Tuesday, 17 March 2015
Higher Education and Research Reform Bill 2014; Second Reading
I rise to speak today on the Higher Education and Research Reform Bill 2014 for the second time.
Due to the complexities of this bill, I have seen two main responses. One is highly-uninformed debate within the community about the current situation and the government's proposals. And the second is a lack of courage by senators of all political persuasions to engage with the government to evolve the higher education model to something more sustainable. I am more than happy to excuse the first point. The Australian community always has good reason to have a heightened level of cynicism when announcements are made by any Australian government. However, the second point is a little more disturbing.
We, as senators, are paid to do a job. Because of the makeup of the current Senate, we on the crossbench are expected to be more responsible and accountable than the opposition. Australians expect the opposition of the day to be obstructionist, but they expect minor party and Independent senators to be impartial. The Australian people have charged the crossbench with a great privilege and a great responsibility.
This bill is before us today because the government believes it is a priority. The government was elected to pursue matters which they believe are priorities. Now, the Senate by no means should act as a rubber stamp, and the Senate should provide scrutiny. But voting down a bill at the second reading before senators have even had a chance to amend a serious bill such as this is absolutely abdicating one's responsibility. Nearly every party involved in this debate agrees that the current system is unsustainable and that change is going to come. It is not a matter of 'if' but 'when'.
Today we, as the crossbench, are in the unique position to review, amend and improve this legislation. We owe it to the Australian people to do just that. In five years' time there may not be a crossbench to scrutinise potential reforms. It is on this day, in this chamber, that we have the opportunity to make positive change. If this bill is taken to an election, like some in this place have called for, then we will lose our ability to have a positive influence. The major parties will have it all their own way. No matter which party wins the next election with their policy, the Australian people and our tertiary education system will lose. I urge my fellow senators to put aside political interest and populism and to do the jobs they were elected to do.
I understand that there is little political benefit in the crossbench working with the government, but this should not be about votes. This should be about doing what is right by our students and our country. Again, I am not asking senators ultimately to support a bill they may disagree with. I am simply calling on them to give this bill a chance to be amended and improved. If, at the end of the day, my fellow crossbench senators still oppose the amended bill then I absolutely respect their right to vote it down. But at least we can say that we have tried to work with the government rather than simply being obstructionist for the sake of it. I believe that, if the Senate put politics and opportunism aside for a minute, we might actually create a fair sustainable and equitable system which would benefit all Australians, but most importantly our students.
We have an opportunity here today to make universities more equitable with the right amendments. This is particularly the case for students from low socioeconomic backgrounds and those from rural and regional Australia. With the right amendments the Senate can leave a positive mark on Australia's higher education landscape. With the right amendments the Senate could create a scholarship system worth hundreds of millions of dollars. This money could be used to pay for accommodation and living expenses, or it could be used to pay for books for disadvantaged university students.
This bill may have the potential to make more seats available in university libraries right across the country at exam time. It may have the potential to fund universities to such an extent that they can purchase sufficient copies of books that are considered recommended reading for students. With the right amendments this bill might have the potential to create a better university system for all of our students. The fact of the matter is we are suffocating universities. We have spent such an enormous portion of this debate thinking about the glory days that we have not taken notice of the impact of budget cuts of successive governments, of all persuasions, to the sector.
In summary, I would like to finish off where I began. Senators have been charged with a great privilege, but with it comes great responsibility. I have serious concerns with the bill in its current form, but I also fear the consequences of doing nothing. Thank you.
I rise today to oppose the government's legislation to deregulate higher education.
A great public purpose requires adequate public funding. That is the matter at hand here today. I reject the remarks from Senator Madigan that people 'do not have the courage of their convictions' in here and that people are 'not doing the right thing' by the university sector. Let me tell you: the Greens have consistently opposed cuts to university funding and cuts to research funding. We have done so always. We have also put forward propositions to raise the revenue in order to fund public education, public universities and research and development.
As recently as a week ago, I put forward a proposal that we stop the flat rate of 15 per cent tax on contributions to superannuation and that we do it in a progressive way, similar to income tax. That would raise $10 billion over the forward estimates. The vice-chancellors a few years ago ran a very strong campaign trying to argue to the Australian community that we needed to raise more revenue to spend on universities. I agree. The Greens were out there supporting the campaign to raise revenue to put more public money into universities.
But I have to say to you that Senator Madigan was correct in saying that over recent years—over decades actually—the level of funding to universities has been cut back. When the former Labor government in their MYEFO statement in 2012-13 announced cuts to research, we objected to that. When Labor announced, in April 2013 going into the election, cuts to university funding, we opposed it. And we went into the election opposing it. We said that after the election Labor in opposition would change its mind. It did, and I am very pleased about that, because the fundamental principle here is: if you want to change from a 'dig it up, cut it down, ship it away' economy to a 21st century economy where imagination is the key resource—not coal, not iron ore, not cutting down native forests, but actually investing in the brains base of this nation—then you have to fund public education and universities.
Where the last government went wrong was the announcement that they would cut the funding to universities in order to spend it on the Gonski reforms. I totally support the Gonski reforms—they should have gone ahead and we should be funding that—but you do not take money out of universities to fund public schools; you need to fund education at every level, from early childhood right through the school system through to universities and TAFEs. That is the way of the future in Australia.
I am one of those people who was at university before Gough Whitlam brought in free education in Australia. I come from a relatively poor farming family in the north-west of Tasmania. My parents were dairy farmers. My mother was a teacher. In order for me to get through school I got scholarships, and I had to get scholarships to get to university. I had the choice between a Commonwealth scholarship and a teacher studentship, and I took the teacher studentship because it paid more than a Commonwealth scholarship at that time.
So I can tell you that I know what it is like to be fronting the fact that you may not be able to go to university because you cannot afford it. That is precisely the case for so many people and that is why deregulation is so wrong. It is wrong to say to young people: 'The parliament of Australia refuses to raise the revenue to put into schools and public education'. The result is that we are going to cut public funding to universities and we are going to tell the universities they have to raise fees in order to cover the gap. And raising those fees of course means hurting a lot of people and making people think twice about the course they go into. They will not have the same choices that they otherwise would.
In a speech he made on this very issue, Professor Glyn Davies said:
Australia spends proportionally less public money on universities than most OECD countries, yet few outside the sector argue for international standards of investment.
