Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

When I left off on the Higher Education and Research Reform Amendment Bill 2014 a couple of sessions ago, I noted that vice-chancellors had a lot to say about the interest charges, demanding the government reconsider plans to impose a new higher interest rate on students' HECS loans.

University students and graduates with existing HECS-HELP debts—currently about 1.2 million people—will be hit with thousands of dollars extra in interest on their loans after 2016, and that is clearly not acceptable and was certainly not something students were expecting when we voted in the general federal election in 2013. Currently there are 750,000 undergraduate students and 250,000 postgraduate students who will face future HECS-HELP liabilities under this bill.

Both existing and new HECS-HELP debts will feel the impact of the Abbott government's changes to interest rate indexation from a CPI of two per cent to the government bond rate, capped at six per cent. The current government bond rate of 3.8 per cent is historically very low, and more typically stands at five to six per cent.

The government has broken yet another promise—and let us hear them deny that, but this is another broken promise. This is a recipe for social harm, inevitably leading to a society made up of the 'haves' and the 'have nots', part of the Abbott government's plan—a plan for $100,000 degrees, crippling debt and vicious cuts to university course funding. This sort of impost on students is not fair—the government is not only asking students to make up the money lost to its cuts, it is asking them to pay for scholarship programs and for research.

The experience of deregulation or the removal of price controls across the world in higher education is that fees increase and people from lower socioeconomic backgrounds, women and mature age students get left behind. Certainly, as a mature age student in my mid-twenties, there was no way I could have imposed a debt of $100,000 on my family when I had two children at primary school. I would not have been able to go to university under this proposal; clearly I could not have done that. And that seems to be a fact the Abbott government fails to acknowledge when it says over and over again: 'There are no up-front fees.' There is certainly a big fat debt at the end of a university degree and, as a mature age student at Murdoch University, I could not have saddled my family with that sort of debt.

The fact that lending institutions now, already, ask applicants seeking housing loans about their HECS debt indicates that students will take the prospect of a huge HECS bill into account as well. Housing prices of course have increased significantly—certainly, they have increased in Western Australia—as have other aspects of the cost of living, not to mention the cost imposts imposed by the 2014 budget in and of itself: the tax on GP visits, the petrol excise increase, and so on. So a student with a big fat HECS debt fronting up for a housing loan may in fact be refused by our lending institutions. It is certainly more probable that those from disadvantaged backgrounds will be deterred from even entering university.

It is interesting to see that some on the Abbott government side and their supporters are calling our campaign to let university students know about these $100,000 degrees a 'scare campaign'. In my home state of Western Australia, one of our prestigious universities, the University of Western Australia, was the first university to announce its 2016 fees under the proposed system: bachelor-level courses have fees of $16,000 per annum, or $48,000 for three years. Minister Pyne is correct that UWA's fees have not hit the $100,000 mark. But of course what he neglects to say is that three-year degrees are not worth very much these days, and, in fact, for many professions, do not lead to a final qualification.

So an undergraduate bachelor degree is simply not enough to be competitive in the jobs market, and that one degree is not enough to achieve the qualifications required for many professions. To do a law degree at the University of Western Australia you need to do a three-year bachelor degree and then a two-year masters degree. Fees for that program are currently $47,200. So, in effect, the real cost to get a law degree at UWA would be closer to the $100,000 mark. For an MBA, you would pay an extra $47,885 on top of undergraduate fees; for post-graduate civil engineering, another $46,604; for those wanting to be clinical psychologists or masters of pharmacy, the fees are between the fifty thousands and sixty thousands, and, indeed, with the Master of Pharmacy degree, up into the seventy thousands. And those fees are all on top of the $48,000 for the three-year undergraduate degree. So, a message to Minister Pyne: those are $100,000 degrees. And of course you cannot be in a profession, in those areas I have just talked about, without doing the additional two years. They are the sorts of degrees that the Abbott government likes to talk about as ones where people end up on higher incomes, well able to afford paying it back—but of course these, in and of themselves, are degrees which will hit the $100,000 mark. These are real examples from my home state of Western Australia at the prestigious University of Western Australia.

The Group of Eight universities like UWA will significantly increase fees to fund research. Fee deregulation, for these universities, is basically a licence to print HELP debt that students may never, ever be able to repay. Universities Australia has modelled the potential cost of engineering and nursing degrees. They found:

At the medium fee increase scenario, and with a four per cent interest rate, an engineering graduate working full-time faces a HELP debt of between $98,952 and $113,169 and would repay it over a period of 20-25 years. This is compared with [the current] $46,701 to $49,284 debt and 14 to 18 years repayment time under the existing arrangements.

A nursing graduate under a medium fee increase scenario who works part time for six years after working full time for six years will pay off their student loan of $51,620 over 20 years, compared with 17 years to repay a HELP debt of $24,646 …

That is from the Universities Australia media release of 4 June.

