Guy Barnett (Tasmania, Liberal Party) Share this | Hansard source

Today, as a government senator, I proudly stand here on behalf of the government supporting both the Higher Education Endowment Fund Bill 2007 and the Higher Education Endowment Fund (Consequential Amendments) Bill 2007. I want to say at the outset that government of any persuasion cannot make these sorts of investments and bold policy pronouncements without managing the economy well. You cannot do it without managing the economy well and you cannot do it without eliminating, for example, government debt, which is what this government has done. We have delivered successive budget surpluses and, as a result of that strong economic management, can now make this decision in legislation which is, in my view, vision in action. It is an investment of $6 billion into the future of Australia’s higher education sector. You cannot invest that type of money into any sector—let alone the higher education sector—for the future of our children and for the future of this nation when you are saddled with debt and running budget deficits. That is exactly what the previous Labor government did in this country.

So I want to salute, right up-front, the leadership of our federal Minister for Education, Science and Training, the Hon. Julie Bishop. She has been outstanding and has performed brilliantly in this role. She has taken this bold approach with the full support of the cabinet: Mr Howard, Mr Costello and the rest of the leadership team. She has the full support of the government senators. This is vision in action, where we are planning for the future. We are not dealing with the problems of the past. Many of those have been dealt with. There is still more work to do, but this is visionary legislation. It is planning for the future. As a member of the Senate Standing Committee on Employment, Workplace Relations and Education, I want to acknowledge, in her absence, the work of our chairman, Senator Judith Troeth, who is not here, for personal reasons, but who I know would like to stand here and strongly support this legislation.

The government senators’ report is available. It is a public document. In fact, the entire Senate committee report is a public document. I note with thanks that Labor senators—including you, Mr Acting Deputy President Marshall, who signed this particular report as deputy chairman—have supported the bills and that Senator Stott Despoja has welcomed the legislation, notwithstanding the various reservations that she has made about it. In respect of the report, I thank the committee secretariat for the work that was done to pull it together and I thank all my Senate colleagues on that particular committee for the work that was undertaken and the hearings that we had, including in Melbourne. The principle of the bill is to provide an additional income stream for universities, and that was widely supported. In fact, I think it was pretty much supported across the board—by all the witnesses and by all the submissions that we received.

The Higher Education Endowment Fund legislation will significantly increase the funds that are available to be invested in the higher education sector. As I said, this investment has been enthusiastically welcomed by that sector. There has been a lot said from the opposition benches and by Senator Stott Despoja in respect of the investment of that fund. I want to touch on that before talking about some other matters in respect of the bill. Yes, it is difficult to predict the returns of the investments under that fund, particularly in the short term, in light of the volatility of the various stock markets and investment regimes around the world. But it is noted that the Federation of Australian Scientific and Technological Societies estimated that the HEEF is likely to provide a funding stream of $300 to $400 million per year. Professor Richard Larkins, on behalf of Universities Australia, indicated an estimated potential funding stream of approximately $400 to $500 million per annum. It is noted that the Treasurer’s Budget Paper No. 2 lists a national return of just over $300 million for each year of the 2008-11 triennium.

Of course, there will be ups and downs, particularly in the short term. But in the short term, medium term and long term, HEEF is going to deliver real benefits for the university sector. I want to say right up-front that something that I learnt during the Senate inquiry was that there would be a doubling of funding to this sector of all existing financial investments and endowments currently held in the university sector. Professor Richard Larkins indicated that he estimated that it is currently at around $2.5 billion. So this will be a doubling or, in fact, perhaps more than a doubling of all of the existing financial investments and endowments currently held in this sector. This is fantastic news for the university sector. It is fantastic news for tertiary education in Australia and our future wellbeing as a nation in terms of our productivity and the economy. I say again that none of these decisions could have been made without the economy being well managed. The investment of the endowment fund will be managed by the Future Fund Board of Guardians, with operational support provided by the Future Fund Management Agency. Another great initiative of Treasurer Costello and our government was the Future Fund. It is fantastic; it is planning for the future. And the benefits will flow through to our children and, hopefully, their children and on and on. This is vision in action. This is a similar principle applying in that regard.

In fact, this is an unprecedented investment in higher education in Australia. It will be a perpetual fund, so the future capital and research facility needs of the sector will be assured, supported and encouraged for years to come. Further contributions to the fund will depend on whether our economy is managed well. There will be a risk to the economy being managed well if the opposition is successful at the election. The Australian people have a choice of going down the path of risk or having the economy managed well and successfully. The choice we face in the weeks and months ahead is about whether the Leader of the Opposition, with his superficial facade, and the opposition are going to have a chance to wreck our economy or not.

