding of the material and the clarity of their thoughts but on the basis of their political philosophy, which often conflicts with that of their lecturers. Of course when I marked assignments, I would never have marked any assignment with less than great objectivity.

Requiring universities to have a policy on academic freedom for students as well as teachers will assist students in exploring their own philosophical underpinnings without fear that their views will offend the sensitive and sometimes indignant sensibilities of some academics. We could not have that, could we? The coalition stands for free inquiry for academics as well as free inquiry for students, without fear and without favour. This is, after all, what education, as opposed to indoctrination, is supposed to be all about. In the autumn sittings this parliament passed legislation to establish the Tertiary Education Quality and Standards Agency, adopting another recommendation of the Bradley review. I took some time then, and will take some time now, to reiterate some serious concerns the coalition has with the government's approach to implementing these far-reaching reforms. It is even more important to restate these concerns during the debate about the bill that seeks to implement one of the two major pillars of the Bradley reforms.

Let's face it, implementation—as you have heard me say many times in this chamber—has always been the Achilles heel of the Rudd and Gillard governments. Not many other portfolios have the dubious distinction of being able to illustrate this point better than my own area of education. Here one can name one program after another—Building the Education Revolution, computers in schools, fibre connection to schools, trade training centres, Indigenous children and family centres, Indigenous residential colleges—which read like an encyclopaedia of government failure. What all these programs, as well as numerous other examples such as the NBN, pink batts, or digital set top boxes for pensioners, have in common is this: there does not seem to have been much planning done after the initial brainwave from the minister or the Prime Minister's office. There are no cost-benefit analyses done, no proper studies, estimates and projections prepared, and no mechanisms put in place to properly supervise the implementation and oversee the expenditure of taxpayers' moneys. I raise these concerns once again because I am increasingly worried that this government's cavalier 'by the seat of their pants' approach to implementing its broad education agenda will infect the grand project of reforming Australia's higher education system.

The Bradley review set an ambitious goal of increasing participation in tertiary education to 40 per cent of our young people by the year 2025. The government has adopted this goal. It is perfectly obvious to everyone in the sector as well as any observer that a significant influx of additional student numbers over the next two decades or so will necessitate a large expansion of universities' physical and teaching infrastructure—that is certain. This in turn will require additional government outlays of tens of billions of dollars between now and 2025.

How much exactly? That is a very good question; sadly, it is not one that the government has answered. It did not even ask it in the first place. And so we do not know the true cost or indeed the benefits of the Bradley reforms. We also do not know what impact these reforms will have on our universities. All we can say is that considering the lack of planning and the government's ham-fisted approach to implementing its programs, we have reason—the opposition has reason, Australia has reason—to be concerned.

Let me say this: the coalition will not tolerate a blind and uninformed rush towards increased participation if it would in any way damage our higher education system and affect its performance and international reputation. We cannot allow a situation to develop where quantity is achieved at the expense of quality. We will not stand by and allow university degrees to be devalued, because the government wants to encourage more young people to participate in tertiary education without providing adequate financing for universities to cope with the expansion—all resulting in falling standards.

We will be watching very carefully how these reforms unfold. The coalition's broad support for these goals does not mean a blank cheque as to the means. We will try to do our best to hold the government to account and ensure that these crucial reforms are carried out in a responsible manner.

Lee Rhiannon (NSW, Australian Greens) Share this | Link to this | Hansard source

I speak to the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011 today as the Australian Greens spokesperson on higher education. It is recognised that the quality and reach of a country's higher education shapes its future. It builds a nation's social well-being and provides the next generation with the skills and knowledge which are vital to our economic development and our place within the competitive global economy. Yet in Australia, higher education has been approached not as an investment in future capacity but as a cost largely borne by the student and the sector itself.