He said that he was one of the people who supported more public funding to universities so that we would not be in this bind of raising fees to make up the difference.
The real issue here is: how are we going to fund our universities? Do we agree, first and foremost, that education is the most important investment we can make in the country in order not only to survive in the face of global warming but to reduce to gap between the rich and the poor—that inequality in wealth that we have in this country? I would argue that it is the most important thing we can do. That is why we should be raising the money from those who can afford to pay it and investing it in 21st century national infrastructure—and by infrastructure I mean brains, in the human capacity base of this country. Of course, we also need to invest in other infrastructure, but that is where we need to be fundamentally going.
I am concerned that, with this deregulation proposal, a teacher would graduate with a HECS debt of around $90,000, and it would take them decades—up to 40 years and more—to pay it off. Women are going to be disadvantaged in this context, because they are the ones who often end up taking time out in part-time work or no work, ultimately resuming full-time work once the children go to school. They would then spend years paying this debt back.
The University of Tasmania is in a unique position because we have only one university for the whole state. That does not apply anywhere else. The University of Tasmania is the key to improving educational opportunities for all Tasmanians. The university has a campus in Launceston and opened a campus on the north-west coast. The north-west coast is an area of Tasmania with one of the poorest retention rates to senior secondary education, let alone university. The provision of the north-west campus has enabled people who left school at an early age to go back and finish their education. It has been a great contribution to Tasmania, but with the cuts that were being proposed we could have seen the University of Tasmania lose out by $113 million. Not only that, but we could have seen many students not being given the opportunity to go on to further education. Since we have only one university, fee competition would not work in Tasmania. You would be saying to students: 'You can go to the mainland to try to get cheaper fees,' but the reality is that you have to pay to get there, you have to pay the rents when you get there, and you have to pay the costs of accommodation and living expenses. It just would not work out to be any cheaper. So the reality is that you are condemning Tasmanians to no competition in the scheme of things, and to having to pay whatever the fees actually result in.
We need to have a situation where we have full-time, permanent teaching staff and research staff in universities. I do not want to go down the path of seeing some universities declared universities but having no research capacity. A public university has to have teaching and research, it has to have permanent staff, it has to have opportunities for young people to achieve to their highest potential. And it has to assist this country to get where it needs to be in a world that is moving rapidly to a low carbon economy and in having to be part of developing a service sector and a global economy that is not based on the consumption of the natural resources of the planet. This week we had the International Energy Agency saying that for the first time we have global emissions flatlining from the energy sector, we have economic growth globally at three per cent and no economic downturn. That demonstrates that decoupling global greenhouse gas emissions from growth is possible, but it means that in Australia we have to have a rapid shift in the way we live, in the way that we earn, and in the way society operates. That means massive opportunity, but only if you invest in that opportunity.
I wanted to make a remark about the cutback that was proposed—the blackmail, effectively. In order for the government to try to get deregulation over the line, there was the proposal to cut research funding. That would have had a mega-negative impact on the Integrated Marine Observing System, in Tasmania, which was going to run out of funding by June. It is essential to a whole range of research not only in Tasmania but right around the world. It would have been a disaster if the government had pursued that, and for Minister Pyne to try to blackmail the parliament by saying: 'Either you pass my deregulation—
I rise on a point of order. The reference suggesting that Minister Pyne has committed the act of blackmail has been raised here three times. Three chairs have made the people withdraw those references and I ask that you ask the senator to withdraw this assertion.
Thank you, Mr Acting Deputy President. I will rephrase what I have said and say that Minister Pyne made it very clear that unless the Senate passed his deregulation he would de-fund research institutions. I think it is pretty clear to the community what sort of standover tactic that was for the Senate, and people—absolutely correctly—have rejected it. But it demonstrates no real understanding of just how important it is that research be funded, and just how important it is that universities be funded.
I think we have got to the point in Australia—and this is where I do agree with Senator Madigan's remarks—where this parliament has to decide whether it is prepared to raise the money to fund universities. I can understand why vice-chancellors are worried about this. How are they going to cope? How are they going to run a university, have permanent staff, have the variety of courses they want to offer and be able to afford it with funding cutbacks?
That is why the Greens stand here to say we want more public funding for education from early childhood, through schools and right through universities and TAFE, and we are prepared to raise the money to pay for it by securing that money from those who can afford to pay. We could remove, for example, the fossil fuel subsidy to the big miners, $2 billion a year—$2 billion, just like that. If the government decided not to give Gina Rinehart et al that $2 billion, we would have it there to put into universities. We could do the progressive taxation on contributions to superannuation. We could restore the carbon price. What about that? That would be $13 billion over the forward estimates to bring down pollution and drive the change we need in Australia. It would bring down emissions at the same time. There are so many ways of raising money.
Yet this parliament sat here last sitting week, and Labor and the Liberals got together and gave $200 million to another subsidy to the mining industry for small miners for exploration—$200 million, just like that. 'Yes,' they said to the small mining industry, 'just go off and do that.' They removed the penalty for people who supposedly inadvertently breach the cap of superannuation contributions, yet, if those people were at Centrelink, they would be down into the criminal justice system as quick as you could say Jack Robinson. I think there are many ways of raising money, but you have to get serious about raising it from the big end of town, raising it from the tax avoiders, raising it from people who are taking their money offshore to tax havens, and actually getting stuck into the trusts in Australia that hide the level of income they get.
Let us actually fund our public universities. Wouldn't that be a great contribution to the future of this country? Let us actually make sure that those people who benefited from a free education are the people who deliver to the next generation a publicly funded education. I can tell you that, whenever I go out, people say to me how annoyed they are that the very people who benefited from Gough Whitlam's free education are the ones who have gone and cut back on that free education and have insisted on the cuts, and it is wrong. That is why the Greens will be absolutely opposing this government's legislation.
For the second time since I have been elected to this place, I rise to speak to the Liberal and National parties' Higher Education and Research Reform Bill 2014. Even with the government's latest policy backflip, for the second time I inform this Senate that I will strongly oppose this legislation. The Abbott government have deliberately and slyly ambushed the Australian people with their proposed changes to university funding and proposed increases to university fees. It is a cowardly and callous pattern of political behaviour that has been repeated in other policy areas, including cuts to health funding which are designed to burn down Medicare; cuts to pensions by linking pension increases to the CPI; increasing the pension age to 70 from 2035; effective cuts to ADF members' pay entitlements; effective cuts to the Australian war veterans' pensions; and effective cuts to their entitlements.
