Senate debates

Wednesday, 4 March 2015

Matters of Public Importance

Higher Education

4:01 pm

Photo of Stephen ParryStephen Parry (President) Share this | | Hansard source

I have received the following letter from Senator Moore:

Pursuant to standing order 75, I propose that the following matter of public importance be submitted to the Senate for discussion:

"The Abbott Government's plan for $100,000 degrees and a new student tax."

Is the proposal supported?

More than the number of senators required by the standing orders having risen in their places—

I understand that informal arrangements have been made to allocate specific times to each of the speakers in today's debate.

With the concurrence of the Senate, I shall ask the Clerks to set the clock accordingly.

4:02 pm

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

The Minister for Education, Minister Pyne, apparently will do anything to try to persuade crossbenchers to support his unfair and unnecessary university package. He appears to be so desperate that he is now apparently abandoning a pledge repeated many times since these so-called reforms were announced in the budget. Hitherto, the minister has insisted that there would be no risk of price gouging if universities were allowed to set student fees at any level they want. But now Minister Pyne has belatedly realised that overcharging is a real prospect, and he is considering including a backdoor student tax in his package, a tax that will be imposed on universities if they raise fees over a set amount, a tax that will effectively force the fees that the students have to pay to actually go even higher. There could be no clearer admission—none whatsoever—that the government now acknowledges that the minister's fee package will lead to the $100,000 degree.

The minister does not like calling his new measure a tax. He prefers euphemisms like 'levy' or 'fine'. But let's speak plain English. This extra charge would be paid into consolidated revenue. It is a tax. This is a tax that will be imposed on students' fees even before they start repaying their HECS debts. The minister has no excuse for pretending that this will not further increase the cost of degrees. He does not have to do the maths to check this out. It has already been done for him. The backdoor student tax is a suggestion that has been made by Professor Bruce Chapman, and it is described in his submission to the current Senate inquiry. The Grattan Institute's Higher Education Program Director, Mr Andrew Norton, has modelled its effects, and he says:

Using the tax rates—

and I emphasise the words 'tax rates'—

in Chapman's submission, and a fee of $30,000 for a law student, we estimate a tax—

and I emphasise the word 'tax'—

of more than $11,000 …

This is from the government's own adviser, Mr Andrew Norton. You might feel that that is too bad for the lawyers, although many of them will not end up working in their chosen profession. But the calculation is exactly the same for veterinary scientists. It is almost identical for agricultural students, for engineers, for architects and for health scientists.

Mr Norton is a former adviser to Mr Pyne. Mr Pyne should heed his warning on the consequences of adopting this tax. The minister should also follow the counsel of his ideological cousins, the UK Tory government. In 2010 the British government rejected a similar proposal because it feared a student tax would force fees higher and put more strain on a student loans scheme in England. This is what the then UK Minister for Universities, the Rt Hon. David Willetts MP, had to say:

… as soon as universities raise their fee above the threshold level, they face a rapidly rising levy which can drive their fees up even higher in order to reach a given level of income.

This is precisely what will be happening here if this tax and the uncapped fees of deregulation become law. The notion this minister is peddling that a student tax would act as a brake on fees is a great fantasy.

The tax proposal is further proof of the minister's greatest miscalculation in his plans for deregulation. He fails to understand, or perhaps somewhat stubbornly refuses to admit, the financial consequences of his plans not just for universities but also for students and particularly for the nation as a whole. Unregulated fees will fuel inflation, increasing the cost of living for all Australians. And as far as transferring costs from taxpayers to students, higher fees will actually increase the cost burden for taxpayers.

Already, the official budget documents show the total HELP debt blowing out from $25 billion to $52 billion in 2017-18. NATSEM's analysis shows that it is very likely that the proportion of bad debt will increase from 17 per cent to 30 per cent. The cost to taxpayers will blow-out by $3 billion a year. That is a lot of bad debt that exceeds anything this minister claims to be making as a contribution to the deficit. One can only imagine how grateful his colleagues in Treasury must be at the prospect of increasing fees leading to higher debts, which of course leads to higher bad debts because people simply cannot afford to pay them.

Minister Pyne has yet to grasp the consequences of deregulating fees. The message has not been lost across this country. The minister likes to pretend that all vice-chancellors are singing from the same song sheet on deregulation. Nothing could be further from the truth. The discords in the choir are becoming more and more audible over time.

