Thursday, 4 September 2014
Higher Education and Research Reform Amendment Bill 2014; Second Reading
With this Higher Education and Research Reform Amendment Bill, the Abbott government is launching an unprecedented attack both on our universities and on the aspirations of thousands of students. Cutting $3.9 billion out of our higher education sector and telling universities that they can make up that difference only by charging students more is a direct attack on the equal opportunity that this country has fought so hard for.
The harsh reality of the first anniversary of the Abbott government is that it has shown that it was never the Prime Minister's intention to keep his promise made before the election that there would be no cuts to education, just as it was never his intention to keep his promises of no cuts to health, no new taxes and no changes to superannuation. The Prime Minister is not only letting down everyone who voted for this government, believing in those promises, but also risking the future of young Australians.
Among those young Australians who will be hit the hardest are those attending our regional universities. Over the last 40 years, the reforms of successive Labor governments have opened up our universities, providing those who previously could only dream of going into higher education with the opportunity to do so. Labor successfully ended the cycle of young academic talent being overlooked due to the size of their parents' bank balance. This bill aims to absolutely smash that legacy. Just as the Abbott government did with health and with pensions and with superannuation, they are pursuing a cruel and flawed ideology that directly attacks Australia's sense of social equity, the very framework that has made our country the envy of the developed world.
According to Universities Australia, cuts to course funding will result in degrees in engineering and science increasing by 58 per cent; agriculture, by 43 per cent; nursing, by 24 per cent; education, by 20 per cent; and environmental studies, by 110 per cent. The Grattan Institute's Andrew Norton has predicted 30 per cent of female graduates in nursing, education, IT, commerce and engineering will never clear their debts under this plan. Australian Catholic University Vice-Chancellor Greg Craven has also warned against the government's plan, saying that it would disproportionately affect nursing and teaching graduates.
These increases are only the starting point, as it is anticipated many universities will go further, with independent modelling forecasting that the cost of degrees in science, in medicine and in law will well and truly exceed $100,000. In fact, I met recently with the Go8 deans of medicine and they are already being told that their courses will be the fee leaders at universities. They are already being told that courses in medicine will be the fee leaders—that is, the most expensive, costing the most that can possibly be charged.
To the health sector, this will be devastating. Most Australian universities now require students who wish to undertake a medical degree to first complete a three- or four-year bachelor law or science degree. That means students who graduate with medical degrees will be at university for at least seven years before they are able to seek full-time employment. Starting their working lives with such a massive debt will require graduates to put remuneration before job satisfaction as they seek the jobs that pay the highest amount immediately rather than pursue that which they are most passionate about.
Now, what do you think that is going to mean for the health workforce when, already, for the first time in five years, we are starting to see a substantial drop in the number of medical students who want to become GP specialists? Where do you think a cohort of students, potentially with debts of $100,000 or more, are going to seek their careers? In general practice? Possibly not. They are going to seek careers where they are able to earn the most as quickly as possible so they can pay off their massive university debt. Many students will be forced to go into workplaces where they can earn the most to pay down a debt many could still be wearing decades after they finish university. As I said, this will have very serious consequences for the medical profession.
The government has already attacked general practice in its budget, and these changes, frankly, represent another attack on our health workforce. Do you think our new medical graduates with $100,000-plus in debt are going to want to practise as a GP in Dubbo or Wagga or any place they are not going to be able to get the money that they need to pay that debt down?
These changes also represent an attack on our medical research workforce. Again, the potential for those students, knowing that they will have such substantial debts, to take the decision to go into medical research—and it is often low paid—is going to be well and truly lost. This comes at the same time as the government is trying to justify the GP tax on the grounds that the funds are needed to pay for the Medical Research Fund, which it insists is critical to tackling our future health needs. Well, this bill runs completely counter to that aim. The government hits patients with the GP tax—which drives them away from seeing doctors, making them sicker and adding to the future health burden—so it can pay for medical research but then imposes such a crippling debt burden on our brightest and best students that few will ever be able to afford to participate in that research.
The bill not also risks our reputation but is a massive barrier to our economic future, because it is absolutely vital that we have a productive, innovative and highly skilled workforce. The Australian experience has proven that economic and social prosperity is only achieved through policies of inclusion, not exclusion. Let us be absolutely clear about this: there is nothing, absolutely nothing, inclusive about $100,000 university degrees. There is nothing inclusive about saddling young Australians with a lifetime of debt. These are truly regressive reforms, and no amount of spin or denial from the other side can prove otherwise. The removal of price controls will see the cost of university degrees skyrocket. The prospect of degrees exceeding $100,000 will become reality if the government proceeds with this bill. The $1.9 billion cut in Commonwealth funding for course delivery will force universities to pass this on through higher fees. I note the capacity and the concern which regional universities have expressed about that.
