Mr PETER BALDWIN(3.25 p.m.) —It is very clear that Australia's higher education sector is permeated by an overwhelming sense that the barbarians are at the gates. Initially, there was a degree of incredulity towards this government's performance in the higher education sector. Incredulity has now been replaced by consternation and panic. When the Vandals, the Visigoths, the Vanstones and the Kemps have control and some say over Australia's higher education policy, it is obviously a very serious situation indeed.

The nature of the reaction is without precedent in what those involved in the higher education sector have had to say. The key trigger to much of this public comment has been the notorious briefing dinner that the Minister for Employment, Education, Training and Youth Affairs, Senator Vanstone, attended with members of the Australian Vice-Chancellors Committee on Monday of last week. At that dinner, when questioned about the likely magnitude of cuts to the sector, she rather flippantly said—and these are the words she used, which have been relayed to me by a couple of people who were there—`How about 12 per cent for starters?' She then erupted into a kind of maniacal giggling.

This is the sort of performance that we are getting from a person who has responsibility for one of the most important areas of government activity in this country. The reaction from the higher education sector is as would be predicted. It has been one of panic, concern and anxiety about what is going to happen. A great edifice has been created over a number of years. We have a substantial higher eduction sector that involves the expenditure of some $5.3 billion in Commonwealth money, but we now have a situation where most universities derive substantial income from other sources.

All that has been achieved over the past couple of decades is now placed at risk by the bull-in-a-china-shop approach of this new minister. It is worth going to some of the comments that the vice-chancellors made after that particular performance. The AVCC president, Professor Fay Gale of the University of Western Australia, said:

I think what you have got is a group of vice-chancellors in a state of shock not knowing how they're going to deal with these issues.

We have never had to face this kind of thing before and not of this order.

Cuts of the scale now anticipated would trigger cancellation of many university courses, drastic staff retrenchments, national academic industrial action and could force some research programs to shut down.

It would mean greatly enlarged class sizes—one of the very shortcoming the Coalition used in its higher education campaign during the election.

Professor Mal Logan, the retiring Vice-Chancellor of Monash University, said:

Cuts of this magnitude have the potential to take universities back to the pre-Whitlam days of elite higher education.

Professor Logan attacked Senator Vanstone for having `no vision whatsoever' for the future of universities in five years. He went on:

She has no idea in my view as to what she wants to achieve in the university system and that's very worrying.

I will quote from a couple of other vice-chancellors, just to round it off. Professor Ian Chubb, Vice-Chancellor of Flinders University, said:

We are absolutely unbelievably annoyed . . . I think to myself could there be a more stupid approach than the one they are pushing?

Professor John Niland, Vice-Chancellor of the University of New South Wales, said:

The Government is playing with live ammunition . . . a university sector in turmoil in Australia will very quickly lead to the undermining of goodwill (overseas).

Professor Dean Terrell, Vice-Chancellor of the ANU, said:

(The issue) is just as important to those people who are watching from various parts of Asia . . . our quality, choice and diversity will be under question.

Professor Michael Osborne, Vice-Chancellor of La Trobe University, said:

This is the worst moment that higher education has ever faced . . . this is going to lead to turmoil, worry, stress and hell for just about everybody.

If that is not an overwhelming reaction, I do not know what is. Since that time Senator Vanstone has tried to allay some of those concerns in a most ham-fisted way. She partly sought to deny having made some of the statements that she clearly made to the meeting of the AVCC. At no stage has any suggestion been made by the government that they will adhere to the very explicit, black-letter commitment they made before the last election to maintain university operating grants and research grants at least at their current level. In the follow-up letter Senator Vanstone wrote to the AVCC to try to hose things down, she made no commitment to that pre-election promise. She belongs to the party that claimed they would adhere to their election promises; they would take them seriously and act with integrity.

We have heard all this talk about $8 billion black holes. What has to be stressed is the questions charged to both the current Prime Minister (Mr Howard) and Treasurer (Mr Costello) before the election and on a number of occasions after the election. They are: what if it were to turn out that the fiscal position is not as you understood the situation? What would take priority, maintenance of your election commitments or achievement of a budget balance? The Prime Minister on the John Laws program and the Treasurer on a couple of occasions affirmed that, in those circumstances, priority would be given to keeping faith with election commitments, even if that meant deferring the achievement of a balanced budget. Those statements were very clear commitments to the Australian people before the last election.

I find extraordinary these pathetic attempts by Senator Vanstone to deny having made the suggestions that she did make. The vice-chancellors who were there have explicitly denied her version of events or her account of what she said. I saw a report yesterday in the Courier-Mail on an unrelated matter—that is, Senator Vanstone's speech last month to the National Conference of the Australian Association of Education of the Gifted and Talented in Adelaide. The report in the Courier-Mail stated:

Organisers and participants of the conference said they were embarrassed by Senator Vanstone's bitter and anti-intellectual statements to an audience of world leaders in education.

This is the person in the Australian government who has responsibility for this area. The report continued:

Senator Vanstone said yesterday the report of her speech was an "outrageous misrepresentation" . . .

The conference organiser, Dr Marie McCann, confirmed the accuracy of her comments. They were transcribed by Southern Cross University education lecturer John Geake, so a careful transcript was kept. The article in the Courier-Mail further stated:

Dr McCann, who is also president of the Australian Association of Gifted and Talented Education, said she was disappointed and embarrassed by Senator Vanstone's speech.