While studying the warnings of Mr Norton and the United Kingdom government about the implications of a student tax, Mr Pyne should also read carefully the submissions to the current Senate inquiry. In particular, he should have a look at the RMIT University submission, which has this to say about the income-contingent loans and fee deregulation:

There are genuine concerns that the combination of fee deregulation and income-contingent loans provides an unsustainable funding environment and one that will compound student debts beyond reasonable or manageable levels.

The University of Canberra's submission expresses the same concern:

When coupled with a likely increase in 'default' by graduate debtors, it seems to us quite possible that the proposed funding scheme will become more expensive to the taxpayer than the current one.

The submission concludes with a stark warning:

Doing nothing would be better than plunging into the unknowable.

Mr Pyne should listen to the expert advice from the sector and from his own ideological allies about the dangers in the present course of action he is following. He should also listen to the Australian people, who have made it abundantly clear that they do not want an Americanised higher education system with its $100,000 degrees nor will they want a student tax that drives the cost of degrees even higher.

It is time for Mr Pyne to prove that he can learn. And instead of making his package even worse by the inclusion of a student tax, a great big new tax—that is exactly what it is—he should withdraw the bill and go back to the drawing board. The minister has simply failed for what he should have done at the beginning—that is, to talk to people on a broad basis. He should have gone through a process of having a green paper and a white paper to actually have a process where people can examine the details of his proposal. For the government to claim that they know nothing about this proposal after having hawked it around in secret across the corridors of this chamber and having, of course, seen Professor Chapman's own submission where he said:

We spent several days with technical staff in the department developing our suggestion …

Professor Chapman also tells us that he has put in a submission to the Senate inquiry with the permission of the department and the minister himself. For the minister now to claim that he knows nothing about it, having thrown his proposal around and having tried to persuade senators that there is something different about this—

Senator Birmingham interjecting

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Order! Order on my right. Senator Carr could you resume your seat. Senator Birmingham, each senator is entitled to be heard in silence. Thank you Senator Carr.

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

It is a preposterous suggestion that this minister, through the goodness of his heart and because he is a decent man, provides access to the department to the top officials for several days, so that anybody can come along and develop a nice new plan.

The facts are clear: this is the last desperate throw of the dice by a desperate government, which is determined to try to impose a $100,000 degree regime on this country, which is determined to destroy the public education system of this country and which is oblivious to the social, economic and, might I even say, political consequences for the welfare of his own government. What we do know is that Professor Chapman has rung the bell on this. Unethical price rises will follow from the government's proposal, despite all the claims to the contrary by this government to date, and now the government is actually acknowledging that.

4:13 pm

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | | Hansard source

Let me attempt to bring not only a little calm to the debate compared to the contribution we just heard but also attempt to bring a little sanity and truthfulness to the debate compared with the contribution we have just heard. Ever since the budget last year when Minister Pyne revealed the government's plan to put the higher education system of Australia, our universities, on a sustainable footing with a sustainable funding model that would support them well into the future, all we have heard from the Labor Party is a constant barrage of lies, a constant barrage of scare tactics and a constant stream of fear mongering, and we heard more of that today from Senator Carr. It is necessary to repeat again and again in this debate that first and foremost—

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Senator Birmingham, please resume your seat.

Photo of Joe BullockJoe Bullock (WA, Australian Labor Party) Share this | | Hansard source

The President made a very firm statement about inferring that members of this House were lying. And that is what we just had from Senator Birmingham. If we are going to enforce the standards which the President outlined, I think we might start now.

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Thank you, Senator Bullock. Senator Birmingham, the President did make a statement about lies and lying attributed to other members in the other place and here. You may wish to reflect on the use of that particular descriptive word.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | | Hansard source

If it pleases the chair, I will withdraw the word.

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Thank you.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | | Hansard source

It in no way withdraws the reality that Senator Carr and those opposite have, for a continuous period of time, been running a scare campaign, a campaign involving fearmongering, a campaign involving mistruths and misinformation spread right throughout the Australian community.

Let us just be very clear about this. First and foremost, the reforms proposed by this government maintain at their heart very significant reforms adopted by a previous Labor government, the Keating government, and that is that there are no up-front fees for Australian students. Let us be very clear about that. There is nothing that Australian students or their families need fear. The fact that stands alongside that is that, ever since the HECS system was introduced, under the Hawke Labor government, we have seen university enrolments continue to rise. As the scale of fees has increased at numerous junctures in the life of HECS, university enrolments have continued to grow. Fees under HECS have not deterred student enrolments one iota. They have kept growing at every step, including each time those fees have increased.

