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Tuesday, 22 June 2010
Page: 6226


Mr PYNE (7:03 PM) —I rise to speak on the Higher Education Support Amendment (Indexation) Bill 2010. The bill amends the Higher Education Support Act 2003, revising the indexation formula for some programs as recommended by the Bradley review into higher education, which was handed to the government in late 2008. Specifically, this bill seeks to replace the Safety Net Adjustment wage price index with the Professional, Scientific and Technical Services wage price index published by the Australian Statistician for all amounts subject to indexation under parts 5 to 6 of the act from 2012. The Safety Net Adjustment wage price index and its replacement makes up 75 per cent of the total index, with the remaining 25 per cent continuing to be the Consumer Price Index.

The bill itself has no financial impact but its practical effect will be a more generous indexation rate applying to all grants under the act from 2012, resulting in an additional expenditure of more than $2.6 billion over five years. From next year, universities will receive additional funding corresponding to the increase in indexation on teaching and learning if they sign onto the Rudd government’s new performance indicators. The coalition is also committed to the principle of the continuation of indexation of university funding and, by implication, the current arrangements regarding indexation as they stand prior to this bill. After undertaking consultation with the higher education sector, we do understand that an indexation formula for student payments and research and teaching grants has been an area of concern. However, I do want to take the opportunity to note that we are not committed to any particular method of calculating indexation.

While Professor Denise Bradley and her panel made 46 recommendations to the government on higher education, recommendation 27 is directly relevant to the bill:

That the Australian Government maintain the future value of increased base funding for higher education by an indexation formula that is based on 90 per cent of the Labour Price Index (Professional) plus the Consumer Price Index with weightings of 75 per cent and 25 per cent respectively.

This was to replace the present Safety Net Adjustment, the SNA, introduced in 1997, which comprises 75 percent of the current index. However, as the Labour Price Index (Professional) that was suggested in the Bradley review has ceased, I note that the government have elected to use the Professional, Scientific And Technical Services Labour Price Index, reduced by 10 per cent, and that the remaining 25 per cent of the index will continue to be the Consumer Price Index. A number of programs under the act gain from the changes to indexation, such as the Commonwealth Grant Scheme, the Capital Development Pool Program and the Australian Postgraduate Awards program. I would also like to mention that in her second reading speech the Minister for Education pointed to these programs, which are subject to the passage of future legislation. They would have these arrangements apply—namely, the student amenities HELP loan limit, which is subject to the passage of the Higher Education Legislation Amendment (Student Services and Amenities) Bill 2009.

While on this subject I want to take the opportunity to reiterate that the Higher Education Legislation Amendment (Student Services and Amenities) Bill 2009 has not yet been subject to passage, due to the coalition’s concerns with this legislation. It seeks to introduce compulsory fees, which would be charged to students for amenities at universities. The coalition was very proud in 2006 to remove the burden of compulsory student union fees from Australian students. The bottom line is that this was a tax on students for services that many students never used. Labor’s attempts to bring it back represent the breaking of a clear and unequivocal promise by the Labor Party before the 2007 election that they would not introduce a compulsory fee, and they ruled out a HECS style system to fund it. Former Labor education spokesperson Stephen Smith said:

I’m not considering a compulsory HECS style arrangement and the whole basis of the approach is one of a voluntary approach. So I am not contemplating a compulsory amenities fee.

This is just another broken promise to add to Labor’s list of 47 broken promises, which the coalition continues to point out on a daily basis.

This is not the only area of concern with regard to the government’s so-called higher education reform. While the adopted method of indexation in this bill has been welcomed by the sector, I note that higher education providers are disappointed by the Rudd government’s decision to reject the other recommendation that was made alongside recommendation No. 27—that is, to increase the base funding rate of student places by 10 per cent. Following the handing down of the budget last year, Professor Simon Marginson of the University of Melbourne, said: ‘The budget dumped Bradley’s moderate 10 per cent increase in the funding rate of local student places. Funding for these places remains below cost. Institutions will have to maintain very large international enrolments to cross-subsidise domestic teaching.’

While the coalition, of course, supports the vital source of revenue that the international student market brings for universities, the comment by Professor Marginson is concerning because we believe there is one source of revenue which has been denied to universities by Labor—that is, the abolition of full-fee-paying places for Australian students. It is well known that the coalition is committed to bringing back full-fee-paying domestic places. We do not believe that the opportunities available to overseas students should be denied to those Australians who are willing to pay for their own education. Full-fee-paying places for domestic students were a strong and solid source of revenue for our universities. Their abolition has undoubtedly hurt a great many of our institutions at the worst time possible, particularly since transitional funding was not deemed adequate by some providers. The foolishness of the Minister for Education in abolishing domestic places became even more apparent after spikes in demand, and we have heard that at least some universities have been unable to accommodate that demand with the Commonwealth supported places only.

While the coalition welcomed the Bradley review and many of the recommendations in it—including the recommendation that has translated into the reform in this bill—I want to take the opportunity to reflect on where we go from here. Unlike the government, we believe that the Bradley review is not merely a checklist. The reforms stemming from the Bradley review are not the end of ongoing debate and reform in the higher education sector but the beginning. In particular, we welcome the move towards the student demand driven system proposed by Bradley and endorsed by the government. It is a good start, but I believe there is much more scope for even greater flexibility and freedom for both students and the universities themselves. Of course, reform does not happen instantaneously. Education providers always need time to adjust to changes and they need support with transitional arrangements. Nevertheless, the coalition is pleased that Labor has undertaken reform to the indexation formula to improve the current arrangements and for this reason we support the legislation as drafted.