"She showed no knowledge and quite frankly did harm to the field," she said.

"I literally stood up and removed the Senator from the stand—I had to close it down."

This is the sort of performance we are getting from this minister. The article continues:

Queensland University of Technology education lecturer Dr Jim Watters said the 200 academics, teachers and parents at the conference were "universally incensed" by Senator Vanstone's comments.

Their concern, outrage and anger has echoed through all parts of the higher education sector; it has not been confined to just the vice-chancellors. The student organisations and the academic and general staff organisations are mobilising nationally. We are seeing a huge reaction from that sector, as well there should be.

What do you say about somebody whose commitment to achieving stability of funding and a stable financial base for that sector is epitomised by flagging the possibility of 12 per cent cuts, erupting into laughter and, when the inevitable furore emerges, making these pathetic attempts to deny having ever said the things that she clearly did say?

What is at stake here? We are talking about Australia's higher education sector. The same minister has responsibility for the schools sector, vocational education, labour market programs and employment programs. What could be more important to the future of this country than those programs? Today's debate is about the higher education sector in particular because we now have a sense of what we can expect from this minister. Our higher education system is a huge national asset. It is not only critically important to the advancement of knowledge and the development of our culture in a broad sense; it is an enormously important economic asset.

A number of speakers and commentators have referred to the significance of educational exports as part of our service sector, stating that they are now approaching the magnitude of significance of wheat, coal and our traditional commodity exports. Obviously the growth rate in those areas is substantially faster. I refer to Professor Michael Porter, from Harvard University, who wrote the seminal work The Competitive Advantage of Nations, which is a definitive study of the factors that determine international competitiveness. He had this to say about the significance of the education and training sector:

There is little doubt from our research that education and training are decisive in national competitive advantage.

He further stated:

Education and training constitute perhaps the single greatest long-term leverage point available to all levels of government in upgrading industry.

He also stressed the importance of all parts of the education and training system and said that a strong research university sector is a critical element in national competitive advan tage. The significance of that was well recognised by the previous government.

The previous Labor government over its 13 years in office made enormous achievements in education and training and, in particular, in higher education. If we look at participation rates when we came to office, the number of university students was around 350,000. When we left office in 1995 the number was over 600,000—a huge increase. If we look at the participation rates for the 17- to 19-year age group—obviously the school leaver cohort—we had a 60 per cent increase during our period of government.

All that corresponded with a huge boost to government funding of higher education to support this expansion and strengthening of research programs and so forth. In terms of equity, the previous government placed an enormous emphasis on increasing participation across the board and, in particular, tried to ensure that disadvantaged groups got a share of that increased participation. The government's equity programs—which were a central element of the profile negotiations we had with higher education institutions—and the specific higher education equity program achieved very significant changes.

Aboriginal participation rates have increased enormously by around 50 per cent, even in the period between 1990 and 1995. Participation of women in non-traditional areas has improved very considerably. Participation by people from non-English speaking backgrounds has improved very significantly.

All this is under threat by coalition government policies and the probable—or certain, I would say—proposal that we will see in the next budget to substantially raise the level of HECS contribution. We were very concerned at the introduction of HECS to make sure we did it in a way that did not constitute a deterrent to people from low income backgrounds participating.

In ensuring the quality of higher education, the initiatives that the former government introduced over the last several years have been enormously important. It is very important to bear in mind that, quite apart from across-the-board cuts in operating grants, which we are likely to see, the coalition even before the election said that they would eliminate the so-called discretionary funds. Those discretionary funds were very much about providing a pool of funds to support the development of quality assurance initiatives in higher education, to support innovations and enhancements in approaches to teaching, as well as a whole raft of other things.

The coalition have been very sceptical about quality initiative, so presumably they think it is all right to eliminate any support for that kind of activity. But I refer honourable members to the 1994 report that the Committee for Quality Assurance in Higher Education published in March 1995. That report reviewed the impact of the government's quality assurance initiative, and states:

The response of the system to the review process has been overwhelmingly positive, with significant improvements noted across the sector. The achievements in the second round of reviews represent improvement against the evidence collected in 1993 on quality in the sector. In particular, there has been a marked improvement in quality assurance policies and practices in teaching and learning.

It goes on:

The Committee and its review teams were impressed by the magnitude and extent of the attitudinal and procedural change evident in 1994 across the higher education system.

Comments have been made by various people involved in higher education on the impact of the quality review. I refer to the higher education supplement in the Australian of 8 March 1995 which refers to a number of respected experts in the field. I quote one of those experts:

The good administrations have used the leverage of the quality money to actually push their institutions in ways that would have taken 15 to 20 years—we have seen the most extraordinary shift in ground as a result of the process—which has been an unqualified success . . .

These are very important initiatives which were implemented by the previous government in terms of participation, equity of access and measures to enhance the quality of the system. All this is placed at massive risk by this bull-in-the-china-shop approach manifested by the Minister for Employment, Education, Training and Youth Affairs.

The coalition government's policies in this area are already having a severely detrimental effect on confidence in the system and on its standing throughout the region. There have been a number of reports of concern spreading throughout Asian countries that are the source of much of the student income that the sector has been able to achieve. (Time expired)