Let us also be very clear that we are also trying to preserve another fundamental achievement of the Labor Party, and that is the uncapping of places for undergraduate students, the ability of universities to accept all those who are capable—and who qualify and who they choose to admit—to undergraduate degrees. We want to preserve that reform that Julia Gillard is so proud of. We want to preserve that reform, but to preserve it you have to make the funding system sustainable. You have to find a way to make sure our universities can continue to be the best in the world.

Another fantasy we just heard from Senator Carr is this notion of a tax. Professor Chapman, like anybody else, is free to put a submission to a Senate inquiry. We welcome everybody having a contribution in this debate, particularly everybody who is willing to have a thoughtful, considered and sensible contribution. We only wish that Senator Carr, Mr Shorten and the Labor Party might consider having a thoughtful, considered and sensible contribution and might actually present an alternative policy scenario to address the funding crisis that universities face over the long term.

Professor Chapman has put his forward. The Labor Party, of course, are desperate to run another scare campaign around that. We keep hearing them talk about this as a tax measure. The truth is that Professor Chapman's model—and it is for him to explain when he appears before the Senate inquiry—proposes that, as universities choose to increase fees on the one hand, the level of Commonwealth subsidy, Commonwealth payment, to the university against that place may decrease on the other hand. There would still be a Commonwealth subsidy—a significant Commonwealth subsidy in many instances. There would still be the right of a student to put all of those fees onto their HECS debt and only ever have to repay them if their income reaches the HECS threshold. So there would still be enormous Commonwealth support for that place at university. There would be no tax. That is not a tax under any definition of the word. We often in this place have debates about whether somebody is calling something a levy or a fee or a duty or a charge to try to get away from the use of the word 'tax'.

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

Or a fine.

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | | Hansard source

This is not even a fine, Senator Carr. I will happily take that interjection. This is an incentive proposed by Professor Chapman for universities to keep fees low—a disincentive to increase their fees, in the sense that, if they do, the Commonwealth contribution will reduce to some extent. It is an alternative idea, and I look forward to the Senate committee examining it. And I look forward to at least the crossbenchers—who have shown a willingness to engage sensibly in this, to recognise that there is a problem—examining it as well.

The truth is there are problems with university funding in the future. There are serious problems. As Universities Australia have made clear themselves—and I will quote their CEO—failure of the package will condemn the university system to 'inevitable decline'. Inevitable decline—that is what the Labor Party seems to be happy to sign up to for Australia's universities. The coalition will not accept that. The coalition wants to achieve a model that allows our universities to retain world-class status, to provide great research and outstanding learning and to ensure our economy is equipped with graduates for the future who can help us to maintain the standard of living that Australians have come to rightly expect.

Senator Carr in his contribution actually did have a grain of truth. He highlighted some of the growth in the HELP system that will occur without changes. We are committed to the HELP system, but what Senator Carr failed to do in his contribution was outline any alternative that either deals with what he says is a problem around the growth in the HELP system or that might address the issues that universities face in terms of their funding sustainability. What we know from what he has mused about publicly, though, is that his way to cap growth in the HELP system is to cap the number of people who access it, to roll back Ms Gillard's reforms, the Labor Party reforms, and to go back to a cap on student numbers that would deprive thousands and thousands of Australians in future of the opportunity to access a university education.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Not the rich kids!

Photo of Simon BirminghamSimon Birmingham (SA, Liberal Party, Assistant Minister for Education and Training) Share this | | Hansard source

Senator McKenzie is right. Go down that path, the type of path that Senator Carr is proposing, and it is most likely that it will be the disadvantaged who miss out. In particular, it will be the disadvantaged who miss out, because, built into our reform package, is greater opportunity for people who may not automatically make it into university—in terms of pathways programs and the opportunity to undertake diplomas. If this bill does not pass, around 80,000 students will miss out on Commonwealth support each year by 2018—35,000 of them at the bachelor level through the proposal to expand the level of Commonwealth support in terms of the range of institutions, and 48,000 who would be studying diplomas, advanced diplomas and associate degrees, valuable pathway courses for people to access undergraduate places in future. These are the things we stand to lose because those opposite will not engage in a constructive conversation or have already latched themselves onto and wedded themselves to Senator Carr's proposal to roll back to the days where government knows best, sets the caps on university places and tells universities how many people they can accept into what course. That is not acceptable to us.

