Senate debates

Tuesday, 2 December 2014


Higher Education and Research Reform Amendment Bill 2014; Second Reading

4:40 pm

Photo of Nick XenophonNick Xenophon (SA, Independent) Share this | | Hansard source

As I indicated just prior to question time today, I cannot in good conscience support the Higher Education and Research Reform Amendment Bill 2014. I think it is important to, firstly, correct what I said earlier where I had indicated in my second reading contribution that full fee-paying places for international students were also introduced. In fact, it is for domestic students as well which will allow universities to enrol students beyond the government mandated caps. That was in the context of a number of higher education reforms. There has been a significant impact on access for students, in terms of opening up the sector, that was introduced by the Gillard government, which uncapped university places and opened up the sector to greater numbers of students. This has had a significant impact on access for students, particularly those from lower socioeconomic backgrounds—which is important and essential. The Rudd-Gillard governments, however, did not introduce higher rates of funding per student and, as I mentioned earlier, cut significant amounts from the higher education budget. I think it is also important to put in context the implications of a number of these changes that are being proposed.

A good commentator to go to, whether you agree or disagree with him, is the economics editor for The Sydney Morning Herald, Ross Gittins, who has made some interesting points that I think are both thought provoking and thoughtful in their contribution. Shortly after the changes were announced, Mr Gittins, in an opinion piece in both The Age and The Sydney Morning Heraldso the Fairfax Press—made the point:

The more economics you know, the less certain you can be about how things will turn out.

How true that is. And he talked broadly about the issue of deregulation and how the government was planning to:

… cut its contribution towards the cost of courses by an amount that averages 20 per cent.

Then he noted that the government was planning to:

… reduce the annual indexation of its contribution, switching to the consumer price index which does not rise as fast as unis, wages and other costs.

Mr Gittins made the point that there appears to be:

… excessive faith in the ability of market competition to foster increased efficiency, constrain price increases and ensure customers get high quality.

In terms of the higher education sector, we are not talking about an ordinary product; we are talking about a sector where it is anything like a market. The point Mr Gittins made, and I agree with him, is that universities, its so-called 'firms':

… are owned by the state governments and highly regulated by the federal government.

And there is:

… a string attached: fees charged to local students may not exceed those charged to overseas students.

…      …   …

In effect, universities have a government-regulated monopoly over a product that gives young people access to the country's highly paid jobs.

I think it is fair to say—I agree with Mr Gittins—that:

Demand seems highly "price inelastic" - unresponsive to price changes.

It is interesting to note this comment made by Mr Gittins:

In the early noughties, the Howard government allowed unis to raise their fees by 25 per cent. One small uni decided not to do so. It found its applications from new students actually fell. So the following year it put its fees up like all the others and its applications recovered.

So it seems that sometimes price is taken to be an indication of quality, when that is not necessarily the case.

It is also worth pointing out that, although the overall spending on universities as a percentage of GDP in Australia is about average amongst the OECD economies, the proportion paid by government was the third lowest by 2004. That is a real issue that we need to consider. There is also the issue of a moral hazard if we have a deregulated system. In circumstances where there are more and more students, having this link between HECS and deregulation is a double whammy for this sector. Perhaps it is overly ambitious on the part of the government. What happens in circumstances where the university has more students and more students are incurring a greater debt? There is a moral hazard because, if that debt is not paid, then it is the taxpayers who have to pick up the bill. I wonder what modelling has been done to determine whether there will be an increase in those unpaid or bad debts. It has been a much bigger issue in the United Kingdom, but I suspect that is due to the fact that there are many students from the European Union who go to universities and then go back to their home country and do not have to pay for the education that they got at a tertiary institution in the United Kingdom.

So there is an issue in terms of safeguards for students, but there is also that fundamental issue that the government said that they would have 'masterly inactivity'. That was the term used by the Prime Minister, as opposition leader, early last year when he spoke to the Universities Australia Higher Education Conference here in Canberra.

I agree with Mr Gittins when he says, 'There ain't a lot of precedent for this radical experiment.' And this is a very significant and radical experiment. The challenge is that we want as many people as possible to be able to access the form of higher education that suits them. Under the current, uncapped system, many more people can attend university, but that means a higher cost to the government, so do we cap the number of places and restrict the number of people who go to university but have it at a lower cost for them, or do we make sure as many people as possible can attend but find another way to fund it? It is vitally important for both students and universities that we get this right.

My hope—and I think it is a forlorn hope in terms of what we have seen both in the previous parliament and this parliament—is to have a bipartisan consensus on whatever scheme is decided on, because that is the best way to give certainty to the higher education sector. That way you get, ultimately, certainty. That is why I think it is important for the debate to include all the options. I see that Senator Kim Carr, the opposition's higher education spokesperson, the shadow minister, is in the chamber. There is an important role for the opposition to come up with alternatives, given the pressure on the system.

It is also important to remember the importance of private providers in higher education. They can offer more targeted and flexible services for students, and they fill a valuable niche. They need to be a vital part of whatever scheme goes ahead in the short or longer term. I want to acknowledge Tabor college in Adelaide. Reverend Don Owers is a man I have enormous respect for. His proper title is principal of that college, which has a very good reputation, not just as a teaching college—offering theological courses and the like. I have enormous regard for him. I know that Reverend Owers has been very keen for these reforms to go through, but in good conscience I cannot support them.

It is also important to note what happened with VET, vocational education and training, in Victoria, where the system was rorted. I am not suggesting there would be the same potential for that to occur here, but we need to learn the lessons of what occurred in Victoria with vocational education, where there have been extraordinary shifts in that market. Maybe Senator Carr can correct me if I am wrong on this, but I think that one or two providers in the last couple of years have managed to snatch 20 per cent of the market, with all sorts of inducements and incentives. I have concerns about the quality involved with that. It is important that we learn from those mistakes. I am not equating the two sectors, but I am saying that it is important to learn from that.

