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Transcript of press conference: Parliament House, Canberra: 28 August 2014: the introduction of the Higher Education and Research Reform Amendment Bill 2014



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THE HON CHRISTOPHER PYNE MP Minister for Education Leader of the House

TRANSCRIPT

E&OE TRANSCRIPT Press Conference — Parliament House, Canberra. Date: 28/08/2014 Time: 9.00 AM

SUBJECT: Discussing the introduction of the Higher Education and Research Reform Amendment Bill 2014.

CHRISTOPHER PYNE: Good morning everyone. Today I’m introducing the Reform bill to change higher education in Australia for the better. This is the biggest reform in higher education in over 40 years. There are many moving parts to the Reform bill but overall it will have two really important impacts. Firstly, it will spread opportunity to tens of thousands of more students through the biggest Commonwealth Scholarships fund in Australia’s history by expanding the Commonwealth Grants Scheme to the non-university higher education providers and by expanding the demand-driven system to the diplomas and associate diplomas typically used by first generation university goers and low-SES students to break into universities and use those pathways to get to undergraduate degrees. The combination of those factors will lead to at least 80,000 more students a year going to university over the next four years. The second big impact will be to allow universities to put a value on the courses that they offer students, so that if you are doing a degree at Charles Darwin, you won’t be charged exactly the same as if you were doing a degree at the University of Melbourne, which is the current system, so that the cost subsidies between rural and regional students to city students will stop. This reform will allow our universities to gain the revenue that they need to compete with our Asian competitors. That revenue can’t be found from the taxpayer - the taxpayer’s already giving enough and with the debt and deficit burden that we have been left by Labor, we can’t find that money from taxpayers. So students are going to be asked to pay 50 per cent of the cost of their education. They’re currently paying 40 per cent of the cost, so we’re asking them to increase their contribution by 10 per cent to the 50 per cent level. I think that’s a fair deal; that’s an Australian deal - a 50-50 split sounds like a fair deal, especially when university students can borrow all of that money from the taxpayer at low interest rates, and not start paying it back until they earn over $50,000 a year, and then only two per cent of their income can be taken to start paying back their fees. So I’m very passionate about these reforms - it might take months to achieve them. The university sector wants reform. Status quo is not an option for our higher education system. It’s the third largest export - $15 billion a year in international education - after iron ore and coal, it represents our third largest export income. It’s vitally important that we protect that

income and we grow it, and we can only do that by offering a high quality university education, which has a reputation overseas as a place which is high quality and will lead to employment.

JOURNALIST: Minister, there’s been a report out of the ANU’s mathematics and science institute, they’ve crunched the numbers, they say that if you yourself did the degree you did when you did it and then took the first job [inaudible] and had five per cent annual increases in your pay, it would have taken you until the age of 64 to pay off your HECS debt, that’s with the changes you’ve made. Does that give you any cause for concern about what could be happening in the future with student’s debt?

CHRISTOPHER PYNE: Look, there’s a lot of speculative modelling, a lot of it. Some of it’s anonymous, some of it is wild, that sounds like it’s more on the wild side than the sensible side. The work that the Government has done indicates that at the moment the HECS debt averages $16,800. $16,800. It is not a huge figure. We expect that after these reforms, that might rise to about $20,000 to $22,000 on average. There is modelling indicating that fees will drop in many courses, and they might rise by around 10 per cent, some 20 per cent in other courses. There are some universities saying they will simply charge a flat fee for everyone, and cross-subsidise across all their courses. Until the reform begins, the wildly speculative modelling figures are not worth the paper they are written on. But what we do know is that students are currently paying 40 per cent of the cost of their education. They will typically on average earn 75 per cent more over their lifetime than people without a university degree. They have low unemployment rates, they have a longer life expectancy, they will be healthier people, and they are doing all that and being able to borrow every dollar from the Australian taxpayer, and pay it back at incredibly generous rates. Our HECS-HELP loan scheme is the envy of the world, so I think that there is a very rosy future for universities and students in Australia if these reforms are passed. If they are not passed, in 10 years you’ll be maybe interviewing me still if I’m still here, and saying to me ‘why didn’t the Government act to save the higher education sector from a slow and inevitable decline, when it knew it needed to?’ like we are talking about the manufacturing sector today.

JOURNALIST: Is there potential though for blow-outs though, individual degrees or circumstances, is that something you’re going to need to monitor closely and perhaps put safeguards in place?

CHRISTOPHER PYNE: Well, I’ll negotiate with the Senate over the course of the next three months, and I’m realistic enough to know that the reform bill that we pass in November will probably not be exactly the same as the bill that I am introducing today. That is the nature of our democracy. For 37 of the last 40 years the Government has not controlled the Upper House. That means we negotiate, and I am looking forward to that negotiation.