The gap between increasing student numbers and diminishing public funding continues to grow. In 2009 there were over 1.1 million students enrolled in Australian universities, nearly 80 per cent more than just 13 years ago. Yet during this time public investment in higher education has gone backwards. The real value of operating grants has not increased since 1994 with the value per student place actually plunging in real terms by 30 per cent over that period. Public investment in our universities sat at a shameful 0.7 per cent of our GDP in 2007, well below the one per cent OECD average and just five places up from the bottom of the list of 35 rated OECD countries and partner countries. As a result, universities have turned to cutting spending and raising income. Diverting money to profit, making projects and chasing the corporate dollar has resulted in a growing dependence on overseas full fee paying students who prop up the sector and provide nearly 60 per cent of Australia's $16.5 billion of export income from education—the nation's third largest source of export income after coal and iron ore in 2008-09.

Meanwhile, student to staff ratios have blown out. Casualisation of the workforce has compromised quality for students and teachers. Academics must do more with less and university infrastructure has not kept up. Students on inadequate income support have struggled to juggle the demands of study and employment needed to survive. This is the state of our higher education, all while Australia has surfed the crest of a decades long mining boom. It is with many reservations that the Greens approach this bill—a market based, demand driven approach to improving access to quality higher education in Australia. This bill aims to implement the government's target of nearly doubling to 40 per cent the number of university educated people by 2025, with 20 per cent of undergraduates coming from disadvantaged backgrounds. It is an excellent goal but there are concerns that this approach could push our universities and the quality of our higher education over the edge.

There are two overarching concerns that the Greens have with this bill: that demand driven funding will become the first step towards a voucher system in Australia, and how the need for significant further investment in universities to support the sudden increase in student numbers will be met. The Greens' concerns are demonstrated in New Zealand's disastrous attempt to introduce pure demand driven tertiary education in the late 1980s. That demand driven model extended to the whole tertiary sector, including the polytechnics and over 220 private providers. The New Zealand government had no ability to steer or shape the courses being offered and quality control was absent. Not surprisingly, the whole thing blew out of control. A huge growth in student numbers brought unsustainable costs and rising student failure and attrition. The bulk of growth was at subdegree and diploma levels delivered by private institutions, and any public return on the qualifications gained were questionable.

An example of how badly wrong it went, as current New Zealand Deputy Prime Minister Bill English said when he was shadow minister for education, is demonstrated by the beginner computer course run by a large polytechnic in partnership with a software producer. Students were enrolled in shopping centres, libraries and through school fundraising committees who were paid a fee per enrolment gained. Students thus enrolled were actually handed a CD of four courses which equated to four enrolments with public demand driven funding attached. More than 20,000 people enrolled in this CD based course, costing a cool $15 million in public funding. The provider generated about a 90 per cent gross margin per enrolled student, with a grand total of three per cent of those students known to have finished the course. Not surprisingly, New Zealand learnt a lesson from that experiment and has been reining in its system for many years now.

Whilst I do believe that the government in drafting this bill has learnt from the New Zealand lesson, it does demonstrate the risks involved in travelling down this path and it provides a cautionary tale about quality, accountability and a firm governmental hand on the steering wheel to ensure qualifications are about real learning. And whilst I acknowledge that this bill is only a partial deregulation and does not in the strictest sense create a voucher system, I share the strong concerns raised by student groups and unions that the bill is moving the sector in that direction and that the dramatic increase in student numbers that this bill allows for will place further strain on resources such as classrooms, facilities, services and student amenities. I will address these concerns but first start with the aspects of this bill that the Greens support without contention.

The abolition of the student learning entitlement from next year makes sense. Few students exceed the SLE's seven-year limit to funded undergraduate study. Universities will save the extra cost of administering the scheme and the limit to updating qualifications will be removed. The strengthening of academic's and students' intellectual freedom by making that right an object of the act is vital. The requiring of providers to have policies that uphold the right to intellectual freedom as a condition of funding provides a necessary accountability mechanism.

I will now turn to the centrepiece of this bill: demand driven funding of higher education. From next year, the uncapping of public funded places for domestic undergraduates will ensure anyone with the ability is guaranteed a funded university place. Funding will be detached from each university course and will follow the student, allowing them to enrol in the course and university of their choice. Increased access for all is a positive thing and students are responding, with the 2009 estimate revised upwards to an extra 59,000 places by 2013 and an extra $1.2 billion in funding to cover it. However, the huge risk is that rapid, unfettered growth will lack the investment required to support the extra teachers and learning resources in a system already struggling with historic underfunding per student. This bill does not adequately address the chronic funding gap between the cost of delivering a course and the funding received to deliver it. Nor does it protect against the risk of further casualisation in higher education or the risk of fees becoming fully deregulated in the future. There is a real concern that any deregulation of higher education could eventually lead to a two-tier system in both funding and quality of teaching.