Following Education Minister Pyne's recent announcement that he would not slash funding to our universities by 20 per cent—just yet—and he would not destroy the jobs of 1,700 researchers—any time in the next month or two—the Group of Eight universities chief executive Vicki Thomson is reported by the media to have said it would be 'unthinkable' for the government's reforms to fail. Ms Thomson is also reported to have said:
The present funding model is broken. University funding is an investment in Australia's future. The Go8 implores the Senate to this week make the right decision for every student and for Australia.
My reply to Ms Thomson and her supporters is: yes, the present funding model is broken because Labor and in particular this Liberal government have chosen to deliberately break the higher education funding model.
Labor broke the public funding model because they forgot who they were. They forgot their values and who they represented. The Liberals broke the higher education public funding model because they want us to become more like America. They want to create a society in Australia where the rich become richer and the poor know their position in life. The Liberals want a divided Australia, one run by a new blue blood, a blue-tie aristocracy where title, position, privilege and bank balance mean more than ability, hard work and perseverance. Yes, university funding is an investment in Australia's future. And, yes, both Labor and the Liberal government are guilty of failing to invest in Australia's future and Australia's young people.
How do we fix our broken model of funding for higher education? The solution is very easy. Firstly, we honestly acknowledge that successive Australian federal governments have deliberately chosen to cut back funding to our universities, while other countries' governments—a lot of the Nordic countries—chose to make higher education a priority. Generations of Australian leaders from both Labor and the Liberal Party chose not to make university funding a priority, while Finland and Norway chose to deliver the best higher education system in the world, and free of charge, to their young people.
Parliamentary Library research I commissioned says:
The Labor Government's 2013-14 Budget higher education savings measures amounted to $2.3 billion. Labor never implemented these savings. The Coalition Government adopted Labor's proposals but the legislation to implement these savings failed to pass.
The Coalition Government's 2014-15 Budget higher education savings measures amounted to $5.0 billion. The Coalition Government's first Bill to implement $3.9 billion of these savings failed to pass. The Coalition has now introduced a new Bill to implement its higher education reforms. The Coalition Government has therefore not yet implemented any of its proposed 'cuts' to higher education.
Other Parliamentary Library research I commissioned shows that, as a percentage of GDP, our university funding has decreased over the last 10 years from 0.9 per cent to 0.6 per cent. The worst years for university funding were between 2000 and 2007, where it was stuck at 0.5 per cent of the GDP. University funding dipped again in 2010-11 from 0.6 per cent to 0.5 per cent of GDP.
The Nordic countries are now absolutely reaping the social and economic benefits of the investment in higher education which they sowed, while here in Australia in 2015 we have a manufacturing industry going down the drain and workers are struggling to keep jobs and this Senate is engaged in this dumb, stupid, ridiculous debate about university funding. Should Australia invest one per cent of our GDP in higher education? Yes, you be it should. Who in their right mind could argue against the principle of one per cent of our GDP being invested in the higher education system? Australia is a First World country. We should be able to almost double our spend on higher education from around $9 billion to $18 billion. The money is there. It is just a matter of priorities. In a time of austerity, should we spend $25 billion in foreign aid over the forward estimates or should invest in Australia's poor? In a time of austerity, should we spend $5 billion in order to try to bribe our states to sell off publicly owned assets or should we help our young people further their education?
I now turn to higher education delivery in Tasmania. If this legislation passes this Senate, the so-called Liberal reforms contained in this government bill will significantly harm the best interests of Tasmania, Tasmania's current and future higher education students, and the staff in the institution of the University of Tasmania. Unlike any other state in Australia, Tasmania has only one higher education provider. We are proud of that. That is the University of Tasmania. So the danger this legislation poses is greater in my home state than in any other state.
This legislation is proof that the Liberals hate the fact that Tasmania has only one higher education provider. I do not think that it is a bad thing. This legislation will undermine the University of Tasmania's delivery of higher education and allow competition into the market. The Liberals will tell you that competition will produce better economic, academic and social outcomes, but that is another Liberal lie. That is not how it works in the real world when you provide First World essential services to places with small populations. Everyone knows that the Liberal's deregulation contained in this legislation will harm the University of Tasmania and Tasmania's reputation as a quality higher education provider.
The real reason the Liberals want to open up the higher education market is that it will allow their big business mates to make lots of money. I have met these big business people, these friends of the Liberals, their mates. They have come to my office and tried to influence me to vote for legislation that will help make them lots of money. These people boast about their power and have a hard time not licking their lips as they talk about the profits they stand to make from the taxpayers once this legislation is passed. Put simply, this legislation will allow the Liberals' mates to move in and cash in on my state's reputation as a quality higher education provider.
This Liberal legislation will allow the Liberals' mates to shamelessly cherry-pick courses and undercut the University of Tasmania because, unlike the University of Tasmania, the new providers who give the Liberal Party lots of money in political donations will not have any legislated obligations to give back to the community by investing in research. A new higher education provider, under the Liberals' rules, will be able to come into my community and set up a shop front and, without research obligations, provide a degree or associate degree with 30 per cent to 40 per cent less operating overheads than the University of Tasmania. That is not a fair system.
The owners of the new higher education providers will not have the same love for Tasmania that the current owners, the people of Tasmania, have. The new higher education owners and managers that the Liberals want to set up shop in Tasmania, unlike Professor Peter Rathjen and his team at the University of Tasmania, will not love, care for and sit at the heart of the social, intellectual and cultural life in Tasmania. The new higher education owners will be ruthless business people, motivated by performance bonuses and with one focus—profit. That will not work in Tasmania. These profits will be taken from students who will, for the first time in Australia's higher education history, receive a government subsidy that will flow to private providers who will have no real connection to the community they service.
A higher education monopoly for Tasmania has been a wonderful thing. It has provided protection while the University of Tasmania has grown and gained a critical mass and produced exceptional academic results. It has produced world-acclaimed results for the people of a state which has a total population of only a little over half a million people, less than a suburb of the capital of China. As the Vice Chancellor of the University of Tasmania Professor Peter Rathjen says in the 2014 impact study:
The University of Tasmania’s 10-year strategic plan, Open to Talent, is unequivocal about the fact that we … must continue to “sit at the heart of social, intellectual and cultural life in Tasmania”.