In addition, initial fees provide little indication of how high they will climb. The US deregulation of fees showed us this when their fees skyrocketed. A two-year investigation by the US Senate Committee on Health, Education, Labor, and Pensions, investigating the rapid expansion of for-profit college enrolments in the USA, found that for-profit colleges are more interested in generating profits than they are on the education or welfare of their students.

Mitch Fifield (Victoria, Liberal Party, Assistant Minister for Social Services) Share this | Link to this | Hansard source

What a ridiculous thing to say.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

A recent story in TheGuardian in the UK—

Mitch Fifield (Victoria, Liberal Party, Assistant Minister for Social Services) Share this | Link to this | Hansard source

You are damning the entire sector because of blind ideology.

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

'Private sector and students profit at the college they call 'the ATM'' revealed that recent changes in the United Kingdom that allowed private for-profit colleges—

Senator Fifield interjecting—

to enrol students eligible for government supported tuition loans—

Senator Fifield interjecting—

Gavin Marshall (Victoria, Deputy-President) Share this | Link to this | Hansard source

Senator Fifield, order!

Sue Lines (WA, Australian Labor Party) Share this | Link to this | Hansard source

Thank you, Mr Acting Deputy President. So we have these 'ATM colleges' in the United Kingdom that allow private for-profit colleges to enrol students eligible for government supported tuition loans and this has resulted in what has been termed 'cashpoint colleges'. Students are encouraged to enrol in these colleges because they can get access to up to £11,000 of student income support, while the college collects the student tuition fees from the government who lends it to them on behalf of the students—a scheme similar to the HELP scheme in Australia.

This has led to a substantial increase in the level of student debt. It has also raised serious concerns about the quality of education that students at these colleges receive, given that there seems to be little regard paid to whether students attend classes or complete assignments. The USA and the UK experiences demonstrate that there will be private for-profit providers eager to enter the higher education market where public subsidies are available. These businesses target the most disadvantaged students with persuasive marketing.

This attempt by the government to deregulate and turn our universities into some kind of commercial market is wrong. It has been widely condemned by the public; it has been widely condemned by student associations. It is not liked by the university themselves, and that is why Labor will not vote to allow these changes through the Senate today.

Richard Di Natale (Victoria, Australian Greens) Share this | Link to this | Hansard source

Before I go to the specifics of the proposed higher education changes contained in the Higher Education and Research Reform Amendment Bill 2014, it is important to ensure we are having this debate in its proper context. This debate is really about the sort of society we want to live in. Whether we are discussing reforms to higher ed, whether we are discussing some of the changes proposed to our health system, whether we are discussing changes to income support, particularly for young people, or whether we are having a discussion about the role of the ABC we have to recognise that this is part of a much broader agenda that fundamentally challenges long held views about the nature of Australian society. It is a very deliberate and a very clear assault on the nature of contemporary Australian society.

What we are basically involved in at the moment is a debate about the sort of country we want to live in. On one side we have the current conservative government, whose project is to forge a path for a new Australia—one where there is smaller government, lower taxes and a move towards a user pays society. I know Senator Ryan is dying to interject—I saw his face light up as I mentioned those things—but let us be frank: that is what this is about. I have to say I am grateful in one sense to the coalition because we often have debates in this place that are really meaningless; they are lots of froth and bubble. This is actually a debate about something of substance; it is a debate about the sort of country we want to live in. And at least we are having a debate that means something. If there is anything that I can say that is positive about these changes, it is that, at the very least, we are having a debate about what is the role of government. What is it that we want from our elected leaders? What is the role of education; what is the role of universal health care and how should those things be funded?

Let us perhaps look at some of the underlying tenants that lead to these changes. The first one is that Australia's public service is bloated, that it is inefficient, that we spend too much. But when you look at the facts, this is where it becomes a little more difficult for the conservative side of politics because, when challenged with some hard data, it is very hard to maintain the view that we have an inefficient and bloated public sector. In fact, our public sector and level of debt is much lower than similar OECD countries. There is no evidence to suggest that we need to move towards shrinking our public sector, particularly when you look at the evidence relative to other similar developed countries.

And then of course there is the question: what is the correlation between the size of government, the rate of economic growth and the wellbeing of those societies? There is no real correlation. Some countries have big public sectors, they have a high rate of growth, they have done very well and their citizens have a high quality of life. We have other countries with very small public sectors where the opposite is true. There is no obvious correlation, so the idea of big government or small government is much less important than whether what we have got is good government—that is, whether we have the efficient use of public resources, whether we are allocating those resources in a way where there is minimal waste and where those resources are distributed in a fair and equitable manner. That really is the question that we should be asking ourselves.

Debate interrupted.