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Tuesday, 12 September 2017
Page: 10119

Mr HILL (Bruce) (19:16): Labor is rightly opposing this bill. We oppose this bill because it is profoundly unfair to young people, especially those from disadvantaged or middle-class backgrounds. This bill will make it even harder for young people from everyday backgrounds to climb the ladder of opportunity through education.

When I doorknocked over 13,000 houses in the lead-up to the election, people told me that education was the single most important thing. Everyone said it: young people, parents and grandparents but most especially migrants, who come to this country to seek a better life with a laser-like focus on education being the key to a better life for their kids. But, rather than helping young people to fulfil their potential to climb that ladder of life and opportunity and secure a better future, unless they are lucky enough to be from a very wealthy family, this bill will weigh young people down with a lifetime of debt accrued through higher fees as they struggle to climb just a rung or two while being expected to repay these higher debts even earlier.

As has been said, Australian students already pay the sixth-highest fees in the OECD. This bill jacks them up by another 7½ per cent. Repaying debts when you earn $42,000 will make it harder—for many people, impossible—to buy a house or provide for a family. I've heard those opposite prattle on with, 'Oh, it's only 10 bucks a week here and 20 bucks there,' and, 'What's another 50 bucks?' The point is that it's in the wrong direction. It makes it more unfair and more unequal, and it is the wrong way to go, especially with stagnating wages, poor graduate employment outcomes and spiralling house prices fuelled by regressive tax concessions.

We oppose this bill because it will worsen inequality in this country—although the Treasurer says that's not a real thing. LOL! The Bill's Digest states clearly that, when compared to the existing arrangements, the new proposal has a disproportionate impact on lower-income earners. It's a particular problem when you consider it against the backdrop of the broader Liberal budget as a whole. Lower repayment thresholds plus tax rises like the Medicare levy and changes to other transfer payments will mean that some Australians will face effective marginal tax rates of 100 per cent. Using one example, Australians with a HELP debt who earn $51,000—most of whom are women—will have less disposable income than someone earning $32,000 when you take it all into account. This may sound fanciful for out-of-touch Liberal members, but the average graduate salary in Australia is under $55,000. Good luck with saving for a house, repaying a uni debt, saving for or paying off a car, paying rent, paying utilities, paying for food and paying for electricity. God help you if you start a family on that income, and you better hope you don't get sick. What on earth have young people done to deserve this?

If we as a nation want to ensure that Australia really is the land of the fair go, we need to do more to address all forms of inequality, especially those that are entrenched or intergenerational in nature. Education is the best tool governments have to encourage social mobility. People in my electorate get this. We oppose this bill because it sells out our country's future and takes us in the wrong direction.

In considering these proposals, everyone in this House must have it fixed in their mind just how critical higher education is to Australia's future successes. This is not the kind of thing we're supposed to say, but Australia's best years are not necessarily in front of us. I'm optimistic that they can be, but it's not certain they will be. We are at risk now—and the signs are not good—of being the first generation in modern Australia to leave a worse standard of living for the next generation. That is shameful. It doesn't have to be that way, but it depends on the choices we make today. That is why I and other Labor members feel so strongly that this bill takes our country and our society in the wrong direction. It doesn't just hit student fees; it also locks in large and ongoing cuts to universities.

Education, as has been said, is a critical enabler of our future economic prosperity and security. Modelling by Deloitte shows that university education added an estimated $140 billion to Australia's GDP in 2014 alone. Our region of the world is the fastest growing. This century holds enormous opportunities, but the world does not owe us a living. We can choose to innovate and compete, or we will get left behind. Australia now has the second-lowest level of public investment in universities of any country in the OECD. While our neighbours and competitors and partners in Asia are investing more in education research and creating wealth from that knowledge, our government spends time thinking up new ways to cut school funding, cut universities, threaten research funding, raise fees, burden young people with a lifetime of debt and slug disadvantaged Australians a fee of $3,223 for bridging courses that don't even give them a qualification. That's a real little gem. Nice one, government; well done! These enabling courses are run by some universities to help some of the most disadvantaged students in the country just to have a crack at getting into uni. There are currently no fees. Yet this bill proposes to charge fees, which is particularly harsh for students from a disadvantaged background. They don't get a formal qualification. There is no stakeholder support. It is a brain fart of the minister.

Australia needs an equitable higher education system if our best future is to be realised. Our smartest and brightest minds get the same access to learning opportunities. That's the goal, and we don't deter or punish young people from poor families. This access must not be conditional on the postcode you were born in, the school you went to or your parents' capacity to pay for a house.

The DEPUTY SPEAKER ( Mr Vasta ): Order! Member for Bruce, will you withdraw that.

Mr HILL: I withdraw 'brain fart'. Is that the bit you meant?


Mr HILL: Sorry, I wasn't sure if that is what you meant.

The DEPUTY SPEAKER: Just withdraw it without qualification.

Mr HILL: I withdraw it without qualification. That is why we oppose this bill and hope it dies in the Senate or wherever in the parliament the government sends this kind of rubbish to rot.

I want to make a few remarks about HELP debt levels and repayment. The government is concerned about growth in unpaid student debt. Overall, student debts are increasing significantly due to the growth of higher education, the government's own higher fees, extension of HELP to non-Commonwealth-supported places and so on. Over four years, we now have 2.5 million students—up from 1.7 million students—holding a debt. The amount of debt has gone up from $25 billion to about $49 billion. On current estimates, 23 per cent of those students are not expected to repay anything at all. Unpaid debt is largely with people who haven't earned above the income threshold long enough, and the debt is written off at their death.