This is a tax on our future. It is a tax on our students who will pay the most, not only through increased fees but through a constantly growing debt burden. For it is not enough for the Abbott government to slug students with cuts to course funding and the removal of price controls; they want to then multiply this already crippling debt through changes to HECS and HELP loans. At Federation University—and I am aware that this is a breach of standing orders, but I have spoken to the Deputy Speaker about doing this briefly—
At Federation University in my electorate, three-quarters of the students are the first in their families to attend university and almost a third of the student population are from low socio-economic backgrounds. These students cannot afford to even contemplate incurring $100,000 debts in their teens. The Abbott government is nothing short of ignorant if it thinks this will be anything other than a massive disincentive for families in regional and rural Australia. Many of the regional universities have said that they would not be able to charge those sorts of fees. That puts regional universities behind the eight ball from the start. They have had massive funding cuts and have no capacity to make up the shortfall. Over time that will compound and compound.
Regional universities are at the heart of not only our regional economies but at the heart of the capacity of regional students to gain teaching degrees, nursing qualifications, IT qualifications, engineering and health sciences, to provide the workforce in regional Australia. Over time, the capacity of universities to deliver that breadth of courses will decline. Also the quality of courses will decline. We will see the sandstone universities, potentially the Go8, those great institutions, able to charge those fees, and regional universities will decline further and further. That is the reality of this bill.
The government claims its new Commonwealth Scholarship Scheme is designed to support disadvantaged students, but again they fail to recognise the inequity inherent in this bill. No Commonwealth funding is allocated to those scholarships, with funding provided on the basis of additional fees from students. So the more universities charge, the more they will be able to provide scholarships. That is fine but it is not okay for regional universities, which are not going to be in a position to do that. This structure will further widen the gap by entrenching market position and power with our sandstone universities. Former Melbourne University Vice-Chancellor Professor Kwong Lee Dow confirmed this very point in a recent speech during a visit to Ballarat:
If high fees are commanded by preferred institutions and preferred courses, to show their status some others will move towards these higher charges to position themselves in the market.
That is exactly what this bill is designed to do:
In poorer communities, including regional and rural communities, families will not be able to meet these higher fees, so the institutions will have less funding and so become less competitive over time.
Professor Lee Dow then went on to say:
… whatever finally emerges from the political machinations with the Senate, students will be paying significantly more, and rural and regional students will be disproportionately affected.
Professor Lee Dow's observations are far from unique. Since the Minister introduced this bill, several professors from regional campuses throughout the country have joined the chorus to highlight the terrible impact of this bill on their universities. In my own electorate, the Vice-Chancellor of Federation University, Professor David Battersby, highlighted the sham of the government's so-called Scholarship Scheme in a piece published in the Ballarat Courier:
The shallow rhetoric about having more scholarships for regional students, including assistance to help them to attend metropolitan universities, and the availability of more sub-degree courses, ignores the real differences we have in this nation between metropolitan and regional higher education.
The differences are structural and not simply related to student choice and cannot be easily ameliorated by the application of market forces.
I make special mention of Federation University not only because of its status as a leading regional education institution but because of its fantastic record of providing our region with highly skilled nurses, teachers, accountants, scientists, engineers and research graduates. They are people who stay in our communities and fill important jobs, develop businesses and provide important services for our communities.
Flying in the face of this record is the Abbott government's determination to cut $42.5 million from teaching and research funding at Federation University. Federation University prides itself on its key focus on research and innovation and has formed a partnership with Monash University, University of Melbourne and Deakin University under the Collaborative Research Network to establish the Self-sustaining Regions Research and Innovation Initiative. The project comprises three major elements: regional science and technology innovation, regional landscape change and regional social and educational connectedness and health innovation. The focus of this initiative is to deliver world-class research with an integrated focus on drivers of change, impacts and solutions for people and communities in regional Australia.
Collaboration in research is critical, but with the government saying to universities, 'If you don't support these bills we'll find the money elsewhere, if you don't go out hard and campaign for these bills and if they don't get through, we'll cut your research funding,' what sort of blackmail is that? What sort of message is that sending to universities? Frankly, I think universities have been shocked by the minister's behaviour in making that statement. That will have a significant impact on my university, Federation University.
One of the components of this bill and one which I think the other place will seek to have discussed separately is the establishment which we signed off on in government—that is, the name change from the University of Ballarat to Federation University. I want to put on record my very strong support for the name change to Federation University, Ballarat, or Federation University, Churchill campus—I am sure we are going to see more Federation University campuses across the state of Victoria in the years ahead. I also want to put on record the damage that this bill does to regional universities. I know that many members of the National Party have concerns about it. I know that, deep in their hearts, they care very much about what happens in this place to regional communities. I hope very much that they are able to convince the Minister for Education to take into his heart the needs of regional Australians.