If these sneaky, deceitful, harmful Liberal changes to Australia's higher education system are allowed to pass through this Senate then the Liberals will take the political gun that they have shamefully and slyly held to the head of the University of Tasmania and every other Australian university during the lead-up to this bill's consideration and place it on the chest of every Tasmanian and pull the damn trigger.
I will not allow that to happen because if you hurt the University of Tasmania you hurt every Tasmanian. Firstly, the University of Tasmania's contribution to Tasmania's economy is $1.7 billion. Secondly, one in four Tasmanians have a direct connection to the University of Tasmania. Thirdly, 5,900 people are employed by our university. Fourthly, more than 30,000 students are enrolled at the University of Tasmania. We are very proud of that. Fifthly, the University of Tasmania is ranked in the top two per cent of universities worldwide according to the Academic Ranking of World Universities 2013. I can tell you that we are very bloody proud of that. Sixthly, with a budget of $96 million, the University of Tasmania is in the nation's top 10 for research income. Seventhly, as indicated in the 2014 impact statement, the University of Tasmania is a key economic driver as well as a place of knowledge and learning, with campuses and facilities in Burnie, Launceston, Bisdee Tier in the Midlands and Hobart.
The Liberals have deliberately and carefully created a sense of panic and desperation in the minds of the people who run our universities and in the minds of our community leaders. Christopher Pyne and the PM have achieved their goals by using tactics a third-world tyrant would be proud of. Firstly, the Liberals have threatened to slash university funding by 20 per cent. secondly, they have threatened the jobs of 1,700 researchers. Thirdly, in Tasmania, they have dangled the carrot, which I am absolutely disgusted by, of $400 million worth of new university buildings. They have never put pen to paper and guaranteed funds for this much-needed and essential investment in a capital upgrade yet we have $50 billion sitting in infrastructure funding. Fourthly, the Liberals, along with the previous federal Labor government, have also deliberately cut the number of associate degrees that the University of Tasmania can teach and deliver to students. So much for Joe Hockey's 'earn or learn'. I tell you, you are not looking pretty.
The fact that both sides of parliament have cut the number of associate degrees is a significant point which has not received due consideration and has caused the University of Tasmania great harm. Associate degrees, or subdegrees, of approximately two years in length are the higher education product now in great demand, especially in Tasmania. Associate degrees have been described to me as a practical learning experience where you will gain knowledge, qualifications and a job. The University of Tasmania has identified a great demand for associate degrees and is planning on providing 10,000 associate degrees in the future to students in Tasmania. I sincerely hope they do and I support them in their plans. The only thing stopping them from going ahead with their plans is this government, which has placed an artificial and arbitrary cap on the number of associate degrees granted to our universities.
It should not come as a shock for the Senate to learn that successive governments have dramatically cut back on the availability of associate degrees. The Liberals in particular, as part of Pynes's nasty political softening up process in order—
The Liberals, in particular, as part of Mr Pynes's nasty political softening up process in order to blackmail the University of Tasmania into accepting the Liberal's outrageous changes have dramatically reduced the number of associate degrees.
During a recent briefing my staff undertook with Minister Pyne's senior education officials, it was admitted that this year the University of Tasmania while asking the government for 360 associate degrees was granted only 60 associate degrees. Once again, here we go, 'earn or learn.' Parliamentary Library research I subsequently commissioned shows that in 2009 the University of Tasmanian was granted 1,095 associate degrees ; in 2010, that number was reduced to 1,023 associate degrees; in 2011, that number was reduced again to 850 associate degrees; in 2012, that number was slashed to 630; and the latest figure for 2015, which has been confirmed by Mr Pyne, is that it has been ripped down to 60. Sixty! In the space of six years, an in-demand higher education course which provides a lifeline for the state of Tasmania though UTAS has been cut from 1,095 to 60 associate degrees. That is a cut of 1,800 per cent. My question to this Liberal government and to the previous Labor government is: was this a deliberate attempt to undermine our state's economy and drive a stake through the heart of the social, intellectual and cultural life of Tasmania, or was the restriction of the availability of associate degrees just sheer incompetence?
While Tasmania has been granted only 60 associate degrees for 2015, Parliamentary Library research shows that in 2013 New South Wales had 1,091 and Victoria had 1,859. I tell you what, they are not in the same economic and social situation we are in. I am calling on the federal government to come clean on the number of associate degrees they issue and explain how they decide to issue those degrees. The Liberals must explain why they refuse to support the University of Tasmania's plan to expand this worthy program. And from the Labor party I want a guarantee that in government they will reverse the cutback in investment in our universities and set up a national goal to take our investment in university funding to one per cent of GDP. I am looking for that undertaking from the Labor Party. Answer this simple question honestly and do not ignore it: if the Nordic countries can deliver the best higher education system in the world to their young people for free, why can't we? I also want a guarantee that Labor in government will invest and allow the University of Tasmania to implement its plans to expand by delivering up to 10,000 associate degrees on the Burnie and Launceston campuses while continuing their magnificent research in Hobart.
I believe that Australia has the means and resources to deliver free higher education to our young people. However, this debate has shown that we do not have the politicians with the vision and courage to deliver free higher education to our young people. So, today, I am putting out a call to those people who want to create a better, smarter Tasmania and Australia to contact my office. I will support candidates at the next election who are prepared to work for a future where Australia has the best higher education system in the world and our government will deliver our children's first degree for free. A free first university degree for all Australian children who want and earn the opportunity will only become a wild, unachievable goal if the Senate and the parliament are populated by people who think it is a wild, unachievable goal.
For Australia to prosper and thrive, we must look to the lessons of Finland and Denmark. We must not look to America, as the Liberals want us to with their legislation. The American higher education system, according to the Economist magazine, is contributing to America's new aristocracy, a hereditary meritocracy. An Economist article examining America's higher education system states:
“MY BIG fear,” says Paul Ryan, an influential Republican congressman from Wisconsin, is that America is losing sight of the notion that “the condition of your birth does not determine the outcome of your life.”
We do not want that future for Tasmanian or Australia.
In closing: if Minister Pyne and Prime Minister Tony Abbott have so much faith in the higher education reforms contained in this bill, why did they not tell the people of Tasmania and of the other states about their reforms before the last election? If the Liberal's higher education policies were any good there would not be a need for a cover-up followed by a disgraceful political ambush and now these desperate threats. I oppose this legislation with every fibre of my being. I will always do so.