The point that commentators, including Ross Gittins, have made is that university administrations are not necessarily as lean as they can be, but it is unsure whether this system will impose the necessary discipline upon them. What is proposed is that they can have uncapped fees, deregulated fees, and, if students do not pay them back, then the taxpayer picks up the tab. I do not think that is necessarily the best way to impose a discipline to keep fees down.

I note that several amendments have been circulated or proposed, and I understand there may be more to come. My colleague and friend Senator John Madigan has put up a number of proposals and suggestions. I am not sure if they have been circulated yet as amendments. I know that Senator Madigan has done this in absolute good faith, to get a better outcome. The implications of some of those amendments need to be looked at in a constructive way, because I think that what Senator Madigan has attempted to do is quite worthy. It is vitally important that we take the time to consider these amendments in more depth so that we can be sure that they achieve their aims. It is also important that we look at alternative methods of funding and look at issues of equity. Economists such as Ross Gittins make the point that there could be all sorts of unintended economic consequences in what is being proposed. We need to be very wary of that.

Tertiary education is not an ordinary product. It cannot be expected to conform to the usual market structures. For many people, participating in higher education is both an emotional and a financial decision. People may choose to attend a university because of its reputation, its convenience, its course selection, even its campus life or a combination of all of those things. We cannot expect people to undertake higher education based solely on financial reasons.

Without the appropriate safeguards in place, the market may become skewed and some providers may start to take advantage, unfairly, of students. For example, in higher education, prestige can add significant value; for many, a higher price signals greater prestige. This could clearly be open to abuse by providers, who would raise their prices simply to seem more prestigious or to signal a higher intrinsic value. I think it is also worth considering what Lord Browne did in his— (Time expired)

4:53 pm

Photo of Anne UrquhartAnne Urquhart (Tasmania, Australian Labor Party) Share this | | Hansard source

Senator Ludwig was on the list to speak next, but he has asked that I seek leave to have his speech incorporated in Hansard. I seek leave to incorporate Senator Ludwig's speech.

Leave granted.

Photo of Joe LudwigJoe Ludwig (Queensland, Australian Labor Party) Share this | | Hansard source

() (): The incorporated speech read as follows—


Labor is a party that has always stood up for education and realised the value of quality tuition. It is a party that believes that education should be accessible to all Australians, irrespective of background. No student should ever have to think twice about seeking a good education. Tony Abbott's plan for $100,000 degrees will do just that. This Bill will cripple Australia's future if some of our best and brightest cannot attend university due to higher fees and higher interest rates on their loans.

In another broken promise, the Government wants to cut $3.9 billion from a sector that simply cannot afford it. Before the election, Tony Abbott and Christopher Pyne promised no cuts to education, no increase to university fees, and no changes to the higher education system. The Australian people did not vote for a Government that would create a society of 'haves' and 'have nots'. Despite what Tony Abbott touts, there is no evidence that deregulated university education reduces costs to students and their families. We cannot allow this Government to place such a burden on our students, with a plan that fails both the fairness test and the national interest test.

Labor will stand up for those that will be hardest hit by the changes sought to be introduced by this Bill, including women, students from low-income backgrounds, and students from regional Australia.

No student deserves to be hit with Tony Abbott's debt sentence.

Bill in detail

The Coalition is seeking to introduce the most radical changes to the higher education system in 30 years. This Bill will cut subsidies for undergraduate study, deregulate tuition fees charged to undergraduate students, change the Higher Education Loan Program (HELP) system, and introduce fees for postgraduate research students.

Among the cuts to higher education and research is a 20 per cent cut to Commonwealth Grant Scheme funding for course delivery; a one-off efficiency dividend of 3.25 per cent on Australian Research Council grants; and a reduction in funding of the Research Training Scheme, which supports higher degree research students. In order to cover these funding cuts, universities will be forced to increase their fees by as much as 60 per cent for some degrees. The cuts to the Commonwealth Grant Scheme funding are arbitrary with increases in subsidy for some courses while others have been savagely cut. Changes to indexation arrangements for Commonwealth grant funding are also designed to reduce government funding of higher education over the long term.

Unrestrained student fees will result in the highest increase to university education costs this country has seen in a long time. In an unregulated market, universities will raise their fees far higher than what is required to offset reduced government funding. Students will foot the bill for universities increasing their research quotas just so that they can remain ahead of the race on world rankings. We only need to compare the current cost of private university degrees to public university degrees to see the difference this Bill will make. Higher fees will certainly deter entry to higher education by those from disadvantaged backgrounds. One look at the United States tells us that university competition leads to increased costs with no improvement in student outcomes. Not to mention what increased competition is going to do to our universities serving rural areas and students from low socio-economic backgrounds. $100,000 degrees are a very real prospect under this Bill.

To add to the Government's agenda of increased costs and cuts, they are seeking to change the HELP indexation rate from CPI to the Treasury 10 year bond rate. This change alone will cost students thousands of dollars extra in interest on their loans after 2016. This measure will have a regressive impact on lower income earners who would pay considerably higher interest payments than high income earners. Massive amounts of compounding interest will be shunted onto students, taking years to pay off. The Government clearly doesn't care about the impact that this will have on students who have completed their degrees. They will be forced to make life choices based on the enormous debt they have accumulated, just from attending university. Those seeking a university education will be faced with a tough choice, potentially the difference between a $25,000 debt and a $100,000 debt. To make matters worse, the Government is seeking to establish a new minimum repayment threshold for HELP debts of two per cent when a person's income reaches $50,638. 65,000 Australians will be affected by this measure.

It is not only undergraduate students hit with the harsh cuts proposed by this Bill. The Government plans to cut $173 million from the research training scheme which pays for the teaching of our PhD and Masters' research students. Universities may charge students up to $3,900 a year under HELP to cover these cuts. New PhD fees will force the next generation of innovators in our country to think about whether a PhD is really worth the cost.