We believe these have been good reforms, but they need to be underpinned by sound finances in the future. We believe that the model we have presented gives that opportunity to ensure that nobody will face an up-front fee and nobody will face a tax, contrary to what you will hear from those opposite. Every Australian will still have the opportunity, if they qualify, to be accepted to a university place under which they need not pay a cent up-front. They will continue to receive significant Commonwealth support, but the universities will also be able to access funding because of a flexible fee structure and because people, when they earn more through their lives, will be paying a contribution back to the university system. That is the important thing with the fairness here. We are asking those who benefit from the university system to help fund it in future, not those who miss out.

4:23 pm

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

The Liberal-National government are trying anything to win the numbers to get this higher education bill passed. What we saw announced today by Minister Pyne is not a compromise; it is the Abbott government's great big new tax. But it is not a tax on those who should pay, the big end of town; it is a tax on ordinary people. It is a tax on, effectively, prospective students, students and their families, They are the ones who will cop it if these measures go through. We know that because of the way it has been set out. It would be based on a sliding scale, between 20 and 80 per cent. The details of this tax have been set out. No matter what language the government may come up with, the proof is out there. That is what we are dealing with: something that is completely unfair and adds to the burden on students and their families. It is certainly not a compromise.

Why has this come about? The minister is spooked—that is why we have this debate on today. He was spooked because so many people across this country were starting to realise that the soft sell that came out of the budget simply was not true and that the government, from Minister Pyne across to the Prime Minister and all their spokespeople in this place, were not being honest with the public about the cost burden that was being pushed on students.

Remember that the original bill was slashing $5 billion out of higher education. It really was a budget savings measure, but you cannot take that much money out of higher education without putting a heavy cost burden on students. Yes, the current bill does not take $5 billion—it is about $680 million—but it still is about putting the cost burden onto students and their families. This is where the minister got spooked, because the understanding has been developing since that budget came down that $100,000 fees were something that people could more than likely face. If they wanted to do something like vet science, it could be $200,000. They are real figures. People were starting to realise that. The government was realising it was losing its support.

That is why what Minister Pyne has done has really brought back that whiff of desperation that is wafting around the government. This time, it is Minister Pyne who has delivered the latest problem that this government has, because he has concocted this very dodgy plan. It is a dodgy plan because the government is trying to boost support in this place for this bill. This is what it is all about. It is another con job to try to convince, in the first instance, the crossbenchers: 'Wow! We should actually be supporting this, because we have a good plan for higher education.' You can hear what Minister Pyne would have been saying to the Prime Minister: 'Don't worry, Tony. I can get you the numbers in the Senate. I've got it all worked out.' I can hear the minister saying: 'It's perfect, Prime Minister. We can talk about limiting the fees that students will pay. At the same time, we'll actually be cutting the funding we have to give to the universities, and our friendly vice-chancellors can increase their fees.' He thought he had all bases covered, but it is a con job that has so quickly fallen apart. The wheels barely stayed on Pyne's wagon this time. As I said, it has been labelled a—

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

You should get on board. It's a great wagon to ride.

Photo of Lee RhiannonLee Rhiannon (NSW, Australian Greens) Share this | | Hansard source

I think you have already fallen off, Senator McKenzie, on this one, because Pyne's penalty plan is in fact more evidence that deregulation does not work. This is very relevant to the Pyne plan, because when he first launched, back in May, his great plan about deregulating fees he would argue that the marketplace is the way we can determine what fees should be and that students can get a fair deal there. But, all of a sudden, now he has really ditched the idea that the marketplace is the solution. Twitter has gone pretty wild about all these statements. This is from @daveyk317:

If Uni's can't keep the $ from increased FEES why INCREASE THEM?

To PREVENT EQUAL ACCESS to education, that's why!

That is what so many people have seen with what this government is up to. It is elitist. It is about putting the cost burden on students and their families, and that will mean it will be much harder for working people to get to our universities. (Time expired)

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.

4:36 pm

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

It gives me great pleasure to rise this afternoon in this place and debate the Abbott government's plan for $100,000 degrees and a new student tax!