I compliment Senator Lambie for a very well-researched speech outlining her concerns. The reference to The Economist magazine in relation to the US system reminds me of the documentary film Ivory Tower by filmmaker Andrew Rossi. That documentary, which I think is a couple of years old, makes the point that skyrocketing tuition prices, private and public; rapidly evolving social attitudes towards the value of a college degree; and the inevitable changes wrought by technological growth and economic disaster have had a huge impact on that sector. I am referring there to a review of the film in Variety magazine. Ivory Tower relates directly to the matters raised in The Economist magazine. Republican congressman Paul Ryan also spoke about this issue. The Variety film review states:
One of the documentary’s key points is that most colleges are no longer selling an education but an experience, happily spending millions of dollars on plush housing complexes and state-of-the-art recreational facilities in a bid to entice as many applicants as possible. It’s the students who pay for these campus expansions, and not just financially: Too many schools, in the film’s somewhat over-generalized estimation, have allowed academic rigor to fall by the wayside, a problem that can be attributed in part to an excess of administrators and a dearth of dedicated teaching faculty. One particularly alarming statistic — that 68% of students at public universities fail to graduate in four years — is introduced by way of a visit to Arizona State U., whose party-school rep is reinforced here by footage of a massive swimming-pool bacchanal that resembles an outtake from “Spring Breakers.”
Clearly we do not want to go down that path.
Senator Lambie made reference to Scandinavian countries. There is a book that I am hoping to plough through soon called Northern Lights: The Positive Policy Example of Sweden, Finland, Denmark and Norway by Andrew Scott, an Australian academic. I think we need to look at it. I think the temperament of Australians is closer to that of the Scandinavians than to that of the Americans. But, even so, it seems that what the government is proposing in this deregulated model is more radical than anything that has been tried in any OECD nation, apart from New Zealand, which went down this path of total deregulation a few years ago but then had to retreat from it because it did not work. It was a public policy mess.
At the outset I believe it is incredibly important to acknowledge that the current system of funding to universities is unsustainable. Having a demand-driven, uncapped system means that something has to change. We either go down the path that Senator Lambie has indicated, where we have to find a lot more public money for our public education, or we need to take a different approach. This requires a nuanced and sophisticated approach in terms of looking at alternatives.
I do not believe that anyone in this debate disputes the fact that our current system of funding is unsustainable. However, I do not believe that deregulation is necessarily the best option for solving this problem. The government seems to be shifting on its proposed measures. If nothing else, I think that Minister Pyne is incredibly flexible—more flexible than a yoga instructor sometimes. There has been a lack of preparation and consultation before such a quantum leap in higher education policy. The government went to the election with a promise of 'masterful inaction'. That is what the Prime Minister, as opposition leader, said two years ago in respect of higher education. This is not masterful inaction; this is the biggest, most radical shake-up this country has ever seen in higher education. The government have not gone about this in a proper way in their approach to policy formulation. I am a bit old-fashioned: I think the old days of having white papers and green papers in order to have a proper process of policy formulation has much to commend itself. That is what the Hawke-Keating government did and that is what the Howard-Costello government did, and they did it very well, by and large, in getting it right in dealing with these issues.
What happened on the weekend is that Minister Pyne threatened to shut down NCRIS, the National Collaborative Research Infrastructure Strategy, the very backbone of research in this country involving the 1,700 scientists funded by it—some of our best and brightest minds—and providing a backbone for research infrastructure not just for universities but for businesses, for absolutely groundbreaking innovation that can make a difference, whether in the wine industry in my home state, whether in medicine, whether in a whole range of telecommunications. That is all about the clever country. What the minister said on Sunday was extraordinarily foolish on his part. I bear some responsibility. The minister was a student of mine some 27 years ago at what is now the University of South Australia, so I guess I have taught him everything that he does not know. I think the minister's interview with David Speers yesterday, if not already a cult classic, will become a cult classic. The last 24 to 48 hours have been a very unfortunate exercise. I give the minister full marks for being indefatigable in relation to this issue, but I cannot accept what the government is doing. I cannot support it.
In the budget last year—it seems so long ago, but in some respects it only seems like yesterday—the government wanted to bring about these reforms with significant savings, with cuts to the sector that would have saved billions of dollars over the forward estimates. We now have a situation where the government is looking at spending another $1 billion to $1½ billion a year. Perhaps Senator Carr can help me out on that. It seems there has been a complete reversal of fortune in terms of what the government is proposing. It is now going to cost a lot more money.
Deregulation is not something that can be easily undone. Once you have the deregulation genie out of the bottle, you cannot put it back in. We have to be very careful about this. We need to have a full understanding of the implications, particularly those in the longer term, before we make such significant changes. My argument has always been that this is not an ordinary market that we are dealing with. This is not an ordinary case of supply and demand.
Ross Gittins, the economics editor for The Sydney Morning Herald, in his opinion piece entitled 'Why "competition" means university fees will rise', published on 31 May 2014, makes a very good point. Even according to one of the authors of the Kempt-Norton report, Andrew Norton, 'the initial increase will be no more than $6000 a year' in fees. But that is still an increase—a very appreciable increase. Mr Gittins makes the point that:
The simple model of how markets work taught in introductory economics courses leaves many people with excessive faith in the ability of market competition to foster increased efficiency, constrain price increases and ensure customers get high quality.
This is not an ordinary market it does not work like that. This is different by virtue of HECS: the HECS Support fee allows students get support to fund their higher education. Gittins makes the point:
There's no profit motive. And, as any academic will tell you, unis are highly inefficient, bureaucratic organisations dominated by administrators. The safest prediction is that giving unis greater revenue-raising ability will lead to them employing more administrators.
How can uni fees be regarded as a ''price'' in the textbook sense when people are lent the money to pay the price under a concessional loan they won't have to repay for years?
In effect, universities have a government-regulated monopoly over a product that gives young people access to the country's highly paid jobs. What will they do when the price jumps - abandon all ambition? Demand seems highly ''price inelastic'' - unresponsive to price changes.