Queensland education cuts

Don't be mistaken, cuts of the nature proposed by the Government are not confined to universities and federal funding. Under the LNP government in Queensland, we have seen widespread cuts to vital education providers including TAFE and public schools. The TAFE system has possibly suffered the most, with the closure of the Ithaca TAFE campus and further proposed closures of Mt Gravatt, Grovely, Alexandra Hills and Bracken Ridge campuses; this is just in the Brisbane metropolitan area alone. These closures have come as a result of Queensland Government funding cuts to many TAFE courses. Due to drastically increased financial outlays required of students, there has been a significant decrease in the numbers of students attending courses. The cost of some courses has been increased by many thousands of dollars. This is a cost that our students just cannot afford. Courses which provide vital education, skills and training to students to place them in a better position to find jobs and enter the workforce are no longer accessible and affordable to all. The erosion of TAFE funding removes the high quality, low cost, accessible education and training that Queenslanders deserve. For many students, TAFE provides a pathway into university education for students.

Now-Premier Campbell Newman made a pre-election promise that there would be no asset sales in Queensland. A contributor to the TAFE cost hike is the establishment of the Queensland Training

Assets Management Authority by the Newman Government on 1 July this year. The QTAMA now owns all of TAFE Queensland's buildings, facilities, infrastructure and assets. TAFE now has to lease back buildings and assets previously owned by Queensland taxpayers. This measure has placed TAFE in direct competition with other registered training organisations.

In 2013 the LNP Government announced six school closures including Charlton State School, Fortitude Valley State School, Nyanda State High School, Old Yarranlea State School, Stuart State School, and Toowoomba South State School, all of which have now closed. The most concerning of these closures is Nyanda State High School. In an attack of the public education system, the site of this school was sold to the privately funded Brisbane Christian College. This is a resounding example of the Queensland LNP Government privileging a select few who can afford private education. The sale of Nyanda State High School has meant that facilities funded by the public purse will now only be enjoyed by students of parents that can afford to send their children to a private school. All of the school closures involved very little public consultation. The Queensland Government failed to engage all of the relevant stakeholders and brought forward submission deadlines in order to push through their damaging plans.

In early 2014, the Newman Government closed the Barrett Adolescent Centre in Queensland; a facility that provided both education and health care services to adolescents with severe and complex mental health problems. The closure of this facility has attracted much attention following the death of three patients following the closure. A report by Queensland Health's Expert Clinical Reference Group stated that the government knew the risks when it decided to close BAC. The report also expressed concern at the loss of skilled clinical and education staff. Education is a core part of the intervention required for young people who require the level of care that was provided by BAC.

In turning back to the Bill before this chamber, it is clear that Tony Abbott is taking a leaf from the book of Campbell Newman in trying to fool the public into thinking that his Government's reforms will result in opportunity. Tony Abbott and Christopher Pyne are trying to force education providers with 500 or more equivalent full time Commonwealth Supported Students to establish a new Commonwealth Scholarship Scheme to support disadvantaged students. Providers will be required to direct 20 per cent of additional revenue that they receive from the deregulation of student contributions to the scheme. Labor and the Australian public will not be fooled. To call this arrangement a 'scholarship' is a fraud. These funds will be provided on the back of a tax on students and will work to disadvantage regional universities that cannot compete with major universities who have the capacity to charge higher fees. This Government is spruiking shallow rhetoric that does not recognise the differences between metropolitan and regional higher education.


It is abundantly clear that both the Abbott Government and the Newman Government in Queensland do not care about the long term sustainability of our vital public education system. Under their policies, only the well-off will have the opportunity to pursue post-secondary education. The Government is asking students to pay for their scholarship programs and for research, things that the Government currently pays for. International experience of deregulation has shown us that it is the most disadvantaged get left behind. No student should be left with a crippling debt sentence. No student should be forced to make the choice between a mortgage and a university degree. This Bill represents far too great a risk for students, the community and public education institutions.

Labor will fight this plan and the plight of the LNP government in Queensland.

Photo of Glenn LazarusGlenn Lazarus (Queensland, Palmer United Party) Share this | | Hansard source

I rise today to speak in relation to the Higher Education and Research Reform Amendment Bill 2014, which the Abbott government is desperately trying to ram through the Senate. Palmer United is opposed to the higher education reforms and will be voting against the bill in every possible way. We will be voting to stop the bill from moving from the second reading stage to the committee stage, as we feel it is a waste of taxpayers' time to allow the Senate to give any further oxygen to this bill by considering amendments which only seek to window dress what is, in reality, a revolting proposal. We will be voting down any amendments which are put forward and we will be voting down the final bill. We are opposed to higher education reforms for a number of reasons, and no amount of texting, chocolates and red roses from Christopher Pyne is going to change my mind or the mind of my fellow colleague Senator Dio Wang. It is our view that the Abbott government's higher education reforms are bad to the core.

I take my role as a senator for Queensland very seriously. I ensure that, when forming a position on matters, I take the time to meet with stakeholders across my great state to seek their feedback and get their advice, to ensure that my final position reflects the wishes and will of the people. I have taken the time to meet with universities across my home state of Queensland and I have also met with student union groups. In Queensland, our universities are located in cities and in rural and regional areas across the state.

In meeting and speaking with universities in Queensland, the feedback that I have received is clear: universities do not want their funding cut and they certainly would not cope with the cuts the Abbott government is seeking to implement through these nasty reforms. Universities have advised me that the easiest way that they could make up for a cut in funding would be to increase the cost of course fees. Increasing the cost of degrees, along with other cost-cutting measures, would enable universities to make up for the shortfall in their budgets. Universities do not have money trees growing on their campuses. An increase in course fees means that Australians will pay substantially more for higher education in this country. This would only push university degrees out of reach for most Australians.

The other concerning issue which universities raised with me is that rural and regional universities will be impacted the most by these higher education reforms. Many rural and regional universities do not have the market power of CBD based and traditional bricks and mortar universities, and any forced increase to course fees would mean that their student numbers would fall. A fall in student numbers would mean that rural and regional universities would have to start cutting courses, which would reduce the range of academic offerings available to rural and regional based students. Students from rural and regional areas will suffer and be further disadvantaged compared to the students located in CBD areas. If student numbers fall in rural and regional areas, the universities will be forced to make cuts across campuses, cutting jobs and services, which will hurt local communities and businesses that supply services and products to these universities.