JOURNALIST: [inaudible] 10 per cent increase in some degrees, what modelling are you basing that figure on?

CHRISTOPHER PYNE: Well there’s a lot of modelling out there, now the Government is obviously, before we introduced these bills, thought about what the impact might be and my advice is that we expect that the, that the share that the students will pay will rise from around 40 per cent to around 50 per cent.

JOURNALIST: And will we see those rises predominantly in city universities [inaudible]…

CHRISTOPHER PYNE: Well that’s probably likely yes, I mean, regional and rural universities will be the big winners from these reforms because, for a number of reasons. For the first time

ever they will be able to compete on price, with the city universities. They have a great quality of life; they’ll be able to offer Commonwealth scholarships based around relocation allowances, living expenses, accommodation. Why would they offer tuition fee scholarships when the students can borrow every dollar from the taxpayer down the track? So each university will tailor their scholarships for what they want to attract to their university. Now the Vice-Chancellor of the University of Central Queensland, Scott Bowman, he says that he is licking his lips at the prospect of these reforms because they are a lip-smackingly good university. Now that is the kind of forward thinking enthusiasm that will lead to regional and rural universities grasping the opportunity this reform give them to compete with the city universities.

JOURNALIST: This figure of 40 to 50 per cent, now the 40 per cent is an average for all degrees for example some science and medical degrees…

CHRISTOPHER PYNE: So is the 50…

JOURNALIST: So some science and medical degrees are substituted or subsidised to the extent of 80 or 90 per cent, are they going to be pushed into the 50 per cent as well that they’ll have to pay, cause that would make it a lot more expensive.

CHRISTOPHER PYNE: Well you are trying to find every negative available in this reform. I would simply say to you that if a student who finishes medicine for example, goes out into the workforce, our medical practitioners, quite rightly, are amongst the highest paid people in the community. They are being given the great gift of being able to be medical practitioners in a country that has the very generous Medicare Scheme and they will be able to pay their debt back, you can be absolutely certain of that. But I also make the point, they can borrow every single dollar upfront, and even if they are earning over $100,000 a year, they can’t be asked to pay back more than eight per cent of their income to pay back that debt. Now people around the world look at the Australian system and marvel at the taxpayers’ generosity to the students, and rather than try to find points of difference and criticism our students should be thanking taxpayers for being so generous to them in giving them the opportunity that they will be given to earn 75 per cent more than people without a higher education qualification, have a better quality of life, and impart the capacity for low unemployment levels, and I just think that students should understand that this is a great opportunity that they have been given and they should be paying 50 per cent for it.

JOURNALIST: You said this will pass in November, who are you going to get on side by then?

CHRISTOPHER PYNE: Well I’m obviously not going to do a running commentary like a horse race call, on the negotiations with the Senate. I’m introducing the bill in about an hour’s time. The bill will pass the House of Representatives. I will continue to talk to Clive Palmer, to the cross benchers in the Senate - I get along well with all of them. I’m looking forward to negotiating with them. And I believe that we will have a reform by the end of this year. That’s what universities want, that’s what the taxpayer deserves, and that’s what the Government is proposing. I think this guy here has tried several times.

JOURNALIST: Thank you, on another issue are you concerned that Coalition MPs have been backgrounding the media, in light of the Prime Minister’s alleged comments about his trip to Melbourne, are you concerned that people like Ian McDonald and others have been publically vocal about the Prime Minister in the past - does this show tension within the party?

CHRISTOPHER PYNE: I think all those matters have been dealt with. I’m introducing the biggest reform in Australia’s history to higher education in about an hours’ time. [Inaudible] It’s going to be transformative.

JOURNALIST: But those critics aren’t going to be helping you sell those reforms if you keep distracting them with party politics.

CHRISTOPHER PYNE: My colleagues passed my reform bill through the party room on Tuesday unanimously. I’m very much encouraged by the support that I’ve received from my colleagues and I hope that support will translate into the parliament.

JOURNALIST: [Inaudible].

CHRISTOPHER PYNE: Well I’m going to negotiate with the Senate cross bench. There are five Senators on the cross bench who are not members of a - who are single Senators if you like. Then there are the three PUP Senators - Palmer United Party Senators. I will talk to them individually as I have, and I’ll talk to them as a group. Of course I talk to my friend Clive as often as I can and I am very hopeful that there will be reform.

JOURNALIST: Is there an opportunity there though with reports of a rift within the PUP alliance?

CHRISTOPHER PYNE: Oh look, I don’t want to comment on the internal machinations of other political parties.

JOURNALIST: But you’ve been keeping a very close eye on that, wouldn’t you?

CHRISTOPHER PYNE: I keep a close eye on everything around here. Particularly the cross benches, and particularly the Fourth Estate. Thank you very much.

Mr Pyne’s media contact: 0407 691 050, pynemedia@education.gov.au Department media: media@education.gov.au