In the words of Minister Pyne, this government is the best friend students have ever had. Today I rise to speak on the Higher Education and Research Reform Amendment Bill 2014 and the benefits it will bring to students across the country. The coalition is introducing some of the greatest higher education and research reforms in Australia's history. I am proud that the coalition government is helping to make Australian higher education the best in the world. I am also proud that we are striving to achieve the best universities in the world. Australia has always been a nation that endeavours to be the best it can be. These reforms will allow our universities to be the best they can possibly be.
When I started university, in 1987, I had to move away from my regional home town of Alice Springs. Like most students, I struggled on a small income while I was living away from home, in the big smoke of Darwin. I was the first of my family to go to university. After I completed my studies, my husband, Paul, went to university to study a bachelor of police investigations. My mother actually started tertiary education in her 40s, while I was still at university myself. To send one person to university can make a difference to an entire family's higher education experience. My mum has since gone on to study a graduate diploma in public sector executive management, a graduate certificate in public sector management, a bachelor of public administration and a master's of international management.
I think she is a very impressive woman, particularly since her first studies were in her mid-40s. I am very, very proud of my mum and I think that she is a good role model for my family.
We want to get more students to study higher education, and we are doing that by making it more accessible for regional students and students from low socioeconomic backgrounds who might have thought university study was way out of their reach. This legislation will create the biggest tertiary education scholarship reform that we have ever had in this country. We are levelling the playing field between city and country. University deregulation means more money for scholarships, and this means more opportunity for students from regional and remote areas to move closer to a university or tertiary education provider.
We only have one university based in the Northern Territory, and that is Charles Darwin University, which is where I studied a bachelor of business, majoring in information technology. It is a fantastic university and a unique educational institution. I was speaking with the new Vice-Chancellor of Charles Darwin University, Simon Maddocks, about his role. He reminded me that Charles Darwin Uni is very different from other capital city universities and that it may need some extra attention in that regard. So I have been working with the vice-chancellor to ensure that the unique challenges facing Charles Darwin University are heard by Minister Pyne. Vice-Chancellor Maddocks expressed his concerns about how these changes might affect regional universities. I will continue to work through these concerns with Vice-Chancellor Maddocks and keep the lines of communication open between Charles Darwin University and Minister Pyne's office.
In fact, these higher education reforms offer many advantages and opportunities for regional universities and will in turn benefit the communities where they are located. Deregulation of universities is widely supported among the higher education industry around Australia. For regional universities, deregulation provides an opportunity for them to position themselves much more effectively and attractively. Charles Darwin University provides high-quality education, with high student satisfaction and excellent employment outcomes. Package that together with lower fees than interstate universities, and you have an attractive marketing plan to recruit students from all over Australia.
We do admit it is possible that fees will go up for some degrees. However, universities still want to attract students, and Australians are smart people; they will look out for the best value for money and this will keep universities competitive. If Charles Darwin University can offer courses at a lower cost than their city counterparts, they could see more students from major capital cities choosing regional areas to undertake their studies. This would be a great boon for the Territory's economy. Locals would welcome the economic benefits students bring to our region, and Darwin is a great drawcard for young people.
The government is committed to improving regional universities, and we will do everything we can to ensure that they are not left behind and that they are able to compete with metropolitan universities. In reducing per student funding under the Commonwealth Grant Scheme, we have made concessions for regional universities to ensure that this does not impact regional universities disproportionately. Many regional universities, including Charles Darwin University, have higher numbers of teaching and nursing students, and these courses will see lower than average reductions in funding, which is good news for regional universities that have large teaching and nursing cohorts.
Charles Darwin University is also a research intensive university. It boasts international excellence in environmental science and in Indigenous and tropical health. It is also leading the way in terms of engineering expertise to assist in the oil and gas developments that have been attracted to our area in our bid to develop the north.
These higher education reforms will allow Australian universities to build on their strong, competitive research systems. We had come to expect funding shortfalls from the previous Labor government, but this case is actually quite extreme. Research assistance had been left in the lurch. Not a single cent had been put aside for the National Collaborative Research Infrastructure Strategy beyond 30 June next year. The Future Fellowships program had been left dry. As I said, not a cent was left to award to mid-career researchers to undertake world-class research in Australia after 30 June next year.