It is worth noting some of the problems with a full voucher system. As student demand changes from year to year, it is hard for universities to plan for a permanent workforce and for building resources. Research has shown that the middle to higher end of SES groups benefit from a voucher system rather than it helping the most disadvantaged students. Despite the rhetoric, a voucher system does not mean that students can study where they like, as institutions will still set course numbers. It can lead to poaching of students by larger universities and widen the divide between prestigious institutions and smaller or regionally based ones. It removes the government from its responsibility to create an accountable higher education system. A voucher system can separate teaching funding and research funding, which can reduce overall levels of research funding.

Given these risks and concerns, it would have been better timing to wait for a government response to the yet to be reported base funding review before debating this bill. That really would have been the responsible course of action for this government. The base funding of student places and a need for indexed basic grant amounts is a pivotal factor on which the quality and health of the sector does turn.

The whims of the marketplace and consumer demand are not a steady framework on which to build a sustainable future. The flow of students and thus funding to various universities can actually fall two ways. It could encourage specialisation in our universities as they develop excellence to attract and keep the student and their funding, and may drive innovation and constructive partnerships with industry to address skill shortages and meet the needs of a new low-carbon economy. Or it could compromise quality, providing homogenised courses across the board to cater to mass student trends, diverging from the needs of a healthy economy and society's wellbeing.

This could be exacerbated by a concentration of high-demand, low-cost courses such as law and commerce at the expense of high-cost courses needed in a modern economy, such as engineering and science. It may provide the opportunity for smaller and regional universities to play to their strengths—strengthening provision for their natural catchment of disadvantaged or isolated students, with the extra funding loads that go with those students subsidising other offerings. Already regional universities are planning to invigorate and enrich regional on-campus life as a selling point and are improving the quality of their distance education offerings for their isolated students. Alternatively, it could allow the bigger, better resourced universities to poach those students along with their chunk of extra equity funding, furthering the divide between the elite and the smaller universities—although this carries its own risk of an inability to fund extra infrastructure needs and staffing levels in high-demand courses.

How will universities plan for growth and ensure quality? Where is the government's plan to address skill shortages in this country—skills needed to participate as part of a globalised community? We need a much clearer picture from the government of the steps it plans to take to minimise these serious risks. For example, whilst the current proposal does not impose any set time or value on the student's learning entitlement, or voucher, it is possible that such limitations could be placed on a student's entitlement in the future. It is also possible that fees may be deregulated in the future, leaving a gap between the student's funding entitlement and the cost of the course. It is not clear how these potential risks are being addressed. The whole point of the bill is that it will remove the ability for universities to charge full fees and it will remove the learning entitlement. That a future government can change this is a moot point with any legislation.

Another issue is that the bill will allow the government to set a cap—a limit on maximum basic grant funding—for courses to rein in excessive course growth, designating them by disallowable legislative instrument. Any demand driven or non-designated course can be thus designated. For example, medicine is a designated course to avoid oversupply of graduates for too few placements. Previously, a government could cut funding by reducing places. The bill will ensure the imposition of a cap on maximum basic grant amounts must not be less than the amount for the previous year. Whilst such a change would be subject to parliamentary scrutiny, clear criteria is needed around triggers for changing demand driven courses to designated courses to either boost or limit demand. How will the government convince a university they must provide high-cost, low-student-demand courses such as engineering or science even when they are listed as national priority courses? We do need to hear an answer to that question. How will designating low-demand courses such as the classics and the arts ensure that universities will deliver them? These are important areas of scholarship and cultural learning that we cannot afford to lose through attrition of demand. Yet these courses will not be funded unless the places are actually filled by students.