The one point that Gittins makes that, I think, proves that is: back in 2004, as I understand it, the Howard government, through Brendan Nelson as education minister, allowed universities to increase their fees by a maximum of 25 per cent. Invariably, all universities increased their fees by 25 per cent, bar one. That university thought that there was a competitive advantage: 'We'll charge a little bit less and more students will come flocking to us.' Guess what? That university saw a collapse in its enrolments and had to increase its fees up by the full 25 per cent the following year.
This is not an ordinary market; this is why deregulation needs to be treated very carefully in the context of this debate. I want to consider the issue of how to cut the Gordian knot of university funding in a way that is equitable, fair and will work in the long term so that we do not end up with a US situation, as described in the documentary, Ivory Tower. I wrote to Minister Pyne on 20 January 2015—it seems much longer ago—and I am very happy to provide my colleagues with a copy of this letter, which was sent publicly to the media, unions and university administrators, which, as a courtesy, I let the minister know that. I suggested to the minister, respectfully, that there ought to be a useful way forward to establish an independent panel to undertake a root-and-branch review of Australia's higher education sector. A review that took into account the role the sector plays in Australian society, both in economic and social terms. It should be a review that looks at where we want to go and how best to get there, both in a local and global context. I suggested it could take up to 18 months, but it could take much less than that, if it were done with some alacrity, if it were done properly and if there were a panel of experts and terms of reference with cross party support—government, opposition and crossbenchers in this place and in the other place. There needs to be consensus on the terms of reference and on the panel of experts, where there can be a robust debate and robust analysis about where sector is going. I suggested that, as an interim measure, universities should be allowed to increase their fees to a cap to allow them to recoup any government cuts. Well, those are now off the table. I understand the funding pressures of universities and there ought to be—as unpalatable as it may be for some—some modest increase in university fees, if such a funding crisis emerges in the higher education sector. That is something that would give us some breathing space, so we may try to get the policy settings right once and for all.
The findings of the panel would presumably be a template for government reforms and, hopefully, have cross party support. The government should implement any measures necessary to allow universities to increase their fees in accordance with the funding. I think the terms of reference should look at the current role of the higher education sector in Australia, the higher education experience of students studying in Australia and how Australia measures up in terms of the world's best practice. We need to avoid the pitfalls of other countries which have gone down difficult paths that have not worked in terms of student outcomes and have cost the budget's bottom line and cost students themselves. I suggested that this review could be comprehensive in much the same way as the Murray report, which in 1957 provided a detailed study of universities in post-war Australia for Prime Minister Menzies. I hasten to add that the Murray report was not written by David Murray—it has not been around that long. The 1957 review was written by another Mr Murray, but it is a very useful report and it is worth reading to see the sorts of challenges which they faced then and which are echoed in some of the problems we face now.
The minister has not taken up my suggestion, and more is the pity. Maybe he needs to look at that; maybe we need to have some bipartisan, cross party way of dealing with this very serious issues in the sector. If the government will not do that, then the government needs to look at the usual green-and-white-paper process to ensure that a proposal has been appropriately and thoroughly discussed, debated and modelled. This may seem cumbersome to the government, but so far the policy formulation in this area has not worked, despite the best endeavours of the minister's office and there are some very capable people in his office.
We have recently seen proposals by Professor Bruce Chapman that would implement a progressive taxation on universities to reduce the Commonwealth subsidies by a certain amount if their fees rose above a certain level. There are various gradations and variations that. Unfortunately, I was not able to meet Prof Chapman today, but I hope to be able to speak to him in the next day or so. The concern is: what effect will it have for the so-called sandstone universities—the Group of Eight universities—when compared to other universities? Will we see a significant inflationary effect in respect of that? We need to have some modelling. I understand that perhaps the department has done that modelling, but that needs to be out in the open. I have not seen the modelling. We need some transparency in this process.
An article in The Sydney Morning Herald on 17 February by the enigmatic Matthew Knott, under the headline 'Fee deregulation will drive up deficit', says that NATSEM, the National Centre for Social and Economic Modelling, the same people that the coalition used when in opposition for the modelling of their policy formulations—so I reject any suggestion that they are anything other than a pretty robust organisation in terms of their modelling—have suggested:
The Abbott government's plan to deregulate university fees would likely drive up inflation and drain billions of dollars from the budget over the long term rather than saving taxpayers money as originally intended …
In other words, this would be not a zero-sum game but a negative game in the sense that it would actually cost taxpayers more money because it would also have an inflationary effect.
I also think that the debate has lacked a nuanced approach in terms of some of the other issues that need to be tackled, and the best way of summarising that is in a new book that was dropped off to my office yesterday—and I should disclose I will make sure I pay for it, Mr Deputy President!—called Universities and Innovation Economies: The Creative Wasteland of Post-Industrial Society, by Professor Peter Murphy of James Cook University. I am trying to get in touch with Professor Murphy and I am looking forward to discussing this with him. But even just a summary of the book resonates with me in terms of some of the issues we face in this sector. This is what it says:
Students drop out of universities in large numbers, many graduate to jobs that do not require a degree and a large number learn little at university, whilst graduate salaries have shrunk over time and student loan debt and default have grown. University research achievements have declined while university administration has expanded massively. The contemporary university is mired in auditing, regulation, waste and aimlessness and its contribution to serious social innovation has deteriorated markedly. The miserable state of the universities reflects a larger social reality, as bureaucratic capitalism has replaced creative capitalism.
I am not necessarily endorsing what Professor Murphy is saying. What I am saying is that this debate has not looked at the issue of university dropout rates, which are very significant in terms of what they cost taxpayers but, more importantly, what they cost students in the months and sometimes years of their lives spent doing a course that they drop out of, where maybe a bit of counselling and guidance could have made a difference.
My concern is that allowing universities to set their own fees means that, in theory, they would no longer need to rely on government funding. That may be a very attractive proposition to future governments, which may start to see Commonwealth contributions as a place to make easy savings. The minister made the point to me yesterday that it would still need to get through the parliament; but who knows what may happen in years to come? There may even be bipartisan consensus on that—dare I say, not while Senator Carr is in this parliament!
But who knows what might happen if you set up a framework in years to come, when Senator Carr is not here—in 2045; or maybe he will be here in 2045! It may be problematic.
It is also important to consider the impact of HECS, which was alluded to by Ross Gittins. I do not want to criticise this scheme—far from it. It is a terrific scheme. It is an outstanding measure that sets our higher education system apart. But that has to be taken into account in the context of deregulation and issues of market failure.