But there is good news: we actually take research seriously. This government is investing $11 billion over four years in research programs for Australian universities. There is $139 million for the Future Fellowships scheme and $150 million in 2012-16 to continue the National Collaborative Research Infrastructure Strategy. This government is picking up the pieces after the failed Labor government, and we are the ones who will ensure that Australian researchers are not left behind.
I look forward to working with Charles Darwin University to ensure that it continues to be a top research university and to provide it with access to the coalition's new research funding model. Of more benefit to Charles Darwin University is this government's change to the Commonwealth supported places for students. We think that students studying for diplomas, advanced diplomas and associate degrees should be able to access Commonwealth support as well. So Charles Darwin University offers a large range of diplomas and advanced diplomas, from a diploma of business, to a diploma of conservation and land management, to an associate degree in engineering or an associate degree in legal studies. Charles Darwin University has a large range of courses that will suit any student's needs.
This government, as I said, is investing $371.5 million to support this initiative with diplomas and associate degrees which will give more options and therefore more flexibility to those who might be thinking of studying. Diplomas and associate degrees provide alternative pathways to those of the traditional bachelor degree after high school program. These courses can give students the opportunity to develop the skills required in a high level of tertiary education or may suit them when they do not necessarily want to do a bachelor degree. Expanding Commonwealth subsidies to these types of courses will help to ensure Australians have the best chance of success when they are studying. This is particularly important in regional and low-socioeconomic areas where students are less likely to attend university than students in large capital cities.
The coalition government is increasing competition between higher education providers. When these institutions are able to compete against one another to attract students then the students win.
We are extending Commonwealth support to private universities and to alternative higher education institutions so that they can also compete for students. We are investing $448.9 million to deliver on this goal. We expect that over 80,000 additional students will benefit from this investment. This means better outcomes for tertiary education institutions. An estimated 48,000 students in diploma and associate diploma courses and 35,000 students in bachelor courses—pretty good numbers, wouldn't you say, Parliamentary Secretary?
What a great investment for the future of our nation! More choice equals better options. Competition will drive quality and encourage providers to be more responsive to students' wants and needs. Yes, some of the courses may go up, but many courses may drop their prices due to the institutions wanting to attract students to study with them.
I find it really disappointing that the Labor Party are trying to scare our kids out of attending university. Even my own nephew, who is attending university next year, has spoken to me about some of the scaremongering that has come from those on the other side. If anything is going to scare our kids away from tertiary studies, it is the ridiculous claim from the Labor Party that people cannot afford to go to university anymore. This is false, and it is highly irresponsible to be spreading these sorts of lies. The Labor Party just do not seem to get it. Students do not have to pay one cent for their university education up-front. I will repeat that: students do not have to pay one cent up-front for their university qualifications.
Yesterday we heard from the other Northern Territory member of the House of Representatives, who was telling the parliament that this legislation requires homeowners to get a second mortgage to pay for their education. For the member for Lingiari, I will repeat again: students do not have to pay one cent up-front for their university education. It is irresponsible and shameful of the members opposite to discourage their own constituents from starting university at a later stage in life as my mum did. The member for Lingiari has a high-paying job. Why shouldn't his constituents be afforded the same opportunity to upskill and increase their income?
That is what the coalition government is here to do—to give all Australians the opportunity to secure their own future and make a better life for themselves. As for the Labor senator, I am not sure that she will be able to tell you how these reforms will affect Charles Darwin University, because she does not actually seem to be in the Territory much; she seems to be travelling all around the country—all you have to do is have a look on her Twitter account to see that. She is unlike her predecessor, my constituent Trish Crossin, who actually did know what was going on. She was right there on the ground. And if she was here, she would have a bit to say about this, I am sure.
This government will maintain the HELP loan scheme so that not even regional students have to pay anything up-front for their higher education. In fact, they will not have to pay a cent back until they have a job and are earning a decent wage. People tell me they think this is a good deal, considering most graduates go on to earn 75 per cent more than the taxpayers who supported their education and did not go to university. This government is committed to enabling universities to continue to provide high-quality education and learning in the decades to come. I commend the bill to the House.
I want to start today by telling a story about two young Australians. One was a bright young man who wanted to become a doctor. Unfortunately, his parents were not wealthy and they could not afford for him to go to university. He left school at the age of 15 and became an apprentice electrician. It took him many years to go back to study at night school to become an accountant. The other was a bright young woman who wanted to become a teacher. She grew up in a housing commission house in Victoria. She had a single mum who worked three jobs to keep food on the table. She was dragged kicking and screaming from school at the age of 15 because she had to go out and pay her way; her mother could not afford to support her.