This bill's mission based compacts are key to the government's ability to steer the demand driven model around these risks and to temper the vagaries of the marketplace. These three-year contracts between publicly funded universities and the government include funding details and negotiated performance, equity and quality targets. They are supposed to align each university's activities with their missions and with the government's goals for higher education and to ensure that quality and participation standards are met with performance funding attached to achieving those targets.

Given the imperative to ensure quality of provision in our higher education, it must be ensured that the performance indicators use objective and proven quality indicators and that the methods of collecting data are protected from manipulation by universities. The intention of compacts to negotiate performance targets based on an individual university's missions and goals must be upheld so that universities are held to their own real improvements and not to predetermined targets across the board that may not match their mission or that they already exceed. The success of the compacts is fraught and dependent on the government's and each university's diligence and good faith.

In the meantime, the higher education sector is facing a great unknown. Its major private income stream, international students, is dropping. It is facing a huge increase in student enrolments to a historically underfunded system without yet knowing if base funding will be increased to catch up to and meet actual costs of delivering this brave new world.

This bill is part of a 10-year package to repair and invigorate higher education in Australia. The extra funding and better student support is a good start, despite our reservations and concerns about any move towards a voucher system. We cannot afford to ignore the risks, and the Greens are committed to closely watching the effects of this legislation and whether it achieves its aim of rewarding any student entering into higher education with appropriate support and a quality experience. We call on the government to heed the concerns of student organisations about paving the way for a voucher system in higher education and the call from the sector for sustainable base funding levels. The challenges are many.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise to contribute to the debate tonight on the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011. For too long Australia has lagged behind the rest of the OECD when it comes to the proportion of our population who have a tertiary qualification. We invest so much in trying to inspire our children on a lifelong journey of learning and yet, for some, there are still limited educational opportunities beyond formal schooling. Despite huge growth in the numbers of women attending university, the fact remains that there are still groups of Australians who are underrepresented in tertiary education, including Indigenous Australians, those from low socioeconomic backgrounds and those from rural and regional areas.

In my home state we have a fantastic university, the University of Tasmania. We also have one of the lowest participation rates in higher education in Australia. Whilst I do not believe that this restructure will be the panacea to that participation problem, I hope that our progressive reforms to the tertiary system will make higher education more accessible. There is overwhelming support and evidence to suggest that the legislation that is before us today is the best way forward for higher education across Australia.

This legislation is about revolutionising the way in which the tertiary sector in Australia is funded. Moving toward a demand driven model rather than forcing each institution to come back year in, year out and negotiate capped places will only work to promote and enhance the accessibility of higher education to Australians regardless of their background. Moving toward a demand driven funding model is also the most appropriate way to ensure that we are equipped for the future challenges in a rapidly changing global economy.

This bill ensures that as a government we meet our commitment to introducing an uncapped student demand system for universities for 2012. Through these funding reforms we will provide our institutions with a flexibility within the sector to meet our national target of having at least 40 per cent of 25- to 34-year-olds with a bachelor level degree or above by 2025. As we work towards achieving our participation target, we will boost our rankings within the OECD and serve to bolster our credibility as a thinking and innovative nation in our region and beyond.

This bill is also significant insofar as it adds the finishing touches to the Labor government's reform agenda for the higher education sector. We have progressively delivered on the commitment that we made in 2009 so that from 2012 our universities will benefit from the deregulation of the allocation of university places through the introduction of a demand driven system for domestic students, except for medicine, and the abolition of student learning entitlement, the SLE, for all courses and the introduction of mission-based compacts and the strengthening of academic freedom.

Fundamentally, this legislation ensures that Australian students can access tertiary education based on their ability, on academic merit and on a willingness to participate rather than just their capacity to pay for it. As well as transforming funding for the tertiary sector, this legislation also abolishes the student learning entitlement. The student learning entitlement is a hangover of the Howard years which limited a student's access to a Commonwealth loan, HECS-HELP, after seven years of study. The introduction of the student learning entitlement created equity issues and posed a threat to lifelong learning. It was proven to have discriminated against low SES and mature-age students and those who chose to change their study pathway. Moreover, the SLE created an administrative burden on universities and, whilst the student learning entitlement was allegedly introduced to promote retention, it did not translate in any way to provide funding for support for students at each institution.

