Wednesday, 17 November 2010
Higher Education Legislation Amendment (Student Services and Amenities) Bill 2010
I welcome the opportunity to speak on the Higher Education Legislation Amendment (Student Services and Amenities) Bill 2010. The coalition opposes this legislation. As explained in the report of the inquiry by the House Standing Committee on Education and Employment regarding this legislation, as tabled yesterday, the government have rushed this legislation into the parliament so that its provisions can be implemented by higher education providers in the new academic year.
The government introduced similar legislation twice in previous parliaments. This is despite Labor promising before the 2007 election that it would not be introducing a student fee to pay for services and amenities on university campuses. Labor’s spokesperson on education, the member for Perth, promised:
… I am not considering a HECS style arrangement, I’m not considering a compulsory HECS style arrangement and the whole basis of the approach is one of a voluntary approach. So I am not contemplating a compulsory amenities fee.
Both of the previous bills were opposed by the coalition and each bill failed to pass through the parliament. The legislation amends the Higher Education Support Act 2003 to allow higher education providers to charge a compulsory student services and amenities fee. The fee will be $250 per student per annum, indexed to $254 in 2011 and indexed annually thereafter. Given the legislation is not intended to apply until 2011, the fee will actually increase before it comes into effect.
The bill requires universities to spend fees collected on numerous specified services, including food and drinks, supporting sport or recreational activity, supporting the administration of clubs, and legal and health services. Whilst the bill prevents a service provider from spending the collected fee on supporting political parties or the election of a person to Commonwealth, state or local government, provisions will clearly allow funds to be spent on political campaigns in favour of policies or against governments.
The coalition agrees that certain student services are an important aspect of universities and university life. However, we do not believe that students should be forced to pay for services that they may not want or that may not be needed by the majority of students. Given these concerns, the coalition submitted this legislation to the House of Representatives Standing Committee on Education and Employment. We asked the committee to carefully consider the legislation and report during the next session of parliament. Despite the Selection of Bills Committee requiring a report by the autumn session of 2011, the Labor majority on the education committee rushed through the inquiry and tabled its report in a little over two weeks. Interested members of the public were given just six days to make a submission. The committee held no public hearings and did not request any further information from those making a submission. As the coalition members noted in their dissenting report:
… Coalition Members … hold concerns about the broader nature of the Committee process in circumstances where there has been little time and limited mechanisms to discharge the obligations associated with membership of such a Committee. In our view, the use of an effective “guillotine” in standing committees would seem to be outside the much proclaimed new paradigm in the Federal Parliament.
The chair’s report explained that the government was trying to push this legislation through parliament this year so that it could be implemented by higher education providers in the 2011 academic year. However, by preventing the committee from completing the inquiry in a reasonable period of time, the government has prevented individual students from making submissions and detailing how the fee would impact on their study needs.
The coalition legislated in 2005 to prevent these students from paying a compulsory fee, particularly those from low socioeconomic backgrounds. In 2005 the coalition amended the Higher Education Support Act to abolish compulsory student unionism and prevent student unions from imposing a compulsory levy on students. The coalition believes in the fundamental right of freedom of association. Before our amendments, students were forced to join the student union upon enrolling at university and were forced to pay an annual or biannual fee to the union. This fee paid for amenities, facilities and services that many students did not use and, in many cases, did not want. Students were prevented from continuing their courses or even from graduating if they failed to pay their union fees.
In contrast, voluntary student unionism requires unions to be financially accountable for the services that they provide. The system allows students to pay a fee when they feel the union is providing value for money and that this fee represents an overall asset to university life. This bill reintroduces a compulsory fee because the government claims that campus services have been reduced since the introduction of voluntary student unionism. The minister argued in his second reading speech that student services fees are necessary because there is now a $170 million shortfall in funding for student services and amenities. Under the government’s legislation, a tax will be placed on students to recoup this apparent shortfall. However, Labor’s figures are based on revenue lost from the compulsory fee, not on total university funding. Since July 2005 funding for universities from all sources grew from $12.4 billion to $17.4 billion in July 2009—an increase of $5 billion. The coalition government’s reforms did not take money out of the education system; the reforms simply allowed students to spend their money on necessary items for their study, like textbooks, stationery and accommodation and living expenses.