That bright young man was my father and that bright young woman was my mother. My mum went back to get her HSC after many, many years of bringing up my sisters and I. She went back to get HSC in her 30s. Then she started to study at university. It was her great ambition to study at university and become a teacher. But, unfortunately, she could not finish her university degree because my father left us when I was 11. He left my mum with three daughters and not very much money in the bank account—$30, in fact. So Mum had to go back to work.
When my father left, my mother was absolutely petrified that my sisters and I were going to face the same destiny of intergenerational disadvantage that beset what I call my working class matriarchy. My great-grandmother left school at 12. She cleaned houses. She was a domestic for the wealthy in the Western district of Victoria. My grandmother left school at 13. She worked three jobs, largely as a cleaner around Melbourne in hospitals and theatres. As you heard, my mother had to leave school at the age of 15 because she was a housing commission kid. Her mother was a single mum and she could not afford to put her through not just university—that was a pipedream—but high school. My mother was petrified that this intergenerational disadvantage that resulted from lack of access to education would beset my sisters and I when my father left us when I was 11, so she was absolutely determined that my sisters and I would go to university. We were very fortunate because we had that opportunity, and that was thanks to Labor. That was thanks to the free education reforms that Whitlam introduced in the 1970s and the affordable HECS system that Dawkins introduced in the 1980s.
I fear that these reforms that we are debating today will take us back to the Australia of the 1950s where only the wealthy were educated, where bright students from the so-called wrong side of the tracks were denied the opportunity of higher education, denied the opportunity to pursue their dreams and denied the opportunity to become doctors, as was my father's dream, and teachers, as was my mother's dream. Given my background, I am pleased to have the opportunity to speak on this bill and to join with my Labor colleagues in standing against this dreadful legislation and policy. I stand together with my Labor colleagues to protect access for all to higher education.
Christopher Pyne, prior to the election, said, 'We will ensure the continuation of the current arrangements of university funding.' The government said that there were to be no cuts to education. Those were the words of the Prime Minister prior to the election. This legislation is further evidence that the promises of those opposite are meaningless. In total, the Abbott government's budget measures cut $5.8 billion from higher education teaching and learning and university research. That is an awfully big cut from a government that promised again and again there were not going to be any cuts to education.
This legislation we are debating today enables the delivery of $3.9 billion of these cuts, including through slashing funding for Commonwealth supported places in undergraduate degrees by an average of 20 per cent and, for some courses, up to 37 per cent. This which means that universities will have to increase fees to make up the difference. The reforms also involve reducing the indexation arrangements for university funding to CPI in 2016 down from the appropriate rate the previous Labor government introduced, which means $202 million in cuts over the forward estimates period. This will be a major contributor to a $2.5 billion per annum shortfall in 10 years time, according to the Parliamentary Budget Office. These reforms also involve cutting almost $174 million from the Research Training Scheme, which supports training of Australia's research students—the scientists and academics of tomorrow. They also involve introducing fees for PhDs. I will come to that later. They also involve introducing a real rate of interest on HECS, moving from CPI to the 10-year bond rate capped at six per cent. This highly regressive measure applies not only to existing and future students but to anyone who still has a HECS debt.
I have been astounded when listening to the speeches of those opposite that many have said these policies will not necessarily result in fee increases. According to Universities Australia, the cost of important courses like engineering and science will have to increase by 58 per cent to make up for the government's funding cuts, while nursing will need to increase by 24 per cent, education by 20 per cent and agriculture by 43 per cent. Environmental studies—which in many ways is the field of the future, looking to ensure that Australia can compete in a low-carbon future—will have to increase by 110 per cent.
Canberra is lucky enough to be home to several excellent universities, including the Australian National University, the University of Canberra and the Australian Catholic University. There are over 30,000 Canberrans currently enrolled in one of these three universities. So it is not surprising that Canberrans are passionate about this issue—and passionate they are! I have spent a lot of time talking to Canberrans about what they think of the budget. I have been doorknocking, held community forums and mobile offices, and I have spoken to Canberrans about how the budget will affect them. I have been inundated by emails, letters and phone calls from constituents who are unhappy with many aspects of the budget, but there is one aspect that they find particularly horrendous. Almost every single person I have spoken to has felt that the government's higher education policies are unfair and an attack on our very social fabric. There is a lot of anger in the Canberra community about a whole range of issues in the budget. There is a lot of anger about changes to Newstart, there is a lot of anger about changes to research funding and there is a lot of anger about the fuel tax hike. However, the issue that resonates with everyone is the cuts to higher education. More people that I have spoken to oppose the cuts to higher education than any other single policy.
These Canberrans who are very angry about these higher education reforms did not necessarily go to university themselves, but they have aspirations for their children or grandchildren to go one day, and they may have aspirations to become a mature age student themselves. Most importantly, they believe that every Australian should be able to choose whether or not to go to university based on their skills, hard work, interests, dreams and career goals, not on their bank account or postcode.
