Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Hansard source

I rise to speak on the Higher Education and Research Reform Bill 2014. For 10 months the Abbott government has pursued an unfair, unnecessary and ideologically driven agenda to restructure higher education in this country. The agenda is unfair, because allowing universities to charge whatever fees they want will drive up the cost of degrees. It will impose crippling debt on students and deny to many of them the opportunity in life that a university education can offer.

The agenda is unnecessary, because the so-called funding crisis that has been used to justify fee deregulation does not exist. The only crisis was the one that the government contrived by its threatened 20 per cent cut to the funding of student places. The minister announced yesterday that the cut will be the subject of separate legislation, by which he means in effect that there will have to be an amendment to the current legislation. The minister announced yesterday, that is to say, that the government was going to pursue this, and pursue it if this matter were defeated in the Senate, having said previously that the matter would be put to rest by the end of March. The government has contrived the funding crisis, but now the minister has moved away from that proposition because he thought it was suddenly, to use his word, a 'distraction'. Yet the government still insists that fee deregulation is necessary

This is because the government's real agenda is an ideological one, as has been apparent from the very beginning. This bill and its failed predecessor were never intended to build world-class universities in Australia, as the Minister for Education and Training continues to pretend. Australia already has world-class universities, as anyone familiar with the global university ranking systems will know, and Australia's university system—and I want to emphasise the word 'system'—is routinely ranked amongst the very best. As the vice-chancellor of the University of Canberra, Professor Stephen Parker, has said:

More Australian universities appear in world rankings than a decade ago, courtesy of the current funding system … there is … nothing in the world-rankings of Australian universities to suggest a problem, let alone a crisis.

The Government's real motive is the withdrawal of public provision in higher education. The Pyne plan, if it becomes law, would usher in the creeping privatisation of the system. The minister wants an Americanised system, with very few already wealthy universities charging high fees for an elite education while the rest become less and less able to compete on equal terms. It would be a world of $100,000 degrees and of constant degradation of the system, and a world in which debt on student loans and fee inflation become major social and economic problems. In the United States, fee levels have been rising at twice the inflation rate for the past decade, and student debt is spiralling out of control. Total debt on student loans exceeds credit card debts.

The Abbott government has failed to deceive the Australian people about its intentions. Australians know we already have a strong and competitive university system. They know what an Americanised system would mean. From the beginning, they have seen the Pyne plan for what it is. They know that it is an attack on the Australian dream—an attack on the fair go that every generation of Australians rightly deserves. They know that opportunity and access to education go hand in hand. They know the doubling and tripling of the cost of degrees can only mean that there will be fewer and fewer opportunities for those who do not have private wealth.

The Australian people are not fools and have consistently and overwhelmingly rejected the perfidious Pyne plan. Even the attempt to spend $15 million of taxpayers' money on a slick but misleading ad campaign did absolutely nothing to help Minister Pyne win public support for his trashing of the Australian fair go. Unable to con the voters, the minister has increasingly resorted to desperate measures to try to bully the Senate into passing this bill. He tried to link continued funding of the National Collaborative Research Infrastructure Strategy to passing the bill. NCRIS was never part of this bill, but the minister, who could not win the argument over deregulation, decided to make Australia's research facilities hostage to the bill's success. He put at risk the jobs of 1,700 scientists and technicians in 27 facilities, 35,000 research projects and Australia's future as a nation committed to the advancement of knowledge through pure and applied research. As the Nobel laureate Professor Brian Schmidt said, it was not the way a grown-up country behaves. And he should know; this is a man who came to Australia from the US because our facilities and universities offered the opportunity to do excellent research.

Even those who would normally be regarded as the allies of the coalition were absolutely appalled by the minister's linkage of this bill to funding for NCRIS. The chair of the Business Council of Australia, Catherine Livingstone, said:

How have we come to a point where a Government feels that it can use assets publicly funded to the tune of over $2 billion over the past decade ... as a hostage in a political process?

The minister lost support all round because of his NCRIS threat—including, reportedly, from some members of his own party.

The government has lost all credibility on its higher education plans. It has lost credibility with the wider public and has done so on the very basic principle that they have defied the essential ingredient of equity in higher education. It has also lost credibility with the experts because its proposals threaten the system's financial sustainability.

Unregulated fees would drive up inflation as has happened in the US. The cost of living would increase for every Australian. The budget papers already show that total HELP debt is expected to increase from $ 25 billion today to $52 billion by 2017-18. And this estimate does not take into account the blow-out in debt if universities are given a blank cheque to set their own fees.

NATSEM modelling, using the government's own data and very conservative assumptions about fee increases, shows that doubtful debt could easily rise from 17 per cent to 30 per cent off a larger debt base. It is clear what that would mean. The taxpayer would carry the can for these inequitable policies. Universities would be funded through debt write-downs and interest subsidies rather than through manageable direct grants, and until yesterday all this was supposed to have been done in the name of resolving a make-believe funding crisis.

As the debate about the government's short-sighted policies has gone on, the minister has been well and truly hoisted on his own petard. He has attained dizzying heights of absurdity as his fiscal rationale has unravelled. It would be absolutely farcical if its consequences were not so dire.