I note that Labor’s committee inquiry report uses Griffith University as an example of the revenue shortfall. Griffith University estimates that it has lost $31.3 million in revenue since 2005. According to the inquiry report, the university projects that without student fees it will need to redirect $10 million a year to student support services and amenities and away from teaching and research. Yet according to Griffith University annual reports, the total revenue for the university has increased by $243 million since 2005. Again, the lost revenue claimed by universities is simply that which they could have taxed students under compulsory student unionism. The figures do not represent funding shortfalls, and the decision on whether to fund additional student services and amenities is one that is made by each university.
As detailed by the coalition’s dissenting report to the House of Representatives inquiry, the university sector supports this legislation simply because it reopens an alternative funding source with regard to student services. Each organisation that made a supportive submission to the inquiry stands to gain financially from the compulsory tax on students, and that is a very important point. The supporters of this legislation all stand to gain financially from its introduction.
Yesterday, the government called on the coalition to recognise the value of providing good services to students on our university campuses. The coalition supports good university services, but we are calling on the government to find alternative solutions for improving university funding that do not force students to pay a tax. The majority of student unions were guilty of mismanaging money when the fee was compulsory. Student unions were simply not providing good university services. The bill’s explanatory memorandum claims that compulsory fees will be spent on student services such as advocacy, health care, sport and recreation and child care. There can be no doubt that many students would require these services when attending university, but when we look at how student unions were actually spending the money before the introduction of VSU we get a very different picture of where the money goes.
Let us look, for instance, at the spending at universities in Melbourne in 2004, the year before voluntary student unionism was introduced. At Monash University in 2004 the student association collected $8.5 million in compulsory fees. The association spent five per cent on sport and recreation, 1.2 per cent on child care, no money on health care and over 50 per cent of their expenditure on—what do you think they spent it on?—administration and the costs of running the union. They were slugging university students with a compulsory fee—collecting $8.5 million—and then blowing half of it on administration. They spent none on health care. We hear the members opposite rabbiting on about the importance of health services at universities, yet at Monash $8.5 million was ripped off students—half of it was spent on administration but not one zack was spent on health care. Over $4.7 million of student taxes were spent on administering the union itself.
At Melbourne University in 2004 the union collected $7.6 million. What did they spend it on? They spent two per cent of that money on legal services, 1.6 per cent on health care—that is quite a bit better than Monash, up from the zero at Monash to 1.6 per cent of expenditure on health care—and 2.4 per cent on academic support. As for sport and recreation—how much would you expect sport and recreation to feature in the $7.6 million collected from Melbourne University students? Sport and recreation got nothing, according to the financial statements. These percentages are comparable with nearly all Australian universities at that time, as I understand it. It is interesting that it is only Victorian universities that published their figures—it is only because they were compelled to by Victorian legislation. You would expect that if student unions were genuinely interested in providing value for money and good services they would be keen to disclose to their conscripted members where the funds were going to. Instead, what did they do? They put in place a veil of secrecy so that, outside of Victoria, conscripted members would not know where their money was going.
In its submission to the Senate Select Committee on Scrutiny of New Taxes, the University of Queensland Union detailed how it is managing the union under a voluntary system of fee collection. The union said in its submission:
As a student organisation, we have reshaped … ourselves to become more relevant to the concerns of our members and place particular emphasis on providing services and social events that will actually appeal to the wider student body and get them involved in the great services, support and representation that we offer.
What a refreshing idea: actually providing what students want. That is a very interesting concept. The end of compulsory student fees has forced the union to start taking student funding seriously and to provide the services that the student population actually needs and those services for which they are willing to pay. Whilst there was a shortfall in revenue for the University of Queensland Union after the introduction of VSU, the union placed a higher emphasis on its commercial operations and managing its finances in order to build an appropriate revenue base. Through cross-subsidisation of services, the UQ union is able to provide free academic and welfare advocacy, tenancy advice, employment support and advice on government assistance programs as well as free legal and emergency loans. That is an interesting concept—a student union organisation that is actually meeting the needs of its members rather than relying on the good old Labor Party to impose a compulsory tax that many students cannot afford to pay and for services they do not want to pay for. It is a refreshing change, I must say. And it goes on to say that the union will soon be in a position to operate on a basis of complete financial independence from the University of Queensland. Hear, hear to that, I say. This is exactly how a student organisation should operate: a union that is providing services that the student population demands and remaining viable because it has chosen to accept responsibility for its finances and is operating commercially, not protected by a great big new tax.