Senator Lines and others have made reference to the new secret tax. It is so secret that no-one in the government has any idea what they are talking about. It is so secret that Minister Pyne—

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

That doesn't surprise me!

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

It is so secret, Senator Carr, that Minister Pyne does not know about it.

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

Really? Read his quotes this morning!

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Really! The secret new tax.

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

It's the mushroom syndrome!

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

You have really overreached! Hundreds—

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Order! Senator McKenzie, can I remind you to address your remarks through the chair and not across the chamber please.

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Certainly, Mr Acting Deputy President, my apologies. It is so secret that there has been no announcement. We have heard continually from the other side that Minister Pyne has made an announcement—that he has gone out to the masses and said that we are taxing students. What a joke!

They come in here with claims that we have made an announcement, which are completely false. And yet the opposition, like the claims of $100,000 degrees, continue to conflate and bring fear into the hearts of young students, particularly those who those on that side of this chamber should be most concerned about and who their electorates represent. They are those from lower-socioeconomic families who are the beneficiaries of this, our reform package.

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

$100,000 degrees are progressive?

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

We are very proud to be the socially progressive party of this particular policy area, Senator Carr. And if you had any bright ideas, you would not be calling a Senate reference inquiry to go out there into universities and private providers—

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source


Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

But we are not calling those; we are not calling the private providers to Senator Carr's Senate inquiry on Friday, because they do not matter. Senator Carr has to be the most elitist Labor Party senator when it comes to education policy that I have ever come across. He is elitist: this is about the very students who Senator Carr should care most about—those from first-generation university families, those from rural and regional Australia, those from lower-socioeconomic families and those who struggle to get into university . They struggle not only with the ATAR but also with the aspiration. They are exactly the students who are the beneficiaries of the former Labor government's plan to have a demand-driven funding system. And we want to assist to make that system financially sustainable.

We want to make sure that system can continue. Professor Peter Lee is Vice-Chancellor of Southern Cross University and that is a university with a very high proportion of exactly the types of students that those opposite talk about. Senator Rhiannon also talks particularly about them, although as she is more concerned about inner urban areas maybe there are not so many lower socioeconomic families and poorer families. If those opposite cared about those kids they would want to ensure that they can continue to have access, like they do now.

Senator Carr's secret plan! The only secret plan that needs to be debated today is Senator Carr's secret plan to recap university places and ensure that white, grammar kids get to go to university. That is not good enough. It is not good enough for my kids out in regional Australia and it should not be good enough for the Western suburbs of Melbourne or the Western suburbs of Sydney and the like.

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

Make up your mind! You don't even know what you're saying!

Photo of Alex GallacherAlex Gallacher (SA, Australian Labor Party) Share this | | Hansard source

Order, Senator Bilyk!

Photo of Bridget McKenzieBridget McKenzie (Victoria, National Party) Share this | | Hansard source

Thank you for your protection, Mr Acting Deputy President!

The only secret is that Senator Carr actually has a plan to recap places and to recap them by using the ATAR. What that actually does is ensure that those students from Tasmania, Senator Bilyk, who have a state system where they do not actually get an ATAR like other states because they do not do years 11 and 12 in the same numbers, are locked out. It means they are absolutely locked out. My students from rural and regional areas who have a lower ATAR are locked out and those from poorer families who have a lower ATAR are locked out. That is the only secret plan that needs to be debated today. It is an absolute joke and it is absolutely abhorrent that the Labor Party is purporting to recap fees based on ATAR. What the research shows, Senator Carr—through you, Mr Acting Deputy President—is that it does not matter what you got in year 12. If you can get the right pathway and make the right choices then you will be able to complete your bachelor degree and go on to further education with an excellent result. Your ATAR does not matter. (Time expired)

4:42 pm

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

Education is a fundamental contributor to successful and productive societies. We know that increasing investment in education, increases the success and productivity of a nation.

Given this, why is the Abbott government so intent on cutting investment in our education sector, increasing the cost of degrees, reducing the affordability of higher education and making it more difficult for Australians to better themselves? The answer is simple: the Abbott government is so far right in its mentality and ethos that it has lost touch with everyday Australians. So, it is up to the rest of us to lead the way and represent the interests of all Australians because, clearly, the Abbott government has no intention of doing this.

