Kim Carr (Victoria, Australian Labor Party, Shadow Minister for Industry) Share this | Hansard source

I rise to speak in this second reading debate on the Higher Education Legislation Amendment (2007 Budget Measures) Bill 2007. Labor supports much of the content of this bill, which includes provisions for the government’s new Higher Education Endowment Fund, HEEF, as well as other measures announced in the budget. While Labor supports the concept of the Higher Education Endowment Fund, I emphasise that many of the measures, including aspects of the new HEEF, the opposition regards as highly controversial.

The bill seeks to cover measures across a number of areas, including a reduction in the number of Commonwealth Grant Scheme funded clusters, changes to the Commonwealth Grant Scheme funding levels across disciplines, and an increase in the maximum HECS contribution for commerce, economics and accountancy courses. This bill has provision for increased student loans and contributions. There are a few measures that will provide a small number of undergraduate and postgraduate students with some additional financial support, which is of course welcome. The much-trumpeted HEEF is the centrepiece of the bill but apart from this by far the most significant aspect of the bill, in Labor’s view, and one that we regard as wrong and foolish is the change to remove the cap that limits the proportion of full-fee domestic undergraduate places. I will go to that matter in some detail later.

The government sought to present the recent budget as an education budget. The Treasurer went so far as to say in his budget speech that this was the budget that set up the nation for the future. The truth is that, while much in the education budget is welcome, it comes after 11 long years of neglect by this government of education and of training in this country. If we consider that education and training go specifically to building the skills and the capacities of our workforce for today to meet the challenges of tomorrow, it is a sorry state of affairs that there has been such a prolonged period of neglect by this government of education in this country. This government has in fact cut funding to higher education by, on average, $100 million a year during its first term in office. Despite its claims to the contrary, up until this budget this government reduced real funding to universities by six per cent per student place between 1995 and 2003. So to call this an education budget in that context is somewhat ironic.

According to the government’s own figures, Commonwealth expenditure on education as a proportion of total government expenditure is forecast to decline over the next four years from 7.7 per cent of GDP in 2005-06 to 7.4 per cent in 2010-11. As a consequence, at the conclusion of my remarks I will be moving an amendment to the second reading that points out the government’s failings in education policy in general and in higher education in particular.

This bill does nothing to lift research funding for our universities and for over a decade the Howard government has allowed research funding, especially research grant funding through the Australian Research Council, effectively to wither on the vine. It has taken away the autonomy of the Australian Research Council, abolished its independent board and made the organisation’s CEO directly responsible to the minister of the day, which means at the minister’s beck and call.

We saw the previous minister for education, Dr Nelson, veto a dozen research grants awarded by the Australian Research Council after an extensive process of peer review—knocked back by Minister Nelson without any public explanation as to the reason. As a consequence, the government is currently before the courts of this country seeking to prevent the public knowing what the reasons were for the government’s decision. This is the situation which led the outgoing CEO of the Australian Research Council, Professor Høj, to make somewhat frank and blunt public statements given the normal reserve of people who work in this particular area of the public service. He made comments about the implications of the government’s approach to our international reputation with regard to research. He was quoted in the Australian Financial Review on 2 May as saying:

I think in the longer term, if Australia got a reputation for excessive ministerial interference, I think people could well say that’s not such an attractive destination to be a researcher.

These are serious, measured and considered comments and they should be heeded by the government; and if not by this government, by this parliament.

The Higher Education Endowment Fund, HEEF, has attracted controversy. It has been claimed that that represents additional money for universities and to that extent it is unusual that it would be controversial. Of course, Labor welcomes additional money being spent but there are concerns being expressed that in the context of the dire financial situation of universities in this country, particularly with regard to very important infrastructure, there is some scepticism about what the government’s proposals involve. It has been described as cunning and as possibly too clever by half. For a start, we do not know whether this is actually new money to be spent to augment the current infrastructure program or to replace the current infrastructure program. Minister Bishop reportedly said in the Australian on 6 May that the new HEEF fund would eventually supersede—that is the word used: ‘supersede’—existing programs including the capital development pool and unspecified other programs.

These programs are vital for university research infrastructure. Just this week, the Minister for Education, Science and Training, under questioning from Labor’s Kirsten Livermore, refused to clarify this issue. These matters were being considered in the discussion of the appropriations in the House of Representatives. The minister said that she would commit to a promise not to reduce infrastructure spending to universities. She would not actually commit to increasing it. That leaves entirely open the possibility that existing funds will be subsumed in the new HEEF, which would essentially swallow them up.

Quite clearly there is considerable ambiguity about what the government’s intentions are in this regard. We simply do not know what the implications of the actual expenditure of government moneys will be when it comes to research infrastructure. A growing backlog is emerging in maintenance and delayed capital works. The government says that the $5 billion endowment fund will yield a $300 million a year dividend for university buildings and facilities. I am sure members of the public would say that that is a lot of money, but the figures need careful consideration. At the budget estimates hearings, departmental officers confirmed that universities were reporting a $1.5 billion backlog in maintenance claims alone. That was based on figures from 2005. The present situation is much more serious. The Australian National University reports a backlog of some $500 million in its current maintenance needs, and that is just one university. If you add deferred capital works, buildings that are needed but cannot be built for want of funds, the overall figure is more likely to be $3.8 billion, which is an even more pronounced need than the official acknowledgement of the current situation.