I want to touch on a few of the benefits under this legislation, particularly the philanthropy aspects of the legislation. Senator Stott Despoja and Senator Carr referred to this, but in my view they did not give due acknowledgement to the importance of this theme flowing through this legislation. The endowment fund will send a clear message to the community that we should provide greater philanthropic support to universities. It will send that very important message not only for years but for decades, and that is good. Our higher education institutions have not been as successful as their competitors overseas in attracting philanthropic donations. In fact, Minister Bishop has advised that less than two per cent of the income of Australian universities comes from philanthropic donations. That is a small percentage in anybody’s book. In comparable universities overseas, it can be as high as 15 or 20 per cent.

The Senate committee considered this matter and, in the government senators’ report, we referred to the figures of two per cent of income in Australia coming from philanthropic donations and 15 per cent of income overseas coming from philanthropic donations. At page 20 of our report we say:

… the Minister stated that Australian higher education institutions have not been as successful as their overseas competitors in attracting philanthropic donations.

…            …            …

The Government has therefore created a new avenue for business and the general public to make philanthropic donations to the higher education sector, and signal to the community that greater philanthropic support to universities should be provided.

We discussed this and we asked questions about it in the Senate committee inquiry. It was clear to us that the funding would be not just for research purposes or block funding but could be for strategic purposes. I asked questions about whether it could be targeted towards health services. Other senators asked about other aspects of concern to them. Basically the answer is yes. There are certain parameters and criteria with respect to that funding and tax deductability. In that regard, we are advised that the advisory board and the department will be consulting with the university sector about how to encourage future investments. They will be looking at tax deductions for research into certain areas, including health, diabetes and a whole range of other areas of interest. It was noted that this will be a great boost to the university sector throughout. This government has created a new avenue for business and the general public to make those donations.

In the first instance, the bill provides that tax deductable gifts of money to the endowment fund will only be able to be accepted on an unconditional basis. That was noted, but the government indicated that contributions could be earmarked for particular universities and that universities could choose to have their own philanthropic funds managed along with the endowment fund. This is an important point and I am sure that the universities will themselves look at this possibility, with respect to the management of their own investment funds, to see if they can make a difference and get a better return on funds invested for those particular universities.

According to the minister, these issues will be addressed following more detailed consultation with the higher education sector and the board of guardians, and the government may then consider amendments to the legislation. So watch this space. We are always looking to improve our legislative framework and our policy framework to encourage good policy and to encourage further investment in the tertiary education sector. I think the runs are on the board and this is actually being delivered.

We have had allegations from the other side and the crossbenches with respect to the lack of investment in the tertiary education sector. I reject those allegations out of hand. I want to compare the funding that the Australian government was contributing back in 1995-96 and what it is contributing now. This financial year alone the government will invest $8 billion in universities, a 31 per cent increase since 1995-96. This year the Australian government is providing an investment of $9 billion in education, science and training, including the centrepiece of this year’s budget, the Higher Education Endowment Fund. This builds on an investment of over $56 billion made by this government in higher education, including research infrastructure for the sector. In fact, we have freed up the sector. We have provided an injection of funds, not just from government but across the board, and that is where the benefits will flow.

During the inquiry, I, as a Tasmanian senator, asked whether the Australian Maritime College will have an opportunity to apply for a benefit from such an investment. The answer was yes. The AMC will, of course, soon be part of the University of Tasmania. The University of Tasmania has plans for growth, and I believe the endowment fund will support the University of Tasmania very significantly. They have plans to grow from 12½ thousand full-time student equivalents to 15,000 by 2010 and to 20,000 by 2020. They have already grown from 10,000 in 2000 to 12½ thousand in 2004.

The planned growth for 2020 will result in an estimated total contribution to the gross product in my state by the University of Tasmania of $425 million or three per cent. That is around the same impact as interstate holiday visitors and around half the total impact of tourism. The University of Tasmania is one of the major employers in Tasmania and, for every increase of 100 effective full-time equivalent students at the university, the contribution to the economy is: $1.6 million to the real GSP, with a total of $130 million more by 2020; $1.9 million to real consumption spending, with a total of $138 million more by 2020; and 26 new full-time equivalent Tasmanian jobs, with 800 by 2010, doubling to 1,600 by 2020. Interstate students will contribute $6 million more by 2010 and $14 million more by 2020.

That is a great result. I congratulate Professor Daryl Le Grew and his team at the University of Tasmania on the work that they have been doing in growing the university and on its success. I know that the federal member for Bass, Michael Ferguson, is working very hard on getting further and better support.