Regional and rural universities provide not only an important education facility for students but also an important social and economic hub for regional towns and centres. Rural and regional universities employ local people and contribute to local economies. In fact, many of these universities also undertake research in specialist areas. These areas include agribusiness, crop health, tropical health and medicine, fisheries and aquaculture, just to name a few. This research involves local businesses and industries. Funding cuts to universities will affect the capacity of universities to undertake research. Universities have advised me that they may have to scale back research.

Universities have also told me that, if their funding is cut, not only will they have to put up the cost of course fees but they will need to look at cutting the quality of the courses. Good courses cost money to deliver. Good courses include practical elements, field trips, quality staff and best practices, tools and equipment. The quality of higher education will fall in Australia if funding is reduced.

While Australia offers brilliant weather and excellent opportunities, it is still considered an expensive country to do business with. Australia cannot keep trying to compete with countries like China, Taiwan and Korea in the spheres of manufacturing; we cannot compete on wages and operating costs. As a nation, we need to be drawing on our capability to innovate, invent, create and lead. To nurture and develop our reputation and international standing as a nation of creativity and innovation, we need to invest in education; we need to invest in becoming a smart country.

The world is prepared to pay for breakthroughs and advancements in science, technology, medicine and health. These things deliver real and tangible benefits which benefit the human race and the global economy. Australia could be driving these advancements, but we need educated people to do this. Cutting funding to education will only hurt our country and hurt our future as a nation. I will not allow Australia to become the dumb country.

In talking with universities and student union groups, I cannot find any reason to support this bill. Two of my children have just finished degrees in business at the University of Queensland. They, like many students, have entered their working life with a HECS debt, which they will carry with them until it is paid off. It is a debt that they will need to constantly bear in mind as they consider their work options and life decisions. My youngest son has just finished year 12 and is waiting to hear which university course he has been accepted into.

As a proud parent, I personally am concerned about the impact of the higher education reforms. Too often politicians make decisions without understanding their real impact on the people they represent. As a father, I do not want to see my children lumbered with an excessive higher education debt. I want to see my children flourish and to enjoy the gifts and benefits that higher education provides. I want my children to experience the opportunities that education offers. I do not want to see them so stressed by a HECS debt that they are weighed down by the worry and start to make bad decisions about their careers and future because they are driven by debt rather than by great opportunities. I want to see all Australian children flourish and enjoy access to quality education. I would like to mention a quote by Confucius which captures how Australia should be harnessing education:

If your plan is for one year, plant rice. If your plan is for 10 years, plant trees. If your plan is for 100 years, educate children.

I refuse to vote for anything that will discourage the young men and women of our country from aspiring to undertake higher education. The other issue which concerns me is that some universities have also said that, should the reforms get through and funding is cut, they will have to look at increasing the intake of international students who are able to pay more for higher education and, as a consequence, reduce the number of placements offered in courses to local Australian kids. So not only will the cost of courses go up but also the opportunities for Australians to attend university will be reduced because there will be fewer places available.

As I have already outlined, the higher education reforms are just bad policy and the bill is bad to the core. What I cannot understand is why the Abbott government did not take the time to properly consult with the higher education sector before developing the higher education reforms. If the Abbott government had undertaken proper consultation we would not be here talking about this terrible bill. In my opinion, I do not think this is about the higher education sector or the long-term vision of this country; this bill is about nothing more than budget cuts.

If the Abbott government wants to cut funding to the higher education sector, to increase the cost of education for everyday Australians and to create education debt problems for our children, they should take these reforms to the Australian people at the next election and see what the people of Australia think of their dumb ideas. Palmer United does not support the higher education reforms. We will be voting against this bill.

5:03 pm

Photo of John MadiganJohn Madigan (Victoria, Independent) Share this | | Hansard source

I rise this afternoon to speak on the Higher Education and Research Reform Amendment Bill 2014. This is undoubtedly a controversial piece of legislation which has the capacity to completely reform the higher education landscape across Australia. Whether this reform of the landscape will be positive or negative, we will not know. Whether the legislation is what it should be, we will not know. The reason we will not know is that throughout the course of this debate some senators in this place could not rise above the politics. They have indicated that they will vote this bill down at the second reading, before we have even been able to discuss amendments. Let me make this crystal clear. In its current form, I do not support this legislation. If this were the final vote today, I would not be voting for it. But this is not the final vote; this is the second reading. I am simply voting in favour of procedure.

This vote is not about whether the bill becomes law, but whether or not we are prepared to be constructive, rather than destructive. This place is meant to be a place of review and I, for one, want to be able to properly review this legislation. We do our constituents a disservice if we refuse to even attempt to fix a bill which aims to make our higher education system more sustainable. I am not arguing that this bill is perfect. I am not even arguing that this bill is repairable. I am simply arguing that we should at least try.

While it may be politically expedient to vote this bill down before it has had a fair hearing, in my opinion that is not the responsible thing to do. I have had over 50 meetings with universities, students, unions, lobby groups, small- and medium-sized businesses and current and former academics on this bill. As a result of these meetings, I sincerely believe that reform is needed and that reform, especially for regional universities, is required. What I have been told by those who run our nation's universities is that the status quo is unsustainable. It would be irresponsible for me to ignore their advice. I believe we owe it to the tertiary education sector and, most importantly, to the students to at least try to make some reasonable reforms work. If, at the end of that process, we in this place are unable to do that, then so be it. But the important thing is that we will have tried. That is why I have decided to vote in favour of the second reading, even when my fellow crossbenchers have indicated that they will not. That is their right to do so. That is democracy at work.

