Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

My question is to the Minister for Education and Training, Senator Birmingham. Can the minister outline how the Turnbull government is ensuring that the higher education student loan scheme remains sustainable for students and also for taxpayers?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

I thank Senator Reynolds for her question and her commitment to higher education access on fair terms for all Australians. Since 1989, the income contingent loan scheme in Australia, known as HECS or HELP, has been groundbreaking in terms of world recognition as a leading way of providing fair, equitable access for all Australians wanting to obtain university education without any up-front fees. Since that time, student numbers have tripled. Indeed, since 2009, when the demand-driven system was introduced for Australian universities, Commonwealth supported places have increased by a further one-third.

But, equally, since 2009, outstanding loans have increased from around $20 billion to over $50 billion. Around 12 per cent of total Commonwealth gross debt is now a student loan under the HELP scheme. That is why the Turnbull government is proposing changes to the loans scheme. There will be a new threshold of $42,000 and a new, lower first repayment step at one per cent—notably, one-quarter of what was proposed by the Grattan Institute—and higher rates of repayment for higher income earners. This is about ensuring the sustainability of the HECS and HELP scheme. As the respected economist from the ANU and architect of the HECS scheme, Professor Bruce Chapman, said earlier this year:

The evidence is now overwhelming that changes to the level of the charge, or other aspects of HECS-HELP, such as the first threshold of repayment, have no discernible effects on student behavior or choices. This has been true for all Australian experience with HECS, including its introduction in 1989 …

In fact, in that time, participation has only gone up and participation by all equity groups—all those from different areas of disadvantage—has gone up by a dramatic level. It is a success, but it is critical we guarantee its viability and sustainability into the future— (Time expired)

Stephen Parry (President) Share this | Link to this | Hansard source

Senator Reynolds, a supplementary question.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

I thank the minister for that answer. Can he now update the Senate on what the OECD's Education at a glance report, which, I understand, was only released this morning, says about Australia's standing in higher education within the OECD?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

The OECD's Education at a glance report demonstrates that Australia's total expenditure on higher education from all sources stands at 1. 6 per cent of GDP, which is above the OECD average of 1.4 per cent. It further shows that Australia's direct public expenditure on all tertiary institutions and publicly-funded student loans and subsidies stands at 1.4 per cent of GDP, again above the OECD average of 1.3 per cent. It equates to some 3.8 per cent of all government spending in Australia versus an OECD average of 3.1 per cent. Expenditure per student at the bachelor, masters or PhD level is well above the OECD average, the seventh highest in the OECD, with Australian average investment of some US$19,700 per student versus an OECD average of $16,600 or so per student. It is a demonstration that we are a country that invests well and, under the Turnbull government, we will continue to invest— (Time expired)

The PRESIDENT: Senator Reynolds, a final supplementary question.

Linda Reynolds (WA, Liberal Party) Share this | Link to this | Hansard source

Is the minister aware of any alternative policies to keep higher education sustainable for students and for taxpayers?

Simon Birmingham (SA, Liberal Party, Minister for Education and Training) Share this | Link to this | Hansard source

While the Turnbull government has very clear policies for the future, there is very little we can discern from those opposite, aside from their obstruction, their opposition and their desire to not face up to the reality of the problems that we face in ensuring the budget is balanced and that the contribution higher education makes to increased spending is taken into account. It wasn't always that way. Back in 2013 then Prime Minister Julia Gillard said:

… the number of places has grown, but funding has also gone up per student place. Money to universities is still going to grow. We've got universities on a growth path. What we are asking them to do is … to accept [an] efficiency dividend … their money would still grow, it just wouldn't grow as fast as they'd obviously wanted … .

Well, in 2013 Ms Gillard had it right, and, of course, Labor has backed down on the efficiency dividend since then. The Turnbull government believes it is a fair and reasonable way to make sure the budget is sustainable into the future. (Time expired)