On pages 8 to 10 of the Bills Digest is an interesting discussion on the options around this issue. One option is to just accept that this is part of the scheme—an equity measure, if you like—and a percentage won't be repaid. You can take the government's premise that we need to recoup more of this debt—fair enough, that's an argument. But there are two broad arguments. You can do what the government wants to do—lower repayment thresholds to, in effect, push young people into a poverty trap, which is the option the government has chosen—or you could take the interesting but politically much more difficult option of exploring requirements to recoup debts from certain estates.

The Bills Digest notes that many people who die without repaying debts are actually from very wealthy households with wealthy estates. The family arrangements are such that they have never declared enough income to repay their full debt, but they may pass away with significant wealth, whether through superannuation, housing or other assets. This is politically difficult because, if anyone suggests that, the other side may say, 'Oh, it's a death tax, it's a death tax!' which is clearly nonsense. There is a case to look more closely at this. The Bills Digest notes analysis that requiring HELP debts to be repaid, just like tax or social security debts, from estates over $100,000 in value would save $2.83 billion over three years.

Obviously, you'd need to craft such a policy carefully. I think most people would think a higher threshold would be reasonable, as well as appropriate exemptions or delayed payment provisions to protect people like families where a parent dies young or for people with surviving partners and cash flow issues. I understand this is not my party's policy and it's not the government's policy. It was in the discussion paper, to their credit, but there does seem to be a policy case to look at this option further. If difficult choices have to be made, that kind of approach is far less regressive and far less unfair to young people than the government's policy.

In terms of the impact on universities: at a time when Australia should be investing in our universities, this bill would enshrine $3.8 billion of bottom-line cuts. Teaching, student programs, research and university facilities will suffer. You have to admit that the minister is doing his best to earn himself an honorary degree from university in media manipulation and spin. He's all over the shop suggesting to people, 'Oh, this is just a temporary efficiency dividend. There's nothing to worry about. It's just a couple of years. It's just the universities doing their bit for fiscal consolidation and a bit of budget savings. Nothing to see here. Oh, look over there, let's pick on some migrants. Let's have a quiz about other people's relationships. Let's beat up on vulnerable people who rely on welfare to eat and live—that's a good idea. That'll distract everyone while we hack away at education, won't it?'

There are two main measures that comprise the cut when you stop being distracted and look at this bill. Firstly, the efficiency dividend is 2½ per cent in 2018 and again in 2019. From that the universities suffer a direct cut of $384 million in just two years. Monash University, on the border of my electorate—my old university—suffers the largest cut of any Australian university of $104 million over the forward estimates. I don't see the member for Chisholm listed to speak on this. I would suspect she is far too ashamed, given that it's technically in her electorate.

The minister pretends this is a one-off, but it is effectively a great, big, locked-in permanent cut, because when funding eventually gets reindexed it's from the level after the cut. You can't pretend this won't have an effect on teaching quality, and the resultant cuts will damage Australia's research effort. Higher education in Australia is a little bit weird by the world's standards. It's an accepted part of our system that there is a cross subsidy and that you make a bit of a profit off teaching students to fund your research, which is what keeps you in the rankings. That's bad enough, but a further 7.5 per cent is then taken out for performance funding.

We support the principle of performance funding, indeed, we proposed it, but the government is going about it the wrong way. Ripping another 7.5 per cent off universities for a yet-to-be-determined performance-based funding pool is, in prudent budgeting terms, a further cut because there is no detail in the legislation or from the government about how this scheme will operate.

I will quote Monash University Vice-Chancellor Professor, Margaret Gardner, who said:

A university budgets principally on the basis of the number of students enrolled and the average amount of money each student will bring…If 7.5% of each student's funding will not follow the student, but will flow depending on the minister's assessment of whether a university has met benchmarks determined on a changing set of education indicators, then this money cannot prudently be included in the budget.

Universities Australia has said the policy amounted to performance funding at ministerial discretion without any clarity as to the problem to be solved. All this means is that in prudent budgeting terms universities will have to plan for a 10 per cent cut in 2018 and a 10 per cent cut in 2019. We will not write a blank cheque which will force this 10 per cent cut and so future ministers can do what they want or cut that funding completely.

Finally, with regard to the extension of CSP to sub-bachelor courses: I understand this has been supported in principle for years, since the Bradley review in 2008, but that is almost 10 years ago. I have serious concerns about this measure and its impact on TAFE. There's no detail from the government. The landscape has changed a lot in this area. TAFE is under enormous pressure. You've got changes to the VET FEE-HELP loans, which have capped loans and fees. This measure has the potential to seriously erode TAFE revenues further, to make the provision of critical, high-quality TAFE unviable in more areas and to confuse students.

I note that while universities would be given access to CSPs for sub-bachelor places, TAFE does not have access to CSPs for higher education. Personally, I think this move is premature and that it's dangerous to support it at this time. Time doesn't permit me to go into the plans to sneak in massive changes to how postgraduate places are allocated, or the wedge for privatisation, the little gem in there that some other body may allocate these scholarships or the anti-New Zealander, anti-migrant measures. But suffice it to say that there are a lot of very good reasons for why this bill should be opposed. There are a few sensible things in there, and the government could well pull them out and put them in another bit of legislation that we would support and wave through tomorrow, while these other things go to die, as zombies, as they should.