Mr BEAZLEY —My question is to the Prime Minister. Does the Prime Minister recall his interview on 3AW last Friday where he refused to rule out applying real interest rates to student loans? Does the Prime Minister agree that, if he refuses to rule out real interest rates on student loans, it is impossible to rule out students being forced to repay more than $100,000 for their degree?

Mr HOWARD (Prime Minister) —I thank the Leader of the Opposition for that question. I certainly do remember the interview on 3AW. The leader's question gives me the opportunity to expand on the theme that I developed during that interview. That is that the government stands by the commitments made in 1998, and before the last election, regarding the various pillars of our higher education policy. Cabinet discussed the matter this morning and I can inform the parliament, and through the parliament the Australian people, that support for those principles has been reaffirmed by the cabinet, by the government.

I can also inform the House that we have no intention of introducing a loans scheme. I make it very clear that any attempt by the Australian Labor Party to run a scare campaign on the basis of a loans scheme or real rates of interest will fail because there will be no real rates of interest. Real rates of interest are something that belonged to your time in government—they were 18 or 20 per cent. That is when the rate of interest was really a real rate of interest. It was such a real rate of interest that it sent many small businessmen and Australian farmers to the wall.

There are a number of challenges in the higher education area. One of those challenges relates to the rigidity of the industrial relations approach adopted within universities and the very negative attitude of many of the academic unions to industrial relations—attitudes that I might say are supported, encouraged and buttressed by the Australian Labor Party and particularly by the Leader of the Opposition. I would not be the least bit surprised if my colleague the Minister for Education, Training and Youth Affairs has something further to say about that matter before the day is much older.

I make it very clear that we will not be introducing a voucher system. We will be maintaining the principles of the HECS system. There will not be any attempt by this government—through the back door, the front door or any other way of getting into this House—to replace the HECS system with a loans system. The bad news for the Leader of the Opposition is that he cannot run a scare campaign on this.