Australia enjoys a high standard of living compared to many countries. We, our fathers and our forefathers have worked hard to put us in this very lucky position. But maintaining this position is going to require smarts—clever thinking—and an understanding that our future rests with our capability to lead, create and innovate.

We cannot compete on time and wages. Asian nations offer cheaper labour and lower levels of compliance, which means they can produce things far more cheaply. But, as we all know, cheaper is not better, and therein lies our opportunity. To be better, we need to invest in our country, our people, our industries and our education system. To be better, we need to be smarter. Being smarter means we will achieve more in the form of advancements across a broad range of industries, including technological advancements that deliver world-first inventions and scientific breakthroughs. Being smarter means we will augment our capacity to innovate and constantly improve all aspects of our economy. Being smarter means we will enhance and grow our skill levels and achieve unmatched levels of competency in new and emerging industries, as well as re-engineer existing industries.

We know that the world is prepared to pay and pay good money for cutting edge solutions and scientific breakthroughs. This is the playing field on which we should be seeking to compete. Increasing our country's investment in education will propel us towards these goals. Reducing investment will only pull us backwards—backwards towards the dark ages. We will become the dumb country.

Australia is already considered a leading provider of quality education. The Australian government's own benchmark report of 2015 confirms Australia is still one of the top destinations for international students, stating that Australia sits at No. 4. Australia generates significant revenue from our education sector as an export industry. Several of our universities make the rankings lists of top 100 universities in the world. Australia currently enjoys the highest secondary education enrolment rate in the world. We are sixth in the world for the percentage of people enrolling in tertiary education.

If we know we need to improve our investment in education to further our prospects as a nation in order to secure our future, why would any caring, sensible, responsible and forward-looking government want to cut investment in our higher education sector and push it beyond the reach of the people? The answer is simple: the Abbott government are not sensible, they are not responsible, they are not forward looking and they just do not care.

4:46 pm

Photo of Catryna BilykCatryna Bilyk (Tasmania, Australian Labor Party) Share this | | Hansard source

I too rise today to speak on the MPI:

The Abbott Government's plan for $100,000 degrees and a new student tax.

I do this because I am extremely concerned about this government's plan to make higher education the exclusive reserve of the children of the most well off in our society. They want to make it harder for young Australians to aspire to a high-quality education. And, as much respect as I do have for Senator McKenzie, I have to say I think her contribution today was one of the most bizarre I have heard in this place in the seven years I have been here. It was all over the show. I have to say I do not think she did her side much good.

In contrast to what the Abbott government is up to, Labor of course has a proud record of investing in higher education. During our last period in government Labor lifted investment in universities from $8 billion in 2007 to $14 billion in 2013. We boosted the student population of Australia's universities to 750,000, putting another 190,000 students on campuses. I have spoken about education in this place quite a few times previously. I have talked about the transformative power of education and how it can help lift people out of poverty, but I will say this again: education is one of the most important investments we can make to improve the lives of individuals and to improve society in general. I find it incredible that this education minister and his Liberal government area doing everything they can to make higher education unaffordable. They are doing everything they can to scare young people from low-income backgrounds away from university education by putting a mountain of debt in their way.

According to media reports yesterday, on top of their plans for $100,000 degrees Mr Pyne wants to slug an additional tax on universities which will be passed straight on to students. Mr Pyne has spent the last 12 months saying despite all common sense that price gouging will not happen under his plan for $100,000 degrees. Now he is preparing a secret tax plan to stop something he said would never happen as an attempt to please some crossbench senators. I would just like to say to the crossbench senators that are considering this proposal: this tax will not end up being paid by the universities. They will pass this tax straight on to the students. I ask them to consider this very seriously. They might have been misled into thinking this measure will stop price gouging, but it will have the opposite effect. 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.

And this tax is not a small impost; it is huge. I would like to quote Andrew Norton, Higher Education Program Director at the Grattan Institute, who said about the latest proposal:

Using the tax rates in Chapman’s submission, and a fee of $30,000 for a law student, we estimate a tax of more than $11,000—

an additional $11,000 a year on top of a course fee that would already rise to $30,000 under the government's higher education reforms. How can we expect students from low-economic areas to commit to such a debt?