Other university unions have failed to meet these challenges. For instance, reports have been made that student unions are currently involved in purposely running budget deficits in order to extract more funding from universities, and to continue pressuring the government to reinstate compulsory fees. We hear accusations from Labor that the opposition is taking an ideological approach towards this legislation. However, it is the government that are pushing their ideology on the university sector. As it proved in its first term, Labor simply does not believe in responsible budget management. When the budget goes into deficit or there are insufficient funds to fund its programs, Labor’s answer is to raise new taxes and force taxpayers to fund programs that they did not vote for. This approach encourages waste and mismanagement because taxpayers can always be called upon to bail out failed programs—let us think for a moment about bailing out the pink batts program, $2.4 billion and bailing out the Building the Education Revolution program. That was way over budget. It is unbelievable.
During Labor’s first term we saw the budget go into record deficit, so the government invented a new mining tax to bail out its mismanagement. Australians are now being threatened with a carbon tax which will push up electricity prices around the country. Under compulsory fees, student unions will be allowed to use Labor’s approach to financial management. The student services legislation does nothing to encourage the financial management and responsibility that students should expect from their representatives. In contrast, under a voluntary system student unions are made to be directly financially accountable to the students that they represent. Students can also voluntarily choose to vote in the union elections and select their representatives on student unions and councils.
Through this bill, though, Labor is proposing to remove financial accountability from those student unions. Perhaps this is why Labor is trying to define the services and amenities that can be provided under the taxes collected by unions. Under compulsory unionism, student unions frequently spend funding on political activities. For instance, hundreds of thousands of dollars were spent on campaigns against the VSU changes. More recently the National Union of Students spent funds campaigning against the coalition in the 2010 federal election. The government argues that union funding cannot be spent for political purposes under this legislation. The explanatory memorandum to the bill states:
… none of the payment will be spent by the person or organisation to support a political party or the election of a person as member of the legislature of the Commonwealth, a State or a Territory, or a local government body.
But this bill does not rule out money being spent on political campaigns in favour of or against legislation. It does not prevent funding being directed to political organisations such as trade unions and political groups such as GetUp!—that totally independent organisation, if you believe their rhetoric, although I do not think anyone does. And I do not think anyone believes that this compulsory tax on students will not end up in the hands of those running political campaigns. You would have to be living in a dream world to believe that. The union will still retain ultimate autonomy on spending and will have the flexibility to spend funding on a wide number of political issues. As I outlined earlier, the union will not be held accountable either financially or through union elections. The coalition cannot support mandatory funding of political campaigns not in the interests of students.
The inquiries into this legislation make it clear that individual students also do not support the changes. The vast majority of inquiry submissions from students expressed concern about the legislation and the compulsory nature of the funding. For example, Jonathon Roberts told the Senate committee:
We need to make sure that we provide incentives for students to want to further their studies. Students already pay a great deal for parking, travel, textbooks and course fees, and now potentially another few hundred dollars a year for facilities many do not have the capacity to use. This makes a difference for those students who are paying their own way through University. It will make a difference for me and many of my friends.
Mr Mathew Scott from Deakin University submitted:
Students like myself already have other things to pay for while studying—textbooks, travel, course fees, to name a few.
Student services have not suffered that much since VSU was introduced. In fact at Deakin, the student union seems to have enough money to run their own book store, bistro and cafes on campus!
Before the election, Labor promised to increase university participation of students from low socioeconomic backgrounds by 20 per cent by the year 2020. The government’s policy to increase percentages is to provide universities with cash incentives that are designed to encourage enrolments of students from poorer backgrounds. If the government is actually serious about improving participation rates of students from low socioeconomic backgrounds, they should be considering the financial barriers on individual students rather than increasing those barriers.
The financial costs of attending university can be considerable. For many students, working is not an option due to time constraints and study pressures. Every direct cost to students is another barrier to education. As a parliament, we should be debating ways to reduce these barriers, like fees of $250 indexed every year, rather than ways to increase them.