I have also heard concerns from Canberrans still paying off their HECS debt. They are wondering how they will cope with the significantly increased interest they will have to pay from 2016. I have heard concerns from Canberrans who had always considered themselves lucky to have such great universities right here in their own city, but who now fear that their children will never have the opportunity to study at these universities.
Canberrans are united against the Abbott government's changes to higher education. They know that they will make university study inaccessible for people from a disadvantaged background like my parents and me. I was the first person in my family to be tertiary educated. My middle sister is a scientist and my little sister is a neurologist, thanks the reforms that Labor introduced in the 1970s and 1980s. If those reforms had not been introduced—if the environment that this government is proposing had existed—I wonder whether my sister would now be a neurologist, I wonder whether my middle sister would be a scientist and I wonder if I would have had the chance to go to university. Given the fact that I grew up with a single mother, like my mother and her mother before her, I really do wonder if we would be where we are today, would have the choices that we have today, and whether our lives would be transformed as they have been through higher education if these reforms were in place when we were in our late teens or early 20s.
Canberrans know that the government's proposals will create a two-tiered system where only the very rich can access our best universities. They know that these changes will saddle our kids with enormous debts, preventing them from ever entering the housing market or getting ahead in life. They know that these changes are bad for our country and that, as I said before, they cut into our very social fabric.
One of the very worst aspects of these bad reforms is the fact that they unfairly disadvantage women. We already know that women shoulder the majority of the caring burden in Australia, which means time away from their career. Whether they take time off after the birth of a child or to care for sick and ageing relatives, it financially disadvantages women, especially when it comes to superannuation. Now, the Abbott government wants to charge them increased compounding interest on their HECS debt while they are out of the workforce. Under these changes, a female accounting graduate who takes a three-year break from her career could still be paying back her student debt well into her 50s, with about $45,000 in interest and, during the period when they are not earning, they are accumulating a debt on which the interest is compounding. By contrast an accounting graduate with the same debt who does not take time out from their career would repay it in 23 years with only $24,000 interest.
We already have a gender pay gap that see women paid less than men, even at the graduate level. These changes will shoulder women with even more debt and further entrench the fact that women are less financially secure than men in this country—particularly when they retire. And we know what the Minister for Education's response to this was:
Now, women are well-represented amongst the teaching and nursing students. They will not be able to earn the high incomes that say dentists or lawyers will earn, and vice chancellors in framing their fees, their fee structure, will take that into account. Therefore the debts of teachers and nurses will be lower than the debts, for example, of lawyers and dentists.
This appalling statement shows how incredibly out of touch this government is.
I am also concerned about the brain drain on our country that these reforms will cause. I recently visited my alma mater, RMIT. I had a meeting with them to talk about the potential impact of these cuts. These were kids from Moe and Morwell, from the Latrobe Valley and from all over Victoria, and they were studying engineering. I was shocked to hear that they are now considering moving abroad to study—going to Germany, to the UK or to Scandinavia to study—because under these proposed reforms it will be cheaper to study in Europe than in Australia. What concerned me most was not the fact that these students are going off to study in Europe and Scandinavia; it was the fact that they then see themselves as staying there.
We know that we have got an engineering shortage in nearly every field in the country. These highly educated engineers will go off to Europe and stay there for the remainder of their careers and possibly their lives. As one of these young men from the Latrobe Valley was saying, 'Not only will it be cheaper for me to go and study in Germany; they have also got a manufacturing industry in Germany as a result of the government support.' In the past, Labor has shown strong industry support in this country, and it still exists, fortunately, in Germany. He is thinking, 'I will get a cheaper degree and I will get the opportunity to work in a thriving, growing, prospering manufacturing industry.' This is of great concern to me. We will lose the precious intellect and potential of bright young Australians. I am concerned there will be a brain drain.
I am bitterly disappointed with this legislation. I completely oppose it, as I mentioned. I am very concerned that it will mean that only the wealthy in this country will be able to be educated, which is an absolute outrage. (Time expired)
Two days ago we heard the Leader of the Labor Party dramatically railing against the proposed reforms to higher education in Australia. Anyone would think that loans for studying at university were a brand-new draconian action introduced by the Liberal Party. This, however, is far from the truth. The Higher Education Contribution Scheme, HECS, was brought into being by none other than the Labor government under the leadership of Bob Hawke. While over time the system has evolved, the current cohort of university students is probably unaware that this was indeed a Labor initiative. In fact, David Gonski, whose name up until now has been the call to arms for teachers and educators around Australia, has backed this initiative of reform. I quote from News Corp Australia:
THE architect of the former Labor government’s education reforms has backed the Abbott government’s plan to deregulate higher education fees, claiming it will free up funds to make universities “even greater’’ …
Australians are proud of our world-class education system. Education is entirely free for our primary and high school students, and I welcome the students who are in the gallery today. Undergraduate and postgraduate education is available to all Australians with no up-front costs, guaranteeing that no Australian is prevented from going to university and making a difference to their future.
