Hollie Hughes (NSW, Liberal Party) Share this | Hansard source

I rise to speak tonight on the Tertiary Education Quality and Standards Agency (Charges) Bill 2021 and the Tertiary Education Quality and Standards Agency Amendment (Cost Recovery) Bill 2021. These bills give effect to the government's decision announced in the 2018-19 budget to implement increased cost recovery for TEQSA. They're not new; they're not a surprise. They have actually been paused three times due to the COVID pandemic and its impact on the sector.

What these bills give effect to is the government's decision to implement cost-recovery arrangements for TEQSA. What does this involve? Listening to this debate throughout today, I'm not quite sure that those opposite actually understand that. What we'll be doing is increasing TEQSA's application based fees to recover the true cost of these activities. These fees will be discounted in respect to some of the providers with smaller student loans, ensuring that we reduce the financial barriers to course innovation. Per-hour charges for compliance assessments will also be implemented. These will be waived if no compliance action is taken. There will be a new annual charge to recover the cost of TEQSA's risk monitoring and regulatory oversight activities, which are not covered by application based or compliance fees. So the new annual charge is the subject of these bills.

Prior to the COVID-19 fee waiver, which is actually in place until 31 December this year, TEQSA's cost recovery was incredibly low. In fact, it was around 15 per cent of total costs. With these changes, TEQSA's level of cost recovery will increase to around 90 per cent of regulatory costs and 75 per cent of total costs. A small number of non-regulatory activities will continue to be fully funded by the government, which equates to being fully funded by the taxpayer, including those who didn't have the benefit of attending university. These include actions to deter third-party cheating services and to promote integrity in the face of external threats, including cybersecurity and foreign interference. The cost of these activities—around $3.9 million per year—will not be recovered from higher education providers.

As I said, the government has delayed the increase of cost recovery for TEQSA on several occasions due to external factors, including the COVID-19 pandemic. These delays have been occurring at a time when the Morrison government has, in fact, been providing record funding to Australian universities: $20.4 billion in 2021, an increase of 17 per cent, and up from $17.3 billion in 2019. This includes an additional $1 billion boost to support university research, which is flowing to the universities this year. Under our Job-ready Graduates Package, more Australians are studying in our universities than ever before—over 800,000 students this year. It's an increase of five per cent in the total number of students since 2020 but commencements of new students are actually up by seven per cent.

But what's really important to note here is that more Australians are studying courses that are actually likely to get them a job. It's outrageous, I know, that we might want to focus on university degrees that actually ensure that graduates are employable and are educated in fields that the market is actually in search of! When we look at some of those areas, what are the levels of commencements that are up? We are looking at 14 per cent in science, 13 per cent in IT, 10 per cent in engineering, 14 per cent in agriculture, 11 per cent in education and eight per cent in health—all significant increases in new commencements in areas where the jobs of the future will be. Science in particular is well-funded under the JRG package. Funding is up by eight per cent more than the average cost of delivering a science degree and 10 per cent more than the cost of an engineering degree. These are some of the most profitable fields under the new arrangements.

On average, base funding across all fields is 5.6 per cent more than the average cost of teaching a bachelor's degree. So claims that the Job-ready Graduates Package is discouraging enrolments in science and engineering are in fact not correct. As usual, the opposite side haven't quite got those facts correct—what a surprise! The enrolments show that, nationally, enrolments in science are up and enrolments in engineering are up. Thanks to our record investment and reforms, Australian universities are actually in a better financial position than anyone expected. There are a number of indications that 2020 outcomes were better than anticipated 12 months ago.

I will put this in actual figures for those opposite. In 2020, a number of universities reported a surplus: Monash University, $259 million; the University of Melbourne, $178 million; the University of Queensland, $83 million; the University of Western Australia, $58 million; the University of Adelaide, $41 million; Flinders University, $35 million; Edith Cowan University, $24 million; the University of Southern Queensland, $13 million; and Western Sydney University, $13 million. All are reporting a surplus, despite claims to the contrary from those opposite and what was originally being proclaimed by the sector.

During the debate today, we have heard those opposite raise cuts to higher education. As we know, that is simply untrue; they just make it up! Our boost to research funding, which accounts for the decrease in higher education funding as shown in Budget Paper No. 1, was not a bring forward; it was a new, one-off stimulation. And the figures in the budget papers exclude the Higher Education Loan Program outlays. Including HELP outlays, the government's overall funding to universities in 2021 is $20.4 billion. As I said, it's a significant increase. In fact, it's an increase of 37 per cent since 2013. TEQSA's cost-recovery levels are currently very low, at around 15 per cent. The taxpayer currently bears the burden of funding the vast majority of TEQSA's regulatory activities. That includes university graduates but, more importantly, the taxpayers include those who never had the benefit of attending a university. Increased cost recovery for TEQSA will involve increasing application base fees to recover the true cost of these activities. The increase to these application base fees will be enabled by a new fees determination to be issued by TEQSA.

We're looking to introduce a new annual charge on higher education providers to recover the costs of TEQSA's risk monitoring and regulatory oversights. The new annual charge is the subject of these bills. TEQSA will continue to seek stakeholder feedback on a draft cost recovery implementation statement, consistent with the Australian Government Cost Recovery Guidelines.

Whilst higher education providers are likely to criticise the new annual charge, it's actually going to be phased in over three years to moderate any financial impact. The charge will be calculated each year for each provider. The amount charged will change each year and depend on a number of factors, including TEQSA's estimated costs for the year in question, the number of registered providers and also the number of enrolled students each provider actually has. If the proposal outlined in TEQSA's consultation were to be implemented unamended, it's estimated that the vast majority of providers, around 80 per cent, would pay an annual charge of between $25,000 and $35,000 a year, once fully phased in—so from 2024 onwards. The annual charge will be phased in, as I said, over three years, commencing on 1 January 2022. So, from 1 January next year, they will be looking to recover 20 per cent of the costs. This will rise to 50 per cent in 2023 and 100 per cent from 1 January 2024.

Having gone through those estimated surpluses of a number of those universities, it's important to note that it's only a small number of very large universities that could see an annual charge of up to around $45,000 a year. The total funds expected to be recovered through the annual charge are currently estimated at around $5.7 million a year, once fully phased in. Plus, just so we're clear, with regard to the charges bill, this will enable a new annual charge to be collected from registered higher education providers to recover the costs of TEQSA's risk monitoring, compliance monitoring investigations, complaint management, stakeholder engagement and other regulatory oversight activities. These costs are currently not being recovered and are being borne by the taxpayer. The annual charge will be phased in over three years. As I just said, 2022 will see 20 per cent, 2023 will see 50 per cent and 2024 will reach the 100 per cent mark. This will be phased in to ensure that the financial impact is moderated. The amount of the annual charge will be prescribed by regulation setting out the formula for the charge, and this will be made through the Governor-General's Federal Executive Council.

The second bill, the cost recovery bill, will enable TEQSA to levy the annual charge created by the charges bill. The amendments will require higher education providers to pay the annual charge as and when it falls due, including any penalties for late payment, and failure by an education provider to pay the charge will constitute a breach of its conditions of registration. I commend the bills to the Senate.