Senate debates

Wednesday, 4 March 2015

Matters of Public Importance

Higher Education

4:28 pm

Photo of Sue LinesSue Lines (WA, Australian Labor Party) Share this | Hansard source

Whether it is the unemployed under 30 or students, the Abbott government wants them to carry a very big burden. Labor's position on higher education is clear. Bill Shorten has said:

Only through education will Australia fully develop our economic potential, our scientific potential, our artistic potential—our people's potential.

Labor will vote against these cuts to university funding and student support.

Labor will not support a system of higher fees, a new big tax, bigger student debt, reduced access and greater inequality. Labor will never tell Australians that the quality of their education depends on their capacity to pay. This whole mess that we are in today, this Minister-Pyne-inspired mess—the denials and the secret deals about what is happening to Australian universities under this government—starts with the Abbott government's broken promise of no cuts to education. The basis for this mess is the budget cuts that the government wants to impose on universities and university students.

The minister has acknowledged, as Senator Carr pointed out this morning, that he has been working with the crossbenchers to implement a plan by Professor Bruce Chapman, a plan described by Professor Bruce Chapman as a tax, a plan described by Mr Andrew Norton, the government's adviser, as a tax. In the usual chaotic style of the Abbott government—backflips and not quite telling the truth—the minister says one thing and another minister says another thing. The government has also called it a fine, but to me and any sensible person out there the design of this secret new scheme is quite clearly a tax. A tax is how I will describe it.

Now this latest thought bubble, this ill-conceived tax for high fees, will hit students and unknown numbers of universities, reduce their incomes as they pay this big fat new tax, this broken-promise tax, directly to government coffers. This latest tax thought bubble clearly confirms that the Abbott government has no idea what it is doing in higher education. All of this comes after the 2015 academic year has commenced.

I went to the University of Western Australia's O-Day. I asked students if they were worried about their futures under the Abbott government. All the students I spoke to told me they were very worried about their futures under the Abbott government, and they were very worried about the costs they were going to incur, the high costs to be imposed upon them by the Abbott government.

I want to focus on the big fat new tax thought bubble of the Abbott government. Andrew Norton gives examples of the tax in his submission, using Chapman's submission for his examples. If we look at humanities, fees above $6,500 but below $11,499 would incur a 20 per cent tax. Fees above $11,500 but below $16,499 would incur a whopping 60 per cent tax, and fees of $16,500 would have a massive rate of an 80 per cent tax. The undergraduate tax is a backdoor way to impose further cuts, far above the 20 per cent reduction in university funding already proposed.

The University of Western Australia met with me over their proposed fee of $16,000 per year for an undergraduate degree. They were at pains to point out that they had done their research. They had scrutinised their budgets, revenues and outgoings. A fee of $16,000 per year was what they needed to ensure their running costs were met.

This big fat new tax, another broken promise—'no new taxes'—would hit UWA's proposed fee, their carefully budgeted fee, their fee that covers their outgoings and provides revenue. This fee would be hit with the Abbott government's big fat new tax. Using the sliding scale of tax, surely adding the red tape that the government is so adverse to, applying the government's secret new tax, would incur a tax of $3,700 per year on UWA's carefully thought through undergraduate degree costs of $16,000 per year.

Is UWA going to take a $3,700 hit to its course fee? No, of course it is not. This new tax will be passed on directly to students. UWA will be recouping the $3,700 slug in tax that they will have to pay directly to the government from its $16,000 fee from students. This is what will happen. This is double taxation. Students will pay for their degrees through HECS and again through the undergraduate tax.

I would love to hear the Abbott government's justification for saying to UWA: 'You might have carefully researched the $16,000 fee, but now we're going to tax it.' To add insult to injury, this secret new tax has not been thought through—more egg on Minister Pyne's face. UWA will be paying more in tax to the government than what it receives in government subsidy, as the subsidy would be reduced to about $1,800 per year. How do they arrive at that? The reality is, this hastily concocted tax—and concocted is a favourite word today; Senator Rhiannon also described it as that—means for high fees in low-subsidy disciplines, the Abbott government's big fat new tax means UWA will pay more in tax than it receives in student subsidies. There will be more red tape for universities as they try to figure out taxes versus subsidies and more costs for students.

There would be no incentive for universities to limit fee rises under this proposal. In fact, the tax would fuel faster increases than would otherwise have been the case. The big fat new tax, the secret deal to try to get the crossbenchers on board, would also be extremely complex to implement. Universities would be required to provide the details of more than 10,000 courses to the government. You hear the government in here saying they do not want to interfere. That is the first thing that would need to happen. On top of that, there is monitoring by the ACCC. This approach was rejected—in 2010—by the UK coalition government. It just shows you how out of ideas the Abbott government is in its chaotic approach to higher education.

This thought bubble by the Abbott government demonstrates once again that they have no idea how universities work. They do not care about whether the kids in low-income families get to university and, as usual, they are just looking after their rich mates. This new tax will certainly ensure that only the children of the wealthy will be able to attend university. This is the same as their GP tax. It will be abandoned. It is just a matter of time.

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