It follows that the abolition of the student learning entitlement will remove a regulatory burden that has been placed on universities since 2003 and ensure that there is no time or dollar limit on a student's learning achieve­ment. It will also remove a significant barrier that medical students have faced since 2003 and has been welcomed by the AMA. No longer will medical students, particularly those who have articulated into medicine from science streams, be disadvantaged when they choose to study medicine because of a fear of exhausting their entitlement.

Those opposite have criticised the government's move to abolish the student learning entitlement but I challenge them to find anyone else who is advocating for it to remain.

Brett Mason (Queensland, Liberal Party, Shadow Minister for Universities and Research) Share this | Link to this | Hansard source

Well I am, Carol.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

Notwithstanding the good senator opposite. We are seeing in this place those opposite playing up again. It is not unlike Senator Mason to play up a bit, but they are also relying on outdated and factually baseless arguments about how this reform will let students waste time lingering in our universities and draining taxpayers dollars. In Australia we simply do not have a situation where students are studying for excessively long periods of time. It is a myth. Those opposite seem to be stuck in a bit of a time warp and lack a true understanding of what tertiary education means today and to the unique intellectual capital of our nation. Those opposite were never serious about investing in higher education in any meaningful way. They simply dressed up the student learning entitlement, painting it as a policy aimed at improving retention while continuing to rip funding out of the tertiary sector. The student learning entitlement never transpired into funding for essential services and student support—those proven elements of any retention strategy. Across the sector, the Group of Eight and others have come out in full favour of the abolition of student learning entitlement. Put frankly, Senator Mason, it is time to move on.

This legislation also provides for the introduction of mission based compacts between the government via the Department of Education, Employment and Workplace Relations and tertiary institutions. The mission based compact will be the mechanism through which universities can show how they are contributing to the government's goals for higher education. The compacts will include details of the major education and research funding for each institution as well as performance targets. The compacts will allow for universities to be rewarded for improving the quality of their offerings, attainment and the participation of students in higher education. As the mission based compacts will differentiate between teaching and research, they will allow an accurate benchmark from which to measure and reward performance, taking the sector forward.

I will now take a moment to talk about the academic freedom aspects of this bill. Notwithstanding Senator Mason's no-doubt-excellent record on objectivity and impartiality when he was lecturing, this bill will also bolster academic freedom, enshrining the government's commitment to free intellectual inquiry in legislation. Until the introduction of this bill, academic freedom was assured only through the national protocols agreed to at the Ministerial Council on Education, Employment, Training and Youth Affairs in 2007.

This bill extends the government's commitment to academic freedom by ensuring that it relates to learning, teaching and research. Including an explicit reference to learning also bolsters a student's access to intellectual freedom. Of course, those opposite will criticise this element of the legislation too. It comes as no surprise that they would again play up on their old rhetoric. Manifest in their long-held paranoia is their mistaken belief that free intellectual inquiry and the protection of academic freedom are biased towards the Left. I only hope that they can for once put aside this baseless assumption and help the government bolster academic freedom for learning, teaching and research within Australia's tertiary sector.

This legislation represents the final pillar in our higher education platform. It builds on the results of the major programs of reform that the Prime Minister commenced as Minister for Education in 2009. As a direct result of our reform agenda already, we have seen close to 100,000 additional students grasp the opportunity of a university education since 2007. Since then we have seen an extra 80,000 undergraduate students each year get the opportunity of a university education, from 408,000 in 2007 to 488,000 this year. We have also seen the number of Commonwealth supported postgraduate places double from 16½ thousand in 2007 to 33,000 this year. Having already succeeded in opening the doors of Australia's universities to more students than ever before, we are even more determined to continue to boost participation.

The legislation before us is a measure that has been welcomed far and wide across the sector. National Union of Students President Jesse Marshall in May this year branded the legislation a 'welcome investment in providing opportunity to Australians to participate in higher education'. Universities Australia has expressed strong support for this bill, urging all parties to support the legislation and approach it in the spirit of bipartisanship. Universities Australia's Chair, Professor Glyn Davis AC, has said:

Passage of the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011 will directly transform the accessibility of higher education in Australia.