I think that what we need to do now is pause. We need to actually reflect on what needs to be done. Reform is needed in this sector. We want to have the best university and higher education sector in the world.
We also need to acknowledge, in the brief time I have available in this debate, the issue put forward by the Council of Private Higher Education. I spoke today to Reverend Dr Don Owers AM, who runs Tabor, a college in Adelaide. I have enormous regard for him. He is concerned that these reforms proposed by the government could have been fairer if they had removed some of the equity barriers facing private higher education providers. I think that needs to be on the agenda as well.
But what we have right now is a mess. We need to step back from this and look at some comprehensive reform to get this right, because what has happened to date is less than satisfactory. We need to get this right. We owe it to the students of Australia and we owe it to the taxpayers of Australia to get this right. I cannot support the second reading of this bill but I hazard a guess that this will not be the end of it. We still have much work to do to do the right thing by this sector.
In closing the second reading debate on the Higher Education and Research Reform Bill 2014, I thank all senators for their contributions to this debate, much as I may not agree with all that has been said. In closing this debate, I also seek to argue the case for greater autonomy and greater freedom for Australian universities to give Australian universities to lift themselves, to lift the outcomes for students and to lift the economic contribution they make to Australia to the types of heights and levels that we know they are capable of doing, have done for years and can do again in the future—if we give them the capacity and the freedom and the autonomy to do so.
… it is … clear that government alone cannot provide all the additional funding necessary for our universities to become top notch.
… … …
… we propose that Australian universities be free to set student fees according to the market value of their degrees. A deregulated or market-based HECS will make the student contribution system fairer, because the fees students pay will more closely approximate the value they receive through future earnings. Market-based HECS will also help to improve our higher education system by making universities even more responsive to student needs and educational outcomes.
They are not my words; they are the words of Andrew Leigh, the shadow Assistant Treasurer, a member of the Labor Party's shadow executive today.
It is time to change our one-size-fits-all funding system and let diversity develop.
Again, they are not my words. They are the words of Gareth Evans, former Labor Party foreign minister of long standing.
I want Labor to be a positive player, not just a blocker.
They are not my words but the words of former federal Labor MP Maxine McKew, speaking about higher education reform.
… the ALP ought to engage with the government to negotiate the further reform of higher education …
… … …
It's a great pity that Labor is sitting on its hands this time.
Again, they are not my words but the words of John Dawkins, former Labor Party Treasurer in the Keating government, education minister in the Hawke government and architect of the modern HECS. Peter Beattie commented:
Make no mistake, without funding reform, Australia’s universities will inevitably slip towards mediocrity and the quality of Australian graduates will decline in relation to our international competitors, both in business and education.
Once again, these are not my words. They are the words of Peter Beattie, a former long-serving Queensland Labor Party premier.
Through much of the debate, we have heard from those opposite that this is some type of great partisan divide. But, with Peter Beattie, Gareth Evans, John Dawkins, Maxine McKew and Andrew Leigh all having argued the case for reform, it is crystal clear that it is not a partisan divide in terms of good, sound policy; it is simply the case that those opposite want to play politics and run a scare campaign, when what they should be doing is embracing reform that is good and worthwhile for Australia's future.
They need not, though, listen to Labor members past and present—those who have led their party through great reform. They could instead heed the advice of, and listen to, the education sector, who have equally argued passionately and strongly for the adoption—if not of this exact model that is before the chamber—at least for reform of the type and nature of reform that is before the chamber. And they have argued for that reform to be made as quickly as possible.
Universities Australia have embraced the need for reform and called for reform, and 40 of the nation's 41 vice-chancellors have stood behind Universities Australia in their call. The Innovative Research Universities have embraced the call for action. The Regional Universities Network have done so. In their most recent statement, they say:
It is essential for regional universities and their students to retain the demand driven student system for bachelor places and to expand this to sub-bachelor degrees to provide more pathways for less well prepared students. The higher education system must be adequately funded to ensure quality and sustainability, and the deregulation of fees provides the most realistic way to do this.
… … …
RUN urges the Senate to end the uncertainty for students and universities and to pass the package.
The Group of Eight universities have been equally—if not even more—emphatic in their support. The Australian Council for Private Education and Training have supported the reforms. TAFE Directors Australia have supported these reforms. This reform package has brought together a level of support across Australia's education sector in ways, frankly, never seen before for a major reform package. To have all elements, essentially, of the education sector backing this reform is a demonstration that the government has listened and acted and developed a policy that should be supported by those opposite. The sector supports this, because they recognise that current funding arrangements based on the uncapped demand driven system for university places is unsustainable. They recognise that the current arrangement is hurting quality. The current arrangement reduces the incentive for innovation by Australia's universities. It reduces the incentive for excellence in Australia's universities. It reduces the incentive for specialisation among Australia's universities.
The package that we have brought to this parliament will provide the capacity for universities to be set free to be able to choose how they will differentiate themselves from each other; how they can specialise; in what fields to develop excellence; and, yes, to differentiate that, in part, by cost. This is also a proposal that dramatically increases access for Australians. I singled out the Regional Universities Network to quote before, because, of course they are representing the universities who most frequently are providing opportunities for students from lower socioeconomic backgrounds, for students who may not historically or traditionally have made it into university. The Regional Universities Network is passionately supporting the passage of this legislation, just as is the rest of the sector.
Before I get to some of the specifics in the bill, I will address some of the contributions that have been made. I listened to Senator Lamble's contribution and I acknowledge the passion in her contribution and the passionate defence that she made for the University of Tasmania. But I note that the Vice-Chancellor of the University of Tasmania is one of the 40 of the 41 vice-chancellors from Universities Australia who are supporting this reform.
Senator Lambie made an equally passionate call for more diplomas and more associate degree places to be available in Tasmania through the University of Tasmania. That is exactly what this package, if passed, would do. It would remove the cap and enable the University of Tasmania—indeed, all of the Regional Universities Network and all of the universities of Australia—to offer Commonwealth subsidised places for diplomas and associate degrees without that cap in place. It would uncap those sub-bachelor levels and allow them to provide greater pathways to students who may not have the skills, capacity or ATAR score to get into a degree level course.