To add insult to injury—and this is the real clincher for me—this tax is not even a new idea. It has been recycled. A similar project was rejected—and those on that side need to listen very carefully to this—by the Conservative government in the United Kingdom in 2010 for fear it would simply drive up fees and put more strain on the government's loan scheme. Anton Howes from the Adam Smith Institute, a UK policy think tank supporting free market ideas, wrote:

The unintended consequence of this risk-free environment for students and universities, coupled with a levy on increased fees would therefore be to drive fees higher, placing further strain on the government’s ability to provide loans up-front, and perhaps prompting future government interference to mitigate this effect.

I would also like to quote the Hon. David Willetts, the UK Minister of State for Universities and Science and Conservative MP for Havant, who said in 2010:

As soon as universities raise their fees above the threshold they face a rapidly rising levy which can drive up their fees even higher in order to reach a given level of income.

When the UK Conservatives ditch an idea because it will be bad for students, that is when we know it is going to be terrible for Australian students.

The Australian government should look to the world and implement the best ideas we find, not the worst and certainly not recycled ideas that have been rejected by the Conservative colleagues of those on the other side. Australia has a wonderful higher education system thanks to reforms firstly by the Whitlam government and then by subsequent Labor governments. We have many universities in the top 100 worldwide, and the strength of our universities stems from the premise that everyone, no matter what their background, should have the opportunity to go to university. This government's desire, for purely ideological reasons, to transform the Australian university sector into an American one is wrong and it will be disastrous for Australian students—and, I might say, for Australian society in general.

Australians are rightly proud of the university sector. Parents are proud that their children—often the first ones in their extended family—have the opportunity to go to university. Parents are proud that their children can gain tertiary skills they did not have the opportunity to attain. But these parents did not vote for these $100,000 degrees. They did not vote for this new tax on undergraduate degrees. The government never said before the election, 'We will make it more expensive your kids to go to university.' They did not say, 'We want to price students from low-income families out of higher education.' But that is what they are doing. The Australian people have been completely deceived by this government. Australian students and Australian parents are extremely angry about these harsh, thoughtless changes that they were not warned about. And unfortunately the ramifications of these policies are already being felt across the university sector. We have already seen enrolments down in some regions because students have been discouraged by the government's talk of increasing the cost of going to university. This is extremely unfortunate.

When the time comes to vote on university deregulation and this new, secret tax, I urge the crossbench senators to oppose it. Higher education is way too important to the future of our nation to be sacrificed. (Time expired)

4:53 pm

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

The cat is out of the bag. There is a secret plan, all right. It is the Carr plan.

Why are we in the dilemma we are in? It is simply because the Labor Party in government lifted the cap on enrolments and, typically of their inability when it comes to competitive policy, they failed to lift the cap on fees. What does Senator Carr want to do? He wants to reimpose the cap. That is what this is all about.

Senator Lazarus made mention of the excellence of Australian universities and I agree with him. Let me then ask him the question: why is it that every vice-chancellor in this country, with the exception of two, is begging the Senate—the crossbenchers, the Greens and the Labor Party—to allow and introduce this legislation? I will tell you why not: because Senator Carr wants to see a reimposition of the cap.

He speaks of $100,000 degrees. Senator Lazarus, let me tell you: the under vice-chancellor of UWA, one of the top 100 universities in the world, has said that his three-year degrees will be $16,000 a year. The last time I was at university, three time 16 was $48,000—not $100,000. And an agriculture degree would be four times 16—that is $64,000, not $100,000. These are absolute twistings of the truth, as Senator Carr and Senator Lines and others know.

The director of the Australian Technology Network said: 'Do not be fooled by $100,000 degrees.' The Australian Catholic University says it does not anticipate a general and massive rise. What Senator Carr does not understand is that, in the world of competition, if someone wants to charge $100,000 for a degree that someone asked charges $64,000 for, do you know what happens? Their lecture theatres are empty. Isn't that amazing for the Labor Party! Senator Whish-Wilson understands that if you want to charge 100 grand and someone else is charging 64 grand, the 64 grand will win out so long as the quality is good.

And that brings me to the point: why are Senator Carr, Senator Lines, Senator Bilyk and others wanting to cut this country down to the lowest common denominator? We are in an internationally-competitive higher education world. If we are mediocre we will lose students—Australian students and international students. The largest non-resources income-earning sector for our country will be decimated. I ask the question: why is it that the father of the Labor higher education reforms, John Dawkins, from my home state, favours fee deregulation? Mr Gareth Evans favours fee deregulation. The opposition shadow Assistant Treasurer, Andrew Leigh, favours fee deregulation. What doesn't Senator Carr get?