In addition to my 10 years as a high school science teacher, I taught high school in the United States as an exchange teacher and was a volunteer teacher educator in India. It was after my experience in these countries that I learned the true value of our own unique education system right here in Australia. We have a system that ensures equality of opportunity and a chance for every child to attend school, and to attend university if that is their choice.
The reform package before the House today is about cementing the foundations of our world-class education system for years and decades to come. This is not about class warfare, it is not about increasing student debt, it is not about stopping Australians attending university; it is, however, about future sustainability for university education in Australia, and increased opportunities. This bill should not be a plaything of Labor and Greens to run their irresponsible scare campaigns. Without reform, within 10 to 20 years, the HECS-HELP scheme will become entirely unsustainable for any government, and the students in the gallery here today may not be able to attend an Australian university. It is the action of a responsible government to look further than six months into the future and to care about how Australia will look in 10, 20, 30 years, not just at the next election.
The bill contains a substantial set of reforms which will allow Australian universities and higher education institutions to flourish and promote choice and opportunity, including a significant deregulation and expansion of the demand driven funding system to improve flexibility and competition. This includes an extension of the demand driven system diplomas and associate diploma programs that cater to less-prepared or less-confident students; the removal of limits on fees; and extension of funding to private and non-university institutions.
Increasing competition is known by any businessperson to act as a breaking mechanism on price increases. The more supply, the greater the downward pressure on prices. This is the reality for any product as insignificant as confectionery; and it is no different for important products like education. I should know about confectionery price increases and competition, because I produced confectionery for 17 years. These reforms are necessary to avoid Australia being left behind at a time of rising performance by universities around the world, something Universities Australia has repeatedly warned is a danger.
I recently emailed my daughter travelling in Europe about the government's reforms. She has graduated and has two masters degrees. Her response was short and to the point: 'What on earth are they on about? The same thing is happening all over Europe in their universities.' To do nothing would impact on quality and send higher education downwards towards mediocrity. This inaction would let our students down and directly threaten our third largest export—international education—which is valued at $15 billion.
Before I delve into the detail of our package of reforms as a whole, I quote the vice-chancellor of our only university in Gilmore, Vice-Chancellor Paul Wellings, who recently penned an opinion piece in the Financial Review on this very issue. In his well-written article, he says:
The unpalatable alternative of leaving the fee system untouched and just adding to the large cuts imposed by the outgoing government was clearly an option. But this option was disregarded by Pyne in a decision to make the sector more competitive.
… … …
… there is a real chance that Pyne's reforms will increase the competitiveness of the sector while maintaining our ability to offer university education free at the point of delivery to all students, irrespective of their social circumstances.
As a member from a regional electorate with a regional uni, if there were to be any adverse changes to higher education under this package you would expect regional areas like mine to be the first to feel the brunt and to say so. The comments quoted here are proof that this reform package will be good for all university students and is being welcomed by those at the coalface. The Regional Universities Network has echoed the sentiment:
The Regional Universities Network (RUN) welcomes the announcement in the Budget of an ambitious program of reform for higher education which recognises the importance of the sector to Australia. The Treasurer and the Minister are to be congratulated for highlighting the important role Universities play in Australia’s future.
It saddens me that in my electorate of Gilmore only three people out of 20 attend university. We have one of the lowest participation rates in the country for higher education. One highlight of this higher education package is the $371.5 million that the government is investing into diplomas, advanced diplomas and associate degrees over three years, which my local students use as a career pathway for a degree. While many young people in Gilmore are reluctant to commit to a university education, often because it means moving to Wollongong, Canberra or Sydney, there are many who are open to the idea of studying through these different pathways.
These reforms offer great choice. Gilmore may be one of the regions in Australia with the lowest university participation, but we are one of the top 30 areas for young people going to TAFE. For the youth of Gilmore, TAFE is where many high school leavers see their chance to gain technical and further education in a way that supports their personal goals and careers. Through this legislation, the government is also giving greater opportunities to those students from the lowest socioeconomic backgrounds, like those in my electorate, through this new program allocation.