Senators will be left in no doubt about the apprehensions within the sector over fee deregulation if they read the submissions to the Senate inquiry into the principles of the bill. Professor Louise Watson, an education policy analyst at the University of Canberra and a member of the 2011 base funding review, said this about the minister's proposals for relinquishing control of higher education fees while at the same time retaining responsibility for paying them through HECS:

University Vice-Chancellors would henceforth decide how much public money they wanted to receive. Whatever graduates cannot repay due to price increases and declining graduate earnings, will be sheeted home to the federal budget. As the ballooning HECS debt in the VET sector has demonstrated, fee deregulation would simply make Australian higher education less predictable, less affordable and less sustainable in the future.

Professor Watson illustrated the point in this way: 'It is unprecedented in public policy to invite a recipient of public money to dictate how much they want to receive. I do not give pocket money to my children on the basis of how much they want to receive; I give it to them on the basis of how much I think they need and how much I can afford. I think that those principles generally govern government financing and they should be applied in the case of higher education.'

The architect of HECS, Professor Bruce Chapman, agreed that the ability of students to defer payment of fees through income-contingent loans would increase pressure on the federal budget. Professor Chapman made a point that Labor has also argued many times since the government unveiled its higher education proposals in the budget last year. Under a deregulated system there would be no real price competition between institutions, because of the deferred payment scheme and the peculiar nature of the education market.

Anyone who is aware of the experience of deregulation overseas knows this to be true. There is no example of fees falling after deregulation, because in the so-called education market fees are perceived to be an indicator of quality. The implications of this for smaller and regional universities are obvious: they would be in a bind. If they do not raise fees, they risk losing students who are wealthy enough to pay higher fees—or who are beneficiaries of the misleadingly named 'Commonwealth scholarships'—to the lures of sandstone universities in the capital cities. But if regional and suburban universities do raise fees, they will impose a heavy burden on the disadvantaged or mature-age students who form a disproportionately high share of their enrolments. As the vice-chancellor of the University of South Australia, Professor David Lloyd, has said:

I don't want unfettered deregulation. In many regards deregulation becomes a group of universities saying 'Trust us, we won't overcharge you.' But to be honest, the public deserves certainty about what the structure of fees would look like.

Research-intensive regional universities—universities like Newcastle, Deakin and Wollongong, which have been steadily moving up global rankings on the basis of their excellent research—would be particularly hard hit by such a regime. Compared with the Group of Eight universities, their capacity to attract the best research students and to fund new projects would go backwards.

That is how Christopher Pyne's Americanised system would take shape. But the minister has not acknowledged the looming budgetary disaster in the system he is attempting to impose upon this country. Indeed, he has failed to release any modelling on the impacts of his radical agenda—no modelling of fees, of HECS debts, or anything. He is happy to pander lies about various perceptions of Labor's models to any newspaper journalist that will take them. He has, however, implicitly conceded that deregulation would lead to massive fee hikes.

In a flurry of negotiations with crossbench senators over the last few weeks, he has floated a proposal for a great big new tax on universities and their students. The suggestion was that universities that raise fees too steeply would be forced to pay what the Minister Pyne prefers to call a fine or levy into consolidated revenue. This is not a new idea. It was also briefly considered by the Tory government in the United Kingdom, when fees were deregulated there. That government—the Minister's ideological cousins— rejected the idea because a tax or fine or levy would cause fees to spiral up; they would not go down. Universities would cover their costs by passing them on to students who would have to pay this great big new tax.

That is the reality of a deregulated system. Fees will rise, pushing the dream of a university education further and further out of reach for increasing numbers of people. And rising fees will create an unsustainable burden for the Commonwealth budget. Under the Abbott government's short-sighted and irresponsible plan, Australia would end up—like Britain—having a system that, to quote the UK Higher Education Commission, 'represents the worst of both worlds, where all parties feel that they are getting a bad deal' and under which government is effectively funding universities 'by writing off student debt rather than investing directly in teaching grants.'

That is the disaster passing this bill would unleash on the Australian higher education system. The government continues stumbling blithely towards that disaster, regardless of what the Australian people have clearly indicated they do not want. Labor knows that people expect governments to fund universities properly—to meet their obligations and pay their bills. The oft-heard claim that there is no political will for increased public provision in the funding of higher education is simply not true. The Australian people have consistently indicated otherwise, and that is the ground on which Labor will continue to contest the government's plans for a deregulated, increasingly privatised and increasingly Americanised university system.

Regardless of what happens to this bill in the Senate, we will be taking this fight to the next election. If we can assume the minister is telling the truth for once, we know the Liberals will, too—so we will have a hell of a contest for the forthcoming election on this incredibly important issue. We shall force the government to do what it did not do with the current proposals—submit its plans for higher education to the verdict of the people. That is a contest we will relish. These proposals constitute just one of the Abbott government's many broken election promises. Before the last election, the man who is now Prime Minister promised that there would be no cuts to education and no changes to the existing funding arrangements for universities. In fact, he went down to Universities Australia and said that his policy was 'masterly inactivity'. And what do we have? The most radical changes, the most dramatic changes, being proposed since John Dawkins's day—and they are being done as secret budget measures. There has been no white paper, certainly no green paper, no proper discussion—just an ambush on budget night.

The government has broken faith with the Australian people on its promises. In doing so, they have taken universities and the Australian people for granted. If they have their way, universities will be able to charge whatever they want—and the losers in that equation are the Australian people. Social justice will be impeded, prosperity will be impeded, and universities will suffer dramatically as we develop a two-tiered system based on a perfidy of a proposition that you can always get what you want if you have the capacity to pay. It would give aid and comfort to the coalition's fundamental belief that this is a rich man's country yet. We shall not let that proposition be forgotten, and we will fight this issue right through to the next election and beyond.