5:07 pm

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

I rise to speak on the Higher Education and Research Reform Amendment Bill 2014 before the Senate. I want to take up some of the points made by one of the previous speakers who spoke in the context of not wanting—

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

You are going to load up the speakers now.

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

Mr Deputy Chair, am I entitled to speak?

Photo of Zed SeseljaZed Seselja (ACT, Liberal Party) Share this | | Hansard source

Indeed you are. Order on my left.

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

I want to pick up on a point made by one of the previous speakers in relation to indebtedness for young students who go ahead and pursue higher education. Of course there is a fundamental solution to that problem, and that is not to incur the debt in the first instance. This is true of almost everything in life. It has always amused me when reference is made to free health care and free education when, in effect, these are the two things that are by far and away the most expensive support and services that we give as a government to those of our nation. The case has been well made that people invest my money—a point that is lost on many—in acquiring their education. This is money which I have worked for and paid my part to the receipts of this nation, which has been lent to these students so that they can advance themselves in life. I have no problem with that. I understand the value of education, and I understand ensuring that we have arrangements in place that create educational opportunity for everybody. If the circumstances of a student require them to borrow some of my money and the money of other taxpayers to invest in their education, then that has my total support. But I am afraid I do not have much sympathy for the argument that an investment, which I loaned to somebody so that they can advance their circumstances in life, is a bad investment. I think that aspect of these changes is quite appropriate.

This package has an expanding and demand-driven Commonwealth funding system for students studying for higher education diplomas, advanced diplomas and associate degrees, costing some $370 million over three years. I hark back to my own era. I recall that when I graduated in a class of 36 students, only two went on to higher education. That opportunity was not there in my age. It was not an option for families who, in my case, could not afford the cost of higher education and the costs of living away from home that were associated with it in those days, before the expansion and regionalisation with universities. So for a government to continue to invest in the opportunities for these young men and women, I think it is a terrific thing. It is of great disappointment that we need to get caught up in this selfish attitude that somehow they have to pay off a debt that has given them one of the greatest gifts in life. The figures are out there. I do not necessarily have them in front of me, but the figures are out there that demonstrate that their earning capacity goes up threefold and fourfold. The investment may also prove to be one of the soundest investments that they make in their lifetime.

The reform package extends Commonwealth funding to all Australian higher education students in non-university higher education institutions studying bachelor courses—costing $449 million over three years. So there are combined investments heading toward a billion dollars in education and in expanding opportunities for education for the young people of our nation. Indeed, whilst not being an expert on the legislation, this extends to all applicants for higher education, be they young students graduating from school or those more mature students who endeavour to enjoy some of the benefits of tertiary development.

Over 80,000 students each year will be provided additional support by 2018. This includes an estimated 48,000 students in diploma, advanced diploma and associate degree courses and 35,000 additional students undertaking bachelor courses. Now that is a number worth repeating: 35,000 additional students. That is 35,000 young Australians who might not otherwise have had the opportunity without some of the reforms that have been presented in this higher education reform package. The legislation provides for more opportunities for students from low socioeconomic backgrounds through new Commonwealth scholarships—broadening out the scholarship program with the greatest scholarship scheme in Australia's history. This, in effect, means free education for the brightest students from the most disadvantaged backgrounds.

Often our colleagues from across the hallway here hold themselves out to have some sort of mortgage over those in our communities who come from lower socioeconomic circumstances. I know some of these young people; I know their families; I know their circumstances. I have employed people who came from lower socioeconomic circumstances. I intend to support any form of legislation through this place that increases the prospects for those young men and women. Indeed, it extends to mature students in this space also—people who can better themselves in life. That is why I believe this piece of legislation is a very well-thought-through piece of legislation.

I was disappointed to hear Senator Lazarus earlier say that there had not been sufficient consultation. That is somewhat in conflict with some of the social media comments that the senator made earlier today, criticising Mr Pyne, the minister responsible for this package in part, for endeavouring to make contact with him.

I want to attach my remarks to those of Senator Madigan, a statesman. I say on the record, his words today were very measured; they are very applicable to these particular circumstances. This is as important a piece of legislation as many that have come before this chamber in recent months. Everyone is in agreement that there has been a deterioration in how the Senate is conducting itself. There are, I understand, conventions that have been long held in this place that have been abused in recent times—with the gagging of debate. There cannot be, from my point of view, a more important piece of legislation; it is equal to the legislation we have had to deal with with the nation's security.

Again, it is worth emphasising the point that there will be an additional 35,000 students, many of them from lower socioeconomic backgrounds, whose opportunities will be dashed here today if this bill is not given the opportunity for proper debate. As Senator Madigan alluded to, we need to allow the time for the ideas to mature, and for everyone to listen to everyone else's contribution. My pay-scale is too low to understand whether Minister Pyne has a capacity to move and shift on some of these issues but I am sure that he continues to be open to discussions to resolve any of the difficulties that members of this Senate have.

Another part of the bill is freeing universities to set their own fees and compete for students. There is a novel idea! All of us operate in market arrangements away from this place—or have done, for those of us who have had some experience in business. The provision of education is a business; and probably the most important business, up there with the provision of health services and security for our nation. What a novel idea that we might allow universities to set fees and create the environment where they pursue a particular market share! I promise you they will respond to demand. You cannot survive in a free market environment unless you respond to the demands and keep yourself price attractive. So this sort of competition will give that a lift.

Competition will definitely enhance quality and make higher education providers more responsible to the needs of the students and the labour market. When universities and colleges compete, students are the winners. These additional 35,000 students and many tens of thousands of students from lower socioeconomic backgrounds will be the winners, because competition by its very nature drives institutions or businesses to the edge to make sure they provide the most attractive, the most competitive goods or services—in this case services—for the lowest possible price. That is how you achieve your market share. Then you have an absolute obligation to maintain the quality in the delivery of those services—if you are to retain your market share and grow your business.

I agree with the statement that when universities and colleges compete, students are the winners. By extension, our communities are the winners; our economy is a winner; all of Australia wins; we all win. That is why I am happy—despite the protests of some previous speakers—to have my money lent to students on these most equitable terms, so that they can grow.