We are told by those opposite that university education should be free. Mr and Ms Taxpayer would say that the current system is far from free. However, the proposed reforms result in a revenue-neutral position for the government. We plan to change the indexation of HELP debts from the current consumer price index to the Treasury 10-year bond rate, capped at a maximum of six per cent—which is actually cheaper than a personal loan. We are doing this because, when the government is $300 billion in the red, every dollar borrowed from HECS is another dollar the government needs to borrow from someplace else.
The interest rate on Treasury bonds is much lower than anything available from a commercial lender. I only wish this had been an option for me when I attained the enrolment level for medicine but could not work my three jobs and do the face-to-face study hours required. If the government is going to borrow $30,000 on your behalf, it does so by issuing a bond. And it is only fair that the cost of issuing and maintaining that bond is incorporated into the HELP debt. This change reflects the cost to government of borrowing the money it lends to the students—and nothing more. It is far less expensive than a commercial loan, and our changes will go a long way towards ensuring the sustainability of the HELP scheme. Perhaps if this scheme had been available previously then more of those on the other side of this chamber would have studied commerce or economics, and the disastrous debts such as those we were left with last September would not have happened. I do not recall any election material from last year's election that said they promised to leave such debt. In fact, didn't they promise four years of surplus? Talk about broken promises! Let us keep things in perspective. The challenge of change that has been left to this government is a direct consequence of severe mismanagement by the previous government and the revenue from Mr and Mrs Taxpayer, our family businesses and our international investors. They squandered the money and borrowed more. It is shameful.
Another reform this package incorporates is the introduction of new HELP repayment thresholds. When you have a HELP debt currently, you are required to pay back that debt as additional taxation once you earn over $53,000 a year. Between $53,000 and $60,000, you pay back at the rate of four per cent of your income. The amount you pay back every year as a proportion of your income then increases with your income on a tiered system up to a maximum of eight per cent right up to an income of $99,000. This reform package introduces a new lower level—a two per cent HELP debt payment—and it kicks in at just over $50,000. Let me repeat: the only part of the repayment system is a two per cent HELP repayment threshold, and that is the only change we are bringing in. This is not a brand-new payback system; it has been in place for some time, under governments on both sides of politics. It goes quite some distance towards assisting in timely payback of student debts. We are slightly reducing the payment threshold, but in doing so we are cutting the total payment amount by about half.
It is important to put the changes to HELP into perspective. Australia's HELP debt increased from around $16 billion in 2008 to more than $30 billion in 2013. In the last year alone the government provided about $5 billion in HELP loans alone. This will be $10 billion in 2017. And no-one needs a degree to understand that this is completely unsustainable; money does not grow on trees. This government is reforming the HELP scheme to make it affordable and sustainable and, most of all, a scheme that still looks after the most disadvantaged in our community. Our reforms mean that no student will need to pay a dollar up-front to go to university and no-one will be asked to repay their debt until they are earning at least $50,638 by 2016-17.
Fee deregulation is necessary to ensure that universities can still access the resources they need. Changes in fees will be a direct result of demand and university policy. Some institutions may increase fees, yet other fees may be reduced. Fee deregulation means that providers will be required to compete on price and quality. New competition among providers will keep many fees down. As a former high school science teacher I know that university attendance is often determined by family experiences and aspirations that are set in the early childhood years. The educational experience, the family's expectations and, even more importantly, a person's economic background while growing up may affect potential attendance at university or even the aspiration to attend.
As I mentioned earlier, at the end of my high school years I was accepted to the University of New South Wales in medicine. However, when I looked at the cost of moving from Woodford in the Blue Mountains to Sydney and the cost of texts and other materials, there was no way I could afford such a course, so I accepted a teachers scholarship. I had already given up on the idea of forensics or architecture, having been told that despite my outstanding results the companies did not employ women on cadetships. Thank goodness that attitude has changed. However, with these reforms, students of any gender and any socioeconomic background can choose the course that they are most interested in. They can invest in their own future. We have expanded opportunity horizons, and I am 100 per cent in support as I know from firsthand experience how much a cheap loan would have meant to me.
This package of reforms is about true equality of opportunity for all Australians, regardless of background, disadvantage or gender. Unlike the Labor Party, we believe that reform is more than just robbing Peter to pay Paul, or even robbing our grandchildren of tomorrow for a media grab today for populist expenditure. We on this side believe that for true reform of our universities and higher education sector we need to do more than talk about an allocation of imaginary Rudd dollars for students and universities. We need a plan, we need a vision, and we need a government with the guts to prosecute the reform argument. I remind the House of a simple fact: over the working lifetime of the average university graduate, they are likely to earn more than a million dollars than someone without a degree. Right now, we have a chance to open the door of opportunity to so many more Australians. Let's make the most of our national future and also help our students to make the most of theirs.