The National Union of Students, which is an organisation run by Labor-affiliated students, strongly supports this legislation and the idea of taxing students. This support by the NUS is despite its campaigns to increase the amount of welfare provided to students due to cost-of-living pressures. According to the NUS website:
1 in 8 students miss a meal regularly because of lack of money and 1 in 2 students report that their studies are adversely affected by financial stress. Students from regional Australia suffer huge relocation costs.
If this is the case, why would the student union movement support a tax that will take money away from students, take away their ability to buy textbooks, and put them under greater financial stress? The government knows that the tax will be a significant burden on students, which is why the legislation provides for a complicated loan scheme called SA-HELP. SA-HELP will provide loans to students who do not wish to pay the fee up front. Students will need to make a request for assistance and provide their tax file number in order to get a loan.
However, the practical implementation of the scheme is not made clear by the legislation. Professor Jane den Hollander, convenor of the Universities Australia Deputy Chancellors Committee, has described the proposed system as ‘complex, complicated and confusing for students and annoying and time consuming for everyone.’ The proposed loan system is not an answer to the burden being placed on students by this legislation. Those who are eligible to access loans will merely be forced into a liability to the Commonwealth, which has not detailed how and when the loan will be repaid.
Instead of reducing the study disincentives of an up-front fee, the complexities of the loan system actually add to the burden that this legislation places on students by enforcing a complicated and time-consuming process on those who are eligible to access SA-HELP. Again, if Labor’s purpose is to help students and provide incentives for study, adding financial disincentives and complex loan procedures to the university experience is not going to help.
I am particularly concerned with the impact this legislation will have on students studying externally and those from rural and regional Australia. The $250 fee will be applied to students who do not actually study on campus and who cannot even access the services provided by the union. The impact of such provisions was made clear in many inquiry submissions. Dr Michael Ayling, an external student at the University of New England, told the House committee inquiry:
I will have no role in student politics at UNE. I will never visit the university gym, join any clubs, make use of their childcare facilities, buy a subsidised cup of coffee at their refectory, nor seek the advocacy of their student union. Yet it is still envisaged that I should pay the new tax.
Mr Scott from Deakin University submitted this to the committee:
I live in regional Victoria in Bendigo, however I attend Deakin University in Melbourne. I am on campus one day a week, but also study several units from my course online.
Why should I be stuck paying for student services which I won’t be using? I already have to pay more to travel from my home in regional Victoria to my university campus in the city of Melbourne, as well as having to knock back shifts at work in Bendigo so that I can travel to University.
The Rudd-Gillard government has shown that it does not understand the pressure facing regional students.
As parliament is aware, the coalition is currently seeking to overturn Labor’s alterations to the eligibility criteria for independent youth allowance, which discriminate against regional students. Unfortunately, we have not been successful to date. Labor’s system currently classifies groups of students as ‘inner regional’ and forces those students to work additional hours in order to qualify for the independent rate of youth allowance. The plan to reintroduce compulsory union fees only further gives regional students a disincentive to study at universities, and studying at universities is so important for improving the economy and fortunes of those living in regional and rural Australia.
The coalition opposes this legislation for each of the reasons I have listed. We believe that Labor’s tax on students infringes the right to freedom of association. This legislation will force students to be financially associated with the union even if they decide not to join the union and vote for union representatives. By compulsorily acquiring fees, student unions and associations will not be held accountable for how they choose to spend student money.
There is evidence that voluntary student unionism has forced student unions to be more responsible and to provide services that students actually need. What a wonderful idea. This bill will allow student unions to descend back into their ugly old ways and spend money on political campaigns and frivolous activities not in the best interests of students. The amount of the fee and the complex process involved when a student applies for a loan to pay the fee provide further disincentives for young people to study at university.
As evidenced by the committee inquiries, the organisations supporting this legislation are those that will benefit financially from it. Individual students who do not want to pay this tax and believe that their study will suffer because of it have been ignored by this government. Finally, the legislation will particularly hurt regional and external students and discourage them from studying. External students will pay the fee despite never using the services provided. Is there equity in levying a tax on people who will never use the services that they are being taxed for? For those students facing the costs of relocating to the city, the legislation provides them with an additional financial burden. The coalition believes that we should not be increasing upfront burdens on students and giving disincentives for them to undertake tertiary study. I urge the parliament to oppose this bill in its entirety and to reject the inequity that it imposes on many struggling students who cannot afford $250 and who are keen to pursue their studies.