I had a couple of hundred staff before I left my business to come here. I invested tens upon tens upon tens of thousands of dollars in my staff, for them to advance and develop their educational background, because I was rewarded in increased productivity. It is no different here. In my case, they paid me back through their productivity as employees. In this case, these students—most of whom I will never know—will pay me back as they contribute to the productivity of this nation, and we will all be rewarded as a result.

The argument about the loans is a moot argument and needs to be set aside. When you do that, you find that a little bit of the heat comes out of this debate and you can concentrate on the positive uplift that this particular reform package delivers right across our community, not discriminating at any level.

Strengthening the Higher Education Loan Program sees taxpayers support all students' tuition fees upfront and ensures that students only repay their loans once they are earning a decent income, of over $50,000 per annum. Let's just think about that. Not one cent needs to be paid upfront by the students, and they do not have to make a repayment until they are earning $50,000-plus. Some might think that $50,000 is not a lot of money. Certainly, some of my colleagues in this place could be forgiven for thinking that $50,000 is not a lot of money. But, if you are a young person starting out, I promise you that $50,000 is absolutely head and shoulders above what my good wife and I earned when I was 18, 19, 20, 21 or 22, when I was starting to collect some copper coins to get a bottle of milk. That's how long ago it was. The milk was still in a bottle.

Senator Payne interjecting

Correct. And I promise you there was no-one at my gate wanting to lend me money, not one red razoo, so that I could get ahead. I would have loved a bit of this stuff around the place going back 30-odd years ago.

The package also removes the FEE-HELP and VET FEE-HELP loan fees which are currently imposed on some students undertaking higher education and vocational education and training. I have listened to the contributions of a number of speakers and there was not one mention of that. You want to talk about money and you want to talk about those things that you think are an impost but not one single speaker raised it, and that is so typical of the contributions often made in this place against progressive government legislation. It is almost as if every night—certainly starting last September—people go to bed, they fit up this machine, it erases the past, it erases the 26 deficits in a row and it erases all the promises of surpluses that would have allowed governments more flexibility in the space of education, in the space of health, in the space of—

Photo of Penny WongPenny Wong (SA, Australian Labor Party, Leader of the Opposition in the Senate) Share this | | Hansard source

No cuts to education, no cuts to health—

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

Mr Acting Deputy President, could you deal with the interjection. It really drives me nuts. It is not a practice I engage in.

Opposition senators interjecting

Photo of Zed SeseljaZed Seselja (ACT, Liberal Party) Share this | | Hansard source

Order on my left.

Photo of Barry O'SullivanBarry O'Sullivan (Queensland, National Party) Share this | | Hansard source

Thank you for that, Mr Acting Deputy President. It was very effective. The higher education reform package also secures Australia's place at the forefront of research. It makes us competitive—

Opposition senators interjecting

with an investment of $150 million in 2015-16 for the national collaborative research infrastructure. Just think about that. What a wonderful boost that will be to allow that to progress and make its contribution to these reforms.

There will be $139.5 million to deliver 100 new four-year research positions per year under the Future Fellowships scheme. What a wonderful progressive measure that is under the reforms. There will be 100 of them—all brand spanking new, polished up four-year research positions. Only the good Lord would know what will come out of that sort of investment. Even if we only get a productivity yield of 25 per cent, imagine the impetus to it will give to our nation and, in doing that, to our economy. These students who were yesterday on $50,000 a year will be on $60,000 a year and their repayments will be free as a result of the investment in the first instance, which is often a test that we apply in business before for we make the commitment in the first place.

There will be $42 million to support new research in tropical disease, which will be of great interest to my colleagues and I from the great state of Queensland where tropical diseases sometimes affect us. We have had little inflictions during the Queensland inquiry recently, where obviously the pollen from the mango trees had got to colleagues while we were trying to examine the witnesses. So this $42 million to support new research in tropical disease will be well received and supported by the good folk of Queensland, who do their share—and someone else's—in supporting the receipts of this nation so that we have sufficient money to lend to these absolutely privileged young men and women, bright young men and women, my nephews and nieces and all my staff's children. What a wonderful opportunity this is. I am having difficulty getting through this without being—

Opposition senators interjecting

There are so many important things to bring to the attention of those opposite because, clearly, by the contribution made from the other side, they were not aware of some of these things otherwise there is no way in the world they would resist this legislation, as we saw from some of the crossbench.

Finally, I will close on the centrepiece, which is a $24-million contribution to the Antarctic Gateway Partnership because, as you know, I believe that wife beaters should be sent to the Antarctic—I said so a fortnight ago—and this sort of investment will make that so much easier for our nation, so it really is a double benefit—we get rid of the wife-beaters and we also support the Antarctic Gateway Partnership.

It has been a great privilege with very short notice to allow me to make a contribution here today. I hope it has had some impact on colleagues.

5:27 pm

Photo of Claire MooreClaire Moore (Queensland, Australian Labor Party, Shadow Minister for Women) Share this | | Hansard source

I move:

That the question be put.

5:34 pm

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Human Services) Share this | | Hansard source

I thank those senators who have spoken on this extremely important Higher Education and Research Reform Amendment Bill 2014.

The bill before the Senate amends the Higher Education Support Act 2003 and the Australian Research Council Act 2001 to implement a fair, balanced and necessary set of reforms to Australia's higher education system. The passage of this historic bill will spread opportunity to more students and ensure Australia is not left behind in an environment of increasing global competition.

This bill is of the utmost importance to our nation's future. It is a reform whose time has come. It is reform that has to happen. The government has listened to concerns about certain measures in the bill and has agreed to amendments.

The status quo in Australian higher education is untenable. Universities Australia and every peak body for higher education in this country are in complete agreement with this statement and support the reforms with amendments. Therefore, the parliament of Australia and this chamber now has a choice: should we as a nation continue with an outdated higher education system and let Australia's universities fall behind the rest of the world? Are we prepared to deny current and future generations of students the opportunity to obtain a world-class education? Or will we actually embrace the challenges of the 21st century and equip our higher education institutions to compete in a global, changing economy?