He gets it, all right. He wants to trash what Ms Gillard, in her capacity as minister, put into place and that was lifting the cap on enrolments. Heaven forbid—heaven forbid! The Council of Private Higher Education Providers, what did they say to us in the Senate hearing? Fees might come—listen for it, listen!—down. Not up—they will come down. Why? Because for the first time ever they will be allowed to participate in Commonwealth supported places.

So what is it that Labor is wanting to do, Senator Lazarus? What Labor is wanting to do is cut out the possibility of 80,000 students participating in pre-university degree courses—the people who do not have a chance yet; the lower socioeconomic students who will benefit from the Commonwealth scholarships that will come into play. Will they go to the Western suburbs of Perth? No, they will not. They will go to the low socioeconomic students. The rural and regional students of the universities I have worked in will be significantly benefited by these deregulated fees we want to bring in. I say to the Labor Party, and to the crossbenchers particularly: if you want to see Australia's universities become mediocre; if you want to see a lack of opportunity for low socio-economic students; if you want to see 80,000 students denied the opportunity of eventually getting a university education; if you want to trash the reputation of vice-chancellors like Paul Johnson from UWA and the other universities—the Group of Eight and Universities Australia—just go down the path you are going down. I say to you: you are damning higher education in this country and you are damning this opportunity for students who will now not get to university. (Time expired)

4:58 pm

Photo of Brett MasonBrett Mason (Queensland, Liberal Party) Share this | | Hansard source

Let me just remind the Senate how important this debate is. Australia is a superpower in minerals, it is a superpower in agriculture and it is a superpower in higher education. We are the 12th largest economy on earth but we have the third strongest university system on earth. Indeed, more than that, we educate more students per head of population than any other country on earth. So often we hear about Australia being a great sporting nation—great at the Olympics; a nation full of sports people. The truth is: we do higher education and education generally even better than we do sport. You do not hear much about this, but it is a fact. We came 10th in the Olympics and we are the third-best at higher education on earth.

Photo of Christopher BackChristopher Back (WA, Liberal Party) Share this | | Hansard source

Our largest export!

Photo of Brett MasonBrett Mason (Queensland, Liberal Party) Share this | | Hansard source

Senator Back just said it is our largest services export industry. And it does not create pollution; it helps our soft power and diplomatic prowess. Education, higher education in particular, is a marvellous boon to this country.

All senators must ask themselves the following question: is the current system of uncapped undergraduate places sustainable and will it lead to a higher quality product for overseas students? Will it grow and enhance higher education and the desirability of studying in universities in this country? Is it possible, as the Labor Party is proposing, to continue to uncap undergraduate student places and place a cap on the fees that universities can charge? Will our universities maintain and improve their relative standing internationally under the current funding model? We all know that is impossible—unless of course Senator Carr really does propose to recap university places. Unless he does that, the quality will start to go down and everyone in the sector knows that.

The money is necessary to provide better research outcomes internationally, which of course always drives student demand for Australian universities. The second money is not going into research in our universities, foreign students will not have the same desire to come. Secondly, the money needs to be unlocked to provide a higher quality education for undergraduates. There is no other way than the government's approach, because there is no other money.

If you do not believe me, I can prove it. I can prove there is no other money. Go back to late 2012 to the mid-year economic update, when there was savage cut to research funding—when the Labor Party was in government, not crowing in opposition, but when they actually had responsibility for the budget. Then in 2013—May, their last budget—what did the Labor Party actually do? They cut funding to universities by $2.3 billion. As Dr Emerson said, that was to make the federal budget 'sustainable'.

No-one believes anymore in Cloud Cuckoo Land. Neither the Labor Party nor the coalition can unlock further money in the current budgetary context. It is impossible. The only way we can unlock money for universities—to improve research, enhance our capacity and improve undergraduate education—is by deregulating the system. Otherwise, the system will start to falter.

When I was at university a long time ago, the Labor Party and the left said that 'introducing tertiary fees will inhibit so many Australians from going to university—people from all sorts of socioeconomic backgrounds and women will not have the capacity to go to university'. Thirty years later, three times as many Australians go to higher education. Why? Because fees and the payment of fees unlock the system. (Time expired)