Student demand-driven funding was a key recommendation of the Bradley Review, and its implementation will help achieve the higher participation and attainment targets for universities that have been set by Government."

Professor Davis said that this bill helps to complete the transformation of the sector and:

Along with a national regulator and the potential for positive outcomes from the Review of Higher Education Base Funding, provision of funding on the basis of student demand further defines the Government's new foundations for the university sector.

Innovative Research Universities also welcomed the changes, arguing that the bill achieves its intended purpose of allowing universities to be funded for each enrolled undergraduate except, as I have said before, medicine.

IRU's Chair, Professor Ian O'Connor, heralded this legislation as 'a major step forward for universities, recognising the need to open access to all Australians capable of university study'. The Good Universities Guide has highlighted how the demand driven funding will benefit students. With such overwhelming support I cannot see how those opposite would stand to oppose aspects of this bill.

I want to echo and endorse some of the comments of the Minister for Tertiary Education, Skills, Jobs and Workplace Relations, Senator Chris Evans. Minister Evans described this new legislation as the opportunity for Australia to move away from a decades-old system of central planning for university funding in which, every year, universities negotiated student places with Canberra. He said:

For the first time, universities will be able to grow with confidence and diversify in response to student needs.

Our commitment as a government is to the continued expansion of a high quality university sector, to educate the graduates needed by an economy based on knowledge, skills and innovation.

As the Bradley review highlighted, the quality and performance of a nation's higher education system will be clear determinants of its economic and social progress.

OECD data shows that Australia's proportion of graduates in the population is less than in comparable developed economies. This was echoed within the Bradley review. The review warned that Australia was falling behind other countries in both performance and investment in higher education. Moreover, the review reaffirmed that we will need more well qualified people in Australia to meet the demands of a rapidly growing global economy. The only way to increase participation in higher education is to look to those groups that are underrepresented in our universities. These are Indigenous Australians, people with low socioeconomic status and people from regional and remote areas.

We also must strategically invest in our education sector. Let us not forget that educational institutions, particularly our universities, form the third-largest export industry in Australia. Developing the intellectual capital of our nation is vital both for our own national development and prosperity and also to secure our reputation and rankings worldwide.

The reforms we have progressively introduced since 2009 ensure that we are laying the strongest foundations for our future at home, in our region and beyond. I look forward to seeing more Australians, regardless of their background, aspiring to and achieving a higher education.

To recap what this legislation plans to do. The Australian government is fully committed to transforming Australia's higher education system through implementing a demand driven system for funding undergraduate places at higher education providers, which are listed in the table in the Higher Education Support Act. The bill will give effect to the implementation of the demand driven funding system for undergraduate student places at public universities from 2012. It will do so by removing the current cap on funding for undergraduate Commonwealth supported places, except for medicine, and the current seven-year limit placed on students' eligibility to receive Commonwealth support for their higher education.

In the new demand driven funding system universities will have greater flexibility to respond to student and market demands. The amendments are integral to achieving the government's higher education attainment target of increasing the proportion of 25- to 34-year-old Australians with bachelor-level qualifications to 40 per cent by 2025. The mission based compacts will provide for Commonwealth oversight of the teaching and research missions. The bill will also promote free intellectual inquiry.

I commend the bill to the Senate and I look forward to seeing the support of all for this bill.

Matt Thistlethwaite (NSW, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to support the Higher Education Support Amendment (Demand Driven Funding System and Other Measures) Bill 2011. The bill is the final piece of legislation in the government's implementation plan for higher education reforms, which was announced in 2009. It meets the commitment to introduce an uncapped student demand driven system in 2012 in order to increase the participation of students in courses and the rates of tertiary educational attainment in our population.

It is commonsense that when a person is eligible for university they should have a good chance of being able to gain access to a university place. However, this common­sense approach struggled to prevail under the Howard government, which saw too many talented Australians being turned away from universities because there were not enough funded places. This government, I am proud to say, will end such inequality and see doors opened to more students than ever before.