This bill provides an opportunity to achieve these necessary reforms now, and disadvantaged students will particularly benefit. They will benefit from the biggest Commonwealth scholarship scheme ever, which means that there will be more help than ever for disadvantaged students to go to university. They will benefit from the abolition of loan fees, which will benefit 130,000 students a year and which has merited barely passing reference in the comments of those opposing the bill from the other side. They will benefit from the uncapping of Commonwealth supported places for pathway diplomas and other diplomas that leads straight into jobs. These reforms ensure that every person from any background who has the ability and who wants to go to university can do so.

There has been a crescendo of support for these changes from the higher education community. This is what universities, TAFEs and private higher education colleges know is needed for the future of higher education and for the future of our country. Universities Australia, the Australian Technology Network of Universities, Innovative Research Universities, the Regional Universities Network, the Group of Eight, the Australian Council for Private Higher Education and Training, and the Council of Private Higher Education have all said that the parliament should pass this bill, although they do see the need for some amendments.

Universities Australia said:

The introduction into Parliament of the Federal Government's higher education legislation is a chance for all parliamentarians to seize the opportunity for making real, lasting changes that are needed in positioning our universities for the challenges of the future.

The Australian Technology Network of Universities said:

Deregulation is a threshold issue for the sector and its passage through the Senate is crucial to protect the international reputation for quality higher education, representing around $15 Billion in export earnings for Australia.

Last week the chair of the Regional Universities Network, Professor Peter Lee, said that it was time to end the uncertainty around the higher education reforms. He said:

A new approach to university funding is needed to maintain the quality education that students expect.

I would add: 'that students deserve'. With some changes, he said the bill 'will help regional students attend and succeed at regional universities and will increase the number of professionals working in regional Australia'—surely an objective of all of us. This unprecedented consensus of support from the higher education sector is as a result of truism as expressed by Professor Sandra Harding, the chair of Universities Australia. We should not underestimate the importance of the reforms, she said, adding, 'The status quo isn’t an option.'

This bill provides a basis to transform Australia's higher education system and allow it to be the best in the world. There are four key elements to the bill. Firstly, it will see a significant expansion in access to higher education. The bill removes the current limits on Commonwealth supported sub-bachelor places. Any Australian student who wishes to study a higher education diploma, an advanced diploma or an associate degree will be able to do so with Commonwealth support for the first time ever. These are qualifications that lead to jobs in fields like child care and aged care, and jobs for computer technicians. These jobs are in increasing demand with our changing economy and our ageing population. These qualifications also form pathways to university, which the Kemp-Norton review of the demand-driven funding system found are important in helping underprepared students to succeed at university and stay at university, and to reduce the dropout rate. The bill ends the discrimination against students who study at private universities and non-university higher education institutions by giving them access to Commonwealth support places. For tens of thousands of Australian students who participate in the higher education sector in those particular institutions, that discrimination will be removed by this legislation. These two measures alone will allow an additional 80,000 Australian students each year to receive Commonwealth subsidies by 2018. That will particularly benefit students from disadvantaged backgrounds, those from rural and regional communities and those who need that little bit of extra assistance to complete their studies.

The bill also creates the Commonwealth scholarship scheme. The Commonwealth scholarship scheme will provide what is likely to be the largest scholarship support in Australia's history for students from disadvantaged backgrounds. It will include students from rural and regional Australia as well, of course. These scholarships will assist students with the cost of tuition fees, but also with the cost of living, with textbooks, with materials—the core fundamentals of coming from a challenging background and being able to be a successful, productive and good student.

Secondly, the bill gives institutions flexibility in how they are able to set their fees. The government has been very clear that fee deregulation is critical to drive greater competition, drive innovation and drive quality, so that our universities are able to compete with the best in Europe and America and the fast developing universities in Asia. The minister has spoken on a number of occasions about the number of universities in China and other countries in Asia which are rapidly reaching the top of the world scorecards in university rankings. Australia is not currently in a position to keep up with the pace. Australian institutions will in turn be more creative and will improve the quality of their teaching and learning, and that will give students the quality of education that they need and that employers are demanding in the 21st century environment. This change is crucial to ensuring the quality and the sustainability of the higher education sector in Australia. As Belinda Robinson, Executive Director of Universities Australia has said:

It is simply not possible to maintain the standards that students expect or the international reputation that Australia's university system enjoys without full fee deregulation.

Importantly, this bill provides this flexibility without reducing access or affordability. Every Australian student will still continue to be able to defer their tuition fees through HECS so they do not have to pay a cent up-front or pay a cent back until they are earning more than $50,000 a year.

That brings me to the third element of the bill, which recognises the key role that HECS plays in our higher education system. HECS is critical to ensuring that no student is denied the benefit of a higher education. Our HECS system has been and will continue to be the envy of the world.

This government is acting to make reforms fairer by removing inequities in the treatment of students and institutions under the HECS. The bill removes 20 per cent loan fees for VET FEE-HELP and the 25 per cent loan fees for FEE-HELP. These loan fees are an unfair cost on those students who are currently not receiving a Commonwealth subsidy. Removing the loan fees makes the system fairer. This measure will simplify and improve the consistency of loan arrangements for students and institutions and will benefit over 130,000 Australian students a year.

Lastly, the government is committed to ensuring Australia has a strong, competitive research system. As part of the higher education reform package, the government will invest $11 billion over four years in research in Australian universities, including $139 million for the Future Fellowships scheme and $150 million in 2015-16 to continue the National Collaborative Research Infrastructure Strategy. The previous government left funding cliffs for both of these vital research programs.

I would not like anyone listening to or observing some of the commentary being made today to think that this is some development that the government thought up last week and thought it might put to the vote this week. This is a discussion which has been happening in reality over years but in the parliamentary sense and budgetary sense over months, since May of this year.