I also noted that Senator Lambie, and I think Senator Xenophon did similarly, argued the case for—and highlighted international examples of—so-called free education. Again, I will quote Andrew Leigh, the shadow Assistant Treasurer: 'If university fees were abolished, as dewy-eyed Whitlamites often demand, this would effectively redistribute scarce government funds from those who do not go to university to those who do. Given that those who attend university tend to be richer than those who do not and are likely to be richer as a result of their education, this would simply widen the already large income gap between the tertiary educated and the non-tertiary educated. Australia should be in the business of reducing not increasing inequality. For these reasons, it is appropriate for students themselves to meet some of the costs of their education.' The argument against that notion of free education is a real one because, if you say that education will be funded by all taxpayers, of course you are putting a greater and more disproportionate load on the taxpayers who never go to university. What our reforms are doing and what governments since the introduction of HECS have done is seek to create a system whereby those who benefit from the university education make a fair contribution to it.
But equally appreciate that under our model every bachelor degree course, every sub-bachelor degree course and every diploma course offered through this model would still be attracting Commonwealth subsidies. Students would not be paying the full fees. There is a Commonwealth subsidy attached, and beyond that there is, of course, the opportunity to access HECS, meaning nobody need pay a single cent up-front.
Senator Xenophon, in his contribution, spoke about consultation. Well, Senator Xenophon, there has been a world of consultation. There has, of course, been the Kemp-Norton review, which was the latest of 33 reviews into Australia's higher education system since 1950—not counting, of course, the countless Senate inquiries or parliamentary inquiries that could be added on top of that. The issue of deregulation has been discussed and looked at by many. Of course, the consultation has been such that we have built the body of support across the nation's educational institutions that I outlined before. He argued—and we have heard it from Senator Carr as well at times—that this would create a US-style system. Again I emphasise, though, that we have HECS. It means nobody need pay a single cent up-front. That is not a US-style system; it is far, far from it. He did acknowledge—and I know a number on the crossbenches have acknowledged—that there is a level of unsustainability and a pressure in the Australian university system at present that cannot be sustained. Senator Xenophon said he may be willing to support some fee increase at present—a lifting of the cap. But I equally note that he acknowledged that, when that was last done, all we saw was that everybody moved up to the new cap and that you did not effectively get any sense of competition in the sector or any sense of specialisation or innovation.
Senator Carr argues that this is a contrived funding crisis. That does not seem to be the view held by the universities, and of course we know that the reality is that the Labor Party announced cuts to higher education and research of $6.6 billion from 2011 to 2013. Every six months, in every budget and every MYEFO, there were cuts from the Labor party. He too argues that we wish to create an Americanised system. I made the point before that HECS makes this a vastly different system, and HECS remains fundamental to it, so that nobody need pay one cent up-front.
They argue that university will only be for the wealthy. All of this has been part of a terrible, vicious scare campaign to suggest somehow that people will be shut out of universities. Thankfully, the students are smarter than that. Of course, that has been the trend ever since HECS was introduced. University enrolments have continued to increase since the Hawke government introduced HECS. They went up and have gone up at every increase in fees that has occurred under HECS. The access to university has continued to grow, because students and their families see the opportunity of university education and realise the equity in the fact that nobody in Australia need pay up-front, because of HECS, but know that there is sufficient private gain and personal benefit for them to take on that student debt and that it will be worthwhile to pay it off through their career, through the generous arrangements that successive Australian governments have supported, because they will gain a higher income and greater opportunity as a result of it. This year, we have continued to see increased enrolments despite the Labor Party's fear campaign and their attempts to drive people out.
Of course, that fear campaign has not just been about arguing that there would be up-front fees somehow; it has also involved the Labor Party throwing around this notion of the $100,000 degree. I am indebted to the Group of Eight universities for highlighting that the $100,000 degree is simply impossible under the reforms being proposed, because the reforms being proposed require that fees be no higher than what is currently charged for international students, minus the level of Commonwealth subsidy being paid. In no circumstance does that get you to over $100,000. It is, as has been the case time and time again through this debate, another instance of Senator Carr, Mr Shorten and the Labor Party misleading.
This legislation creates great new opportunities—new opportunities to expand access to education for Australians, and new opportunities for Australia's universities to position themselves to excel on the world stage and deliver greater benefits to our economy into the future. It will allow our universities to specialise and provide the best possible education for their students. We are guaranteeing that domestic undergraduate fees will always be lower than international fees. It will create a major new Commonwealth scholarship program to help students with living and other expenses. It will spread opportunity for students who need pathways to qualify for university or sub-degree qualifications to prepare them for their jobs. It will create an incentive for universities to invest more in those pathway and sub-bachelor degree courses, rather than the model at present, which creates maximum incentive for universities to stuff as many bachelor degree students into the lecture room as they possibly can. It will create a fairer spread of HECS to students who choose to study with non-university higher education providers, such as private colleges or TAFEs. And it will eliminate the differential in loan fees that those students outside the university system face. It, of course, maintains the CPI as the determinant for increase in HECS over time but adds a new interest rate pause for new parents, as proposed by Senator Madigan and others on the crossbench. It is estimated to create opportunities for an extra 80,000 people to access higher education as a result of the package proposed here.
The alternative is, of course, to look at what the Labor Party is proposing, which would tear up the reforms of the Gillard government in uncapping university places and would put at risk 120,000 places at university in the future. It is a stark contrast between those opposite, who would seek to asphyxiate innovation in the university sector, and those on this side, who seek to provide a chance for universities to chart their own destiny and provide real opportunities for the future.
We have listened through this debate—through the successive debates—around higher education. When this matter was considered last year we adopted a number of amendments to the package from those on the crossbench. We have listened this time around and sought to unclutter the debate and ensure we can simply have a positive debate about the merits of providing freedom and autonomy to Australia's universities rather than regulating them ultimately to a poorer future. I urge those in the chamber—those on the crossbenches—to engage in this debate sufficiently that we can proceed beyond the second reading, to give consideration to the amendments the government has circulated in our attempt to facilitate a focused debate around the future of universities and how they fund themselves.
I particularly urge those opposite as we move beyond this debate, noting that it is likely to be unsuccessful today, to take a long, hard look at themselves and their position in relation to the history of higher education and where they stand today, because they are turning their back on their legacy of creating HECS. They are turning their back on Julia Gillard's legacy of uncapping places. We want to create that autonomy and that freedom and unshackle Australia's universities, and that is exactly what this bill does.