The government's higher education reforms provide extra funding for the sector, extra support for students and extra opportunities to universities to offer more places to those willing to gain a tertiary education. The main purpose of the bill is to implement a new system for the funding of undergraduate places at universities eligible for funding of Commonwealth supported places under the Higher Education Support Act. The amendments in this bill will seek to remove the caps imposed on the number of student places at each university. Instead it will provide places according to demand.

The bill has come about as a result of a wide-ranging review of the Australian higher education system that was chaired by Professor Denise Bradley. The government accepted a number of the recommendations of the Bradley review, including deregulating the allocation of university places through a demand driven entitlement system for domestic students; changes to the indexation formula of university funding; increasing targeted places to improve participation rates of low socioeconomic status students; and establishing a new tertiary education quality and standards agency.

These changes will begin the process of working towards two key targets that were established by the Bradley review. Firstly, a national target of at least 40 per cent of 25- to 34-year-olds having attained a qualification at a bachelor level or above by 2025. Secondly, that by 2020 twenty per cent of university enrolments at undergraduate level are people from low socioeconomic status backgrounds.

The cornerstone of a strong economy is an educated workforce. To provide for economic output that meets our country's achievements, we need to provide the best trained workforce in Australia and work towards being one of the most educated economies in the western world. Skills Australia has forecast that by 2025 one-third of all jobs will require a minimum of a bachelor's degree qualification. To meet that demand for highly skilled workers, this government is ensuring that everyone who is eligible can gain access to a place at an Australian university. More Australians with TAFE or university qualifications means more Australians in good jobs and higher living standards for everyone. To start this process we will invest almost $490 million over the next four years, from 2012, to uncap the number of public university places, allowing universities to offer enrolments to all eligible students. This will create an additional 80,000 student places over the four years from 2010 to 2013, allowing about 50,000 additional students to participate in higher education. We are delivering on our promise of a new era for universities, delivering on our promise of an education revolution which focuses on students, on more access to university education, on research and innovation, on improving the skills of the workforce and on boosting productivity.

We are also building on the government's relationship of trust and mutual respect for universities. The bill also seeks to abolish the student learning entitlement. This entitlement was the subject of criticism from universities and from students. The bill also introduces requirements for universities to have policies in place to protect academic freedom in learning, teaching and research. The bill will require universities to enter into mission based compacts with the government. These mission based compacts are three-year agreements that show how each university's mission contributes to the government's goals for higher education and they include details of major higher education and research funding and performance targets. The compacts will be in two parts—one for teaching and one for research—and they will define targets for improvement and for reform. The targets will relate to quality, attainment and participation by students from underrepresented groups.

Key stakeholders in the tertiary sector—the universities and students—agree it is sensible to remove the regulatory burden and reduce administrative costs for universities so they can meet the requirements of accepting additional students. This bill will allow that to occur. We are allowing universities to pursue their main mission, which is excellence in teaching, in research and in innovation—quite simply, doing what they do best. These changes to legislation will achieve positive outcomes, increasing commencements and achieving greater equality by ensuring university places are open to talent, not just to family, school or social background.

The reforms will raise the aspirations of students who would previously never have considered going to university. This will also lift the number of low-socioeconomic-status enrolments in universities. Many of these students will be the very first members of their family to have the opportunity to attend university, and for these students access to a world-class education will give them the skills they need to achieve a better standard of living and higher paying, quality jobs for tomorrow. This is a fine Labor policy and vision, an investment in long-term reform giving more Australians the skills and education they need for a good job and a secure future. The opportunity to access a university education will change the lives of each and every one of these students.

These reforms have seen us move away from a decades-old system of central planning to a new, demand driven approach. The Gillard government's reforms of higher education underpin our drive to build a highly educated, skilled and productive workforce to underpin our nation's future. This is the final bill in a suite of reforms, the final piece of legislation in the government's implementation of the higher education reforms announced in 2009. It meets our commitment to introduce an uncapped, student demand driven system in 2012 in order to increase participation and it meets the national target set by the review of 40 per cent of 20- to 34-year-olds having attained a qualification of bachelor level or above by 2025. I commend the bill to the Senate.

Debate interrupted.