Across this country a number of universities are operating out of grossly outdated 1950s facilities. There are universities trying to educate students in crumbling buildings, overcrowded lecture theatres and decayed tutorial rooms. Many universities are in an embarrassing state of decay. There has been no serious effort to address the backlog of capital works in universities over recent years. This question of deferred buildings and other matters has been canvassed and complained about for many years, and yet there has been a failure of the government to respond. We are a First World country. Our international competitors are spending considerably larger sums of money on research infrastructure and university capital works than we are. The gap between our performance and that of our competitors is growing. We now have a desperate need to catch up and bridge the gap. I am concerned that this particular measure is not sufficient to meet that challenge.

We still do not know anything about the conditions attached to the establishment of the new fund. The government is seeking to raise expectations about what can be done with this fund, but it has given no clear undertakings as to what will be done with this fund. We do not know about the composition of the board. We have had indications of some appointments, including the Chief Scientist and others, but we have yet to see the full range of personnel the minister would like to appoint to the board. We do not know anything about the guidelines that will govern the fund. All we have been told by departmental officials is that this is a very complex measure and that they hope to have some matters before the parliament by September. I wait in some anticipation to see whether that actually happens.

The university sector has been starved of funds for the better part of the last decade. We have seen a decade of shameful neglect, and we are now seeing an attempt by the government to repair damage that the government itself has inflicted upon the sector. We will support this measure, but with those caveats because there are considerable issues that need to be looked at.

This bill includes a change to the fee-paying regime, an attempt by the government to further increase the level of fees that can be charged to students for domestic undergraduate places. There is a measure to remove the cap on domestic fee-paying students. We oppose that measure. Labor’s policy is to phase out these full fee paying domestic student places, which are only three per cent of the total student load at the moment but nonetheless reflect a determined ideological drive by this government to shift responsibilities away from the Commonwealth and onto individuals.

We are discussing with the higher education sector the finer implications of these measures, but ours is a philosophical position driven by a desire to give all students a fair go and equality of opportunity. Labor will of course allow full fee paying students who are currently in the system to finish their courses, but the policy position we argue is to phase out full fee paying students right across the public university sector, beginning in the 2009 academic year.

We oppose the government’s budget measures here for other reasons. It was indicated in the estimates hearings that the measures in this bill—reducing the number of funding clusters, removing the cap on the number of full-fee degree places—will mean that universities will be free to enrol an entire discipline as a full-fee domestic course. It will be possible for universities to move to full fee paying programs in highly commercial areas where they believe they can maximise returns.

The position that has been acknowledged by the departments is that, within the clusters, there will now be opportunities for universities to charge the sorts of fees that have been a matter of some deep concern to the public in terms of the way in which this government approaches universities. This means a university will essentially be able to shift its program to those lucrative areas, particularly those exclusive areas, where it can charge the maximum amount for students to go to university.

The government decided early in its life to allow universities to charge up-front fees. We have seen students who can afford to pay higher fees being able to buy their way into courses when they have much lower entry scores than those of their peers in publicly funded places. For example, last year the entry score for a HECS place in the Bachelor of Behavioural Science course at the University of Sydney was some 17 points higher than the entry score for a full-fee place. Frankly, that raises serious questions of equity and also quality—and that suggests to me why it is necessary to remove this policy.

We have seen this government moving away from a commitment to fund education appropriately as a matter of national priority. What we see in the measures contained in this legislation is a recognition by the Howard government of its neglect, but these measures will in no way compensate for the 10 years of neglect. We are four months out from a federal election—so of course it is important that additional resources be spent on education! It is terrific to see the government suddenly feign an interest in education and research. But the fact remains that the provisions in this bill will actually see a much higher level of expenditure shifted towards individuals and away from the Commonwealth’s national responsibilities in these areas. What ought to be emphasised is that education should be seen as an investment, not just a cost. That is why I move the following amendment:

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

(a)

notes that the Budget announcements in higher education come after more than 11 years of neglect and complacency towards, and underinvestment in, Australia’s higher education sector, and that under this Government:

(i)

as a proportion of total revenue, Commonwealth grants to universities have decreased from 60 per cent of their revenue in 1996 to 40 per cent, while university revenue derived from private sources of income has increased from 35 per cent to 52 per cent and revenue from fees and charges has increased from 13 per cent in 1996 to 24 per cent,

(ii)

Commonwealth investment in education as a proportion of total Government expenditure is actually forecast in the Budget to fall from 7.7 per cent in 2005-06 to 7.4 per cent in 2010-11, and

(iii)

there has been a significant and serious run-down of research infrastructure, including a failure to provide a real increase for Australian Research Council project funding; and

(b)

further notes that the Budget:

(i)

abolishes the current cap of 35 per cent on full-fee domestic undergraduate degree places, and

(ii)

increases contributions of the Higher Education Contribution Scheme for commerce, economics and accounting courses to the maximum amount while at the same time reducing the Commonwealth contribution for those courses”.

Finally, it is an irony that the Productivity Commission, of all organisations, has now come to the aid of public research and public universities in this country. It is an irony that the high priests of market economics have reminded the government of its responsibility to ensure the proper place of our public university system in this country and the critical role that universities play when allowed to fill their proper function of creating new knowledge, transferring new knowledge, training the next generation of researchers and highly skilled people and, of course, engaging in community debate and civic responsibilities. The Productivity Commission has said that the government’s emphasis on its very distorted view about the role of commercialisation needs to be addressed. Unfortunately, what we have seen with these sorts of measures is that the government has failed to heed even that warning from a body in whose words it would normally find considerable comfort. I will not spend a huge amount of time canvassing these issues in the committee stage, but it will be necessary to move amendments to this bill, which we will do. I commend the second reading amendment to the chamber.