We have seen from particularly those opposite the most extraordinarily irresponsible scare campaign. Their claims that students will face $100,000 degrees and that that will mean that disadvantaged students will not be able to go to university are, quite frankly, deceptive, cruel and duplicitous. They are factually wrong, in fact. Going to university is now and will be based on whether a student has the ability to go to university, not the size of their bank balance.

Labor shadow Assistant Treasurer, Dr Andrew Leigh, gave the lie to the scare campaign on deregulated fees when he wrote: 'There is no reason to think that fee regulation will adversely affect poorer students.' In fact, as a result of these reforms, equity and access will be improved through the new Commonwealth scholarship scheme and the Higher Education Participation Program, the HEPP. All of the university groupings that I mentioned previously have made it clear that $100,000 degrees will not be the norm or even common. For instance, Vicki Thomson, the executive director of the Australian Technology Network, destroyed the scare campaign when she said:

… the university sector is not looking to introduce standard $100,000 degrees and deregulation won't deliver them.

It is shameful the fear such myths are creating in the community. As I have said previously, as a result of this package, many thousands of students will experience fee reductions.

It is the government's view that there will be very serious consequences if the bill does not pass the parliament. If the Higher Education and Research Reform Amendment Bill is not passed we as a country will be left behind. For our universities, the funding system will continue to operate like a straitjacket. There will be little scope or incentive for them to develop and market new and innovative courses to Australian students much less a capacity for them to shine internationally. Australian universities will be forced to continue to deal with the continuing instability and uncertainty of the current funding system.

If the Senate needs any further evidence of that, it need look no further than the $6.6 billion worth of cuts that Labor announced for 2011-12 to 2016-17. That is hardly the way to run the country's third biggest export industry. Let us not forget that what Labor did not cut they left unfunded. So, if the bill does not pass, the Future Fellowships scheme will cease and many of our best researchers will be forced to go elsewhere. The National Collaborative Research Infrastructure Strategy will cease, putting 1,500 researchers into limbo. The loss of these two programs alone will do irreparable damage to our capacity to support high-quality research. For the higher education activities of our TAFEs and private colleges we will be closing the door in their faces.

If the bill is not passed, students will continue to be locked out of pathway qualifications which, as identified by Dr Kemp and Mr Norton in the review of the demand driven system, have a significant impact on the dropout rate of students with lower ATARs. If the bill is not passed, 80,000 Australian students a year will miss out on receiving Commonwealth support to study. If the bill is not passed, we are going to forgo the largest scholarship scheme for disadvantaged students that this country has ever seen.

The government has listened to the concerns of both the crossbenchers and the higher education sector. Just today we have announced a number of responses to those concerns. The government has said that it will accept Senator Day's amendment to keep the indexation rate for student debt at CPI rather than moving to the 10-year bond rate as previously indicated. We have also said that—and I note that he is not in the chamber—we will accept Senator Madigan's amendment for a HECS indexation pause for the primary care giver of newborn children. I particularly acknowledge Senator Madigan's very considered and working contribution to the second reading debate.

The government has also today circulated other amendments that provide for the creation of a structural adjustment fund for universities focused on those with large numbers of low-SES students—

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

$33 million—how paltry is that? $33 million—how pathetic is that?

Photo of Marise PayneMarise Payne (NSW, Liberal Party, Minister for Human Services) Share this | | Hansard source

that ensures domestic student fees must be lower than international fees. In fact, the domestic student fee and the Commonwealth contribution combined must be less than the international student fee. The government has also circulated two technical amendments on grandfathering and the definition of 'additional revenue' for the purposes of the Commonwealth scholarships. I hear Senator Carr indicating that he finds one of those amendments 'paltry'. That would have to be from a comparison with living in a complete intellectual vacuum and, therefore, I completely understand his point, from his perspective!

We have also indicated that we will support the creation in the HEPP a scholarship component for students from disadvantaged backgrounds. We have guaranteed that Commonwealth scholarship guidelines will ensure that those scholarships are focused on low-SES and regional students, as so many senators have sought. We have indicated that the Treasurer will direct the Australian Competition and Consumer Commission to monitor prices in the higher education sector, and we have guaranteed a suitable process of evaluation of the reforms over coming years. These amendments will guarantee for students huge benefits of freeing up the higher education system and of supporting all Australian undergraduates from diploma courses through to bachelor degrees—for the first time ever.

Now the Australian parliament has an opportunity to support some of the greatest higher education reforms of our time, and frankly, it is clear that there is no credible alternative. It is a vacuum on the other side. The opposition has not furnished one, either when it was in office or today. In fact, as Senator Carr has suggested in recent days, their solution appears to be recapping the higher education system and slamming the door in the faces of many thousands of disadvantaged students. As Mike Gallagher, one of the most experienced figures in higher education policy, has said:

The 2014 higher education budget reforms are necessary. They are logical, coherent, sustainable, equitable and inevitable. My guess is that the detractors of microeconomic reform in Australia's higher education industry will find themselves on the wrong side of history in resisting efficiency, improvement and innovation, as they will be in opposing the redistributive measures of the package and, curiously, supporting socially regressive subsidies from general taxpayers to more advantaged segments of the community.

This bill will allow our higher education to be the best in the world, with some of the great universities in the world. It will ensure that future generations of Australians can get a world-class education to support them in the jobs of the future. It will provide the backbone of our future economy. I do not understand why those opposite want to make students continue to pay interest fees of 20 and 25 per cent on VET fee-help and fee-help. I do not understand why they are turning their backs on those who choose to participate in higher education through TAFEs and through the private sector. I do not understand why those who purport to stand up for those who face some of the greatest challenges in life cannot see that we need to make these changes and that it will indeed be the backbone of our future economy. Because if we do not, we only go backwards. I urge senators to support the bill.

Photo of Nova PerisNova Peris (NT, Australian Labor Party) Share this | | Hansard source

The question is that the bill be now read a second time.