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Monday, 3 November 2003
Page: 21742


Mr CADMAN (3:11 PM) —My question is addressed to the Minister for Education, Science and Training. Would the minister inform the House of any recent academic work examining whether the Higher Education Contribution Scheme deters poorer students from studying at university? Is the minister aware of other comments or statements in this area?


Dr NELSON (Minister for Education, Science and Training) —I thank the member for Mitchell for his question and his very strong support for the modernisation of Australian universities, the expansion of places and the increased money for those 38 publicly funded universities. In 1989, to its great credit, the Australian Labor Party then in government introduced the Higher Education Contribution Scheme, otherwise known as HECS. One of its principal architects was Professor Bruce Chapman, who is the professor of economics and social policy at the Australian National University.

There was widespread opposition at the time to the introduction of HECS. Those who argued stridently against it said that it would reduce participation in Australian higher education by low-income families. It was further said that it would effectively destroy the future of higher education. The truth is that, after 14 years since the introduction of HECS, to which the Australian taxpayer contributes three-quarters of the public funds that go to universities and the students then as graduates pay a quarter back through the tax system, the size of Australian university participation has almost doubled and the proportion of Australians who hold a university degree has also doubled from nine per cent to almost 19 per cent.

Recently a lot has been said, particularly by the Australian Labor Party, about proposed changes to HECS. The Australian Vice-Chancellors Committee commissioned Professor Chapman, who is also a former adviser to former Prime Minister Paul Keating, to examine all of the research that has been done in relation to the impact of HECS. Professor Chapman's report, which was released by the Australian Vice-Chancellors Committee on 17 October this year, says a number of things which are very important and which I encourage Australian families, in particular, to read. For example, on page 13 of the report he says:

... HECS has not deterred students from less privileged backgrounds from attending university.

He also says:

... the introduction of HECS did not affect the access of the disadvantaged, in terms of enrolments.

In relation to changes that the government introduced to HECS in 1997, when we went to a three-tiered system where dentists, doctors, lawyers and vets paid the most for their HECS contributions and those in arts, humanities and social sciences the least, the report says:

... neither the introduction of higher and differential HECS nor the lowering of the income repayment threshold after 1997 affected the share of low socioeconomic status individuals among total higher education students.

This government is proposing a number of changes for Australian universities which mean in total $10½ billion of extra public investment in universities over the first 10 years. But one of the changes argued for by all of the vice-chancellors which the government has accepted is that universities for the first time will set the HECS charge from zero to a level which is a maximum 30 per cent above the current HECS levels, with no change at all for teachers and nurses. In this regard in particular, this report is very important because Professor Chapman and Dr Ryan say:

... we do not expect HECS-HELP—

these are the changes proposed by this government—

to adversely affect the socioeconomic composition of enrolments in Australian universities.

In other words, the experts who have reviewed all of the research, who are quite dispassionate in their analysis of all of this, have said that these changes will have no adverse impact on participation in Australian higher education.

I am asked about other policies. The Australian Labor Party has said in its own policy, three-quarters of which it adopted from the government's, that it proposes to reduce the HECS contributions by students in science and mathematics. That is 80,000 students in Australian universities. That is 14 per cent of all the students in the sector. The Labor Party costed that, by the way, at $43.6 million. The department of finance has costed it at $262 million. In other words, there is a black hole in Labor's economic analysis of $218 million—and of course the Labor Party frontbench laughs while the member for Werriwa sits there stern faced because he at least knows this is accurate and that he will have to take notice of the department of finance if he ever gets hold of the taxpayers' chequebook. But, interestingly for the Labor Party, Professor Chapman, in relation to this particular measure, says:

... the ALP proposes moving mathematics and science courses from band 2 and band 1.

In other words, they would be reducing the contribution. He says:

While this will significantly reduce the cost for maths and science students, it is not expected that there will be important effects on higher education demand in these areas.

So there is the Australian taxpayer presented with a Labor Party policy which is underfunded to the tune of $218 million, not according to this government but according to the department of finance. Worse still, any dispassionate analysis of it, which has been done by the vice-chancellors, finds that it will actually have no impact whatsoever on higher education outcomes. Mr Speaker, I seek leave to table the report produced by Professor Chapman.


The SPEAKER —The minister does not need leave.


Dr NELSON —I table that and I also table the media release from the Australian vice-chancellors.